Skip to main content


Return to Transcripts main page


Tracking Alberto; Tornado Warning; Alberto Remains a Tropical Storm; Haditha Investigation; Question of Honor; Private Armies in Iraq; Contractor Behavior; Body Snatchers

Aired June 12, 2006 - 23:00   ET


ANNOUNCER: Alberto's a menace, but will it grow into a hurricane? Florida's on alert. Hurricane warnings posted and this question -- are residents ready?
Civilians killed in Iraq. Tonight, a fact check. Was there a cover-up in Haditha? The lawyer for the leader of the group of Marines speaks out.

And, one of the most dangerous jobs in the world.


AMY CLARK, PRIVATE SECURITY CONTRACTOR: The biggest thing I think about is that -- is my team going to get wiped out tonight?


ANNOUNCER: Secret private armies working for the U.S. in Iraq. CNN gets exclusive access in the shadowy world and asks, what are their rules of engagement?

Across the country and around the world, this is ANDERSON COOPER 360. Live from the CNN Broadcast Center in New York, tonight, sitting in for Anderson, John Roberts.

JOHN ROBERTS, CNN ANCHOR: It may not be a hurricane yet, but Alberto sure looks like one. With winds of 70 miles an hour, the tropical storm is right on the cusp of becoming a hurricane, the very first of the year.

Tonight it's inching closer to Florida which is now under a state of emergency. Mandatory evacuations are under way, as millions prepare for a very real threat.

CNN is your hurricane headquarters. CNN Meteorologist Rob Marciano is live in Cedar Key Island, Florida, and Jacqui Jeras is at our weather center in Atlanta. Both are tracking the storm.

Having a little trouble getting Rob's signal up because of the rain, so let's go to Jacqui right now and some breaking news.

Jacqui, what do you got?

(BEGIN BREAKING NEWS) JACQUI JERAS, CNN CORRESPONDENT: Well, we've got a tornado warning. Pasco County, just outside of the Tampa area. Now, you can see the watch that's in effect as well. These feeder bands coming in offshore. We see little spinning, little rotations with each of those. And they could drop out a tornado at any time.

There you can see Tampa. Here's the line of storms pulling on up to the north. And Pasco County, right around Wesley Chapel, we see the area of rotation is pulling on up to the north right now about 45 miles per hour. So you need to take that seriously and certainly take caution.

And those lines could continue to produce tornadoes through the overnight. In fact the new watch has been extended now until 8:00 in the morning.

One of the other reasons why we're having some trouble getting Rob's signal, here's Cedar Key right there. You can see the showers and thundershowers which are pulling through and just in the last half hour, we got a report off of Cedar Key that the winds were gusting around 40 miles per hour. So they're continuing to increase.

Also, just offshore over in this area in the Gulf, Doppler radar is indicating there's been about five to eight inches of rainfall in the last 24 hours. So that is indicative of what we're going to be seeing here, we think, across northern parts of Florida as the storm system continues to pull on through.

It's not looking nearly as organized as it was about 24 hours ago. But it's been maintaining its status all day long with 70 mile per hour winds, just shy of hurricane strength.

Hurricane center says it's still possible that this could bump back up to a category one, but right now we're seeing no signs of strengthening. One thing that could help it bump up just a little bit is when the winds die down through the overnight hours. We have those upper level winds that shear down the storm a little bit. So those die down tonight, that could bump it back up to a one.

It's moving up to the northeast about 10 miles per hour. And its present location, about 100 miles away from Cedar Key, so go ahead and do the math and roughly maybe around 8:00 o'clock or so tomorrow morning. But give yourself a couple of hours on either side of that window for potential landfall as well.

We do expect the forward speeds to possibly pick up a little bit tonight as it gets caught up into a trough.

There you can see the forecast down the line too. Something we need to pay very close attention to because this is not just a Florida storm. This will also be having a big impact on areas like coastal Georgia and on up into the Carolinas, primarily in the form of that heavy rainfall. Five to eight inches, a good estimate within the path there with locally heavier amounts, maybe even up to 10 -- John.

ROBERTS: All right, Jacqui in our CNN center in Atlanta, thanks very much.

That little cell of heavy rain that Jacqui pointed out to you has now passed over Cedar Key Island.

So Rob Marciano is back up and working. How does it look from your vantage point there, Rob?

ROB MARCIANO, CNN CORRESPONDENT: Well, what's change the over the last 20 to 30 minutes, John, is we're starting to see the winds turn a little more southerly. Before and all day, really, they've been more easterly. Seemingly they want to get more of a southerly component. What that tells us is that this storm or the center of the circulation itself is getting a little bit closer. It's getting a little bit more to where it's almost parallel to us, or due west of us.

That won't happen for another several hours, but the fact that we're starting to see more of a south wind, and it's a strong southerly component to the wind, tells us just that.

The problem with getting that south wind now is that it begins to push the water in. It was low tide shortly, about an hour and a half ago. But the tide now is quickly turning in. I don't know if you can see the ripple on these waves that are beginning to push in, but I just turned my back on the ocean 20, 30 minutes, and I turn around and this water has come up a good 10 to 20 yards. So it only has about another 20 yards to get to where the sea grass and the seaweed is where the typical high tide is. And that high tide is scheduled for later on tonight or earlier tomorrow morning, around 4:00 a.m.

