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New Orleans Residents Trickle Back Into Dry Algiers; Anger Boils In St. Bernard Parish Because Flooding Danger Was Never Addressed; Mike Brown Will Get Tough Questioning On Capitol Hill On FEMA Response To Katrina

Aired September 27, 2005 - 07:00   ET

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

SOLEDAD O'BRIEN, CNN ANCHOR: I'm Soledad O'Brien in New Orleans. A difficult day of homecoming today. Residents being allowed to return to their houses for the first time since the city reopened after it was flooded. Many absolutely stunned to see just how little of their lives, in fact, remains. A lost anger certainly.
One man who needs to give answers is the former head of FEMA, Michael Brown. A big morning for him as he is called before Congress to testify on Katrina relief. We're watching that story. Miles?

MILES O'BRIEN, CNN ANCHOR: Thanks, Soledad. I'm Miles O'Brien. President Bush this morning heading into America's latest disaster zone. Energy is the main focus as he sees firsthand the impact of Hurricane Rita on oil refineries. He will see the destruction in western Louisiana, people hit hardest by Rita there, now picking up the pieces on this AMERICAN MORNING

M. O'BRIEN: Good morning, we're glad you're with us. A lot to talk about from Washington today as we continue to follow the aftermath of Hurricane Rita and Katrina. Before we do, let's go to New Orleans where Soledad is this morning.

Good morning, Soledad.

S. O'BRIEN: Good morning to you, Miles. I'm on Magazine Street this morning in uptown New Orleans. As you can probably get a sense of, not too much damage here. Not a lot of water damage. This is a six-mile stretch of shops and furniture shops and jewelry shops, clothing shops, antique shops. You can see they're still boarded up. Clearly, the street has a long way to go before it fully comes back. There is no electricity on a lot of the streets.

However, this is an important street for making New Orleans the port it became back in the late 1700s and many people predict, in fact the recovery and return of Magazine Street is going to be very important for the economic recovery of New Orleans this time around. We'll give a tour of Magazine Street and talk a lot more about business here in New Orleans just ahead. Miles?

M. O'BRIEN: All right. Looks like a long way from business as usual there. Check back with you in a little bit.

Let's start with the damage assessment from Hurricane Rita. The death toll from the storm now stands at, 10, nine in Texas, one in Mississippi. You'll remember, 23 who died in that bus fire near Dallas during the evacuation.

General Russel Honore, who surveyed the damage, describes the small towns of Cameron and Creole as destroyed. He says the only thing still standing is the courthouse which was built on higher ground.

The Department of Energy reporting nearly 1.3 million customers with out electricity in four states because of damage caused by both hurricanes. Early estimates indicate Rita and Katrina will cut capacity for U.S. oil refineries by 1.7 million barrels a day. One analyst saying, we didn't dodge a bullet, we took a couple in the legs.

Former FEMA chief, Michael Brown, is expected to tell Congress today that he made mistakes during Hurricane Katrina, but he is sure to face some tough questions about his continuing role as a FEMA advisor. Ed Henry is in Washington. He joins us with more on that.

Ed, what is Mr. Brown likely to talk about today? What mistakes will they focus on?

ED HENRY, CNN CONGRESSIONAL CORRESPONDENT: Well, in a preview of that public testimony that is coming today, Mr. Brown yesterday met behind closed doors with congressional investigators.

He told them he wishes federal officials had pushed more forcefully and earlier to get federal troops brought in to restore order in New Orleans quicker after Hurricane Katrina. That is in contrast to the fact that allies of the Bush administration have suggested the blame really lies with state and local in Louisiana, for not doing that sooner.

The significance here, of course, is this is going to -- when Brown testifies it will reignite the whole debate about the game, and the White House had been feeling pretty good the past couple of days about the fact that the image coming out of this weekend, with President Bush is a hands on commander in chief, all over Hurricane Rita. Now Brown's testimony will put the microscope, once again, on the federal government's response to Katrina not Rita.

The fact in the early days of the storm, the president said Brownie was doing a heck of a job. You can obviously expect Democrats to take shots at that. But also Brown will probably put some of the blame on local and state officials and that is going to prompt Democrats to say this is going to be a whitewash of an investigation.

They still want an independent commission, not a congressional committee, but an independent commission investigating this, Miles.

