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Warren Jeffs in Court; 'Prophet' Turned Prisoner; Lost Boys & Lawsuits; FLDS: Cult or Calling?; Facing the Followers; Eye on Ernesto; Iran Showdown

Aired August 31, 2006 - 23:00   ET


ANDERSON COOPER, CNN ANCHOR: The captured fugitive who is wanted in two states now, appeared at his extradition hearing before a Nevada judge.
Jeffs considers himself a prophet, of course, and so do his thousands of followers.

Today, in the courtroom, with guards on each side and his hands in chains, Jeffs looks more like, well, like any other mortal facing serious criminal charges and possible life in prison.

CNN Ted Rowlands reports.


TED ROWLANDS, CNN CORRESPONDENT (voice-over): Under heavy security, polygamist leader Warren Jeffs was brought into a Las Vegas courtroom. He was shackled and wore blue jail issued clothing. Appearing meek and at times confused, Jeffs politely answered questions from the judge.

JUDGE: Are you Warren Jeffs?


JUDGE: All right.

ROWLANDS: Jeffs, who didn't have an attorney for the short hearing, stood and listened as the judge explained that he was wanted in both Utah and Arizona.

JUDGE: Do you understand everything I just explained?


JUDGE: OK, what would you like to do?

JEFFS: Go ahead and be extradited is fine.

JUDGE: You want to waive your rights in regards to extradition and go back as quickly as they can have the -- come pick you up?


JUDGE: All right. ROWLANDS: Jeffs will be transported to Utah where he faces two counts of being an accomplice to rape. Prosecutors there say they're ready for him.

RYAN SHAUM, UTAH PROSECUTOR: We have an opportunity now to present our case. We have an opportunity to go forward with the evidence that we believe we have.

ROWLANDS: Jeffs had one unidentified supporter in the courtroom -- this man. After the hearing he was followed by a crowd of journalists, but had nothing to say as he left the courthouse.

Warren Jeffs is believed to have as many as 10,000 loyal followers across the western United States, Canada and Mexico. Many of them live in the Colorado City Hilldale area which is very close to where Jeffs will be held in Utah.

GARY ENGELS, MOHAVE COUNTY INVESTIGATOR: I think the community there, you know, the ones that are his loyal followers, are going to stay loyal to him and they're going to support him and they'll provide him with any amount of money or anything else he needs.

ROWLANDS: Flora Jessops, a former member of the FLDS, says she's concerned about Jeffs' followers and what they may do with their prophet in jail.

FLORA JESSOP, FORMER FLDS MEMBER: They're going to look at him as a martyr, as he's been the one that's wronged.

As a child, I was taught and they're still teaching these children that law enforcement is our worst enemy. And that the streets would run red with the blood of our enemies.

ROWLANDS: So far, though, there has been little reaction from the secretive communities where until now Jeffs has held almost complete authority.


ROWLANDS (on camera): And the last step here in Las Vegas, concerning Warren Jeffs, is to move him, get him to Utah. And authorities from Utah are coordinating that, they're keeping it a secret. Security is a major concern, moving Jeffs. They do not want the word out of when they're going to do it or how they're going to do it. The last thing they really do want is one of his members, flocks, one of the members of the flock to interfere with it at all. They do not want the media to know about it, so they're keeping it under wraps -- Anderson.

COOPER: But at this point, Ted, I mean, he is still the leader of the FLDS. I mean, there's no sign that's going to change?

ROWLANDS: No. Clearly, and whether he's in jail or not, those that believe in Warren Jeffs are still going to believe in him. And he can have visitors so he can still direct the faithful from jail with very little trouble. So clearly unless somebody else comes in and makes a play for leadership or leadership role, he's going to still control these 10,000 plus people even though he's sitting in jail.

COOPER: Interesting. Ted, thanks.

Warren Jeffs doesn't just face trouble in the criminal front. He's also been slapped with several civil lawsuits by people he allegedly abuse and terrorized. Some, his own relatives.

CNN's Dan Simon now with that piece of the story.


DAN SIMON, CNN CORRESPONDENT (voice-over): Warren Jeffs better get used to the jail and the courtroom. In addition to the criminal trials he now faces in Utah and Arizona, Jeffs is also a defendant in at least three lawsuits filed by former members of his FLDS community.

SAM ICKE, KICKED OUT OF FLDS: The thing that actually got me kicked out was, you know, I kissed this girl and then she told, you know, told everybody what was going on.

SIMON: Sam Icke is one of the "Lost Boys," hundreds of young men who say they were torn from their families by Warren Jeffs, kicked out of their community for minor infractions that Jeffs declared were sins.

RICHARD GILBERT, KICKED OUT OF FLDS: I was excommunicated by the Prophet Warren Jeffs at the age of 16 because I decided that I wanted to go to a public school.

