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CNN Live Today

Residents Returning to New Orleans Neighborhood; Florida Keys Evacuate Ahead of Storm; Atlanta Community Severs Ties with Red Cross; Tyco Executives Sentenced to State Prison; North Korea Vows to Abandon Nuclear Program

Aired September 19, 2005 - 12:00   ET

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

DARYN KAGAN, HOST: Let's take a look at what's happening now in the news.
Enter at your own risk. That is what even city officials now are warning. Still looks like heavy traffic on the roads back into New Orleans. But what are the evacuees coming home to? There are no traffic lights, no 911 service, no food, not much clean water. Federal officials continue urging people really, you want to think twice about coming back into the Big Easy.

Meanwhile, the president backing up Vice Admiral Thad Allen saying that he has made the administration's position on New Orleans very clear. In Washington today, Mr. Bush saying that he shares the goals of Mayor Nagin to get New Orleans going again, but he still has concerns. One of the biggest fears is that the city could face flooding again if another storm were to come along.

For now it's not New Orleans but the Florida Keys under evacuation orders as Tropical Storm Rita approaches. Rita is expected to obtain Category 1 status later today. Theoretically, it could move into the Gulf and threaten Louisiana again. A live storm update just ahead on that.

Hello. Welcome to CNN LIVE TODAY. From the CNN Center in Atlanta, I'm Daryn Kagan.

Ready or not, here they come. It is homecoming day in the Algiers section of New Orleans. That is a quiet and relatively intact neighborhood on what locals call the West Bank of the Mississippi but which actually sits southeast of downtown.

Besides its stunning views, Algiers, ZIP code 70114, boasts electricity, drinkable water and working phones. It's the first part of town to officially invite back residents, though the feds urge evacuees to go slow and think twice, and they are entering at their own risk. That is tough advice for some Algiers residents and representatives to take.

(BEGIN VIDEO CLIP)

JACKIE CLARKSON, NEW ORLEANS CITY COUNCIL: We have four different groups of police over here in addition to our Fourth District. We have, including special agents, ICE federal agents, we have Army and National Guard, we have 82nd Airborne, and we're secure. We have phone -- we've always had phone service. We have pure water, drinking water, potable water, and we have sewer. We have garbage pickup. We have more and more stores ready to come online that we're talking to.

And most importantly, we have a bunch of eager citizens that are ready to rebuild New Orleans. I have more volunteers to run my office than I've ever had, and I have a lot of volunteers.

(END VIDEO CLIP)

KAGAN: Our Mary Snow is in Algiers. She's watching the process the bureaucrats are calling repopulation -- Mary.

MARY SNOW, CNN CORRESPONDENT: Hi there. Hi there, Daryn.

And we're actually in the courthouse in Algiers. And some of those volunteers you heard about are inside this building working the phones.

Now, unlike many areas in New Orleans, this is an area that has the total infrastructure in place. Residents are getting this pamphlet giving them information saying come home, as you mentioned. There is drinkable water here. Most of the power is restored. There are some traffic lights that are still out. Some people even have cable.

Residents have been coming in, cleaning out their homes. They certainly suffered damage, but not the damage that we've been seeing in other parts of New Orleans.

Now, there are also things, though. This is not business as usual, as you can imagine. Where do you get your food, for instance? How do you get cash? This pamphlet is telling people where to go.

There are banks set up here in Algiers, which has about 56,000 people, according to the city. And people are going to these stations where they can pick up water, supplies, some food near a supermarket a couple of miles away.

The people getting reoriented. They're trickling in, in this community.

Now, the mayor has said that he is going to take a look at how this transition goes because, unlike Algiers, other parts of New Orleans that are slated to reopen do not have drinkable water, do not have electricity restored. And the mayor's office said earlier today that we should be hearing a better timeline of when other parts of New Orleans will be opening up.

We saw some business owners coming in. It's unclear, though, about that timeline. And as you mentioned, there are some safety concerns, obviously, being raised.

Also want to point out that Algiers does have a 911 system in place, and that is something that federal officials had questioned about whether or not it would be safe for people to come back to some of these areas because the communications is limited. But this area so far has seen people come back -- Daryn.

KAGAN: All right. Mary Snow live from Algiers in that section of New Orleans.

Well, not surprisingly, some New Orleanians are -- even in relatively unscathed Algiers don't need FEMA to tell them that the city still lacks many of the comforts of home.