M. O'BRIEN: We know that Mike Brown is still on the FEMA payroll. Why?

HENRY: Last week, CNN first reported that he was on the payroll despite the fact he had resigned under fire, and it's going to be about another month. Administration officials explain that Brown was hired as a contractor to transition out of this position. But CNN learned last night that, in fact, Brown also yesterday told Congressional investigators what he's doing for that money. He's helping FEMA assess what went wrong in the immediate aftermath of Katrina.

As you can imagine, this is raising eyebrows on the Hill. They are basically saying why in the world is the person who is under fire for his own performance now getting taxpayer money to assess what went wrong? And why in the world is the person whose qualifications as a former head of an Arabian Horse Association now getting federal money to figure out what went wrong? That is causing a lot of cackles on the Hill.

You can bet there will be some fireworks at this congressional hearing today at this hearing to find out why Michael Brown is the person helping trying to assess what went wrong, Miles.

M. O'BRIEN: I should say so. All good questions. We look forward to seeing them being posed and answered. Thank you, Ed Henry.

Government inspectors are also investigating how officials awarded cleanup contracts, in the days after Katrina, with tons of waste to haul in Mississippi and Louisiana. The U.S. Army Corps of Engineers quickly granted a $500,000 contracts to large firms. Now Homeland Security's inspector general says the firms must be scrutinized for price gouging and actual debris removal. FEMA says it has auditors watching for signs of abuse.

Now to Soledad, on Magazine Street -- Soledad.

S. O'BRIEN: All right, Miles. Thanks.

In just about an hour, President Bush will head back to the hurricane ravaged Gulf Coast region to assess some of the damage from Hurricane Rita. Dana Bash is at the White House for us this morning.

Good morning to you, Dana.

DANA BUSH, CNN WHITE HOUSE CORRESPONDENT: Good morning.

The president is going to head to Beaumont, Texas, then to Lake Charles, Louisiana. He'll also take an aerial tour in between.

Now, these towns along the Texas/Louisiana, where Rita made landfall, are home to oil refineries that produce, just in that area, about 10 percent of the country's gasoline. Many are still shut down.

Ahead of his tour today, Mr. Bush made clear he's already concerned that sky-high gas prices will go up and -- the president, who historically has been much more focused on production than conservation, took quite an unusual step. He asked Americans to drive less.

(BEGIN VIDEO CLIP)

GEORGE W. BUSH, PRESIDENT OF THE UNITED STATES: We can all pitch in by using -- by being better conservers of energy. I mean, people just need to recognize that these storms have caused disruption, and that if they're able to, you know, maybe not drive when they -- on a trip that's not essential, that would be helpful.

(END VIDEO CLIP)

BASH: The president also said that he wants federal employees to lead by example. He actually sent out a memo, this memo last night, to federal agencies saying that they should take what -- the steps they can to conserve, including carpooling, using public transportation, and even curbing nonessential travel -- Soledad.

Dana Bash at the White House for us this morning. Dana, thanks a lot.

As we've mentioned, after Rita struck, when everybody had to evacuate from New Orleans, now some people are allowed to come back in. In fact, the neighborhood of Algiers invited back in to assess some of the damage. And business owners, as well taking a look at just how bad things are. Adaora Udoji is not very far from where I am this morning, in Downtown New Orleans, to talk about people returning there.

Hey, Adaora, good morning.

ADAORA UDOJI, CNN CORRESPONDENT: Good morning, Soledad.

Yes, the people are coming back. Many of them for the first time, Soledad. And many of them having to get through two or three checkpoints to get to their homes or businesses. As you said, it is -- Algiers is one of those places where people are coming in.

It's an area that didn't suffer that much flooding. Not flooding damage. It's just south of us. Those folks are going back in and finding that they do have water and they do have electricity.

Now, it's far, far worse in St. Bernard Parish where there was severe flooding and terrible destruction. There is no water, there is no electricity. Mayor Ray Nagin warning people who are going in that they need to be self-sufficient.

There are still floodwaters in the lower Ninth Ward. That was the result of some levee failures as Hurricane Rita was making its way to the Gulf Coast. Army Corps of Engineers say it will take several days, probably by the end of the week to get several feet of water out of that area.

Also, today, the mayor is continuing to allow business owners back into the French Quarter, also the central business district so that they can assess damage to their businesses. As you know, Soledad, knowing there has been devastation and actually seeing it is very different thing. Today, a very tough day for those folks who are coming in. Soledad?