So I suspect as we get that southerly wind pushing that water with the high tide, this water will easily be up and over the beach. Could easily also be up and over where my feet are. We're obviously going to be retreating just a little bit as time goes on tonight.

But the greater concern for storm surge will be higher up the bay and through Appalache Bay, St. Marks River, up through there where they had surge from Hurricane Dennis. Folks up there could easily see six to nine, maybe even 10 feet of storm surge by 4:00 and 6:00 a.m. tomorrow morning.

Now it's beginning to let up just a little bit, John. It does come in squally type of weather, on and off kind of stuff. Wouldn't mind getting a breather right now.

Until that center is abreast of us or to the west of us and then past, we're going to be in it for a good several hours, if not until day break tomorrow.

ROBERTS: Rob, something that we see in addition to the wind- borne water is when the eye or the center of the hurricane or tropical storm starts to approach land, it carries with it a dome of water. That's something that's very pronounced in strong storms such as Hurricane Katrina, Hurricane Andrew. How much of an effect would that be expected to be with Tropical Storm Alberto? MARCIANO: Well, we don't -- you know, we don't expect to see much of that. And typically, even with the stronger storms, that dome or that lifting of the water because of the area of low pressure really is only about 10, maybe 15 percent of the surge. The real pain part of the surge comes from just the wind pushing the water inland.

And the deal with the Gulf of Mexico is that the way the floor of the ocean is shaped or the gulf is shaped is such in the shallow way and that that water gets pushed up very easily.

And then you get the way the big bend area of Florida curves around into, say, the New Orleans area. That creates this funneling effect. So that's why the surge was so intense in the Biloxi and Gulfport and Waveland area during Hurricane Katrina. That's why the storm surge was so intense up in Appalache Bay and St. Marks area during Hurricane Dennis.

The Gulf of Mexico, really, especially this part of it, is unlike any other ocean or body of water in the world. Unfortunately for us, it's in the middle of hurricane country and the storm surge is only exaggerated because of the way the geography sets up here in the southeast parts of the U.S.

ROBERTS: All right, Rob, we'll let you catch a little bit of a break. We'll check back with you later on this hour.

Rob Marciano in Cedar Key Island, Florida, thanks.

Alberto is the first of what's predicted to be 16 named storms this year. Many of them could end up on a direct path to Florida, which has seen more than its share of hurricanes over just the last few years.


ROBERTS (voice-over): Hurricane warnings have been issued along the Florida Gulf Coast. And residents are again going through the motions of a familiar and wearying routine.

UNIDENTIFIED FEMALE: Make sure my roof doesn't leak anymore. We make sure everything's inside so the wind doesn't get it. We have the wood cut for the windows if we have to put it up. And that's what you got to do.

ROBERTS: In the past two years, Florida has worn a bull's eye. Hit with eight -- that's right, eight hurricanes.

In 2004, after two tropical storms, Hurricane Charley roared across the Keys in August. Slamming into Fort Myers as a category four storm with 150 mile per hour winds.

The next month, Frances, Ivan and Jeanne tore across the state with rain, winds and tornadoes. The four hurricanes left more than 100 dead and $21 billion in damage.

Then a year ago, Tropical Storm Arlene, the first of 2005, made landfall near Pensacola.

In July, Hurricane Dennis, a category three with a massive storm surge, left tens of thousands of acres in the panhandle flooded.

And a month later, in August, Katrina carved her path of destruction through Florida, before wrecking New Orleans.

Some four weeks later, Rita clipped the Keys and finally, Wilma hit in October.

Last year's hurricane bill in the sunshine state, about $12 billion.

Florida is the state most vulnerable to hurricanes, but it's also the most prepared.

GOVERNOR JEB BUSH (R), FLORIDA: We know from experience that every storm is different, but we know that all of them have the potential to make life miserable for people that are impacted by these storms.

ROBERTS: While it would be a minimal hurricane at most, Alberto could be a nasty experience. Landfall is expected at high tide, during a full moon, and officials are warning of a potentially damaging storm surge.

And though no one wants a hurricane, Florida is suffering from a drought. The heavy rains could bring welcome relief. Perhaps the silver lining in the stormy clouds.



ROBERTS (on camera): And CNN is your hurricane headquarters. Stay with CNN throughout this 2006 hurricane season for all the latest on the weather, where it might affect people, and what to do if you're being threatened by a hurricane. CNN, your hurricane headquarters.

Turning to Iraq, is America rushing to judgment about alleged atrocities in Haditha? A lawyer for the Marine in charge of the group under investigation is fighting back. Coming up, he tells the Marines' side. And we'll also speak with another Marine who himself was accused of murder.

Also, American contractors in Iraq. High stakes, incredible risks. The threat of death at every turn. We'll take you inside their very dangerous mission. See how they're cashing in.

Plus this...