(BEGIN VIDEO CLIP)

JARROD NACKLEY, SANDWICH SHOP OWNER: I'll hold up until everything's 100 percent back. I don't really see the point in being able to get into a home or business. I certainly can't conduct my business without potable water and, you know, even having an electricity to your home, which may or may not be true, I don't know. Based on what I saw, it's going to be quite some time.

So there doesn't seem much to go back to, unfortunately, right now. I'll be the first one there when I know everything's ready to go, but right now there's just not quite enough services to return to.

JULIA REED, NEW ORLEANS RESIDENT: This is like a tale of two cities. On the side where I'm standing now, where my house is, the French Quarter, all the places that the tourists know as New Orleans are -- you know, look pretty good. And you think, well, we could be running any minute now.

But then you go -- like last weekend I went with the Guard just across Claiborne Avenue, which is maybe 10 blocks from my house. And it was like, you know, there were bodies still there. And water was still very high. And sludge where the water had drained off. I mean, that's drained off a lot. It's a huge difference between last week and this week.

But, you know, half the city still looks like a war zone. And it's easy when you're driving up and down St. Charles Avenue to think, "Wow, you know, New Orleans could be back any moment," but the reality is much more gruesome.

(END VIDEO CLIP)

KAGAN: Now, the very last thing the Gulf Coast or south Florida or Cuba or the Bahamas needs, another tropical storm, and yet a strengthening Tropical Storm Rita, by name, with the beat on the Keys and a forecast track that ranges from alarming to horrifying.

The southernmost Keys are under mandatory evacuation orders, tourists and residents alike at this point. Rita is looming with top winds of 60 miles an hour.

John Zarrella is watching things in the skies in Key West -- John.

JOHN ZARRELLA, CNN CORRESPONDENT: Hi, Daryn. Count them: five evacuations from the Florida Keys in the last two years. Three last year for three of the four hurricanes that hit Florida, one for Dennis this year, and now here in Key West.

And as of noon today, that evacuation order has been extended. Not just mandatory evacuation for everyone in the lower Keys, but a mandatory evacuation for the entire Florida Keys. That's all of -- pretty much all of Monroe County, about 80,000 people being asked to evacuate. And there is good reason for that. And you see behind me the boarding up has begun here. A lot of folks with aluminum shutters and the plywood going up.

The level of urgency ratcheted up because there is an increasing chance that this storm, Rita, could be a Category 2 hurricane when it gets close to Key West. And there is a possibility that the storm, the core of the storm could come right over the lower Florida Keys at this point in time.

So state officials, the governor of Florida, Governor Jeb Bush, local officials here have decided to go ahead and order that mandatory evacuation.

There are no shelters open in the Florida Keys now. They will not be open. You have to go to the mainland to Florida City in order to find evacuation shelters for the people in the Keys.

Flying over the Florida Keys down here in Key West, you can see a lot of the preparations going on. People swamping the local Home Depot, picking up supplies so that they can do this boarding up.

And of course, this has all changed, Daryn, very dramatically and very quickly. Yesterday looking at barely a tropical storm, and now concerns that as it moves over the warm waters of the Florida Straits, some 90-degree waters, that this thing could explode very rapidly before it gets here and could deal this area a very, very severe blow.

So as precautions, tourists ordered out yesterday, continuing today. They're very proactive down here in the Florida Keys, getting people moving and getting them out. And now a heightened sense of urgency -- Daryn.

KAGAN: John, those numbers you had at the beginning caught my attention. Five evacuation orders. Is that making people numb, or are they seeing what's happened along the Gulf Coast really get their attention?

ZARRELLA: I think what's happened quite clearly is that what happened in the Gulf Coast certainly has played a part in the fact that they are going ahead now and ordering.

But the fact is that once you have the possibility of something being more than a Category 2 hurricane when it hits here, the rules in the Florida Keys say anything above a Category 2, you evacuate for. So once they're expecting it to be a two, you have to evacuate for a category higher, take precautions for that category higher. So that's the reason why they are ordering these evacuations for the entire Florida Keys. And the hurricane warning has now been extended from Miami-Dade County all the way down through the Florida Keys -- Daryn.

KAGAN: All right, John Zarrella live from the Keys, thank you.

Let's get the latest on the storm. Bonnie Schneider is giving us a full check of the weather -- Bonnie.

BONNIE SCHNEIDER, CNN METEOROLOGIST: All right, Daryn.

Here's what we're looking at right now. We still have Rita as a tropical storm with maximum winds at 65 miles per hour. But as John was just telling you, Rita is likely to strengthen. The storm is moving over very warm water near 90 degrees, and that will help to intensify Rita.

