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CNN Saturday Morning News

Cleaning Up New Orleans; Reuniting Families In the Aftermath of Katrina; Mississippi Attorney General Files Suits Against Insurance Companies

Aired September 17, 2005 - 08:00   ET

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

HARRIS: It is cleanup Saturday in the French Quarter, but even the drier parts of New Orleans will not start to reopen until next week. The mayor says the situation will be assessed day to day.
Tropical storm Ophelia pulled away from pounding North Carolina's Outer Banks. The storm has picked up some speed and turned its eye on the East Coast, as far north as Canada.

Vice President Dick Cheney undergoes surgery next week to remove an aneurysm behind his right knee. He will hospitalized a short while. The 64-year-old Cheney has a long history of health problems, including four heart attacks.

NGUYEN: Well, recognizable names will soon be returning to New Orleans, names like Broussard and O'Brien. That's because French Quarter business owners are coming back, at least for a little while.

CNN's Mary Snow is in New Orleans with those details. And Mary, I imagine those business owners are ready to get back into business.

MARY SNOW, CNN CORRESPONDENT: Absolutely, Betty. Good morning to you.

And this is really the first step in terms of bringing these businesses back.

We are in the Garden District, and if you can see behind me, with the sun coming up, shedding light on some of the damage, really, it's very random. Some of the businesses on this street untouched, others badly damaged.

And this is what business owners are going to be coming back to see. This is one of three designated areas in the city of New Orleans.

Another designated area is the French Quarter, as you mentioned, so crucial to the city's tourism and really famous for its night life. Also, the central business district. Throughout the day, business owners will be able to come to those areas. They are being encouraged not to stay here, and it is anything but business as usual.

The water is not to be drinked (ph). They are being told not to bathe in this. Electricity is spotty. It is going on throughout the city, but it's still not fully restored. And also, when business owners come to areas like this, they have to go through military checkpoints. They have to prove that they own a business in order to get to the areas. And there is a dawn-to-dusk curfew.

Now, on Monday, residents are going to be start to be allowed to come in to this neighborhood of Algiers, and what city officials have said is, the infrastructure really is back on track. This includes trash pickup and 911 system, water and electricity. Over the next week and a half or so, there will be about 180,000 residents who will be allowed back into their homes, the mayor saying that the city will be assessing each day which other areas will start to be reopened, Betty.

NGUYEN: Mary, this is the first wave of locals who are being allowed back into areas where they own homes or businesses. For those business owners, you mentioned there's no power, there's no water. How long is it going to take for them to be back up and running?

SNOW: That is a very good question, but, you know, initially, the projection was that New Orleans would have been a ghost town for months. So it was kind of surprising to hear that businesses and residents are going to be allowed back in.

Some of these businesses, I have to tell you, Betty, in this area, at least, seem to be untouched. There are others that's it's going to take a very long time in order to repair. But electricity is expected to be restored in most of these areas within the next week and a half, and water, according to the mayor, should be within the next few weeks. There is -- the city, at least, is aiming to have them be able to use that water in the next couple of weeks.

NGUYEN: So once those are on, it seems like things will be running pretty smoothly, at least hopefully, and they can get in, since those areas weren't damaged too badly. Mary Snow, thank you.

SNOW: Sure.

HARRIS: And now, for more news out of the disaster zone in our mission-critical update, President Bush says he won't raise taxes to pay for rebuilding the Gulf coast. Experts estimate the cost at around $200 billion. But the president did admit that other programs will have to be cut to help pay for relief programs.

The death toll in the wake of Hurricane Katrina stands at 812 in five states. Nearly 600 of those deaths come from Louisiana.

The draining of New Orleans improves every day. The Army Corps of Engineers says the city is just 40 percent inundated with water, that's down from 80 percent.

HARRIS: Even with considerable warning about Hurricane Katrina, things went horribly wrong. But the disaster is now a wake-up call for emergency planners all across the country.

CNN's Tom Foreman now on the who, when, and why the warning was ignored.

(BEGIN VIDEOTAPE)

TOM FOREMAN, CNN CORRESPONDENT (voice-over): Homeland Security chief Michael Chertoff is being haunted by the past, by yet another accusation that he and the bosses at FEMA, an agency he oversees, ignored warnings of how bad Katrina would be.

LEO BOSNER, FEMA: We told these fellows there was a killer hurricane headed toward New Orleans.