RANDI KAYE, CNN CORRESPONDENT: They could have handed you a death sentence. ROBBIE ZAPPA, RECEIVED STOLEN TISSUE: Absolutely. If a jury of our peers find them guilty of doing this, I think they ought to be charged with attempted murder.


ROBERTS: We'll expose the hidden market for body parts. Why some funeral homes stand accused, when 360 continues.


ROBERTS: In a new CNN poll, when asked about the alleged atrocities at Haditha, Iraq, 57 percent of respondents think it is fairly likely or very likely that U.S. troops have committed war crimes in Iraq.

As for Haditha, a small group of Marines are under investigation for the deaths of 24 civilians there. The lawyer for the group's leader insists that no crime occurred and that no cover-up either, at least by his client, happened.

More from CNN's Senior Pentagon Correspondent Jamie McIntyre.


JAMIE MCINTYRE, CNN SENIOR PENTAGON CORRESPONDENT (voice-over): According to his attorney, Sergeant Frank Wuterich led a four-man team that killed Iraqi civilians in two houses in Haditha, under the belief that armed insurgents were hiding among them.

Although Wuterich says he did not fire the shots. But he does admit being one of the Marines who shot five men who got out of a car and ran, thinking they were insurgents driving a potential car bomb. The Iraqis turned out to be unarmed.

But Attorney Neal Puckett insists his client followed the standard rules of engagement for clearing suspected insurgent hideouts which he argues allows the Marines to go in guns blazing if they're facing a threat and it's the only way to protect themselves.

NEAL PUCKETT, STAFF SERGEANT WUTERICH'S ATTORNEY: Sergeant Wuterich does not believe that he did anything wrong on that day. He followed the rules of engagement, as had been instructed to him by professional instructors, by his chain of command; and everything he understood he was supposed to do, he did.

MCINTYRE: Puckett says the killing of the civilians was inadvertent, and then when it was clear at day's end that mostly civilians, including women and children were victims, he accurately reported the facts to his superiors.

PUCKETT: I don't know if someone else above his level in the chain of command did, but I know that Sergeant Wuterich reported everything, either to his immediate commander who was there on scene or over the radio back to the company, and there was no attempt on his part to misrepresent anything or to cover anything up. MCINTYRE: So where did the information come from that went into a press release issued the next day, that said 15 Iraqi civilians were killed from the blast of a roadside bomb? The release said after gunmen attacked the convoy with small arms fire, that Marines and Iraqi army soldiers returned fire, killing eight insurgents.

PUCKETT: Sergeant Wuterich got on the radio and said -- used specific or remembers using the words "collateral damage," "houses cleared." He was asked by whoever was on the other end of the radio how many KIA, and he said approximately 12 to 15.

So that's where the 15 number comes from. And I can tell you at the end of the day, Sergeant Wuterich and his squad were still there and they assisted in the removal of the bodies to be taken to the hospital. So there was an accurate count at the end of that day -- 24 civilians were killed.

MCINTYRE: Puckett says his client reported the Iraqis died from gunshots or in some cases shrapnel from fragmentation grenades that were thrown into the houses just before the Marines broke in, firing weapons.

And Puckett insists Wuterich never claimed the deaths were the result of either a roadside bomb or a firefight.

In Connecticut, Staff Sergeant Wuterich's parents, Rosemary and David, urged people not to judge the Marines until they can tell their stories.

ROSEMARY WUTERICH, MOTHER OF MARINE: If people will listen, they'll know there's just no way they could have done this. Any of them. Not just our son. Any of them. They could not have done this. Could not. They need to know him. You don't know him. Don't judge him.

MCINTYRE (on camera): Puckett also tells CNN, when Sergeant Wuterich went off to clear the houses where the women and children were subsequently killed, his plan was sanctioned by a higher-ranking Marine officer, a second lieutenant who was with the quick reaction force that had just arrived on the scene.

Jamie McIntyre, CNN, the Pentagon.


ROBERTS: Talk of alleged war crimes by U.S. soldiers in Iraq makes headlines. But when a Marine is cleared, well that seems to get less attention.

In 2004, after two Iraqis were killed outside a suspected terrorist hideout, Second Lieutenant Ilario Pantano said he shot them in self-defense. He said the men disobeyed his instructions and made a menacing move toward him.

Prosecutors allege Pantano intended to make an example of the men by shooting them 60 times, and then hanging a sign over their bodies. A year later the charges were dropped and the Marine decided to tell his story.

Today Pantano's book hit the stands. It's called "Warlord: No Better Friend, No Worse Enemy." I spoke with Pantano earlier.


ROBERTS: It would seem pretty obvious this whole Haditha situation has been very much on your mind for the past few weeks. You wrote an editorial, an op-ed piece that was the "Washington Post," on May the 28th, very critical of what Congressman John Murtha has been saying.

Why did you take such issue with Murtha's position, which was that it's pretty obvious here that Marines have killed Iraqi civilians, quote, "in cold blood."

SECOND LIEUTENANT ILARIO PANTANO, U.S. MARINES (RETIRED): Well, it's the quote part that I take objection to, John. To make some assumptions about what happens and what transpires on the battlefield and the idea of something occurring in cold blood, the idea of then later on in his own statements alleging that there was some kind of -- the motive for this was potentially tied to, you know, policies and rotations and things of that nature.

