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Libby Guilty; Sins of the Father; Steamy E-Mails; Target: Americans

Aired March 6, 2007 - 23:00   ET


ANDERSON COOPER, CNN ANCHOR: Americans in need of a place to live. Americans left homeless by a tornado while government mobile homes sit vacant not far away. They failed to help with Katrina, now they're not helping tornado victims either. We're keeping them honest. That story is coming up.
So is a rare look at the battle for hearts and minds on both sides of the war in Iraq. U.S. military video and slickly produced video from the bad guys.

First though, our top story. He was Vice President Cheney's right hand man. Now Lewis "Scooter" Libby is a convicted felon. A federal jury in Washington returning guilty verdicts today on four out of five counts of perjury and obstructing justice for lying to federal investigators about who leaked the name of CIA Officer Valerie Plame in the heat of a battle over prewar intelligence on Iraq's nuclear program. It took jurors 10 days to reach their verdict in part, as you'll hear, because jurors felt sorry for Mr. Libby.

I spoke with Juror Denis Collins earlier tonight.


COOPER: The defense was arguing that Libby basically had a bad memory and forgetfulness caused his false statements. Did you just at the end of the day not buy that?

DENIS COLLINS, LIBBY TRIAL JUROR: No, I think he did. I mean, there is pretty good testimony he did have a bad memory. But, you know, the person who really made that point was John Hannah. And he's a person who worked with Libby. And he said that his memory was exasperating, troubling, that Hannah would tell, tell Mr. Libby something in the morning, an argument for some policy. And seven or eight hours later, Mr. Libby would recite it back as if he had just thought of this. So that was the part of his testimony that helped him.

The part that hurt him, Hannah's testimony hurt Mr. Libby as well as when he said that he had a great grasp for facts, ideas and arguments.

One of the jurors sent a question through the judge said, how could Mr. Libby occupy that, that really, you know, that job, as tough as it was, if he couldn't remember? And the response, Mr. Hannah was, oh, he had a grasp of the ideas as well as any boss I had ever had. So, so, while we could accept that he forgot who told him information, it was very hard -- we had, eight or nine conversations or pieces of evidence that showed that he had heard of Mrs. Wilson in the June/July period. Very hard to believe that he would have forgotten that information.


COOPER: Libby's lawyer said today he will seek a new trial. Barring that, sentencing set for June. The charges could bring a 20- year sentence. But as a first-time offender, Mr. Libby is expected to get just a fraction of that.

Before we dig deeper into that and a dramatic day, here is a quick look at how we got here.


COOPER (voice-over): The case against Libby began five years ago and half a world away.

In February 2002 CIA dispatched Former Ambassador Joseph Wilson to Africa to look into reports that Iraq wanted to buy yellow cake uranium from Niger, a key ingredient in building nuclear weapons.

About a month later, in March 2002, Wilson briefed officials at the CIA, saying he didn't believe the reports out of Niger were credible.

Fast forward to January 2003. President Bush made this assertion in the State of the Union address.

GEORGE W. BUSH, PRESIDENT OF THE UNITED STATES: The British government has learned that Saddam Hussein recently sought significant quantities of uranium from Africa.

COOPER: Those 16 words were challenged publicly by Wilson. On July 6, 2003, he wrote a "New York Times" op-ed, titled, what I didn't find in Africa. In it, Wilson accused the White House of manipulating the intelligence from Niger to justify an invasion of Iraq.

Now, by this time, Vice President Cheney, his Chief of Staff "Scooter" Libby, and other White House officials knew that Wilson's wife, Valerie Plame, worked at the CIA.

Libby also had mentioned Plame in conversations with some reporters.

On July 14th, Robert Novak published his mission to Niger column, identifying Plame as Wilson's wife, saying she worked as a CIA operative and that senior administration officials told him it was her idea to send Wilson to Niger.

The following September, the Justice Department opened up a criminal investigation into Plame's outing. Nearly two years later, on October 28, 2005, Libby was indicted on charges of obstruction of justice, perjury and making false statements to the FBI about his conversations with NBC's Tim Russert.

After 10 days of deliberations, a jury today convicted Libby of four of the five counts against him.


COOPER (on camera): It's not over yet. Sentencing, a civil suit, congressional hearings and more. A lot to talk about.

I spoke earlier with "Court TV's" Savannah Guthrie and CNN's Jeffrey Toobin.


COOPER: Ms. Savannah, let me start with you. You were inside the courtroom throughout this trial. Is this verdict a surprise? Is this one you were expecting?