GREG HOOLE, ATTORNEY FOR LOST BOYS: Another boy was kicked out because he gave a girl a necklace. Another boy was kicked out because he had seen a movie.

SIMON: Salt Lake City Attorney Greg Hoole filed what's been labeled the Lost Boys lawsuit on behalf of six alleged victims. The suit claims the real reason for the boys being thrown out was to make polygamy possible so that each man could have multiple wives.

And under Jeffs, the suit claims the number of wives for each husband went way up. It claims the FLDS leader established an unlawful practice of reducing the surplus male population by systematically expelling young males from the FLDS communities.

HOOLE: If you want multiple wives for the older men, you've got to get rid of the boys. And Warren was doing this with a vengeance.

SIMON: Jeffs also faces a lawsuit filed by his own nephew.

BRENT JEFFS, NEPHEW OF WARREN JEFFS: When I was around 5 years old to 6 years old, when he had done this to me...

SIMON: Brent Jeffs claims his uncle repeatedly sodomized him as a child. (On camera): And there's also this lawsuit from a young woman named M.J., who claims Jeffs forced her to marry and have sex with an older man when she was only 16. The documents say her resulting pregnancies have been painful and emotionally devastating.

HOOLE: She was married to a man that she had no desire to be married to. So essentially she was raped and as a result of those rapes she was impregnated. What could be more devastating than that?

SIMON: Hoole says Warren Jeffs has never responded to the lawsuits which seek unspecified damages. But now with Jeffs in custody, he says the suits will gain momentum. After all, it's hard to take someone to trial if they're a wanted fugitive.

Still, with two criminal trials ahead, it could take several years before these civil cases reach a jury.

For now, all of Jeffs' accusers can take some comfort, knowing he's locked behind bars.

Dan Simon, CNN, Spokane, Washington.


COOPER: Well, Rod Parker is a lawyer who's representing FLDS in some of the lawsuits the sect is facing. He spent a good amount of time with members of the sect in the past. I talked to him a short time ago.


COOPER: I assume you saw Warren Jeffs at the extradition hearing on television. How did he appear to you?

ROD PARKER, ATTORNEY FOR FLDS: I saw some still pictures of it, and he appeared very out of place and I think a little bit frightened.

COOPER: Were you surprised that he was caught and caught in the way he was?

PARKER: I don't know how to answer that, really. I think his capture was inevitable. I think probably everybody would say that. And the method of capture, I don't know that I really have a reaction to that.

COOPER: Are you representing him now or do you know, will you represent him in the future when he's brought back?

PARKER: I haven't been asked to yet. I don't know what their plans are.

COOPER: I want to read something that the Utah attorney general said about the arrest. He said, quote, "I think you're going to see a lot of changes within the FLDS community as far as their feelings about him, their fear of him, their loyalty to him. We're hoping that will start to crumble." Do you think that's true? What do you think will happen to the church? Does Jeffs remain the prophet?

PARKER: I have a couple of reactions to that. First of all, I think that he will remain the prophet. I think his office is in their religion a position that's chosen by God and short of apostasy, there's nothing that would change that.

But my other reaction to that is that I really question the legitimacy of that kind of an objective on the part of the attorney general. What he's really saying is that his objective is to fundamentally change or even eliminate this church as it presently exists. I think that goes beyond a legitimate prerogatives of his office.

COOPER: It was interesting, last night Gary Tuchman was allowed inside the home of someone in Colorado City, a young woman who had a child. And she was clearly heartfelt in her beliefs. I mean, she was confused by what had happened to Jeffs. But, you know, this is really the first time, at least that I and most of our viewers had seen and heard from someone in the FLDS who's still currently in it, who follows Warren Jeffs. And she, I think clearly, just came across as this perhaps naive, but certainly sweet and heartfelt young woman.

You're not a member of the FLDS. You've worked with them in the legal system. You've had a lot of contact with them. What are they like?

PARKER: Yes, you're right. I'm not a member. I have had a lot of contact with them. And I would say I've had many experiences just like the one you had, being invited into somebody's home or invited to meet them in some other setting and interact with them and really get a sense of what type of people they really are and how different they are from our stereotypes and our preconceptions of what's really going on down there.

I find them to be very family oriented. And they're there because they want to be there. They know they have other alternatives, and they are simply not interested in those alternatives. They are there voluntarily because that's their choice.

COOPER: Rod Parker, I appreciate your perspective. Thanks for being on.

PARKER: OK, you're welcome. Thank you.


COOPER: Well coming up, the latest on Tropical Storm Ernesto, almost hurricane strength, raking the East Coast, could make landfall any moment now. We are live with an update.

And a desperate mission for a former follower of Warren Jeffs who returns to the world she left behind to find her mother, when 360 continues.