I think that's a pretty strong suggestion for, at the time, somebody who admitted he hadn't even read the investigation.

ROBERTS: Your situation, April of 2004 you were investigating a house. There were a couple of Iraqis who trying to escape in a car. You stopped the car, you had them in custody, they ended up dead. How?

PANTANO: Well, that's right. And in fact, in a moment in time they attacked me, and they made a move to attack me, and I shot them dead.

ROBERTS: So you claimed self-defense, the Marine Corps eventually agreed with you. The question that I have about that incident, though, is you emptied two clips into these two Iraqis.

PANTANO: That's right.

ROBERTS: One clip, reloaded, emptied the second clip.

PANTANO: That's right.

ROBERTS: And then you put a sign on their car that said, America's -- your best friend or your worst enemy.

PANTANO: Right, no better friend, no worse enemy.

ROBERTS: No better friend, no worse enemy. Why did you go those extra steps? Were you trying to defend yourself or trying to make a point?

PANTANO: Well, I think that, you know, in the course of the investigation and ultimately in my exoneration, it was made very clear that I was defending myself.

You know, the decision to weigh in on the amount of force that was required, you know, these were things -- listen, in everyday life we have opportunities and examples to look at use of force. We have rap stars that have been shot nine times and go on to make billion dollars selling albums.

So to try and suggest that there's an appropriate amount of force, how much should be, and what that -- you know, when to throttle that on and off. I think the truth is it comes back to the on scene commander.

In that case I was applying the amount of force I felt was required to do the job. In this case the job was end the threat.

ROBERTS: And why the sign?

PANTANO: Well, again, the sign was part of -- part of my internal reaction to what was going on with the violence. Bear in mind, we had been taking casualties significantly.

And part of this was even messaging to my own men of, we are here to be no better friend. And they can all speak to, and in fact in the testimony, spoke to all of the efforts that we made in terms of purchasing candy or soccer balls or rebuilding schools.

But when the time comes, when the enemy attacks you, you will be no worse enemy.

So it's almost the same kind of messaging on some level and it's internal messaging, but it's the same kind of messaging like looking at Zarqawi's face on TV that your network broadcasts.

ROBERTS: Because here's what I'm wondering about that, is you use two clips to neutralize these two Iraqis. You put the sign there. It's been said that what happened in Haditha, if what's alleged is true, could have been a result of a rage, of Marines going too far. Is it possible in the heat of combat to, quote, "go too far"?

PANTANO: I wouldn't disagree that the stress of battle is overwhelming and can certainly drive somebody over the edge. I wouldn't disagree with that at all. I've certainly seen the edge. I think anybody who's really been in combat and had to kill a man has seen the edge and know what that looks like.

ROBERTS: So your bottom line with Haditha, there's a chance that the allegations could be true, there's a chance they might not be true. But what's your bottom line with Haditha right now?

PANTANO: I think that you summed it up actually quite succinctly. There's a chance that they're true, and there's a chance that there isn't. And I would say that giving the benefit of the doubt to those that have risked their lives to provide freedom for somebody else. I think that that's not only appropriate, if we don't give our soldiers and servicemen the benefit of the doubt, who do we give it to? ROBERTS: Ilario Pantano, thanks very much.

PANTANO: John, thank you very much.

ROBERTS: Appreciate your coming in.

PANTANO: Thank you, sir.


ROBERTS: There's another side to this Iraq war that few people get to see. Up next, an exclusive inside look at the contracting business. People risking their lives to make a lot of money off of your tax dollars.

Also tonight, a chilling story about people who allegedly steal body parts from the dead and then sell them for profit. Body snatchers. They've supposedly made millions. We'll tell you who is getting hurt.



ROBERTS: You're looking at a live shot there of Cedar Key Island, Florida. Tropical Storm Alberto, about 105 miles away from there. Currently about 95 miles away from making landfall in the west coast of Florida. Maximum sustained winds still 70 miles an hour. That's four miles an hour shy of being a category one hurricane.

And according to the National Hurricane Center, no sign of strengthening, but this one still could be a problem for people along the west coast of Florida.


ROBERTS: So you think your job is tough? Try working in Iraq. Right now thousands of military contractors are in the middle of war, risking their lives, all the while making a lot of money through lucrative deals with the Pentagon.

Tonight there's new concern about what's happening with your tax dollars. And there's a videotape that some say showed contractors doing terrible things. We'll show it to you shortly. But first an exclusive look at the front lines of the contracting business.

Here's CNN's Senior International Correspondent Nic Roberts.



NIC ROBERTSON, CNN SENIOR INTERNATIONAL CORRESPONDENT (voice over): Last-minute preparations for one of the most dangerous jobs on earth. Private military contractor in Iraq.

GONZO: I'm a gun truck commander. Basically I drive the truck, I set the lead pace for the convoy. My call sign's Gonzo.


ROBERTSON: Amy Clark is there when Gonzo leaves. I wanted to find out how this gutsy industry works. And Amy will show me.