SAVANNAH GUTHRIE, "COURT TV": I think -- I'm not surprised by this verdict at all. I mean, the prosecutors put on a very straightforward case. You had Libby's statement out there. And the prosecutors put on a series of witnesses designed to unravel that story.

Sure, some of them had memory problems of their own. But at the end of the day I think the jurors concluded, look, how can eight different people be the ones with bad memories and Libby's remembering it right. So they rejected the defense arguments and ultimately came back with verdicts of guilty on four of the counts and acquitted on what most thought was the weakest count.

COOPER: What do you think it was, Jeffrey, that convinced this jury?

JEFFREY TOOBIN, CNN SENIOR LEGAL ANALYST: Tim Russert. I think Tim Russert was by far the most important witness in the case. Because remember, Libby's explanation for how he learned of Valerie Wilson's identity was from Tim Russert. And Russert got on the witness stand and said it didn't happen. It just simply didn't happen.

And now we have a situation for the first time in American history that a major public figure is going to prison in all likelihood based on the testimony of a journalist, which is, you know, troubling for me as a journalist. I'm glad it wasn't me. Russert didn't have any choice. But I think that's really what we're going to remember this case for.

COOPER: Savannah, we heard from the jury that, or from one of the jurors, the jury considered Libby the fall guy. Is there, was there evidence presented to that effect?

GUTHRIE: Not really. There was one piece of evidence that was this note that the vice president actually wrote not going to protect one staffer, meaning Karl Rove, and sacrifice "Scooter" Libby. That note was in evidence.

But beyond that, there was precious little other than the defense attorney's statements in opening arguments, that "Scooter" Libby was the fall guy or the sacrificial lamb. Nevertheless, I think it's interesting that the jurors actually had sympathy for Libby. They actually kind of believed that he was the fall guy. But in the end, it made no difference.

I never understood how that was a legal defense. An interesting political idea, something to write about and talk about? Sure. But not really a legal defense to the charges. And this jury just not -- this jury verdict just underscores that.

TOOBIN: It was interesting how many jurors apparently responded to the fall guy defense. Because, you know, as a technical legal matter, it was clear no one forced "Scooter" Libby to testify falsely in the grand jury. Yet, you have this sense, watching the trial, that there were lots of people out there criticizing Wilson, making a big point of the fact that his wife worked at the CIA. His wife sent him on the junket. And it was only Libby in the dock.

So you could understand, kind of in an atmospheric way why the jury felt that way. But the facts simply didn't support it...


COOPER: And yet, Jeff, I mean no -- there are no criminal charges that have been filed in this about the actual leak itself. And according to Prosecutor Fitzgerald, this is the end of it.

TOOBIN: I think that's right. I think...


COOPER: Was a crime committed?

TOOBIN: You know, it's certainly a crime that most prosecutors would not have brought. I think -- I think -- in order to make a case that you outed someone, you have to intentionally blow someone's cover. And Richard Armitage, you know, we have the tape of his interview with Bob Woodward, who was the first journalist to learn that -- from Armitage, the former deputy secretary of state, that Wilson's wife worked at the CIA.

But he suggested she was an analyst. It's not clear that he knew she was undercover. He was sort of -- he was passing along gossip in the sense that she sent him to Africa, not that she was an undercover, undercover agent. So I can see why Fitzgerald didn't bring the case.

COOPER: But Savannah, I mean, Joe Wilson clearly believes through his civil suit that there was a crime committed, that there was this intent to invalidate his opinion and destroy his wife's career. GUTHRIE: Right, but there's a big difference between a civil claim and of course the criminal case, which there's a higher burden of proof. And it's a totally different statute.

What Jeff says, I think is probably correct. In the criminal case, the special prosecutor knew, hey, I don't have intent here. It's not clear that "Scooter" Libby, for example, necessarily knew that Valerie Plame-Wilson's status was classified. So therefore it wouldn't necessarily have been a crime for him to leak it if he didn't know it was classified.

In the civil case, it's totally different. They have to say, hey, they intentionally violated my constitutional rights. And the judge is going to hear arguments on that in May.

COOPER: Very briefly, how much time would "Scooter" Libby do?

TOOBIN: Under the federal sentencing guidelines, somewhere between a year and a half and three years.

COOPER: Jeff Toobin, Savannah Guthrie, thanks guys.


COOPER: Even before he went to Africa and was outed by Robert Novak, Joseph Wilson and Valerie Plame were already a well-known Washington couple.