In fact, when we take a closer look at the track of what we can expect, you'll see that as it approaches Key West, it does have get strong enough to become Category 2 hurricane.

This is very important to note, because when you talk about a Category 2, we're talking about winds that exceed 96 miles per hour. Not happening just yet, but the potential exists that the National Hurricane Center has forecasted to intensify rather rapidly.

In fact, as we take another look at the track, you'll see by Thursday, we're looking at the potential for the storm to reach Category 3 strength, especially when it comes over those super warm waters and deep waters of the Gulf of Mexico. This is a real ripe area for the storms to grow and to develop.

So that's what we're looking at with Rita. And if we take another look at the watches and hurricane areas, we have hurricane warnings extending far to north even into south Florida and also for the Florida Keys. The Florida Keys issued their hurricane warning late last night around 11 p.m.

And we have hurricane warnings, of course, for parts of the Bahamas, as well, tropical storm warnings elsewhere. And tropical storm watches, actually, posted on the southwest corner of Florida. So we'll be watching it on both sides of the Florida Peninsula for some very strong winds.

Now depending how close Rita gets or if it makes a direct hit on the Florida Keys will really determine the damage we'll see and the wind speeds we'll get, because note, of course, in the center of circulation we have the strongest winds, but they usually can extend pretty far out. So if this does, indeed, reach Category 2 strength, we'll be watching for certainly more damage.

Now what's going to happen with Rita beyond the Florida Keys, beyond the Florida Straits? The storm moves into the Gulf of Mexico. And this map you see right here is a composite of all the computer models we look at. It could be up to a dozen to 14 of them. And unfortunately once it comes into the Gulf, they're not in such great agreement. So we're really just letting people know, anywhere from Alabama, Mississippi all the way back to the west towards Corpus Christi we'll be watching closely to see what Rita does next. But one thing is a good -- I think a very good probability is that Rita will intensify to Category 3 strength at least once it does get into the Gulf of Mexico -- Daryn.

KAGAN: Sounds like tapes from about three weeks ago. Thank you, Bonnie.

Coming up next on CNN LIVE TODAY.

BRIAN TODD, CNN CORRESPONDENT: Brian Todd, live at the National Center for Missing and Exploited Children, where volunteers are working around the clock to track kids missing from Katrina and its aftermath. I'll have an update and we'll show you some of those kids' faces in a moment.

KAGAN: Thank you, Brian.

Also, kicking out the Red Cross? Find out why one county CEO wants them out of his relief center. LIVE TODAY is back after a break.

(COMMERCIAL BREAK)

KAGAN: There is a new criticism how the Red Cross is handling the Hurricane Katrina crisis. Not in Louisiana or Mississippi. It's right here in Georgia.

Vernon Jones, the chief executive officer of suburban Atlanta's Dekalb County, says local Red Cross efforts aren't really helping Katrina victims that have gathered here. So Jones wants the group out of the centers in Dekalb County as of 5 p.m. today.

Reporter Rebekka Schramm with our Atlanta affiliate, WGCL, is live now. She is from -- in a Dekalb County relief center with more on the story -- Rebecca.

REBEKKA SCHRAMM, WGCL CORRESPONDENT: It's getting ugly here, Daryn. Just to give you background, the Red Cross never signed off on this disaster relief recovery center, but the Red Cross showed up here anyway, even though it is so stretched thin when Dekalb County said it would help evacuees with or without the Red Cross. Well, now the relationship between the two agencies is even more soured.

(BEGIN VIDEOTAPE)

VERNON JONES, CEO, DEKALB COUNTY, GEORGIA: I'm at the center in Lithonia. I've been trying to reach you.

SCHRAMM: Dekalb County CEO Vernon Jones heard back from the local Red Cross CEO, Tim English, just before the center opened this morning. JONES: We want you here, but there are certain things that you all are going to have to meet, certain deliverables, and Tim, quite frankly you all are not doing a good job. It's not only coming from my staff, but it's coming from the volunteers. And to a bigger degree, it's coming from the evacuees themselves. It would be nice...

TIM ENGLISH, RED CROSS CEO: You stated in your letter and on television.

SCHRAMM: Since they could not reach an understanding, the Red Cross will sever its ties with Dekalb County, meaning evacuees can get help with other services here, but not the Red Cross.