She runs the Baghdad end of a small military contracting business and has agreed to open the door to CNN, so long as we agree not to disclose the name of her company.

AMY CLARK, PRIVATE SECURITY CONTRACTOR: The biggest thing I think about is that -- is my team going to get wiped out tonight?

ROBERTSON: What Clark doesn't know is that in less than three weeks, they'll be hit hard in an attack. And she'll close down operations.

When we meet Clark, she's running a tight-knit outfit. Struggling to find a niche. Competing against the titans of the industry where contractors fill a void left by U.S. and Iraqi troops.

CLARK: I call it outsourcing conflict. And a lot has been outsourced. And where you've got a military where the assets and the personnel are strained thin, private contractors have had to step in and fill the void. And it's unprecedented, like in no other conflict.

ROBERTSON (on camera): He's Britain, right?

CLARK: Yes, he's British, but he's great.

ROBERTSON (voice-over): Industry insiders estimate the total value of logistical and security contracts in the multibillion dollar range.

CLARK: The front lines are the logistical supply lines. That's where a lot of the IEDs are being focused. They're focusing on the major supply routes.

ROBERTSON: And that's where Clark has found space in the market, on the front lines. Her employees put their lives on the line, protecting, among other things, drivers and trucks full of gravel, destined for U.S. Army bases.

In 150-mile journey, the gravel's value can soar six times its original cost. And the cost has proven substantial in lives too, as one of the industry's giant Blackwater learned when four employees were brutally murdered in Fallujah in March 2004.

Most of the companies operating in Iraq don't want journalists around. But Blackwater did allow us exclusive access to its U.S. facilities.

(On camera): It's uncanny, I'm driving around North Carolina and seeing contractors in SUVs. It's like I'm back in Baghdad again. The company has never let a TV crew in like this before. Blackwater Vice President Chris Taylor escorts us around. The one thing he won't talk about is what happened in Fallujah because of pending lawsuits brought by families.

He shows us police officers shooting on a practice range. On mock ships Blackwater trains sailors in force protection after the bombing of the U.S.S. Cole in 2000.

CHRIS TAYLOR, VICE PRESIDENT, BLACKWATER USA: What we're on now is the country's largest tactical driving track.

ROBERTSON (voice-over): 2.6 miles. Custom built. Training here matches daily realities in Baghdad.

TAYLOR: We're going to do a little slalom work here. Again, imagine that you've been attacked and now you're weaving in and out of traffic to get your principal off the X, to get to a safe zone.

ROBERTSON: Blackwater is the brain child of camera-shy Multimillionaire Eric Prince.

After 9/11, business boomed. They've just built a brand new headquarters.

(On camera): I see the gun barrels on the doors.


ROBERTSON: A nice touch.

TAYLOR: A little bit of the Blackwater motif.

ROBERTSON: War time demands allowed them to expand. They're now the second-largest employer in northeastern North Carolina.

TAYLOR: Right, 8,000 square feet in the original building -- 64,000 square feet here.

ROBERTSON: That's a big expansion.

TAYLOR: It's a rather big expansion, but it's need. Certainly we've left room for growth.

ROBERTSON: Growth, because Taylor believes Blackwater has a bright future.

TAYLOR: There's opportunities all over the world.

ROBERTSON (voice-over): The protection of innocents in Darfur, Sudan, is just one of the global hot issues the company says it is ready to tackle, and not just in the realm of peacekeeping. The company is developing airships for surveillance.

In the aftermath of Hurricane Katrina, heavily armed Blackwater protection teams were among the first on the scene.

TAYLOR: If you notice, the hull is in a v shape. ROBERTSON: And frustrated by the high U.S. troop death toll from roadside bombs, Blackwater has built a prototype for an armored alternative to the Humvee.

The company says it can assemble hundreds of battle-ready men. A small private army at a moment's notice.

But back in Baghdad, Amy Clark and Gonzo are about to find out how tough that challenge is as things go wrong when a mission comes under attack, an incident that would spell the end of their dreams.

GONZO: Yes, I'm mad. And I'm probably not going to be able to get a job now after I do this interview. But the world needs to know the truth.

ROBERTSON: When we come back, how this videotape raises questions about accountability in this multibillion dollar industry.


ROBERTS: So what exactly does that video reveal? We'll show it to when Nic Robertson's exclusive report continues on 360, next.


ROBERTS: Before the break we showed you a side of the Iraq war that often does not make the news -- the lives of independent contractors risking it all. They're part of a multibillion dollar industry fueled by your tax dollars. An industry very much in need by the U.S. military.

But a videotape has raised some questions about the behavior of some of these contractors. Once again, here's CNN's Nic Robertson.


ROBERTSON: Just released on an Internet Web site, linked with employees of Private Military Contractor AEGIS. This video appears to show private military contractors in Iraq firing at civilian vehicles.

Not only does this so-called trophy video appear to show Iraqis being shot at by contractors, but the video is callously set to Elvis music.

It appears to be a damning indictment of the outsourcing of war.

But a U.S. investigation found no probable cause that a crime occurred.

U.S. Senator Charles Schumer was outraged about the video.

SEN. CHARLES SCHUMER (D), NEW YORK: We still don't know if...