For better or worse, the scandal made them national celebrities. Today's verdict brings the latest chapter of their story to a climax.

I talked with Ambassador Joseph Wilson about that and the case earlier tonight.


COOPER: Prosecutor Patrick Fitzgerald said he doesn't expect any further charges to be filed. Is Libby's conviction enough for you?

JOE WILSON, FORMER U.S. AMBASSADOR: Well, it's not --- I would look to point out that the case against Mr. Libby was not Wilson against Libby. It was the U.S. Government against Mr. Libby.

We have filed civil suit against Mr. Cheney, Mr. Rove, Mr. Libby and Mr. Armitage and John Does one through nine, I think there are now. And we would hope to be able to pursue that civil suit so that we can get for the record, their depositions and their testimony as to what really went on.

COOPER: Do you wish, though, that the U.S. government had pursued charges against others as well? I mean, clearly you think more people were involved in this?

WILSON: Well, clearly, more people were involved in it. Mr. Armitage was a leaker to Bob Woodward. And Mr. Rove, who still is employed by the U.S. government, was a leaker to Mat Cooper. So clearly, there were more people involved in this. And Mr. Fitzgerald said again today there remains a cloud over Dick Cheney.

So, yes, but we weren't part of the investigation. We will be part of the civil suit. So I'm not going to -- I'm not going to sort of second guess what the FBI and the Justice Department did. I think that they did everything humanly possible.

Mr. Fitzgerald said today that part of the reason he couldn't get to a lot of this was because of the obstruction of justice.

COOPER: You believe that Presidential Advisor Karl Rove was deeply involved in smearing your family. You've said you would like to see him, and I quote, "frog marched out of the White House in handcuffs." If he's responsible, why hasn't he been charged with a crime? In fact, why hasn't anyone been criminally charged with the leak itself?

WILSON: Well, first of all, I think it's important to understand what Mr. Fitzgerald said at the time the indictments were announced, which was that whatever you prosecute them under, justice is served if they're convicted of a crime.

And the fact that Mr. Libby was convicted of perjury and obstruction of justice doesn't mean that he wasn't culpable of something else. Anymore than when Al Capone was convicted of tax evasion, it didn't mean that he wasn't a mobster. So I think it's important to keep that in mind.

It's also important to understand that the statute, the way it's written, is very complicated and very difficult to prosecute under. It requires a foreknowledge that she was covert.

COOPER: Does the president of the United States have some answering to do? Earlier he had said -- years ago, he had said that anyone caught leaking would be dealt with.

WILSON: Well, I'd like the president to live up to his word, yes. I think the one person who remains employed by the U.S. government, who was a leaker, known to be a leaker was Karl Rove. So I certainly think that he should be fired.

I also think the president and the vice president owe the American people an explanation of exactly what, if any, their roles in this might have been.

For openers, I think it would be helpful if they released their testimony to Mr. Fitzgerald from when they were interviewed by him. They must have transcripts of those interviews. I think that would be useful for the American people to better understand exactly what they knew, when they knew it, and what they did about it.

COOPER: You of course, are still not without your critics. After Former Deputy Secretary of State Richard Armitage admitted that he originally leaked your wife's name, "The Washington Post" wrote this about his revelation. They said, "It follows that one of the most sensational charges leveled against the Bush White House -- that it orchestrated the leak of Ms. Plame's identity to ruin her career and thus punish Mr. Wilson -- is untrue... and the person most responsible for the end of Ms. Plame's CIA career is Mr. Wilson." How do you respond to that?

WILSON: Well, you know, the role of "The Washington Post" editorial board is to provide informed comment to its readers. And what they wrote in that editorial was directly contradicted by what was reported in their news pages.

When the editorial board doesn't bother to read the news pages of its own newspaper, why should I?

COOPER: So without a doubt in your mind there was an attempt on the part of this administration to destroy, to discredit you and destroy your wife's career?

WILSON: Absolutely. And I think the evidence, the exhibits that were entered into evidence and the testimony in this trial make that very clear. Make it very clear that the vice president is talking points that were dictated by him to Kathy Martin. They were written by him on the -- on the editorial, were directly at odds with the facts as they emerged in the trial, including such things as the supposed role of my wife in my going out to Niger, including such things as the contents of my report, including such things as my qualifications, which of course were undermined and challenged by the administration even though in Mr. Libby's grand jury testimony he acknowledged that both the vice president and he felt that I was eminently qualified to undertake the mission requested.