FOREMAN: Leo Bosner is a long-time FEMA employee and an official of the employees' union. He helps write the daily National Situation Update to inform government leaders in all departments of potential problems.

Very early on, the Saturday morning before the Monday Katrina hit, that report told Chertoff and his FEMA leaders, in bold type, about the state of emergency on the coast. It said, "New Orleans is of particular concern because much of that city lies below sea level. If the hurricane winds blow from a certain direction, there are dire predictions of what may happen in the city."

Comparisons were noted with the 1969's great killer storm Camille. But Bosner says the warning bell did not produce a strong reaction.

BOSNER: And I remember, couple of fellows were saying, Why aren't we doing more? What's going on? We felt devastated, we felt let down. We had done our job, but the bosses didn't do theirs.

FOREMAN: Homeland Security has admitted that even with the monster storm closing in, Secretary Chertoff was working from his home, not his office, that Saturday. But, they say, he was in close contact with FEMA headquarters, and with top man Mike Brown, now resigned, but at the time, talking with the president.

GEORGE W. BUSH, PRESIDENT OF THE UNITED STATES (on phone): I'm confident, Mike, that you and your team will do all you can to help the good folks in these affected states.

FOREMAN (on camera): The employees' union, which has helped raise these latest accusations, has been unhappy for quite some time with the Bush administration's treatment of FEMA, so politics could be at play.

(voice-over): But Secretary Chertoff is staying away from counteraccusations. He knows he'll have to answer all these charges before Congress anyway, so his office is saying the focus now needs to be on the people who still need aid.

Tom Foreman, CNN, Washington.

(END VIDEOTAPE)

HARRIS: Hundreds of children are separated from their loved ones in Katrina's wake. Many may be shuffling through shelters when their families are in different cities. The Center for Missing and Exploited Children is trying to reunite families.

CNN's Kimberly Osias is there with an update on the mission. Kimberly, good morning.

KIMBERLY OSIAS, CNN CORRESPONDENT: Good morning to you, Tony.

You're a father, right?

HARRIS: Yes, yes.

OSIAS: YES. Well, you certainly know that awful. that sick feeling in your stomach when you lose a child at a toy store, at a grocery store.

HARRIS: Yes.

OSIAS: Awful, awful.

HARRIS: Yes, absolutely.

OSIAS: Well, there are a number of fathers and mothers here as well, former law enforcement officers, that are very familiar, all too familiar, with that feeling and are really donating their time and their talents to make a difference, to really put the pieces of the puzzle together to help reunite those families still displaced, still scattered, children missing from their parents and parents missing from their children.

There are more than 2,000 that are still missing from the hurricane. About 760 cases have been resolved, which is certainly good news.

In fact, as we reported last evening, there's one case that was resolved just while we were on the air. Somebody actually saw -- I want to show you, introduce you to Ace Martinez, certainly a really happy story. That's good news to report, and when you're here, and you watch that happen, and at that moment, that sort of Eureka! feeling, it is great to be a part of that.

He was seen on CNN yesterday, and the call came in, and little Ace Martinez was located in Covington, Louisiana, with caretakers, and is said to be in good health. Happy story.

Now, still missing, take a look at this face, Karen Schmidt, see if it makes any kind of connections for anybody out there. She goes by the came Renee. That's what she answers to. Brown hair, brown eyes, about 35 pounds, missing from Chalmette, Louisiana. She was also possibly with her sister, with parents. I mean, very little information is known, oftentimes, about the particulars, which certainly makes this job even more difficult for these caseworkers.

This is little Rosebud Knight, blonde hair, 25 pounds, hazel eyes. She goes by the name of Rosie. Darling. And you can tell, some of these pictures are more clear than others, and some are blurry. Some, there are no pictures at all, because, of course, a lot of folks left in such a rush, they didn't have but their clothing on their back, didn't have a lot of photographs. Certainly, again, another one of those complicating and difficult factors to contend with, Tony.

HARRIS: Boy, you made me think there, Kimberly, about that panic that sets in when your kid is missing.

OSIAS: Yes.

HARRIS: And that the panic, I can't imagine living with that for two weeks.

OSIAS: I know.

HARRIS: Coming up on three.

I, you know, I'm curious, can you describe for us how this network is working? Are we talking about phone connections? Are we talking about Internet connections? How is this working to bring these kids together with their families from so many different shelters, from so many different states now?