ROBERTSON (on camera): We don't know if there's anyone...

SCHUMER: But no one got out. ROBERTSON: No one got out of that vehicle.

(Voice-over): Especially when he learned it was possibly AEGIS employees who shot the video. He has issues with the fledgling British company. Awarded by the Pentagon the largest single security contract for Iraq, $293 million.

SCHUMER: AEGIS has had at best a checkered past. And if we want to show our best face to the Iraqis, hiring a company with a record that is hardly exemplary.

ROBERTSON: At the head of AEGIS, this man, Former British Army Officer Tim Spicer, self-acclaimed unorthodox soldier, in his 1999 autobiography. And he has managed to survive allegations of scandal.

In 1997, while head of a company called Sandline International, he was forced to appear before a commission of inquiry in Paqua, New Guinea, over allegations that included bribery connected to an alleged coup plot. He was not convicted and allowed to leave the country.

When it came to Tim Spicer and his company, Senator Schumer believes the warning signs were there for the Pentagon to see.

SCHUMER: You combine the previous record and actions of Spicer and this video, and it just cries out for real investigation.

ROBERTSON: Contractors are not just going places where the military won't. They're navigating territory where there is no rule book.

U.S. Air Force Colonel Jenny Johnson, a former military lawyer, found that out the hard way when she deployed to Iraq in July 2004. Assigned to the private contracting office in Baghdad, she worked alongside AEGIS in the early months of reconstruction.

COL. JENNY JOHNSON, U.S. AIR FORCE (RET.): They didn't seem to understand that they were a contractor to the United States and to the United States taxpayers. That I didn't work for them. They worked for me.

ROBERTSON: The contract required AEGIS to provide security for reconstruction projects.

JOHNSON: That reconstruction effort had to happen fast, and it had to happen furiously in the early days after we got in there.

ROBERTSON: Vital time lost. Promises of reconstruction unfulfilled. The insurgency gained popularity and Colonel Johnson says she had little leverage over AEGIS.

JOHNSON: If I can't get my guys out to the field, I can't deliver on those promises. And it's our soldiers and our Marines that are on the ground every day that pay the price.

ROBERTSON: We asked AEGIS to comment on Colonel Johnson's allegations about the company's performance in Iraq. Tim Spicer, once keen to be seen and heard, turned down numerous requests to talk to us. AEGIS ultimately sent us this e-mail: "We have no wish to respond. However, you might like to bear in mind that AEGIS has just had its contract in Iraq extended for the third year of its three year contract."

As to the trophy video, AEGIS has said previously it has launched an internal investigation. The results of that have not been made public.

For now, in Baghdad, in the absence of clear rules and jurisdiction, Amy Clark says she has to continually improvise to keep her contract employees in line.

CLARK: And because this whole area is gray, there's not really any type of law that we're held to.

ROBERTSON: No one knows that better than Gonzo.

GONZO: I've lost several -- several friends to IEDs, roadside bombs. I've been hit by an IED twice.

ROBERTSON: This is Gonzo's second tour as a private military contractor in Iraq. He doesn't know if he'll survive.

GONZO: My MP-5, automatic weapon.

ROBERTSON: So when he came back, he started a video diary. And as he shows me his video, he explains exactly why he's prepared to risk his life again.

GONZO: My goal is pretty simple. I just want to be able to pay off a house, get some property.

ROBERTSON: He can earn in three months what it would take him a year to earn back home. His motivation is high.

GONZO: I have a good insurance policy. You know. Either way, it's a win-win situation for my wife and kids. Right now they're collecting a paycheck at home. If anything happens to me, God forbid, then they'll be taken care of.

ROBERTSON: Gonzo is exactly the sort of guy on which Amy Clark has built her small contracting operation. Ex-military, over 30, married, and most critically, won't freeze up if called upon to shoot back.

CLARK: We had an incident Monday where the retaliation was much more complex than anything we've had. And you know, one of these days I'm going to have to -- instead of going to one family and talking about a funeral, I'll have to go to three or four families.

ROBERTSON: That day almost came. Just three weeks after our first interviews, Amy Clark's teams were hit in multiple IED roadside bomb ambushes. We went back to find out what happened. CLARK: Two IEDs went off simultaneously, downing one of our security truck and wounding two of our people. At that point, they took on heavy small arms fire from rooftop positions.

ROBERTSON: Gonzo was out with another team when he got the call, his buddies had been hit.

GONZO: The blood in the back seat of the truck, all the bone fragments and flesh, it pretty much told the tale. He got hit pretty bad.

ROBERTSON: But the attacks that night were far from over.

CLARK: They took three IEDs. One in the front and two in the rear. By this point we were down one security truck.

ROBERTSON: Clark lost two men. Five more were wounded. And then came a devastating blow. The U.S. military withdrew her license to operate near Fallujah. Overnight, she says, she was closed down.

CLARK: And I've gone above board to try to be transparent, offering myself and any of our contractors open for questioning by anybody in this particular arena and no one has taken me up on it.

ROBERTSON: She's still awaiting an answer, she says. But on the question of the future of the company she was working for, she already knows that answer.