COOPER: Ambassador Wilson, I appreciate your time. Thank you.

WILSON: Thanks, Anderson. Nice to be with you.


COOPER: Well, Lewis "Scooter" Libby's ties to the administration are deep of course. Here's the raw data.

In the 70s Libby studied political science at Yale under Paul Wolfowitz, who would later serve as deputy defense secretary in the Bush White House.

Libby went on to work with Wolfowitz at the State Department.

In 2001 he was named chief of staff and national security advisor to Vice President Dick Cheney.

According to "The Washington Post," Libby once told an aide that he would continue to work for the vice president until, quote, "I get indicted or something." Of course, as we mentioned, he was indicted October 28, 2005, resigned later that day.

Coming up ahead on 360, the astronaut. What may have fueled her obsession and sparked a bizarre trip cross-country.

Also, these stories.


COOPER (voice-over): Terror targets. The U.S. takes aim at al Qaeda, the dramatic new video.

Plus, the outrage over Walter Reed grows.

UNIDENTIFIED MALE: I wouldn't live there even if I had to.

COOPER: Tonight, the company responsible for the neglect and their connection to Halliburton and the vice president.

Ahead on 360.


COOPER (on camera): We want to let you know about a remarkable report we have been working on. It's called "Sins of the Father." It airs next Monday at 10:00. It's the story of one of our colleagues, Headline News Anchor Thomas Roberts. What happened to him decades ago when he was a young teen still haunts him.

Here is a preview.


COOPER (voice-over): In the fall of 1986, Thomas Roberts started his freshman year at the prestigious Calbert (ph) Hall. He adjusted quickly to the new school, but the strain of his parents' divorce was a constant source of struggle.

THOMAS ROBERTS, HEADLINE NEWS ANCHOR: My relationship with my parents through that time, and with my mom going back to work and all these changes, I pulled back. I kind of disconnected from my family environment.

COOPER: By Thomas's sophomore year, his mom, Michelle, realized the emotional and financial difficulties at home were too much for her son to deal with alone. Struggling herself just to make ends meet, she looked to a familiar face to help mentor her son, someone she felt she could trust. She turned to the man who had already helped Thomas get into the school, Father Jeff Tuey (ph).

MICHELLE ROBERTS, THOMAS'S MOM: I thought he needed a male influence. And who better, you know, than the Catholic priest who's charming and kind and wonderful? You know, I wanted Thomas to be just like him.

COOPER (on camera): Who better?


T. ROBERTS: That night I remember getting dropped off at Father Jeff's house. And we began a conversation in his den, where he just started to ask what's going on with you. And so he took a kind ear, you know, and listened to me. I remember it was a conversation that I cried. I let Father Jeff know that my relationship with my parents wasn't where it should be.

From this conversation forward, he pretty much knew that I was a kid without anybody, you know, to talk to.

COOPER (voice-over): No one to talk to, except of course Father Jeff. After that first conversation, Thomas believed he finally had someone he could confide in. He trusted Father Jeff. He continued to return to the priest's house on Cottage Lane.

When you see the house, what do you think?

T. ROBERTS: I wish I had never seen it. I wish I had never seen this house. Never.


COOPER: What happened inside that house would test Thomas Roberts in ways he never imagined. Don't miss the "Sins of the Father," next Monday night at 10 p.m., Eastern.

Just when you thought it could not get any stranger, there is a new twist in the NASA love triangle that we first told you about a month ago. You may remember, Astronaut Lisa Nowak drove more than 900 miles in diapers to convert her romantic rival. Now we know what may have sent her over the edge.

CNN's Susan Candiotti investigates.


SUSAN CANDIOTTI, CNN CORRESPONDENT (voice-over): It may be freezing outside those shuttle hatches, but inside zero gravity, steamy e-mails can keep astronauts warm.

"Will have to control myself when I see you. First urge will be to rip your clothes off throw you on the ground and love the hell out of you," writes Air Force Captain Colleen Shipman to her lover Astronaut Bill Oefelein.

At the time last December, he was circling earth, piloting the shuttle Discovery. Oefelein tells Shipman he's, quote, "a moron when she is not near." He writes, You must really have me around your finger that I can't even function without you here, and with you here, I am slightly smarter than a slug."

When romantic rival Lisa Nowak found the e-mails, it apparently sent the lovelorn astronaut over the edge.