OSIAS: Well, there is a national database. There are folks on the ground that are also working in concert. But as you well know, I mean, cell service is very difficult...

HARRIS: That's right.

OSIAS: ... in these areas, still not up. So that certainly makes things very difficult. And also, oftentimes there are families in one shelter, and they get separated when they move from shelter to shelter.

HARRIS: Wow.

OSIAS: So it's -- you know, it's a very fluid situation, difficult to kind of get a -- get their arms around.

HARRIS: That's right. Kimberly Osias for us. Kimberly, thank you.

NGUYEN: Shifting onto another story dealing with Katrina, battered by that storm and now facing flood, a flood of litigation, homeowners and their insurance agents prepare to fight it out over their coverage.

HARRIS: Also, a small Mississippi town in big distress, and looking for help from FEMA.

JACQUI JERAS, CNN METEOROLOGIST: And tropical storm Ophelia making its closest approach now to the Massachusetts coastline. What kind of an impact will that have on the Boston area? Let's take a live look there right now, cloudy skies and 63 degrees. Your forecast for Boston and the rest of the nation coming up.

(COMMERCIAL BREAK)

HARRIS: In today's legal briefs, storm suits from New Orleans to Mobile, Alabama. Homeowners are facing the daunting task of rebuilding, and insurance squabbles are making the task even harder.

For example, Mississippi's attorney general has filed suit against five major insurance companies on behalf of victims. And Louisiana is also pursuing legal action.

Joining us now to talk about the legal challenges of such lawsuits are former district attorney Tom McCain, live in Boston. Tom, good morning to you.

TOM MCCAIN, FORMER DISTRICT ATTORNEY: Good morning. How are you?

HARRIS: Good. And civil liberties attorney Lida Rodriguez- Tassef in Washington. Lida, welcome back.

LIDA RODRIGUEZ-TASSEF, CIVIL LIBERTIES ATTORNEY: Good morning, Tony. How are you?

HARRIS: Oh, well, well.

All right, are we -- Lida, let me start with you. Are we at a point now where we have insurance companies sort of splitting hairs over whether your home was destroyed because of wind damage, or because of flooding from storm surge?

RODRIGUEZ-TASSEF: Well, we certainly are. And this is even worse hairsplitting than that, Tony. You got them talking about penetration versus rising water.

HARRIS: What?

RODRIGUEZ-TASSEF: Did a window -- yes, really. Did a window break that caused the water to come in, and is that what caused the water damage? And if so, it's covered. And if not, then it's not covered.

It's really troubling, because what you have here is people who paid for hurricane insurance.

HARRIS: Right.

RODRIGUEZ-TASSEF: And insurers are saying, You might have paid for hurricane insurance, but this wasn't a hurricane. This was a flood that caused the damage. It's a real problem.

HARRIS: So Tom, (INAUDIBLE) are, you know, are we at this place where we have adjusters trying to determine whether the damage was caused by, what, penetration from the storm surge, or the winds from a category 4 hurricane? This seems a little silly. What am I missing here?

MCCAIN: Oh, I think it's a matter of how quickly hey want to resolve these matters.

HARRIS: Yes.

MCCAIN: If they want to help the people and get money to them and get the repairs done, the federal government's going to have to step in and make some judgment calls on these. And we can't spend all the time in litigation. That's not going to help anybody's effort. So I think it's going to require some leadership and some efforts by the court to just move the cases ahead and to help these people out.

RODRIGUEZ-TASSEF: But ...

MCCAIN: That's the goal of what we should be trying to do.

HARRIS: Yes, Lida?

RODRIGUEZ-TASSEF: But come on, Tom. I mean, think about this. People paid for insurance to cover them from hurricanes. They acted responsibly. Now, you have insurance companies who are claiming that the damage caused by flood. Well, look, this is...

MCCAIN: I'm not saying that the insurance companies shouldn't be paying it. What I'm saying is, if you start litigating each and every issue, you're just going to clog up the court system, you're going to clog up getting the work done. If you move in...

HARRIS: Well, Tom, how do you resolve this?

MCCAIN: ... and have an overall judgment, the federal government's going to have to play a role in this.

HARRIS: OK, so...