(COMMERCIAL BREAK) COOPER: Flora Jessop married a polygamist husband when she was just a teenager. Eventually she escaped the world of Warren Jeffs, and today she returned to face the true believers and to find her own mother.

CNN's Gary Tuchman reports.


GARY TUCHMAN, CNN CORRESPONDENT (voice-over): We drive on the dirt roads of Colorado City, Arizona, behind a woman on a quest. Flora Jessop says she escaped from the FLDS church when she was a child bride.

With Warren Jeffs under arrest, she is now trying to find family members she left behind.

JESSOP: Let my mother come out and talk to us! What the hell are you afraid of?

TUCHMAN: Flora has two mothers. She hasn't seen her birth mother for seven years and believes she lives in a health clinic run by Warren Jeffs' church that's protected by a huge fence.

JESSOP: I'm not going away until you come out here!

TUCHMAN: But nobody in the clinic opens the gate. And the speakerphone just rings and rings.

JESSOP This is America, for God's sake.

TUCHMAN: Earlier, Flora and three of her brothers tried to find one of their 21 other siblings who they also believe are afraid to escape.


UNIDENTIFIED MALE: Does Ruby live here?

TUCHMAN: Nobody came out, but a voice inside the house said there was no Ruby.

JESSOP: You want me?

TUCHMAN: As Flora drove away after another unsuccessful effort -- a local policeman, part of a force believed to be loyal to Warren Jeffs, stopped her vehicle in its tracks.

UNIDENTIFIED MALE: Hey, don't get behind me. Back over there. Residents there wish you would stay off the property.

JESSOP: We just want to see Mom, to make sure she's OK. That's all we want.

UNIDENTIFIED MALE: Can you arrange it to just let us see her, say hi to her for a minute? UNIDENTIFIED MALE: I have nothing to do with that. What I'm dealing with right now is residents calling and saying people are there on the property, they wish they would leave.

JESSOP: We are going to be here until I see my mother is OK.

TUCHMAN: But as she stood on the car there was still no word. An Arizona state representative accompanying Flora Jessop says he'll talk to fellow legislators about what he witnessed.

DAVID LUJAN, ARIZONA STATE REPRESENTATIVE: Yes, it's something I'm going inquire into when I get back to Phoenix, as to if this in fact a public health facility, why does it have a huge fence around it and a lock at the front door so nobody can get in.

TUCHMAN: We, too, wanted to find out if Flora's mother was indeed in the medical clinic. But when I called the facility, all we were told was no comment.


COOPER: That's got to be so hard for family members who just want to find out some information. Is there anything she can do?

TUCHMAN (on camera): Not much she can do, Anderson. Flora was here all day and she did not find her mother or any of her 21 siblings. And who can imagine coming to a town with no more than 10,000 people and not being able to locate your family.

But that's the way it is here. There are even people who live here in Colorado City, Anderson, who have decided to leave the church, but because of Warren Jeffs' rules, their family members are still part of the church no longer talk to them and they don't see them either and they still live here.

One other point I want to tell you, Anderson. When Warren Jeffs gets extradited to Utah, he'll be about 20 minutes away from Colorado City in the town of Hurricane, Utah. It's spelled hurricane, but pronounced hurricane. And the name of the prison he'll be at is the Purgatory Correctional Facility. And that is not a joke.

COOPER: Ironic, no doubt. Gary, appreciate it. Thanks.

Warren Jeffs has ruled over thousands of followers in two main communities, Colorado City, Arizona, which you just saw; Hilldale, Utah, as well.

Here's the raw data on those towns. According to the 2000 census, the average family size in both Hilldale and Colorado City is between 7 and 8. By comparison, statewide in Utah and Arizona, the average family size is 3. And in Hilldale, 37 percent of people live below the poverty level. Colorado City, it is 29 percent. That's more than three times higher than the statewide figures.

Well, the world gave Iran an ultimatum to stop its nuclear program today, but Iran didn't blink. Fortunately the world and the White House and the U.N. to, well, make the next move.

Also tonight, Israel took on Hezbollah. Will it take on Iran next? We'll show you the war games both countries are now preparing for, when 360 continues.


COOPER: Turning now to a developing story we have been following tonight. Tropical Storm Ernesto fooled us for a bit. We thought it would peter out, but as we've already said, it's lashing the coast of the Carolinas at winds just under 70 miles per hour, almost a hurricane strength, and raising fears about tornadoes further north.

National Guardsmen are activated in North Carolina, and Virginia is under state of emergency.

Dan Bowens of affiliate WRAL is standing by in Ocean Isle Beach, North Carolina.

Dan, how is it going?

DAN BOWENS, WRAL CORRESPONDENT: Good evening, Anderson. Right now Ernesto is making landfall about 20 miles east of where we are on Bald Head Island. It's moving at about 19 miles per hour. The storm is said to have gusts of about 70 miles per hour. Now Bald Head Island is in the southern tip of Brunswick County.