Prosecutors say she plotted to get even. A mind-boggling 900- mile cross-country drive from NASA headquarters in Houston to Orlando in adult diapers to meet Shipman's plane.

Nowak is charged with trying to kidnap Shipman from an airport parking lot. She told police, Nowak, wearing a wig and trench coat pepper sprayed her. A hunting knife, steel mallet and BB gun were found in Nowak's car.

Her mug shot stunned the space community. A humiliated Nowak was shackled in court. NASA put her on a 30-day leave after she was freed on bond.

The space agency promised help for her and other astronauts under stress.

Nowak, a mother of three who was seeking divorce, downplayed her affair with her fellow astronaut. Not Oefelein. He told police he was involved with both women, but later told Nowak he wanted to date Shipman exclusively. He claimed Nowak was quote, "happy for him."

The alleged kidnapping plot suggests otherwise. This is where things can get tricky. The handsome astronaut seeing two women slipped up. Colleen Shipman told police one night after a party, quote, "We came home, and we had a few drinks, we were laying in bed and he called me Lisa." Oops.

(on camera) Lisa Nowak has pleaded not guilty. No comment from the two other players in this case, who just might be regretting those oh so personal e-mails sent from outer space. And back.

Susan Candiotti, CNN, Miami.


COOPER: Bizarre story.

You've heard about the mold and the mice, of course. But wait until you hear who was supposed to clean up Walter Reed. The company and its connection to Vice President Cheney.

Plus, dramatic new video of American forces targeting terrorists, along with video from the other side.

You are watching 360.


COOPER: Targeting terror. The Defense Department released dramatic video today of the U.S. taking aim at members of al Qaeda in Iraq during an air strike operation west of Taji on Friday.

Now, another tape. This one was released by Iraqi insurgents and it may not have the impact that they were hoping for.

CNN's Tom Foreman explains.


TOM FOREMAN, CNN CORRESPONDENT (voice over): The latest propaganda video is clearly intended to show a growing military sophistication on the part of the insurgents. But it may be an inadvertent admission that they cannot handle pressure from coalition forces.

Intelligence analysts are interested in this video because for the first time insurgents are claiming to have detailed profiles of American mine sweeping vehicles. Even identifying them by name -- the buffalo, the cougar, the RG-31. And they say they have strategies for destroying them.

OCTAVIA NASR, SENIOR ARAB AFFAIRS EDITOR: This is definitely a tape to flex muscles and show what they're capable of and also to invite others to join in the fight. Basically making it appealing. Making it something that others would want to join.

FOREMAN: But in almost every case, the video is cut right after a bomb explodes beneath the mine detecting vehicle, making it impossible to tell if any real damage is done.

NASR: What happens next is that something that the insurgency doesn't want us to see. Why? That we do not know.

FOREMAN: We do know many coalition vehicles are designed to safely withstand a wide array of landmines, as seen on this Department of Defense video. And they can be repaired and returned to action quickly. The insurgents don't show that.

Also, the Pentagon says the number of successful roadside bomb attacks has started to go down, not up. That's not on the insurgent tape either.

(on camera): American military leaders have certainly been frustrated in their efforts to bring the insurgency under control in Iraq. But for all of the claims on this new videotape, the insurgents effectively admit they're not doing as well as they might hope.

(voice-over): At one point, the announcer repeats what is becoming standard in these tapes, a plea for scientists, weapons experts and researchers to join the insurgent movement. Because the announcer says, they are in dire need of help.

Tom Foreman, CNN, Washington.


COOPER: And we're working to bring you reports...

FOREMAN: A plea for scientists, weapons experts and researchers to join the insurgent movement because, the announcer says, they are in dire need of help.

Tom Foreman, CNN, Washington.


COOPER: And we're working to bring you a report tonight from CNN's Michael Ware in Baghdad on another kind of war taking place in the shadows in Iraq. That story a bit later in the hour.

We'll be right back.


COOPER: The kind of warfare in the insurgent video that you saw before the break is what we're used to seeing in Iraq, but there's another fight going on behind the scenes. This battle is taking place in the shadows, a quiet struggle for control of Iraq's intelligence agencies, and it is a fight the United States simply cannot afford to lose.

CNN's Michael Ware investigates.


MICHAEL WARE, CNN CORRESPONDENT (voice over): This is the face of the intelligence wars here, an Iraqi officer unable to show his identity amid the shambles of his agency's southern headquarters. It was stormed not by insurgents or Shia militia, but by coalition troops and Iraqi special forces who suspect he's working for another side.