S. O'BRIEN: You know, it's so true, Adaora. So many people have said I've been watching it on TV, everyone told me how devastating it was. Still, I was utterly unprepared for it. Adaora Udoji, not very far from where I am, this morning in Downtown New Orleans. Thanks, Adaora. Let's get back to Miles in New York. Miles?

M. O'BRIEN: Thanks, Soledad.

A couple of important stories out of Iraq we need to tell you about this morning. A deadly suicide attack in Baqubah. The death of a man believed to be Al Qaeda's number two operative as well. Aneesh Raman, live in Baghdad.

Aneesh, tell us about the latest attack first.

ANEESH RAMAN, CNN CORRESPONDENT: Miles, Iraqi police yet again the target this morning. A suicide bomber wearing an explosives vest detonating outside and Iraqi police recruitment center, in the town of Baqubah. It's about 35 miles north of the Iraqi capital.

The explosion took place amid a large number of recruits. We know at least nine people were killed, over 20 others wounded. The police, of course, perennial victims of insurgent attacks, Miles, but yesterday a disturbing new possibility. Six teachers shot to death in the town of Iskandariyah, south of Baghdad.

It happened after insurgents disguised as Iraqi police went into an elementary school as the kids were leaving. They took the teachers aside and opened fire. It's really rare, if ever, that we've seen teachers targeted in this fashion.

It's, of course, raising concerns not just about security of Iraq schools but also about the possibility this might not be an isolated incident, and whether we will see more types of these types of crimes in the weeks to come.

M. O'BRIEN: Aneesh, tell us about this Al Qaeda operative, high-ranking, apparently, killed in Iraq. What do we know about this?

RAMAN: The U.S. military is saying it is, quote, "A very important development." Abu Azzam was the second most-wanted man in Al Qaeda in Iraq, second to the group's leader, Abu Musab al Zarqawi.

He was killed on Sunday in the capital during a joint operation by both the U.S. and Iraqi military. The military says Azzam was behind a number of car bombs throughout Iraq, also and responsible for financing and organizing money for the Al Qaeda in Iraq organization.

But, Miles, it's always unclear whether the capture of anyone outside of the Zarqawi himself, will really impede this organization.

M. O'BRIEN: Well, you have to ask the question, if they get Zarqawi, will that stop it either?

RAMAN: Exactly. That is the perennial issue that forces here are dealing with. An incredibly adaptive enemy that is able to real allocate resources. You'll recall, we just had that offensive in Tel Afar, where they were able to recapture an area that was previously under resurgent control. That was immediately followed by a string of suicide bombings in the Iraqi capital that killed well over a hundred people. This enemy is incredibly adaptive and that is something that they are always having to deal with, Miles.

M. O'BRIEN: Aneesh Raman in Baghdad, thanks.

(WEATHER FORECAST)

M. O'BRIEN: Still to come, we'll take you to St. Bernard parish. Residents there getting their first look at the hurricane damage and their anger is starting to boil over.

Plus, more on today's hearings into FEMA's failures after Katrina. We'll ask one Congressman what he would like to hear from today's key witness, the former FEMA director, Mike Brown. That's ahead on AMERICAN MORNING.

(COMMERCIAL BREAK)

S. O'BRIEN: As you know, residents of New Orleans have been making their way back into the city. No surprise that many of them are utterly devastated by what they're seeing. Also no surprise that many of them are very, very angry. I had a chance to tour St. Bernard Parish with the Sheriff Jack Stephens.

(BEGIN VIDEOTAPE)

S. O'BRIEN (voice over): On the day people could officially come back, they did. Sheriff Jack Stephens hugged them.

SHERIFF JACK STEPHENS, ST. BERNARD PARISH: Take care.

UNIDENTIFIED MALE: Thank you, man.

S. O'BRIEN: And consoled them.

STEPHENS: I know this hasn't been a good day, but it's good to have y'all home.

UNIDENTIFIED FEMALE: I know.

S. O'BRIEN: And welcomed them back.

STEPHENS: Welcome back.

(LAUGHTER)

UNIDENTIFIED MALE: Good to be back.