CLARK: If you fail here, no matter what the reasons are, it will be very difficult after this.

ROBERTSON: And that's something Gonzo's learning. He has yet to find another security job.

Nic Robertson, CNN, Baghdad.


ROBERTS: Coming up next on 360, a gruesome report on people who profit from the dead. We're talking about body snatchers who in some cases dig up the dead and sell their parts for big money.

Plus, we continue to track Tropical Storm Alberto as it takes aim at Florida's gulf coast. The latest when 360 continues.


ROBERTS: Two funeral homes in Philadelphia have shut down amid charges that funeral directors let the unthinkable take place on their watch. The removal of body parts from the dead. Parts that would then be sold for use in medical transplants nationwide.

The two funeral homes are among 30 in New York, New Jersey and Pennsylvania believed to have teamed up with a biomedical company that illegally dissects corpses for profit.

More now from CNN's Randi Kaye.


RANDI KAYE, CNN CORRESPONDENT: When Robbie Zappa heard the news, he was at first terrified. And now, he may live in fear for the rest of his life. They could have handed you a death sentence.

ROBBIE ZAPPA, RECEIVED STOLEN TISSUE: Absolutely. If a jury of our peers find them guilty of doing this, I think they ought to be charged with attempted murder on all of us.

KAYE (voice-over): What investigators say they did was all but unthinkable. It had been secret for years. But it began to unravel hundreds of miles from Robbie.

When the new owners of this New York City funeral home noticed bodies whose bones had been replaced with plumbers pipe.

UNIDENTIFIED FEMALE: That's the three of us at our wedding.

KAYE: That discovery would eventually lead to Wendy Kogut's sister. Danette Kogut had been dying of ovarian cancer. She asked Wendy to carry out her last wish.

WENDY KOGUT, DANETTE KOGUT'S SISTER: Take me in that bag and take me directly to the crematory. I don't want anybody to see me after I die.

KAYE: And instead, now you're finding out she got was what?

KOGUT: Instead, we come to find out that somehow, somebody got a hold of her body and they cut it up and they harvested whatever tissue, bone, or anything else they could take from her, skin, whatever they could take from her body, that's what they did.

KAYE: Wendy says at the funeral home, before her sister was cremated, somebody stole her leg bones and pelvic bone. Even her skin. All part of an elaborate body snatching scheme. Investigators believe it spans the globe.

KOGUT: I just feel like they raped my sister and they violated her.

KAYE (on camera): New York prosecutors say Danette's body and nearly 1,100 other corpses were harvested against their will. Four New York City men are charged with enterprise corruption, for stripping dead people of bone and tissue to make a buck in the body parts business. A billion dollar industry.

(Voice-over): Even worse, the ghastly violation of the dead could actually harm, even kill the living.

Could your sister have been an organ donor or a tissue donor?

KOGUT: No. Because she had cancer. And you can't be an organ donor when you have cancer. KAYE: But prosecutors say that didn't stop this man, Dr. Michael Mastromarino, from selling stolen diseased tissue to tissue banks and hospitals around the world, allowing it to be transplanted into unsuspecting patients.

Mastromarino, the owner of Biomedical Tissue Services in New Jersey, is believed to be the kingpin, with the embalmer supplying the bodies. Mastromarino denies the charges.

Two other men, investigators say, actually carved up the bodies in a room that looked like this. Then forged donor forms and created medical records to conceal the truth about the body parts.

(On camera): In fact, on her sister's donor form, Wendy Kogut says the cause of death is listed as blunt trauma, not ovarian cancer. And they were especially creative when they forged the name of the person authorizing consent.

KOGUT: My grandfather was the one who they had sign the donation form. And his name is Morris Kogut. And he's been dead for over 30 years.

SANDY RUBENSTEIN, WENDY KOGUT'S ATTORNEY: You couldn't make this up. It's something that you just couldn't make up.

KAYE (voice-over): Attorney Sandy Rubenstein represents Wendy Kogut in a lawsuit against the Michael Mastromarino and his company, Biomedical Tissue Services. He calls the scam outrageous.

RUBENSTEIN: Not only for the victims whose family members died and then had their tissue and bone taken without permission, but for those people who received potentially diseased tissue and bone.

KAYE: People like this man, Robbie Zappa. And that's why today, Robbie in Georgia is so fearful. Recently, he had neck surgery and later received this letter, warning some bad bone tissue from New York could have been implanted during the operation. Doctors urged him to get tested immediately for Hepatitis B and C, Syphilis, and HIV, the virus which causes AIDS.

(On camera): Looks like you had a lot of tests.


KAYE: Judging from that list.

ZAPPA: A lot of tests. A lot of tests. Right here you can see it says, Hepatitis Panel, Hep. A, B -- everything's negative. So far, so good.

KAYE: Robbie never imagined the surgery he had to relieve his pain would lead to even more.

ZAPPA: The little thing that looks like a finger right there in the middle of it. That's the bone tissue. That's what all this is about. KAYE (voice-over): Now, because of the body parts stolen in New York, Robbie Zappa must get tested regularly for years to come.