It's a scene far from the other Iraq war on TV screens of roadside bombs, suicide attacks and firefights. This is a conflict waged in the hidden world of espionage, between intelligence agencies sponsored by the CIA and Iran.

It's about who controls Iraqi intelligence. And it's a battle the U.S. risks losing.

It's all here in this document from Iraq's National Security Council. In these pages, the blueprint for the nation's new intelligence community. A blueprint that would merge all intelligence gathering under Iraqi government control, a government heavily influenced by Iran.

It would be a damaging blow to the CIA, which since the fall of Saddam's regime has built its largest station in the world here. U.S. intelligence sources tell CNN the agency has around 500 offices. More than the CIA presence in Saigon during the Vietnam War.

At stake is control of an organization ensconced inside this heavily-defended building, the Iraqi National Intelligence Service, or INIS. It's headed by this man, Mohammed Abdullah Shehwani, a man so secretive, this is one of the few known photographs of him.

Appointed three years ago by the U.S., military and intelligence sources say Shehwani's INIS is funded completely by the CIA. Though an Iraqi agency, not one cent comes from the government in Baghdad.

Top Iraqi government officials complain the agency is beyond Prime Minister Nuri al-Maliki's control. But now the Shia-led government is trying to assert that control.

Shehwani, currently under Iraqi government investigation over unspecified corruption allegations, has not been seen in the country for at least three months. U.S. ally and former prime minister Ayad Allawi says Shehwani is being unfairly targeted.

AYAD ALLAWI, FMR. IRAQ PRIME MINISTER: I don't know whether it's an attack on the U.S. intelligence, but definitely it's an attack, a political attack against Shehwani.

WARE: One of Shehwani's rivals is this man, Shirwan al-Wa'eli, Iraq's minister for national security, here on a recent tour of Baghdad neighborhoods. He leads the agencies that over the past two years, according to U.S. intelligence, has grown to almost 3,000 operatives. The goal, to compete with the CIA. And under the new intelligence plan, this agency is set to grow even more, with the minister applauding his relationship with Iran and distancing himself from the U.S.

SHIRWAN KAMIL AL-WA'ELI, MINISTER OF STATE FOR NATIONAL SECURITY (through translator): Multinational forces are in Iraq. And they're supportive on the security issue. And we have a good relationship with them. But we do not bargain Iraq to any side. The Americans give us only moral support, not logistical support.

WARE: While the CIA-backed agency suffers, this ministry has become an intelligence organization the American government and its allies never meant it to be.

CNN's repeated requests for on-the-record comments from the U.S. military, embassy and intelligence agencies in Iraq went unanswered.

Meanwhile, the intelligence plan is due to go to the Iraqi parliament. And what happens there may be every bit as important as the battles on the streets of Baghdad.


COOPER: Michael Ware joins us now from Baghdad.

Michael, how much influence does the Iranian intelligence services have on the Iraqi government?

WARE: Well, this is a great, big, open question, Anderson. Certainly if you speak to Western intelligence or American military intelligence, they will tell you that the Iranian influence is significant, if not great.

Indeed, they point to a myriad of Iranian intelligence and Revolutionary Guard networks operating in Iraq, including some coming out of the Iranian Embassy here in the capital of Baghdad. So their influence cannot be underestimated, Anderson. And this really is an intense rivalry for what is basically the fate of the Iraqi intelligence community.

COOPER: Fascinating report. Michael, thanks. Appreciate it.

Michael Ware form Baghdad.

Back here at home we're hearing a lot about Vice President Cheney today. It's not just about the Libby trial. His name has surfaced in connection to the growing scandal at the Walter Reed Army Medical Center and the deplorable treatment of wounded veterans. Cheney used to run the Halliburton Corporation. Now a former Halliburton official is under fire for neglecting the hospital at your expense.

CNN's Joe Johns tonight is "Keeping Them Honest."


JOE JOHNS, CNN CORRESPONDENT (voice over): What happened to the people who are supposed to keep the mold and the mice under control at Walter Reed begins years ago with a $120 million federal contract.

JOHN GAGE, AMERICAN FEDERATION OF GOVERNMENT EMPLOYEES: This was taking care of all the buildings, working on keeping things, you know, in good shape and maintaining them. It's an old facility and you really have to have that maintenance there.

JOHNS: Federal employees started out doing this work, of course. But then the work was outsourced, privatized. Whatever you call it, the government decided it could save money by giving a private company the business.