S. O'BRIEN: On Patricia Street, the water has receded a lot, but still there are several feet to drive through in some spots. The wind and the water stripped homes to the beams, obliterating not just neighborhoods, but virtually every single home in the parish. If they weren't digging out, they were pulling out of town. And many were furious.

UNIDENTIFIED MALE: We've been begging for money for a long time from the federal government. We've been telling it was going to happen and it's [bleep] OK? [bleep] about their response, OK? The response was pathetic, OK?

STEPHENS: Right.

UNIDENTIFIED MALE: But they allowed this to happen.

S. O'BRIEN: The sheriff says there's plenty of blame to go around.

STEPHENS: It starts at the top at the federal government, but I think it extends to state government, and I think it extends to levels of local government, too.

S. O'BRIEN: There's no place to live, no power, no water, no sewer system, no businesses and no prospects for anything happening any time soon. And questions remain, lingering, like the gooey mud that practically inundates every home. As far as residents here are concerned, there have been no real answers to the questions why the parish flooded.

STEPHENS: Early on, somebody asking, do you think it was racial discrimination? This community is like 93 percent white. I think it's economic discrimination.

O'BRIEN: Frustration among people who have lost everything is rising to a boil.

UNIDENTIFIED FEMALE: So we don't have flood insurance. Like idiots!

O'BRIEN: The aid people hoped they would be getting weeks ago from FEMA seems slow to come.

PHIL CAMPO, ST. BERNARD PARISH RESIDENT: What do I want them to do? I want them to bring their behinds down here take a look at the inside of these houses. Getting on a camera will not do a damn bit of good. They need to bring their behinds down here and get inside the buildings and take a look at what has happened to these people. This is terrible!

And it's not going to end up really well because FEMA will wash their hands like the insurance companies are doing.

O'BRIEN: Sheriff Stephens, who is planning retirement in a few years and doesn't want a political future, says his biggest fear is that his parish, overlooked in Katrina the first time, will be ignored in the aftermath.

STEPHENS: And they need to do a better job than they did for this community and for New Orleans. You know what? They need to do a better job of putting us back on our feet, because we're worth it. We can't abandon Fallujah, Alkut, or Baghdad, we shouldn't abandon St. Bernard or the lower Ninth Ward, either.

(END VIDEOTAPE)

O'BRIEN: It's a real fear. The sheriff believes that in fact, once the media moves off the story, when they do, that, in fact, what will happen is the focus of the nation will be off his parish. And that will mean that the money will -- that may be ear-marked for St. Bernard Parish and the lower Ninth Ward may not come to them eventually. He is very concerned because he has to essentially rebuild his entire parish from the bottom up -- Miles.

M. O'BRIEN: I can't speak for all the media. I hope we don't move on in that way, Soledad. Thanks very much. Back with you in a bit.

Former FEMA Chief Michael Brown will testify before Congress today about the federal government's slow response to Hurricane Katrina. He's expected to be asked why he is still on FEMA's payroll, as well. Congressman Christopher Shays sits on the panel that will hear Brown's testimony. He joins us now from Washington.

Congressman, good to have you with us.

Why is Mike Brown being paid by the federal government?

CHRISTOPHER SHAYS, (R-CT): You know, I learned about this yesterday. I probably should of known sooner. But that will be an obvious question. He shouldn't be working for FEMA. He shouldn't be on their payroll. He shouldn't be a consultant. He should answer any and all questions that we ask of him.

M. O'BRIEN: Yeah. It's interesting to me if -- well, so many conflicts of interest here. He's the focus of the investigation, and then he's testifying in the midst of it. What are you trying to get out of him?

SHAYS: Well, I want to know, for one thing, why he seems so clueless about the conditions in New Orleans, particularly the Superdome. There was a huge disconnect. I mean, that, for me, was as soon as I saw him respond and seem to clueless, I thought this man needs to go.

But, obviously, there are a lot of other questions. I want to know the contacts he had with the local government, the state government. The local and state governments were warned on Saturday that this was going to be a catastrophic hurricane. So I want to know, with dialogue, why there was a FEMA person in the Superdome -- excuse me, you know, in the Superdome well before the storm, and what we learned from the FEMA folks who were there.

M. O'BRIEN: Let's talk about, you know, how this extends beyond FEMA. Let's face it. It's a federal agency with about 2000 employees. You can talk about local, state officials. You can talk about the president here. There's a lot of blame to go around here. In some sense, is Brown being scapegoated here?