TRACY MEEKINS, NEW ORLEANS EVACUEE: Oh, you know what? That's not -- that's not the strain. Every site that they have opened since Katrina, they opened it for a period of 48 hours or maybe it might go three days. They shut it down, and they abandon.

SCHRAMM: The Red Cross says it's not abandoning Dekalb, but that it's simply complying with Jones's written request to do business separately. Jones said all he wanted was for the Red Cross to resolve its management issues or else leave.

JONES: I'm just disappointed that -- that they don't want to address the issues. They want to sweep it under the rug, but that's fine. We're going to continue to do what we're doing here, and we do it well.

(END VIDEOTAPE)

SCHRAMM: Now, the metro Atlanta Red Cross says it's unfortunate that Jones chose to take this to the media instead of handling it one on one. A Red Cross spokesman tells me, quote, "Our focus continues to be providing service to our clients."

But I'll remind you, there are two other large megacenters, if you will, that the Red Cross runs here in metro Atlanta, so evacuees are welcome to go to those centers -- Daryn.

KAGAN: A lot of people overwhelmed by this crisis. Thank you.

Well, want to explain to you what you've been seeing on the left of your screen. CNN continues its mission to help children lost or misplaced due to Hurricane Katrina. Over the weekend, we had thousands of calls. And thanks to viewers, we have helped reunite more than a dozen children with their family members.

Our Brian Todd has the latest on the project. He's at the National Center for Missing and Exploited Children in Alexandria, Virginia.

Brian, hello.

TODD: Hi, Daryn.

At this hour they are meeting here to try to update some of those numbers. We hope to bring you those updated numbers a little bit later on.

As you mentioned, they have been here virtually around the clock. These are volunteers, former law enforcement officers donating their time. This center is now entering its third week in operating the Katrina missing persons hotline. It was up first on Labor Day. And since that first full weekend of September 9 and 10, the calls into this center have tripled.

But each call presents a little bit of a puzzle. Each one of these volunteers is here for several hours at a time. When they get a call, typically the information that they'll get is fragmented. The caretaker or parent or extended family member who calls in maybe hasn't seen the child in several weeks, doesn't know where the child or parent could be.

It could be - in this cases there is a case where a non-custodial parent will call in where -- and not have much information on the child's whereabouts or characteristics, where the custodial parent may actually have the child in custody. They're cross referencing all that information and coming up with the most accurate numbers they can.

Another issue is pictures. In the vast majority of these cases, they have either no picture, a bad picture or an outdated picture. And so that's an issue that they're working with. Actually, they say that in most cases they have no picture of the child. That's why in some cases when you're see this on the left side of the screen, you're seeing a silhouette.

Nevertheless, we're going to put up a couple of the pictures now of kids whose cases are still active.

Jessica Edwards, she is 12 years old, and her sister, Tiffany Edwards, she is now 18 years old. These pictures may be fairly recent. They were separated from their caretaker during Hurricane Katrina last seen in New Orleans. So they are still actively looking for these two sisters.

Also Ashley Brown. Now Ashley is 12 years old. This could be -- this could be an outdated picture that we're seeing here. Looks like Ashley when she was maybe 5 or 6. Some of the characteristics that they put up here. This is on the web site where they put this up. Last known to be with her mother in Harvey, Louisiana, have not been heard from since Katrina hit. This child has a scar on the left side of her body, a scar on her left thumb and pinky finger and she is missing her left middle finger.

So Ashley Brown, an active case where they're still looking for this young lady.

If you have any information on Ashley Brown, Jessica or Tiffany Edwards or any of these other children missing, you are asked to call 1-800-THE-LOST. That is 1-800-THE-LOST. Or go to www.MissingKids.com and you can look up these cases online. They are going to keep the center operational for an undetermined period of time until they get most of these cases resolved. Many of these volunteers have extended their stays, come in from all parts of the country from Boston to southern California. Many have extended their stays several days past the allotted time just to be here and track more missing kids, Daryn. So they're working it around the clock and hope to get more cases resolved very soon.

KAGAN: They're doing important work. Brian Todd, thank you.

Up next we're going to show you the softer side of a tough guy. You've become familiar with Lieutenant General Russel Honore. He has the top job along the Gulf Coast of the military but didn't know he had found time to search for a feline friend of his family. That story ahead when CNN LIVE TODAY returns.

(COMMERCIAL BREAK)

KAGAN: The sentences are in for two former Tyco executives. They had been hoping for leniency. That does not appear to be the case. Our Susan Lisovicz at the New York Stock Exchange with more on that -- Susan.