All day Brunswick County has been under a state of emergency. There were volunteer evacuations here, but not too many people left. There with two shelters that were opened earlier today. But we've been in touch with Brunswick County Emergency Management, and they tell us that they have actually had light attendance.

For much of the day here, what we saws with a lot of rain, upwards between 3 and 8 inches of rain. But at about 9:00 o'clock this evening, we started to feel some of those squalls and really wind gusts, strong wind gusts here where we are, about 40 miles per hour.

And some siding off the hotel that -- where we are staying has actually peeled off. A gate in the front of the hotel where we're staying has peeled off. There are reports of several power lines that are down. Also several traffic signals that are down. And at this point, we're told that the fire department has responded and is working to take care of that situation. But obviously with the rain and the electricity, they have to work very slowly and very carefully.

We're also -- town managers are also worried tonight about the possibility of beach erosion. But if you can see, the wind is actually blowing toward us, this way. So the beach erosion which would have happened if it was blowing in the opposite direction is really not too much of a concern or as much of a concern as it was earlier this evening.

But, again, Ernesto, as we speak, making landfall at Bald Head Island, about 20 miles east of where we are, heading 19 miles north toward the Wilmington area at this point. Wilmington is certainly starting to feel some of the severe wind gusts that we have been feeling throughout much of this evening. Anderson, back to you.

COOPER: What kind of flooding are you seeing in the area?

BOWENS: A lot of the flooding that we're seeing is on the streets here. We've been in touch with Brunswick County Emergency Management. They say that there really hasn't been a lot of flooding in some of the open fields and things along those lines, but the flooding is in low lying areas along the streets. They've obviously been asking people to stay off of the streets, but as you know, with several of these storms, there are people who just have to get out and see, they have to get out and see what is going on at the beach. And, you know, we can tell them that the beach is look fairly rough right now. They're seeing a lot of white caps.

But at this point, street flooding, other than that, we're not seeing all that much flooding.

COOPER: And I know you said at the beginning of the piece, but in terms of shelters and people evacuating, what is the situation?

BOWENS: There was a voluntary evacuation order issued in Brunswick County. That order went out at about 1:00 o'clock. They opened two shelters, one at a local middle school here. There was light attendance. I mean, this area has been through several of the tropical systems.

Late yesterday this was a tropical depression. And as it turned into a tropical storm today, people's eyebrows were certainly raised, but they figured, you know, we have been through hurricanes here, we have been through several other events, just recently, Hurricane Charley here in 2004. And so people not necessarily feeling the need that they had to evacuate. Since it was a voluntary evacuation, we know that not many of them did. They decided to ride it out in their homes or in like a hotel where we are here.

COOPER: All right. Dan Bowens from WRAL. Appreciate it, Dan. Thanks very much.

Coming up, Iran refusing to stop enriching uranium, defying the ultimatum set by the U.N. So, what happens now? Are Iranians prepared to pay the price of sanctions? Are sanctions even possible? CNN's Aneesh Raman reports from inside Tehran.

And more war games in the Middle East. Is Israel preparing to take on Iran next? When 360 continues.


COOPER: Iran had until today to stop its uranium enrichment program. The deadline was set by the U.N. and the deadline came and went.

Tonight its nuclear program is still up and running. Iran making it clear it has every intention to keep it going, refusing to back down from what is becoming increasingly a volatile standoff.

CNN's Aneesh Raman is there.


ANEESH RAMAN, CNN CORRESPONDENT (voice-over): Defiant to the end. Iran's president speaking this morning to huge crowds in northwest Iran left no doubt his country will not suspend its nuclear program.

This nation, he said, will not tolerate tyranny and will not give in to a cruel pressure in violation of its rights, even a bit.

People in this agricultural region are some of Ahmadinejad's strongest supporters, cheering every phrase. Here for some he is a hero. And they reveled in their president's continued challenge to debate U.S. President Bush.

They say they want a public to know all the news and facts, he says, and decide for themselves. But when we offer to debate the world's problems and corruption and let the world judge for themselves, they reject it.

But it is Iran's rejection of the U.N. deadline to stop its nuclear program that matters today. And in Tehran, as shops open for business, despite fears of business going down, of sanctions, here as well there was defiance.

We have undergone sanctions for 27 years, says Hossein. We are not afraid of sanctions. Iranians can live off a bite of bread and live in cramped dwellings.

There are many here who do fear sanctions outright. And while today's deadline was big news in Iran, Iranians have known this day was coming, have known they can do little to affect their government's choices.

Mojtaba Vahedi runs a reformist newspaper here. Trillion the better response from Iran was possible.