RODRIGUEZ-TASSEF: But that's not what's going to happen, Tom. You know, these insurance companies are going to say, We entered into contracts with these people They signed these contracts. They knew what they were buying. If they wanted flood insurance, they would have gotten flood insurance from the federal government.

MCCAIN: yes, but the insurance companies have the ability to raise the premiums next time around. If they're going to be in business, they're have reinsurance and all the rest. If they start nickel-and-diming, you know, it's going to go out of business just from the business sense.

HARRIS: Well, Lida, let me ask you this...

MCCAIN: But I think you're overdoing the degree to which the insurance companies are going to start stonewalling on this.

HARRIS: OK, Tom, but hang on just a second. Lida, let me ask you, if the courts can break this contract, can't they break any contract?

RODRIGUEZ-TASSEF: It's not about breaking the contract. It's about contract interpretation, Tony. Basically, the court can interpret the contract to mean that hurricane insurance covers you for storm surge...

HARRIS: Right.

RODRIGUEZ-TASSEF: ... because the -- it was the winds of the hurricane that caused the water to rise, and the water rose, not because of all this rain or because of some flood, but because of a storm surge caused by the wind. The court can do that.

Now, in the past, they haven't done that.

HARRIS: Right.

RODRIGUEZ-TASSEF: But this is a whole new ball game. In Mississippi, they may very well do that, especially because some of the insurance companies have already paid on similar language.

HARRIS: Got you. OK, let me move on here, because I want to give just a little bit of time to this next topic, but not a whole bunch. Thirty-four elderly people, as you know, died in the St. Rita's Nursing Home. The owners are now charged with 34 counts of negligent homicide. This was just outside of New Orleans.

And Lida, if you would, give us a quick definition of what that term means, negligent homicide?

RODRIGUEZ-TASSEF: Negligent homicide needs to be criminal. It means to be an absolute reckless disregard for human life, such that you knew or you should have known that your actions would have caused death. Mere negligence in the civil context, when you have a civil lawsuit, is not enough. You have to have criminal negligence.

MCCAIN: In this case, it's clear that there was -- the hurricane was predicted. The path of the hurricane, the intensity of the hurricane was well predicted and was accurate.

HARRIS: Yes.

MCCAIN: You had an evacuation plan for these nursing home. The operators of the nursing home failed to exercise the evacuation plan. As a result of that, 34 people died, not as a result of natural causes, but as a result of drowning. This is a clear case where the failure to act was reckless. They had a duty, and they failed on that duty, and that's negligent homicide.

HARRIS: And Lida, this defense from the owners, they claimed that they never received a mandatory evacuation owner from the parish. Many of the patients refused to leave, and that many were so frail that they wouldn't have survived in the evacuation. It's a defense, but how much of a defense is it, really?

RODRIGUEZ-TASSEF: It's actually a very good defense. During Hurricane Ivan, two people died, two elderly people died in the evacuation. These people were elderly. If the nursing-home owners can prove that they were frail, that they would have run a very big risk of moving them, had they moved them without an evacuation order, that... HARRIS: (INAUDIBLE).

MCCAIN: Four of five, though, nursing homes in the same region all evacuated without issue, and there were no deaths. In this situation, it was a failure to act which caused the death. There was an evacuation plan. There were ambulances available. There were buses available.

HARRIS: And Tom...

MCCAIN: And these operators, whether it was for financial reasons or not, failed to act, and I think that that is going to be sufficient...

HARRIS: And Lida...

MCCAIN: ... for negligent homicide.

HARRIS: ... you get the last word on this.

RODRIGUEZ-TASSEF: Oh, thank you. Tom spoke it like a true prosecutor. We got to wait till all the facts are in. Just because there were deaths here doesn't mean these people are guilty. We have to wait and see what the evidence shows.

HARRIS: Tom McCain, Lida Rodriguez-Tassef, good to see you both.

RODRIGUEZ-TASSEF: Thanks, Tony.

HARRIS: OK.

MCCAIN: Thank you very much.

NGUYEN: Take a look now at the left side of your screen. Nearly three weeks after Hurricane Katrina devastated the Gulf Coast, there are still hundreds of children waiting to be reunited with their families. For the next two days, you will see the pictures of those children.

CNN is working with the National Center for Missing and Exploited Children to help bring Gulf Coast families back together. And some of the photos, you won't see a picture, only a silhouette. That's because the parents simply didn't have time to grab pictures in the rush of getting to safety.