SUSAN LISOVICZ, CNN CORRESPONDENT: Daryn, and the sentences came down here in lower Manhattan state supreme court. Dennis Kozlowski, the CEO of Tyco, the former CEO of Tyco, and his former numbers man, Mark Swartz, his CFO, had been sentenced 8 1/3 years to 25 years in state prison.

The two men have also been ordered to pay fines of $70 million and $35 million respectively for unauthorized loans to the victim, the victim in this case being the company that they used to run.

Both Kozlowski and Swartz were convicted, you may recall, in June of looting of upwards of $100 million from the company in the form of unauthorized loans as well as illegal bonuses and just a generally lavish lifestyle.

As you mentioned, Daryn, earlier this morning, both men pleaded for leniency in state court. Kozlowski said that there were 130 letters sent to the judge that give the judge perhaps a different portrayal of the person that was seen in the media. He said that he knows that he was hoping for a lenient and a fair sentence.

And Swartz said he never thought that he would be in this situation in his life: "I have always tried to be an upstanding citizen and individual." He would like to return to his family as soon as possible. That is not the case. They are being put in handcuffs and will be incarcerated as soon as possible.

One -- one of the particular differences here in this sentencing is these executives sentenced will go to state prison, which is considered much tougher than the federal prisons, where you'll see Bernie Ebbers spending his very long sentence, as well as the executives at Adelphia, John Rigas and Timothy Rigas. Both very long sentences.

And it should also be mentioned one of the other differences, that Tyco is not a bankrupt company. This is a very healthy company. But Tyco was one of the parties that said that they should not get leniency because that company spent hundreds of millions of dollars not only because it was looted, but because of it was robbed of its good name. That hurt the company for the last couple of years.

Daryn, back to you.

KAGAN: It has been a long journey that continues for those two men. Susan Lisovicz, thank you.

So when the Saints go marching home in Giant Stadium tonight, it will be more than an average "Monday Night Football" game. Our Allan Chernoff has more on a special kickoff.

You ready for some football, Allan?

ALLAN CHERNOFF, CNN CORRESPONDENT: Absolutely, Daryn. And this stadium will be filled. But the people who come into this stadium, they may have a little bit of surprise, especially if they're Giants fans, because the name of their opponent, the Saints, has been painted onto the end zone over here. And lining the stadium are Saints banners.

The NFL is doing what it can to make the saints feel at home here in New Jersey. They're going to have the cheerleaders of the Saints over here. They are also, as you can see, setting up for entertainment. There will be lots of entertainment. This is going to be the highlight of the NFL's hurricane relief weekend.

The band Three Doors Down right now is preparing a practice session. Harry Connick Jr. and also Branford Marsalis also scheduled to perform.

It's all part of a telethon effort that the NFL has been running all weekend long. The league, players, owners, they have already contributed $10 million and they're hoping to collect millions more from the fans.

Now, the Saints themselves, they're actually not all that happy about playing here. The NFL commissioner decided to move their first home game over here. Obviously the Superdome is out of commission, but the Saints would have preferred to have been closer to home.

In fact, last week when the NFL commissioner wanted to address the team before the game against the Carolina panthers, the Saints said, "No, we don't want to hear from the commissioner." The Saints ended up winning in very dramatic fashion, 23-20 on a last-minute field goal.

Now the Saints are being talked up as America's team. They will, however, have a home for their remaining home games. They'll be splitting between Baton Rouge and San Antonio -- Daryn.

KAGAN: Yes, no charity in their hearts for opponents, though. As you said, they beat a very good Carolina Panthers team last week. So we'll see what they have in store for the Giants tonight. Thanks, Allan.

CHERNOFF: It was an upset.

KAGAN: Thanks. It was. Good game, too.

Softer side of that John Wayne dude, as he's been come to known as a take-charge Lieutenant General Russel Honore rides to the rescue of Gumbo and Hammy. That Gumbo and Hammy, a cat and a hamster, respectively belonged to Honore's daughter, Kimberly.

Kimberly lives in Jefferson Parish, and she was out of town when Hurricane Katrina struck. She reportedly pestered her dad with e-mail about her stranded pets until he got them to safety.

Honore also told his troops to go ahead and let evacuees bring along their pets. "We got the capacity," he said, "and it seemed like the right thing to do."

