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CNN Live Today

Bush at Center of Political Storm Over Port Deal; Is FEMA Prepared for the Next Hurricane Season?

Aired February 23, 2006 - 10:30   ET

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

(NEWSBREAK)
DARYN KAGAN, CNN ANCHOR: The Bush administration is doing some explaining today about security at the nation's ports. It goes before the Senate Armed Services Committee to answer questions about a deal that allows an Arab company to manage six major ports.

Our chief national correspondent John King reports that the deal has put the president in the eye of a political storm.

(BEGIN VIDEOTAPE)

JOHN KING, CNN CHIEF NATIONAL CORRESPONDENT (voice-over): Put this president in a port in the post-9/11 world, and the result is something like this, here in Philadelphia.

GEORGE W. BUSH, PRESIDENT OF THE UNITED STATES: We will use all our power to keep out the terrorists and the criminals, so they can't hurt our citizens.

KING: The Port of Baltimore.

BUSH: We're strengthening defenses at our most important and vulnerable locations.

KING: Union Pier, Charleston, South Carolina.

BUSH: We have a solemn duty to protect our homeland, including the seaports of America.

KING: How, then, did it come to this: the president at war with his party and at odds with public opinion, defending a deal to allow an Arab company to manage six major U.S. ports?

ERIC DEZENHALL, PRESIDENT AND FOUNDING PARTNER, DEZENHALL RESOURCES: Americans often have a harder time with inconsistency than we do dishonesty.

KING: As we now know, the White House says the president and other top officials didn't know about the deal until after it was approved by a government review panel led by the Treasury Department.

But Patrick Mulloy, an attorney who helped write the law, says the president should have known.

PATRICK MULLOY, INTERNATIONAL TRADE LAW EXPERT, GEORGE MASON UNIVERSITY: The process was not followed as Congress laid it out in the law.

KING: The law calls for the president to weigh in and to report his findings to Congress, if the initial review suggests the foreign investment could undermine national security.

MULLOY: Then, senior people get involved and start debating the merits, pros and cons.

KING: But Mr. Bush and his top aides were not involved in this deal, to the astonishment of critics, because the lower review, led by Treasury, did not warn of a national security risk that warranted presidential attention.

Only six months ago, the investigative arm of Congress raised alarms on this very issue, suggesting, Treasury is too biased in favor of foreign investment, and, as a result, "narrowly defines what constitutes a threat to national security, and is reluctant to initiate investigations for possible presidential action."

MULLOY: And that's what happens when you don't follow the law. You short-circuit it. And, then, you get yourself into trouble.

KING: Looking to get out of political trouble, the administration plays down security worries, says Customs and the Coast Guard do the policing, whether the port manager is based in Abu Dhabi, London, or Nebraska, for that matter. That's a hard sell in Washington and among longshoremen at the Port of New Jersey.

GLENN GOODWIN, LONGSHOREMAN, PORT OF NEW JERSEY: You know, for the last four years, we have been hearing about -- you know, our president telling us that, you know, the Middle Easterners are the enemies. But, yet -- and, still, now it is OK to go to the negotiation table with them. You know, I mean, it is ridiculous.

DEZENHALL: Spectacle overwhelms analysis. It doesn't pass the outrage factor. And a lot of what crisis management is about is addressing outrage, which is irrational, not factual.

KING: And, in politics, as a two-term-governor-turned-two-term- president surely knows, first impressions and emotion often trump the facts.

John King, CNN, Washington.

(END VIDEOTAPE)

KAGAN: And there are a lot of questions about whether the port deal is really a threat to national security. Here with some perspective on that is former Homeland Security inspector general and CNN security analyst, Clark Kent Ervin, joining us from Washington.

Clark, good morning.

CLARK KENT ERVIN, CNN SECURITY ANALYST: Good morning, Daryn.

KAGAN: You, as we can see by reading your editorial in "The New York Times" this morning, are no fan of this deal.

ERVIN: Yes, that's right. There is no question but that the UAE has, at best, a mixed record on terrorism. They have been an ally, they have been cooperative in certain respects, certainly.

But on the other hand, two of the 9/11 hijackers came from the UAE. UAE was one of only three countries in the world that recognized the Taliban before 9/11. It was a tran-shipment point for the nuclear smuggling network that ultimately got components to Iran and North Korea and Libya. So this should cause concern.

KAGAN: President Bush had an open meeting today where he talked about and addressed this question of foreign management of American ports, and this is what he had to say.

(BEGIN VIDEO CLIP)

GEORGE W. BUSH, PRESIDENT OF THE UNITED STATES: The management of some ports, which heretofore has been managed by a foreign company, will be managed by another company from a foreign land. And so people don't need to worry about security. This deal wouldn't go forward if we were concerned about the security for the United States of America.

(END VIDEO CLIP)

KAGAN: Supporters of this deal, Clark, point out that Customs will do the inspection. The Coast Guard is really in charge of the ports. So, really, what's the problem?