After much lobbying and legal wrangling over a number of years, the contract was eventually awarded to a company called IAP Worldwide Services. A result that to this day raises eyebrows at the Pentagon.

GEN. PETER SCHOOMAKER, CHIEF OF STAFF, U.S. ARMY: This is a very unusual kind of transaction that took place.

JOHNS: So unusual, in fact, that Democrats in Congress are taking a much closer look at the deal. Here's why.

IAP is run by this man, Al Neffgen. You probably haven't heard of him, but he used to work at a subsidiary of Vice President Dick Cheney's old firm, Halliburton. And Democrats love to hate Halliburton because of its astounding track record getting fat government contracts with the Bush administration.

SEN. HILLARY RODHAM CLINTON (D), NEW YORK: Yet again, Halliburton. And it raises its head by being a former Halliburton official who got a contract to do in-house maintenance at Walter Reed. I'll tell you, folks, this has the got to end. You know, somebody has got to be responsible.

JOHNS: Three years ago, in 2004, Al Neffgen, testifying before Congress on behalf of that Halliburton subsidiary he used to work for, sounded like a cost-conscious kind of guy.

AL NEFFGEN, CEO, IAP WORLDWIDE SERVICES: The public has a right to expect that its tax dollars are spent wisely.

JOHNS (on camera): Which brings us back to Walter Reed. The promise to spend wisely and control costs is why IAP got the contract for building and ground maintenance.

(voice over): IAP's critics, including some in Congress, have claimed that the company didn't have enough people on the job when it finally started performing the Walter Reed Contracts last month. But IAP says it had 290 people working the first week of February, and now has more than 305. About the same number working there when federal employees were doing maintenance.

Still, critics say the fight over the contract hurt the hospital.

The union complained saying there weren't enough workers to maintain the hospital, especially with the United States at war in Iraq.

UNIDENTIFIED MALE: You can seep what happened. They weren't getting the service, the grounds were falling apart.

JOHNS: The whole story isn't in, but some in Congress want to take a closer look at the contract and the hospital to see who thought it was a good idea to cut back on staff when the Army was ramping up for war.

Joe Johns, CNN, Washington.


COOPER: Who indeed?

Coming up, the hospital scandal as told from the inside. An Iraq war veteran describes what life was like at Walter Reed in her own words. That's next.

And later, homeless storm victims and more FEMA misery.


COOPER (voice over): Plus, they have nowhere to live.

UNIDENTIFIED MALE: Everything's gone.

COOPER: Yet, thousands of brand new FEMA trailers are sitting empty 160 miles away.

UNIDENTIFIED MALE: It's unacceptable.

COOPER: Does this sound familiar? Are last week's deadly tornadoes the new Katrina?

We're "Keeping them Honest" ahead on 360.



COOPER: Well, it's clear the conditions at Walter Reed Army Medical Center are unacceptable. Our heroes deserve better.

Tonight you're going to hear from one of them, Tammy Duckworth. She spent months at the hospital after a helicopter crash in Iraq. She lost both her legs in the accident. And what she saw at Walter Reed, well, hear for yourself.

Tammy Duckworth in her own words.


L. TAMMY DUCKWORTH, DIRECTOR, ILLINOIS DEPT. OF VETERANS AFFAIRS: I was in a semi-coma state for about 10 days. My husband over and over again for 10 days kept saying to me as he sat next to my bed, he kept saying, "You were injured. You are safe. You're at Walter Reed."

"You were injured. You're at Walter reed. "You are safe."

And even though I was coming out of my -- I was semiconscious, when I woke up I knew that I was safe because I was at Walter Reed. And that is precious. That is precious for our troops who are in theater right now to know that that level of care will be there for them if they are injured.

I was injured in the second year of the war, in 2004. So that was fairly early on. And even then there were issues with the bureaucracy. There were issues.

I had a cockroach in my hospital room. At the Malone House, where my mother was staying, as she was helping to take care of me, you know, I saw mice in their cafeteria. I didn't eat there. We would have meetings there and we would bring in our own food. But I wouldn't eat at that cafeteria.

So there were already issues as far back as 2004, 2005.

I feel that the conditions at Walter Reed are a reflection of the complete lack of planning for the war, and the lack of planning for this war lasting as long as it has. And so, Walter Reed, while it is medically the premier institution in the country, if not the world -- and I received the absolute best care while I was there medically -- there was a complete lack of planning in the administration for, how are we going to take care of this many wounded warriors for as long as we are going to? Because they never even planned on us being at war as long as we have.