But if you recognize any of the pictures, or just the names of people put up on that screen, these children looking for their parents, please call the phone number that you see right there on the screen. It's 1-800-843-5678. That's 1-800-THE-LOST.

CNN SATURDAY MORNING will be right back.

(COMMERCIAL BREAK)

NGUYEN: We've been talking a lot about Katrina, but, of course, Ophelia... HARRIS: Yes, yes.

NGUYEN: ... still hanging around, Tony.

HARRIS: Jacqui Jeras has an update for us. Hi, Jacqui.

JERAS: Hey, guys.

Well, Ophelia's about as close as it's going to get to the New England coastline. It's about 95 miles away now from Nantucket. Still packing a punch, though, winds at 60 miles per hour. Basic effect that you're going to be feeling for the most part is going to be the high surf. That will be the worst of it.

But you can see maybe just a little bit of rain out onto the Cape. Could even get as much as one to two inches as it brushes on by. A little bit of a flood threat, but that won't be a major issue, and some occasional gusty winds. The tropical storm-force winds extend out about 175 miles from the center of the storm. So we may see some of those stronger gusts on occasion throughout the morning.

But this storm is just moving so quickly, around 21 miles per hour, so it's going to be out of here after midday today, and you will feel little impact, it'll just be those big waves.

Two other areas of concern, keep in mind, we are still in the heart of hurricane season here. Both of these are tropical waves. This one right here has the most potential of becoming a tropical depression, possibly later on today. The next named storm would be Philippe, by the way.

And then this one, maybe some slow development north of Puerto Rico over the next couple of days. So a couple of other things to keep our eye on out there for today.

If you're traveling across the Northeast, you will deal with some of those gusty winds and some of the rain across the Northeast. The low overcast conditions keeping your temperatures much cooler into the Northeast. You jump into the 80s as you head towards New York City and over into Philadelphia, Washington, D.C., warmer still, with an isolated thunderstorm or two.

And the Southeast should be a little bit drier, maybe a 20 percent chance of a storm, but pushing 90 in Atlanta, and we'll see low 90s all across the Sunshine State.

Some stormy weather in the nation's midsection. We'll talk more about that later on.

HARRIS: Storm fatigue.

NGUYEN: Yes.

HARRIS: (INAUDIBLE).

JERAS: We're all feeling it. HARRIS: So (INAUDIBLE), Jacqui. Thank you.

And new next hour.

(BEGIN VIDEO CLIP)

UNIDENTIFIED FEMALE: We're not as bad as New Orleans, but we need help just as bad as New Orleans.

(END VIDEO CLIP)

HARRIS: We will take you to Mississippi and show you one of the forgotten towns devastated by Hurricane Katrina.

NGUYEN: And coming up next on "HOUSE CALL," survivors of the storm face their next challenge as they begin to rebuild their lives.

CNN SATURDAY MORNING returns at the top of the hour.

(COMMERCIAL BREAK)

HARRIS: President Bush says rebuilding the Gulf Coast will cost whatever it will cost, and that will mean cutting other programs. The president would not provide a ballpark figure or suggest where the money may come from.

Congress has already approved $62 billion in aid. Analysts estimate reconstruction costs will be at least $200 billion.

In less than an hour, business owners in three parts of New Orleans will be allowed to return to check things out, but they must abide by a strict curfew. Starting at 8:00 a.m. through 6:00 p.m., people will be allowed into the French Quarter, the central district, and the uptown district. They are advised not to drink the tap water, and most services are not restored.

Vice President Dick Cheney will undergo surgery next week to remove an aneurysm in an artery behind his right knee. The elective surgery will be performed under local anesthesia and will require a short hospital stay. A top aide says he'll be able to return to work shortly after the procedure.

Two art masterpieces stolen five years ago have been recovered. The FBI says the self portrait of 17th century Dutch artist Rembrandt was found in Denmark during an international sting operation. The FBI says four men were arrested. And "Young Parisian," a painting by French impressionist Renoir was found earlier this year in Los Angeles. The paintings were taken during a daring heist from a Swedish museum in 2000. They are valued at more than $50 million.

Betty Nguyen and I will be back at the top of the hour. Remember, to locate a child displaced by Hurricane Katrina, call 1- 800-843-5678. That's 1-800-thelost. "HOUSECALL" begins right now.

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