Meanwhile, the Navy offers temporary saltwater barracks to those bottlenosed dolphins that have been displaced by Katrina's storm surge. Eight dolphins were washed out to sea when their aquarium was destroyed in Gulfport, Mississippi. Four now are ensconced in portable saltwater pools set up by marine mammal experts at the Naval Construction Battalion in Gulfport. But the other four dolphins have gone missing.

Our Gary Tuchman is airborne with a helicopter search team. Right now, he tells us the experts are concerned, but they're not giving up. We will keep you posted on the dolphin story.

Coming up, who is calling the shots in New Orleans, anyway? An interview with federal government point man for disaster relief, Vice Admiral Thad Allen. His take on whether New Orleans is really ready to take care of its own.

(COMMERCIAL BREAK)

KAGAN: Here now, a look at some stories making news now.

It may sound like science fiction, but doctors at Ohio's Cleveland Clinic are mulling plans for the first ever face transplant. The surgery would be aimed at helping people who have been disfigured by fires or accidents by giving them new faces, transplanted from donated cadavers.

They are responding to a call for action from President Bush. NASA today unveiling plans for a new mission to the moon in 2018. The initiative involves building permanent outposts. NASA astronauts last visited the moon in 1972.

President Bush is calling today's nuclear agreement with North Korea a positive step. The North Koreans agreed to abandon their nuclear program, in return for energy assistance from the U.S. and other countries. President Bush told reporters that for the agreement to work, there has to be a reliable verification process. We'll take a closer look in just a few minutes.

Now back to today's top story, the partial reopening of New Orleans. Mayor Ray Nagin is reopening the Algiers area today. That is despite concerns voiced by Coast Guard Vice Admiral Thad Allen, who is overseeing federal relief efforts. Allen warned about health and safety problems, but in an interview with Miles O'Brien and Soledad O'Brien today on CNN's AMERICAN MORNING, he tried to play down the conflict with Mayor Nagin.

(BEGIN VIDEO CLIP)

VICE ADM. THAD ALLEN, U.S. COAST GUARD: We don't disagree with the mayor's plan. He has a vision for where he thinks New Orleans should go. We support that. We would like to see New Orleans restarted. What we're talking about is the timing of the entry of the general repopulation in relation to some of the really critical factors that were discussed previously.

We're mainly talking about potable water, the 911 system and so forth. We just think the conditions need to be set so when people come back in, they can operate safely and moreover, with the weakened levee system, that there's a plan to evacuate whatever number are allowed back into the city.

SOLEDAD O'BRIEN, CNN ANCHOR: OK, so clearly while you may have the same big picture in mind and the small picture and the timeline, you very much disagree. He wants to start, frankly, today, and you don't. When would your timeline begin, and how would yours look that's different from his?

ALLEN: Well, I might compare and contrast the East and the West Bank. You just had a report from the West Bank in Algiers. We have a set of metrics that we're looking at, whether it's sewer, water, telephone and things like that. And we kind of color code them. Red is unacceptable, amber, you're willing to accept some risk, and green, good to go.

All the conditions on the West Bank, under this planning system that we have worked with the mayor's own staff, are either amber or green. We felt those conditions were acceptable for the population to reenter. What we're trying to do is do the same thing on the East Bank. And if you went to potable water right now, for instance, that would still be red on the East Bank.

O'BRIEN: OK, so you're fine, then, with everybody going back into Algiers starting today? As the mayor has already indicated, he's invited people to come back to that zip code.

ALLEN: Well, he wants to repopulate Algiers this morning. We're all in agreement that the conditions have been met where the risk is low enough where the general population can enter without a significant problem.

O'BRIEN: But what about the folks who then come into Algiers and then go over to New Orleans, which is not gotten the green light, as you point out? ALLEN: Well, entry into the East Bank is being controlled through a series of checkpoints. And over the last two days on Saturday and Sunday, businessmen have been allowed back into the city for the purpose of looking at their businesses, assessing the damage that's been done and starting to plan how they're going to bring those businesses back online. And that's been done with the city being open from dawn till dusk or roughly 8:00 until 6:00 in the evening.

That's a much different paradigm than what's happening on the West Bank. Any move beyond having the businessmen re-enter and assess their properties needs to be accompanied by the same types of metrics and assurance that the conditions are met that we have on the West Bank.

Do you think, as the mayor said, that you'll be able to have a third of the city back in within a week, week and a half?

ALLEN: It's pretty problematic, Soledad, when you look at what needs to be happen to have potable water in place and the 911 system in place. I would put a time element on it, but it's kind of impossible to tell. We need to take these things and work them as fast as we can. Because we're all in agreement, we need to get that general population back in there. We're just asking the mayor to work with us on that process.