And simply, Walter Reed is completely overwhelmed. And they do not have the -- the support, the logistics needed to handle this many on outpatient basis. And the bureaucracy is just terrible. And no wounded soldier who is heavily medicated, who may have a brain injury, should have to negotiate a bureaucracy like that.

(END VIDEOTAPE) COOPER: That is Tammy Duckworth, who, of course, ran for Congress. She's a Democrat.

Up next, tornadoes wiped out their homes, they have nowhere to go. What about those thousands of FEMA mobile homes that are still empty after Hurricane Katrina? Yes, those ones sitting there. Well, they're not being used. We'll find out why.

We're "Keeping Them Honest" next.


COOPER: A very sad sight. That's the funeral for Michael Tomkins (ph), who was one of eight students killed when a tornado tore through their high school in Alabama last week. Tomkins (ph) was just 17 years old. His father was serving in Iraq and came home to bury his son.

Two other funerals were held today.

Across the South, in town after town, last week's deadly tornadoes left many homeless. Although help from Washington is literally sitting in a massive parking lot, the government can't seem to get the mobile homes to those who need them.

CNN's Jeanne Meserve is "Keeping Them Honest."


JEANNE MESERVE, CNN CORRESPONDENT (voice over): Ten days ago, this was a neighborhood. Today, it's a ruin.

Residents are asking a familiar question -- where is federal help? Where is FEMA?

On February 24th, a severe tornado churned through southeastern Arkansas, chewing apart 150 homes.

TERRY EDWARDS, DUMAS, ARKANSAS, RESIDENT: Well, as you can see, there was a house here at one time. But no longer. We lost -- lost it to the storm.

MESERVE: But Hope -- literally, Hope, Arkansas -- is only a three-hour drive away. You may remember that's where all those FEMA mobile homes sit, those 8,000 fully-furnished mobile homes purchased for Hurricane Katrina victims. They became an embarrassment because they're still here unused.

Now another disaster. The trailers would appear to be a perfect solution for housing the tornado victims only 160 miles away. But after 10 days, still no hope from Hope.

That's why we're "Keeping Them Honest."

REP. MIKE ROSS (D), ARKANSAS: It's unacceptable. It's reprehensible. And it's a symbol of what's wrong with FEMA. MESERVE: FEMA says it can't send the mobile homes unless the tornado-ravaged area is declared a federal disaster area. It hasn't been. So FEMA's trailers still just sit there.

JUDGE MARK MCELROY, DESHA COUNTY, ARKANSAS: I took for granted that help was on the way. You know, that's what our government is there for, federal emergency management. If this is not an emergency, there is not a cow in Texas.

MESERVE: FEMA is still assessing whether state and local governments really need federal help. One FEMA official points out that Arkansas currently has an $850 million budget surplus.

The governor has a different view.

GOV. MIKE BEEBE (D), ARKANSAS: We're using all our resources that are set aside for this, all our resources that are -- that are designed for disaster relief from the state level, and all our personnel. So, it's time the federal government did their part.

MESERVE: The anger in Arkansas is tinged with suspicions of political games. Less than 48 hours after tornadoes hit Alabama and Georgia, President Bush and FEMA director David Paulison were on the ground with assurances of federal help. Those states have Republican governors. Arkansas does not.

FEMA says that isn't a factor. But some locals aren't buying it.

EDWARDS: Because I think the Republicans got their butts kicked in the state of Arkansas by the Democrats this year, and I don't think they're liking it too well.

MESERVE: Today, 10 days after the tornado, most people here have found some kind of shelter, but not a home. Having the FEMA mobile homes so close, so empty, so unavailable, and yet so inaccessible is a bitter pill.

KEVIN HILL, DUMAS, ARKANSAS RESIDENT: For them to say that we can't get nothing, they need to come stay with me for the weekend. I invite them all. Get up and not know where your britches are in the morning. Just tell them to come visit me.

MESERVE: Where, residents ask, is common sense? Where is compassion?

Jeanne Meserve, CNN, Washington.


COOPER: It sounds like we have heard it before.

Up next, a fiery landing. We'll tell you where this happened and how many survivors there are.

That's next on 360.



COOPER: Get the latest news in the morning on "AMERICAN MORNING" with Soledad and Miles at 6:00 a.m. Eastern.

And a reminder. We want you to help us keep them honest. If there's a wrong that needs to be made right in your community, tell us about it --

Larry King is next.


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