SHAYS: Absolutely. He is being scapegoated because it's at all three levels. Also, having been there, this was a catastrophic storm. This was almost a biblical in proportions. I literally saw hundreds of thousands of homes that are just now sticks. You can't blame Mr. Brown or anyone else for that. What's interesting, though, why did Mississippi respond so much better than New Orleans and Louisiana? And I'd love to know the answer to that.

M. O'BRIEN: Well, a lot of factors there. That is probably a whole another discussion. I do want to bring this out to you, though. Nancy Pelosi is the Democratic leader, on the other side of the aisle here, says this: Michael Brown's appearance before the sham committee proves that Republicans are adept at staging photo opportunities, not meaningful and rigorous oversight of the Bush administration. What do you say to that one?

SHAYS: Well, you know, I've lost so much respect for Nancy Pelosi. This is a committee with 11 Republicans and nine Democrats. It's a much fairer committee than any other select committee that has been formed, certainly different than the Contra aid funding, where the Democrats had like three to one. This is nearly Republicans and Democrats even. They are missing in action. They should be there to ask questions. No, no --

M. O'BRIEN: You've got a FEMA--

(CROSS TALK)

SHAYS: No, there's not reason. You have no buts to that.

No, let me just make this point to you.

M. O'BRIEN: OK.

SHAYS: She can argue that we should have a commission and that is a valid argument to make.

M. O'BRIEN: Would you agree with that? Do you believe there should be a commission?

SHAYS: No, I don't. But that's the debate. She can't argue for being missing right now. She has four members that are coming, we think, because she's refused to appoint anyone. It is really an outrage that she would do this.

M. O'BRIEN: But isn't this something that is so important to the nation that perhaps an independent commission should look into this?

SHAYS: You know, maybe that should happen. Maybe it should. I don't think so. Because I don't think this is 9/11. The difference between 9/11 and the commission that I actively supported is, there you had 15 agencies that were top secret, that we had to have private hearings on.

Here, everything is going to be open. All the people come before us, there's not going to be a lot of secret hearings, so you'll be able to judge how well this committee does.

We're not trying to understand why we were attacked from overseas and who should of known, where were the breakdowns. This is pretty basic stuff. We had a huge storm there was a failure on the federal, state, local level. What went wrong is an open hearing. You'll be able to see how well we do.

M. O'BRIEN: All right. We will be judging it all. Congressman Christopher Shays, thanks for your time.

SHAYS: Thank you.

M. O'BRIEN: Still to come on the program, the president's plan to on offset an oil shortage after two hurricanes. Andy is "Minding Your Business" next on AMERICAN MORNING.

(COMMERCIAL BREAK)

M. O'BRIEN: The president, who has been rather itinerant these days, in the wake of these hurricanes, is back down in the region. He will go into southeastern Texas, southwestern Louisiana and that is oil country. Andy Serwer is here to talk about further issues relating to the implications to energy prices.

ANDY SERWER, CNN ANCHOR, AMERICAN MORNING: That's right. I'm going to talk about that, Miles.

The president obviously has energy on his mind. Yesterday, he talked about releasing petroleum from the strategic petroleum reserve, which would help alleviate potential shortages. You may remember after Katrina, the SPR let go 30 million barrels.

Just to put this into context. The United States uses about 20 million barrels of oil a day. Right now, 4 million barrels a day of production on offline because of the two storms. However, about 2 million barrels is expected to come back online very soon.

Yesterday, the CEO of Exxon, Lee Raymond, however, expressed concern about natural gas. I think this is a story we're going to be talking about over the coming months which is the potential shortages, and especially higher prices of natural gas, and how that will impact heating bills this winter. I think that is a big thing.

M. O'BRIEN: But you've been telling us over and over actually natural gas prices will go even higher.

SERWER: That's what people are really anticipating. It could be hundreds of dollars more for heating bills across the country this winter. That's a big chunk of money at one time as opposed to a slow trickle of gas prices.

M. O'BRIEN: All right, the story has got legs, as they say. Andy Serwer, see you in a bit. Thank you.

Still to come, on AMERICAN MORNING, a closer look at the worst damage done by Rita. More than 70 percent of the homes in this one town were destroyed by the storm. That's ahead on AMERICAN MORNING.

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