O'BRIEN: So then who's in charge here? If you say we want to you slow down and work with us and he says here's a letter that I'm handing out to people who come in and say welcome back, you're operating at your own risk if you go inside your house and it collapses, well, you're operating at your own risk. It sounds like you're not quite on the same page. And I can't tell who trumps who in this scenario.

ALLEN: Soledad, there's no trumping here. The mayor's in charge. It's his city. In conjunction with the state leaders, this is a local issue. The reason the federal government is here is, in these events there are requirements for capacity competency and capability that overtake local state governments. And that's the reason we're here.

And actually, I represent the collective federal input and attempt to support the mayor in his plan. In this case, I'm trying to advise him and pass information to him and also the citizens of New Orleans regarding the concerns we have.

(END VIDEOTAPE)

KAGAN: So that spotlight is on New Orleans, as hurricane recovery efforts continue across a broad stretch of the Gulf Coast, but when the storm hit Mississippi, neighbors helped neighbors.

Our Ted Rowlands has a story of destruction, but also of survival, from Biloxi, Mississippi.

(BEGIN VIDEOTAPE) TED ROWLANDS, CNN CORRESPONDENT (voice-over): In a field of debris on Howard Street in Biloxi, Mississippi, one house is still standing. In that house 24 people survived the storm, 15 of them were pulled to safety by Michael Kovacevich and Joey Davis.

JOEY DAVIS, BILOXI RESIDENT: They say we were stupid for staying here. But if we hadn't, a lot of people would be dead right now.

ROWLANDS: As these photographs taken from inside the house show, most of the neighborhood was underwater. As people lost their homes, Michael and Joey waded through chest-high water to save them, starting with a call for help from a man with a family in trouble.

DAVIS: We got his two daughters, him and his wife.

MICHAEL KOVACEVICH, BILOXI RESIDENT: And then the next move was to get the guy across the street. That's when Joey went and got him out.

ROWLANDS: Then an elderly man and his wife on the other side needed help.

DAVIS: So we went out the back and got both of them, and then the family next door, we got them out.

KOVACEVICH: The water was even with the top of the fence at that point. We knew we was getting water in the house, but we didn't think we would get that amount of water.

DAVIS: Twenty-four people were eventually huddled upstairs. Marks on the wall show how high the water was in the house.

KOVACEVICH: I mean, it just kept hitting and hitting and hitting, and the winds never would let go.

ROWLANDS: For five hours they waited, hoping the house would hold up. Michael's 15-year-old daughter Lanie took care of the children.

LANIE KOVACEVICH, BILOXI RESIDENT: I just talked to them and tried to keep them not looking out the windows and stuff, because they could see everything floating by and their house and stuff.

M. KOVACEVICH: She said I went through this storm a girl and come out a woman.

ROWLANDS: Two people they couldn't save were hanging onto a tree.

DAVIS: I'm not sure exactly which tree, but they were up there.

ROWLANDS: When the storm subsided, Joey led firefighters to the tree. This photo show as couple being rescued. Not all of their neighbors made it. This was one of the hardest-hit areas of the city. Many homes were completely flattened.

Thankfully for the 24 people that survived inside, this one is still standing.

Ted Rowlands, CNN, Biloxi, Mississippi.

(END VIDEOTAPE)

KAGAN: Coming up, we're going to look at some world news on that apparent breakthrough with the Korean -- North Korean talks, nuclear talks. Will North Korea really keep its side of the bargain? We'll ask an expert, just ahead.

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KAGAN: Let's check out some world news now. It is one day after the German elections, yet it's not clear who will be forming the next government there. Angela Merkel's Christian Democrats and their allies won 225 seats in the 598-seat parliament. Supporters of incumbent Chancellor Gerhard Schroeder were close behind with 222. Neither candidate could potentially form a coalition government, and both are seeking possible partners.

Ten people were killed south of Baghdad today when two suicide car bombs detonated within minutes of each other. The bombs targeted police commandos escorting religious pilgrims.

Also today, insurgents fired a mortar at some Iraqi quick- reaction forces in Baqubah. The shots missed and hit a nearby house, killing one person and wounding five others.

There is a potentially important breakthrough in negotiations with North Korea. The North Koreans say they are willing to give up their entire nuclear program in return for international energy assistance. The White House says it's pleased, but warns that the key to the agreement is implementation.