MOTJTABA VAHEDI, NEWSPAPER OWNER (through translator): A better response from Iran was possible by opening this issue up to the public, and using independent experts like former reformist officials.

RAMAN: That did not happen and now Iranians can only hope against the worst.

BAHRAM TAVAKOLI, GOVERNMENT EMPLOYEE (through translator): If a military invasion against Iran is a possibility, says Bahram, it is to the Iranians' benefit to resolve the problem peacefully.

RAMAN: A military invasion is not seen as something that will come anytime soon, but Iran's government has made it clear through war games that have been ongoing for weeks now that it will defend against any attack.


COOPER: Aneesh, how much support does the Iranian president have?

Clearly we're having some trouble with Aneesh's sound.

Aneesh, can you hear me? Probably not. That was Aneesh Raman in Iran.

As the world prepares to decide what to do next with Iran, there is one country that is already making plans that have nothing to do with sanctions.

CNN's Chris Lawrence reports on Israel's warning and a very public show of force.


CHRIS LAWRENCE, CNN CORRESPONDENT (voice-over): Israel is already looking beyond the U.N. deadline.

EHUD OLMERT, ISRAELI PRIME MINISTER (through translator): We should be prepared for the threat from Iran and its Israeli-hating president.

LAWRENCE: Mahmoud Ahmadinejad has denied Israel's right to exist. Now some Israeli officials are urging residents to reinforce bomb shelters. And an Air Force commander has been put in charge of a project to tune up preparations for a possible confrontation.

Israeli F-15s can reach Iran in 45 minutes without refueling. It's ordered two new submarines, capable of firing nuclear weapons. And the IDF has invested a lot in refitting the aero missile defense system to face a longer range threat.

(On camera): If a conflict were to arise with Iran, is Israel better or worse off after this conflict with Hezbollah?


LAWRENCE (voice-over): Chuck Freilich is the former deputy national security adviser for Foreign Affairs. He says Hezbollah's huge rocket arsenal in Lebanon was designed to be Iran's deterrent in case Israel or the U.S. some day attacked its nuclear program.

FREILICH: Well, here they used it under the wrong circumstances for a very small gain from their point of view. They have partly lost their -- its deterrent value from that point of view.

LAWRENCE: Iran's long range missiles are capable reaching Israel. A senior cleric says if the United States attacks Iran, Israel will pay the price.

Last year someone asked Israel's military commander, how far would you go to stop Iran's nuclear threat? UNIDENTIFIED MALE: Two thousand kilometers.

LAWRENCE: That's the distance between Israel and Iran.

More than a year later, no one is laughing.

(On camera): 25 years ago Israel ordered the first air strike ever on a nuclear plant when it took out a facility under construction near Baghdad.

Most analysts agree Iran has studied that attack and adapted accordingly.

Chris Lawrence, CNN, Jerusalem.


COOPER: Well, as you've heard, European negotiations over Iran's nuclear program continue next week. But the U.S. is calling for heavier action. The problem is can they actually get it done?

Coming up in my program, my conversation with Former Defense Secretary William Cohen. His views on the options available for Iran and the U.S.

And the long tail of a hurricane, we tend to think of them as a southern curse. But wait until you hear what is happening to insurance rates on riverfront properties right here in New York City, when 360 continues.


COOPER: Iran continues to defy international pressure to end its nuclear program today, breaking a U.N. deadline and calling the U.S. a bully.

The Bush administration says it won't respond until after further negotiations next week. And Tehran may think it has called the world's bluff. Question is for how long.

I spoke earlier with William Cohen, former defense secretary and the author of "Dragon Fire," a fictional novel about nuclear terrorism.


COOPER: Secretary Cohen, the deadline, it's come and gone. Today, President Bush said there must be consequences for Iran, but what are those consequences going to be?

WILLIAM COHEN, FORMER SECRETARY OF DEFENSE: Well, that's a very debatable question right now. I've tried to point out that I think it's important that the Security Council measure up to its responsibilities by enforcing its own resolutions. I think we only breed contempt for the rule of law when we pass laws by Congress that don't go in force. The same thing is true for resolutions by the Security Council that don't go in force. And so, I think it is a responsibility here that they either stand behind them or they will witness a consequence to the Security Council by countries such as the United States, not willing to come to the Security Council. And that's not in anyone's interests.

COOPER: But how optimistic are you that's really going to happen? I mean, the Security Council has already been -- they have been debating Hezbollah and Lebanon. They haven't been focusing on Iran. And now you have Russia and you have China who need Iran's oil.

COHEN: I think the best thing that the Security Council can do, if China and Russia in particular stand behind the resolutions, agree to impose sanctions, you can start out on a graduated basis, but nonetheless, make it clear to Iran that it's not in their interest to move forward with a nuclear weapons program. Nuclear energy, that's one thing the Russians and virtually everyone else has agreed to try to work to, make that feasible.