ERVIN: Well, it's really important to understand exactly what that means. That's right, the Customs Bureau is still going to do inspections, but the problem is that very few inspections are actually done. Only about 6 percent of cargo containers are physically inspected to determine whether they contain a weapon of mass destruction or some other threat item.

Furthermore, it's right that the Coast Guard is in charge of port security, but all that means is that the Coast Guard is responsible for setting standards and reviewing security plans. Whether those standards are met and whether those plans are implemented is ultimately left up to the port operator. And in this instance, the port operator would not only be a foreign company, but a foreign government, because this company is owned by a government. And not a government like Britain, but the government of the United Arab Emirates.

KAGAN: The controversy has also served the purpose of shining a light on how this whole deal-making system takes place, with this thing called the Committee on Foreign Investment under the Treasury Department giving Congress very little say in how this all kind of ends up. Do you think that needs to change?

ERVIN: It certainly needs to change. As was pointed out in John King's piece, the procedure as it is is very lax, and yet the procedure was not followed. Because this deal, if it goes forward, will result in a foreign power acquiring a key asset, an investigation was required to have been conducted and the president was to have been informed. That didn't happen in this instance.

But certainly going forward, wherever a key strategic asset in the age of terror would ultimately be controlled by a foreign company or a foreign government, it seems to me that the president needs to personally weigh in on this himself. He needs to make a decision, and then that decision needs to be reviewed by Congress. And Congress should have the opportunity to reverse it if it so chooses.

As I say in the op-ed today, if treaties and trade agreements are important enough to require a congressional sign-off, then surely, the control of the key strategic asset, likewise, should require congressional involvement and approval.

KAGAN: But do you think there will be a change in this deal or in how the system works?

ERVIN: Well, we're really in a political firestorm here. There's no question about it. And I think the politics are such that -- laying aside the substance, which I think argues for undoing this deal or not permitting it to go forward -- I think, frankly, the politics are such that it will be undone.

KAGAN: Clark Kent Ervin. Finally, did your wife have the baby yet?

ERVIN: Well, you're very kind to ask, indeed. We actually think that today is the day.

KAGAN: We do?

ERVIN: And so as soon as I'm done, I'm going to speed back home and probably speed there after to the hospital.

KAGAN: OK, well don't let us keep you. And wish your wife well for us. And please let us know who finally arrives.

ERVIN: Thank you so much, Daryn.

KAGAN: OK. Clark Kent Ervin, thank you for your time.

ERVIN: You bet.

KAGAN: Well, President Bush's Homeland Security Adviser Francis Townsend was instrumental in preparing the administration's report on Hurricane Katrina. She will talk more about it at a briefing scheduled to begin at the top of the hour. You can watch that live right here on CNN at 11:00 a.m. Eastern.

Ahead on LIVE TODAY, a wild ride in Texas -- not on a bull, in a car.

And rescued from deep inside a chimney, this man finally able to breathe some fresh air. Ooh, he's dirty, though. His taste of freedom didn't last long. We'll explain after a quick break.

(COMMERCIAL BREAK) (NEWSBREAK)

(MARKET REPORT)

KAGAN: Stay with us. We've got a story coming up. It's going to leave a lasting impression on you. If you're a fan of the movie "Rudy," you're going to love the story of Jason Mcelwein. We'll tell his story just ahead.

(COMMERCIAL BREAK)

KAGAN: Great story for you know about a kid they call J-Mac. He said, put me in coach. And when he went in, J-Mac set the crowd on fire. It was only for four minutes, but it was magical.

Mike Catalana with our affiliate WHAM in Rochester, New York has the story.

(BEGIN VIDEOTAPE)

MIKE CATALANA, WHAM REPORTER (voice-over): Jason Mcelwein was at practice today doing what he does every day; as a student assistant, he helps out the team. But all that changed on Wednesday night.

That's when coach Jim Johnson decided to give Jason his shot to suit up and play.

JASON MCELWAIN, GREECE ATHENA H.S. SR.: He says -- this is your senior present -- this is your last chance to ever get out on the floor as an actually basketball player for that night.

CATALANA: Jason or J-Mac, as he is known, is medically diagnosed as a highly functioning autistic. He's also loved by his teammates and fellow students. That's why they came to the game with his face on signs. And when he entered the game, they went crazy.

JIM JOHNSON, HEAD COACH: My emotions started running wild. I actually sat down, and I started to tear up, and I was like, oh, my God, this is happening.

CATALANA: Jason got in the game, took a pass and took a shot. He missed badly.

JOHNSON: His first possession he gets the ball. He shoots an airball. He misses like by six feet, and I put my hands on my head, and I'm like, please, Lord, just get him a basket.

CATALANA: One minute later, he got his hoop, a three-pointer that set the gym on fire.