ZAPPA: They didn't care if they killed anybody. They just wanted the money. Let's take the bones, let's take the tissue, doesn't matter what's in them, let's just make some money.

KAYE: Lots of money. Prosecutors say more than $4.5 million over three years. Body parts are big business. Parts from just one body can be used in as many as 250 different people and can bring up to $250,000.

(On camera): Does your client deny selling body parts that were illegally harvested?


KAYE: Mario Gallucci is Michael Mastromarino's defense attorney.

These are serious allegations. Your client is being painted as a butcher by the prosecutor, someone who was secretly carving up bodies against their loved ones' will. You can understand why some family members are sickened by this.

GALLUCCI: Absolutely. I'm sickened by it. When you hear a story such as this and the allegations, it makes it sound ghoulish. But the problem is, is what really went on is not what's really being told to the American people.

KAYE (voice-over): Gallucci says Mastromarino inspected bodies at the funeral home's request and collected tissue so be tested. But Gallucci insists it was the processors that determined what tissue was diseased or viable for sale to the medical community. And at no point, Gallucci says, was his client ever told any tissue was diseased.

As for consent forms, he says funeral homes filled out the donor consent forms and Mastromarino had no way of knowing if they were fraudulent.

Danette Kogut's ashes were scattered in the waters off this Brooklyn pier three years ago. But any closure that provided for her sister is now gone.

KOGUT: I don't even know what happened to my sister. Sometimes you wonder what happened to her body. If it was her ashes that I saw.

KAYE: For those violated in death, it is a fate too grisly to understand. For those violated in life, the consequences will continue to haunt them.

Randi Kaye, CNN, New York.

(END VIDEOTAPE) ROBERTS: So far, there are no documented cases of diseased transmission from the stolen tissue. The FDA says that the risk of infection is low. However, the actual risk is unknown. The FDA and the CDC, Centers for Disease Control, recommend that anyone who has received tissue recovered by Biomedical Tissue Services seek medical testing.

Coming up, an update on Tropical Storm Alberto. But first, Erica Hill, from "HEADLINE NEWS," joins us with some of the business stories that we're following tonight.

Hi Erica.

ERICA HILL, CNN CORRESPONDENT: John, the bears were on the prowl again on Wall Street today. Stocks fell sharply, with investors worried about rising interest rates and two key inflation reports tomorrow and Wednesday. The Dow fell nearly 100 points to close at 10,792, a four-month low. The NASDAQ lost 43 points or 2 percent, closing at its lowest level in more than seven months.

Oil prices, though, also fell today as investor worries eased there about possible supply disruptions from Tropical Storm Alberto. Experts say the storm is likely to bypass major areas of oil refining and production on Florida's gulf coast. Oil fell $1.27 a barrel, closing at $70.36.

And a major recall for DaimlerChrysler. More than 110,000 Jeep Grand Cherokees are being recalled because their front seat warmers can overheat and catch fire. The recall involves 2003 and 2004 Grand Cherokee SUVs. DaimlerChrysler says it's been sued by six people who claim they've suffered long-term injuries from seat warmer burns. Ow.

ROBERTS: You know, I'll tell you, this is going to be an interesting summer, Erica, with the stock market, fears of inflation. Every time there's a little counterclockwise symbol on the map, oil prices are going to go up. It's going to be pretty volatile.

HILL: That it will.

ROBERTS: Thanks. We'll see you tomorrow.

HILL: See you tomorrow.


Still ahead, Florida on alert as Tropical Storm Alberto takes aim. An update on 360, next.


ROBERTS: Time now to see what story we'll be keeping an eye on tomorrow. It's on our radar tonight, literally -- Tropical Storm Alberto.

CNN Meteorologist Rob Marciano is tracking Alberto live from Cedar Key Island, Florida, where he's got the latest for us. Rob, how's it looking?

MARCIANO: I tell you what, John, about 20 minutes ago the rain just shut off. It's been a warm, dry wind ever since. And it's quite pleasant out here right now. Maybe blowing 30, maybe 35 miles an hour at times. But nowhere near what it was, about 45 minutes ago.

Our winds have turned southerly, which tells us that the storm itself is pretty much parallel or due west of us. So we're about halfway through with this storm. And the way it's been written up in the discussions, most of the action is to the north and east of the storm. So we may be done with most of it.

The only concern now is the potential for storm surge as that southerly wind will push some of this water up and over Cedar Key. Now the attention goes to Appalache Bay, John, and in through the big bend area of Florida where this storm will take aim later on tonight. Back to you.

ROBERTS: All right, Rob, thanks very much, we'll keep checking back with you throughout the night.

ROBERTS: More of 360 in a moment. Stay with us.


ROBERTS: Be sure to tune in to "AMERICAN MORNING" for the latest on Tropical Storm Alberto.


© 2007 Cable News Network.
A Time Warner Company. All Rights Reserved.
Terms under which this service is provided to you.
Read our privacy guidelines. Contact us. Site Map.
Offsite Icon External sites open in new window; not endorsed by
Pipeline Icon Pay service with live and archived video. Learn more
Radio News Icon Download audio news  |  RSS Feed Add RSS headlines