But a nuclear weapons program, that's something that is not in their interest and hopefully Russia and China will see it is not in their interests in being, objecting to enforcement of this.

COOPER: There are those that talk about military action against Iran. We just saw a piece about Israel preparing its forces, buying submarines, trying to ratchet things up, get more prepared for a possible attack on Iran.

Militarily, though, what -- what are the options? How big a danger is Iran? They've got an awfully big force.

COHEN: Well, the options aren't great, frankly. I don't think we should make any mistake or be under any misapprehension. This is not going to be easy in the event military action were ever required.

COOPER: It is not like back with Iraq where they had one nuclear facility. Iran has learned from that lesson when Israel struck that facility. They have their operations spread out.

COHEN: They do have their operations spread out. And it's not simply a matter of whether the United States could in fact target individual sites and bring about substantial reduction. I don't think that that is really the issue. The issue is what is the consequence of engaging in this type of military confrontation or conflict?

But I think that most military planners would say this is not a great option. We'd like to avoid it. It is not something the president wants to take off the table. Let's see if we can exhaust every diplomatic action possible.

COOPER: It's understandable why a lot of Americans, though, would be skeptical of what this administration is saying about Iran, you know, based on what this administration and past administrations have said about Iraq. Clearly, the intelligence on Iraq was not very good no matter how it was used. Do we know really what the situation in Iran is? You're pretty confident they're trying to get nuclear weapons?

COHEN: I don't think there is any question about the ambition of the Iranians. I think there is substantial question about how far along they are in the program.

And when it comes to intelligence, we haven't been very exact. All the more reason why important for us to do whatever we can to build a consensus within that Security Council, so we don't have to take action based on a miscalculation or bad intelligence.

COOPER: Secretary Cohen, it's always good to have you. Thank you.

COHEN: Great to be with you.

COOPER: Coming up, the latest on a developing story tonight, Tropical Storm Ernesto.

But first, Erica Hill from "HEADLINE NEWS" has a "360 Business Bulletin" -- Erica.

ERICA HILL, CNN CORRESPONDENT: Anderson, a pretty quiet day on Wall Street ahead of the long weekend. Stocks ended however they started today. The Dow and the NASDAQ each lost only a fraction of a point. Traders were mostly cautious ahead of tomorrow's monthly employment report. But a nice summer rally does remain intact. All the indexes posted gains for the month.

Donald Trump has fired another aspiring employee, but this time, it wasn't a budding young apprentice who got the act. Oh no. Trump's veteran TV sidekick is being shown the door -- 36-year-old Carolyn Kepcher, the stony faced blond who sat at Trump's side through four seasons of the reality show, has been shown the door. Kepcher does have a replacement on the show. It's going to be Trump's daughter Ivanka. And according to the show's Web site, his son, Don, Jr., will be a frequent fill in for the show's attorney co-star George Roth.

And Billionaire Warren Buffett celebrating his 76th birthday yesterday, with a trip down the aisle. The investment giant tied the knot in Nebraska where he married his long-time companion in a civil ceremony. The wedding was held at the home of Buffett's daughter, Susan. Apparently, no plans for a honeymoon. It's Buffett's second marriage. His first wife died of a stroke in 2004.

Congratulations to Warren Buffett. How about that?

COOPER: Absolutely and apparently to every child Donald Trump has because they now will have TV gigs.

HILL: Yes, it's good to be a Trump, isn't it?

COOPER: Erica thanks.

HILL: Hey. COOPER: Well, it is a soggy, soggy night for much of the mid- Atlantic. Rains from Tropical Storm Ernesto could eventually stretch all the way up to New York this weekend.

Still to come, the latest on the storm, how insurers also are preparing for another type of storm to hit the Big Apple. One more powerful, a hurricane like Katrina, they're leaving some folks out to dry and we'll tell you about that ahead on 360.


COOPER: We continue to monitor Tropical Storm Ernesto. Winds 70 miles an hour, pounding the Carolina coast. It made landfall just a short time ago.

For the latest on Ernesto, let's head back to CNN Meteorologist Jacqui Jeras in Atlanta -- Jacqui.

JACQUI JERAS, CNN METEOROLOGIST: Yes, about 11:30 landfall, Long Beach, North Carolina. It's near Cape Fear, just off to the southwest of there. Making its way on shore now, just pounding North Carolina and South Carolina both. Extremely heavy rain and look at those pictures.

The flooding is going to be a huge story here over the next couple of days. In fact, our Doppler radar is estimating 10 to 12 inches, just to the south of Wilmington.