MCELWAIN: I was very excited. The team was excited. Everybody else is excited.

CATALANA: But J-Mac wasn't done. He kept shooting and kept hitting, another three and another three.

MCELWAIN: I was on fire. I was hotter than a pistol.

CATALANA: When he was done, he had hit a team record-tying six three-pointers. The crowd stormed the court and put Jason on their shoulders.

RANDY HUTTO, ATHLETIC DIR.: It was one of those special moments that as an athletic director if I retire today, this would be the one thing that I talked about forever.

CATALANA: Jason's playing career is done, but his celebrity continues at school.

MCELWAIN: Everybody -- I was late to every single class. Everybody was saying congratulations.

(on camera): You got a superstar on your team now.

LEVAR GOFF, SR. CAPTAIN: yes, he's like a celebrity in school. He's loving every bit of it, too. You see him smiling all the time.

In Rochester, New York, this is Mike Catalana reporting.

(END VIDEOTAPE)

KAGAN: Well, that will warm your heart. Jason, congratulations to you.

(WEATHER REPORT)

KAGAN: The White House is looking at mistakes of Hurricane Katrina. They're releasing a report this morning, but will federal response be any better next time? Up next, the steps that FEMA's new man in charge says the agency is taking to improve its response rate.

(COMMERCIAL BERAK)

KAGAN: As we told you earlier, the president and his cabinet are doing some soul searching today over the government's response to Hurricane Katrina. But with the hurricane season set to begin June 1, how ready is FEMA for the next big one?

CNN's Tom Foreman has that story.

(BEGIN VIDEOTAPE)

TOM FOREMAN, CNN CORRESPONDENT (voice-over): By the time hurricanes hit American shores again, FEMA will be improved and ready to respond. That's the promise from Acting Director David Paulison.

DAVID PAULISON, FEMA ACTING DIRECTOR: FEMA has lost the confidence of a lot of people in this country, and we have to prove that we can do it.

FOREMAN: FEMA says it's working on dozens of reforms. During Katrina, police, firefighters and the Coast Guard had radios that did not work with each other, and cell phones were out, hindering rescues. FEMA says it has new equipment, similar to the gear on this military truck that will link radio systems and provide cell service, even when the phone towers are down.

PAULISON: We will have the ability to get realtime accurate information. We'll know when things go wrong. We'll know exactly when the dikes give away and whatever could happen.

FOREMAN (on camera): You'll know where it's going on, too.

PAULISON: And where it's going on, too.

FOREMAN (voice-over): FEMA is replacing millions of prepackaged military meals, water, rescue equipment, too. The agency is reviewing its supply chain to figure out why some trucks ended up stranded, lost or in the wrong place.

After Katrina, FEMA phone and computer help lines were clogged, so capacity is being doubled to let 200,000 disaster victims register for help each day.

PAULISON: I think that's the important thing, that we're not just sitting back and saying, oh, it's not going to happen again. Well, by golly, it darn well may happen again, and we better be ready.

FOREMAN: Local emergency managers say the federal government is cutting $13 million of their readiness funding, so they're not convinced FEMA is remade yet.

MIKE SELVES, INTL. ASSN. OF EMERGENCY MANAGERS: I'm not sure. I heard the proposals that have been made. I don't know that FEMA is any different, not in any substantive way that we've seen, than it was last August.

FOREMAN: And there is Michael Chertoff. The embattled secretary of homeland security was overseeing FEMA last hurricane season. He still is. Morrie Goodman is a former FEMA official.

(on camera): Do you think the people in FEMA will follow Michael Chertoff?

MORRIE GOODMAN, FORMER FEMA OFFICIAL: What do you mean by follow him? You mean follow his lead?

FOREMAN: Trust him as a leader.

GOODMAN: I think the people at FEMA are very bewildered about who's the captain of the ship and where's this ship headed.

FOREMAN (voice-over): Paulison disagrees, but understands the doubt.

(on camera): Why should the American public believe you when you say FEMA will be ready?

PAULISON: That's a difficult question. I don't know that I would expect them to believe me. The proof is going to be in the pudding.

FOREMAN (voice-over): Tom Foreman, CNN, Washington.

(END VIDEOTAPE)

KAGAN: And we're talking about the lessons learned as the White House unveils its Katrina report. President Bush's Homeland Security adviser speaks about the report in just a few minutes. We'll bring that to you live.

And later, the skyrocketing cost of health care. How can we prepare for a time when one out of every $5 we make goes towards staying healthy?

The second hour of CNN LIVE TODAY begins right now.

And we have two major live events set to get underway any minute now in Washington, D.C. We will take you there live. The White House Homeland Security adviser is holding a briefing on the administration's just-released Hurricane Katrina report, looking at government failures and lesson learned.

Plus, administration officials are facing some tough questions on that controversial ports deal with an Arab company. They're briefing a key Senate panel this hour.

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