Joining to talk about that, Jim Walsh for the Belfer Center for Science and International Affairs at Harvard University.

Jim, always good to see you.

JIM WALSH, BELFER CENTER, HARVARD: Good to see you, Daryn.

KAGAN: Are you surprised from this agreement coming from the North Koreans?

WALSH: Well, I think a lot of Americans who are Korea watchers have been cautiously optimistic since they first started meeting in September, but then a week before the meeting, there were some negative signals coming out of Pyongyang, and a lot of started to say, oh no, here we go again, it's deja vu all over again. But an agreement was arrived at, and I think that's an important step. It's not the end of the journey, but it's not just a piece of paper in words. This, I think, is an important development.

KAGAN: So why now?

WALSH: Well, I think -- I can only speculate, but I think in part it reflects new flexibility on the part of the Bush administration. They have taken a different tone. They've been more flexible. And it's also required flexibility on the part of the North Koreans. I think they look across the border at China. They see a country that's growing powerful and stronger everyday economically. They want to grow stronger economically, but they can't do it under these current conditions. So I think both sides have motivations, and both have shown maturity and flexibility.

KAGAN: You mentioned President Bush. We heard from him earlier today. His response to this development, tepid, let's say. He's still a little bit wary, still wants to know about verification and implementation.

WALSH: And I think verification's going to be one of the big issues to negotiate. This sets out a set of principles, but then we have to define how it's going to be implemented, and I think that's going to take some time. But what's really important here I think, is politically. It's not just the substance and not just the process, but the politics. Those folks who want negotiation, like Ambassador Hill, are going to be able to come back to Washington and say, look, we're making progress here, let's stick with this; let's and continue to see if we can get an agreement. Those who have oppose engagement, who have traditionally within the Bush administration, opposed negotiations, they're going to have to sit back and let this continue because the folks in Beijing are making some progress.

KAGAN: Let's move this forward and see how this could affect something else in another part of the world, negotiations between Europe, the U.S. and Iran and the nuclear situation there.

WALSH: Well, I think they are largely separate issues. They're driven by their own internal dynamics. And Iran and North Korea are very different countries in different positions.

I do think, though, that in some indirect way it may put a little bit -- it may give the U.S. an extra talking point, in that the North Koreans are saying they want to join the NPT, the Nuclear Nonproliferation Treaty, and they're willing to abide by an agreement that says no enrichment, no reprocessing. And of course the core of the argument with Iran is the issue of reprocessing and enrichment, but generally these are separate things, and they're going to happen on their own dynamics.

KAGAN: All right, we'll be watching both of them. Jim Walsh with Harvard. Thank you, Jim.

WALSH: Thank you.

KAGAN: You're welcome.

We are also watching a huge weather story, Tropical Storm Rita affecting the markets already.

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LISOVICZ: Sentencing in a notorious corporate fraud trial. I'm Susan Lisovicz at the New York Stock Exchange. Former Tyco chief Dennis Kozlowski and former CFO Mark Swartz have each been sentenced to eight and 1/3 to 25 years in New York state prison. They've also been ordered to pay some hefty fines. Kozlowski, $70 million; Swartz, $35 million, as well as $134 million in restitution.

The two were ordered to start serving their sentences immediately and led from the courtroom in handcuffs. Kozlowski and Swartz were convicted in June of giving themselves hundreds of millions of dollars in illegal bonuses and forgiving loans to themselves, in addition to manipulating the company's stock price. Kozlowski also became infamous for his lavish lifestyle, that included a $6,000 shower curtain that was billed to the company.

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KAGAN: And getting back to Kozlowski and Swartz, they had asked for leniency. Their defense attorney saying this is not Enron. We did not leave a bankrupt company. It's not the same thing. Apparently, the judge didn't go for that.

LISOVICZ: No. And in fact, Tyco itself said it spent hundreds of millions of dollars, not only because of all the money that was looted from the company, but also trying to restore its good name. Hundreds of millions of dollars in legal fees, investigative fees, recruiting fees. So Tyco has spent a lot of time just trying to get over that very dark chapter in its history.

KAGAN: Susan Lisovicz at the New York Stock Exchange, thank you.

Dark clouds as part of Tropical Storm Rita. Our Bonnie Schneider is taking a look at that -- Bonnie.

All right. We will check back with Bonnie. We encourage you to stay with CNN for the latest on Tropical Storm Rita and the rebuilding after Katrina.

I'm Daryn Kagan. LIVE FROM, coming up next, after a break. See you at the top of the hour.

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