Let's go ahead -- there you can see the radar picture. We want to zoom in for you, and I will show you the center of circulation. We're going to zoom in a little bit tighter here, I think, and try and get you a better view. There is Cape Fear. Right in this area. This is Long Beach, right in that neighborhood. That's where we had landfall just about 15 minutes or so ago.

We're expecting this to stay strong. It is going to continue to be a problem here throughout the rest of the night with the gusty winds. The rain amounts are going to continue to pile on up.

It is moving north, northeasterly right now. Now that it's on land, it's going to start to weaken. It's going to be kind of gradual, but we think this is going to stay at a tropical storm strength through the night tonight and even lingering into tomorrow morning.

It's going to be moving across North Carolina, affecting people over into western parts of the state as well, moving on up through the Appalachians then. And it is going to be bringing in some heavy amounts, especially into the mountainous areas. We've got an easterly wind coming in. That's going to be pushing up the mountains, and that just makes the rainfall amounts that much heavier.

Here's a few totals that we've been seeing already. Mount Pleasant, about 6.5. About 6.5 in Wilmington also. And just about 2.5 in Charleston, South Carolina. This is a forecast rainfall total map for the next 48 hours. All of the white that you see here, that's more than three inches of rain. In fact, I think it's going to be more like four to eight inches of rainfall in this white area. You get into the purples, we're talking about a good two, three inches and then in some of the reds, Baltimore, down towards D.C., extending down towards Norfolk, we're expecting to see maybe two plus inches of rainfall over there as well.

This is going to be lingering on through your weekend. Not only do we have problems by the way in the Atlantic, we have some problems in the Pacific too. We've been looking at Hurricane John all day long. This was a monster hurricane yesterday. Category 4 and look at how this thing is just starting to fall apart. It's down to a Category 2 hurricane at this time. It is just kind of skirting off the coastal areas, but we're concerned by tomorrow morning, Cabo San Lucas, a lot of tourists go and visit here. We're going to just watch those winds begin to increase. It's possible that we could get a direct hit by midday. These times, by the way, Pacific Time.

Going to be bringing in torrential downpours here as well. Concern about mudslides and landslides, and then it is going to be curving off towards the west, pulling away from the U.S. So, not a concern for the U.S., but big trouble for Cabo San Lucas tomorrow.

COOPER: That's going to be a mess. Jacqui, thanks.

A question tonight, what if Ernesto had taken a turn for the worse? A legitimate hurricane on the order of Katrina. And what if it had made landfall on or around New York City?

As CNN's Ali Velshi reports, it is a question that some insurers have already answered.


UNIDENTIFIED MALE: Allstate Insurance Company will not renew your homeowner's insurance policy at the end of the current premium.

ALI VELSHI, CNN CORRESPONDENT (voice-over): Allstate says insuring David Fitzgerald's house is just too risky. In a letter canceling his entire policy, Allstate wrote that they were anticipating major storms in his area in the coming years and that the cancellation is part of a larger initiative to remove our catastrophic risk exposure.

David Fitzgerald lives in Brooklyn, New York.

DAVID FITZGERALD, FORMER ALLSTATE POLICYHOLER: Hurricanes or bad weather would not be something I would think about, no.

VELSHI: It's not that Brooklyn's never seen disaster. It did face the great hurricane of 1938, for example.

Jay Guin (ph), who does catastrophe modeling for insurance companies says it could happen again. JAY GUIN, AIR WORLDWIDE: There is scientific research and the historical record of hurricane activity in the New York region supports the estimate that there is a one in 100 chance that the region will be impacted by a very severe Category 3 or a weak Category 4 hurricane.

VELSHI: And Allstate, which says it's already paid out more than $3.5 billion in Katrina related claims, doesn't want to take that risk. The company confirmed it is not writing new policies in parts of Texas, Louisiana, Mississippi, and Florida.

As for New York, Allstate has this to say. "We are the largest home insurer in the State of New York. A very small percentage of policyholders whose homes we ensure will receive this letter.

About 28,000 policies out of more than 650,000 in the state. But Fitzgerald's not sure why his house was picked.

FITZGERALD: I don't see, you know, houses being blown away here. I don't know anybody who's had a catastrophic loss where I live.

VELSHI (on camera): Well, as improbable as it might seem, a hurricane hitting a place like New York would cause unprecedented damage. That 1938 hurricane, Guin says if it hit New York today, it would result in $35 billion in insured losses.

GUIN: When we re-simulate the 1938 hurricane with the strength that has shifted about 50 miles west of where it made landfall, then those numbers go up dramatically. The insured losses can be on the order of $70 billion.

VELSHI (voice-over): As for flood insurance, the major insurance companies will sell you a policy, but they're not the insurers. The government is, through the National Flood Insurance Program.

A quarter of the payouts the program makes are in low to moderate flood risk areas. David Fitzgerald doesn't think Brooklyn has ever flooded; and like most Brooklynites, he doesn't have or plan to have flood insurance. He does need his house insured, though, and he's done that through Liberty Mutual. Same coverage as he had with Allstate, but less money.

Ali Velshi, CNN, New York.


COOPER: Fascinating. More of 360 in a moment. Stay with us.


COOPER: It has been an extremely deadly week in Iraq. More than 250 Iraqis and 15 U.S. soldiers have been killed since Sunday. At least 46 people were killed just today.

Impossible to know who's behind all the attacks, but U.S. forces have launched an aggressive offensive against insurgents, including al Qaeda fighters in the hotbed of Ramadi.

Now, it is difficult and dangerous work, of course. And sometimes the outcome is not what was planned.

CNN's Michael Ware went on a raid just last night with U.S. troops and caught it all on tape.

MICHAEL WARE, CNN CORRESPONDENT (voice-over): To strike at the heart of al Qaeda in Iraq, U.S. forces in Ramadi are punching into areas not successfully penetrated before. The militants' command bases, from where their attacks are organized.

Like the one against this police outpost, still blackened from a suicide truck bombing, in which Iraqi officers died and their American trainers suffered burns.

Army officers say there are too few troops to capture the farmlands where the leaders hide, move and meet, which included Abu Musab al-Zarqawi until his death, and now the man who replaced him.

U.S. troops in the latest covert operation in Ramadi, the true al Qaeda frontline. America's 16 infantry commanders seek new ways to take their enemy counterparts by surprise, to thwart the early warning systems that allow top targets to slip past U.S. raids.

By launching an attack with something they hope al Qaeda won't expect, an amphibious assault. In fast moving Marines gunboats, Gatling guns in the barrel, heavy machine gun in the stern, powering in darkness west along the Euphrates River, a small army reconnaissance team spies its landing with an infrared beam, invisible to the naked eye.

UNIDENTIFIED MALE: The ground is pretty marshy. Stay put for a better spot for you guys to get off at.

WARE: And Captain Dan Ensulin (ph) makes it ashore, warning his men to watch their rear. From the river bank, his platoons silently cross 900 yards of open fields, creeping into places. Other soldiers around them land by helicopter or push in by road. Encircling houses used by two key al Qaeda leaders who shift their hideouts each night.

The attack goes down. But with no traces of al Qaeda, at least for tonight, in this house or those raided by other teams, a tragedy unfolds.

UNIDENTIFIED MALE: Tell the females to stay. Children can stay.

UNIDENTIFIED MALE: OK, what it looks like we got here, you got obviously a family living here. Two males, of age basically, that we'll secure and detain them with us.

And then we saw the one AK. That doesn't necessarily mean anything. Could be a bad guy, could not be a bad guy.

WARE: With Iraqi army engineers, they prepare to blow a locked door searching for weapons. UNIDENTIFIED MALE: Chief Soto?


UNIDENTIFIED MALE: Just give me a fire in the hole so I can send it up in that.


UNIDENTIFIED MALE: When you guys are ready.


UNIDENTIFIED MALE: We got shots fired. Anybody hurt?

WARE: When the soldiers investigate, they find a family in mourning. The scene was a tough one. And the soldiers are moved.

UNIDENTIFIED MALE: Gee, that's got to be tough.

UNIDENTIFIED MALE: Yes. Well, what he did is he, he stood up or sat up to chase away the insurgents with his AK. When he stood up, he saw, he says he thought it was Americans, so he sat back down and went up again and looked again and then went back down and then his wife got up to look, and when she got up, he shot her. So he says, he told her, he said, I told her, sit down, sit down.

Unfortunately couldn't make that -- what the shooter saw was two guys pop up. Unfortunately, they came back down, it was a different one, different person that came back up.

UNIDENTIFIED MALE: It's hard on the men too.


UNIDENTIFIED MALE: And probably second to losing one of our own, it's probably one of the hardest things that happens to us in reality.

UNIDENTIFIED MALE: That would be a big blow.

WARE: Then it becomes harder still.

UNIDENTIFIED MALE: Let's take him in the house.

WARE: Where a medic tends to the baby in its father's arms.

UNIDENTIFIED MALE: It looks like it's just a surface wound. And it looks like the -- did they say it was a piece of shrapnel that hit her?


WARE: By morning, of 22 detainees taken in the operation 20 were released. At least a dozen turning out to be Iraqi police. The al Qaeda leaders, nowhere to be seen. Unless the soldiers' aggressive new strategy pays off, the car bombs will continue. And these will remain the faces of the war in Iraq.

Michael Ware, CNN, Ramadi, Iraq.


COOPER: An unbelievably difficult assignment. We will be back tomorrow night, same time.

"LARRY KING" is coming up next.

Thanks very much for watching this edition of 360. Have a great night. We'll see you tomorrow.


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