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ANDERSON COOPER 360 DEGREES

California Fires Out of Control; Alleged Captor's Sexual Obsessions

Aired September 1, 2009 - 22:00   ET

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


ANDERSON COOPER, CNN ANCHOR: Two breaking stories again tonight: the L.A. County fire slowly beginning to yield, now 22 percent contained, according to county officials, but still reducing houses to ash, threatening homeowners too foolish -- homeowners who are too foolish to leave, even though they will be taking on a wall of flames armed only a garden hose.

We're live in a neighborhood you will all remember from the movies, now with a towering inferno for a backdrop.

We begin, however, with the haunting possibility that Jaycee Dugard was not the only girl whose disappearance will eventually be tied to her alleged captor, Phillip Garrido -- that a new window into his evidently sick and twisted mind. It comes from our first look at some very disturbing court records.

The families of two other missing girls are now following every new development in the investigation. So is John Walsh. You will hear from him shortly. We will also speak with a man who had extensive dealings with Jaycee, the woman he knew as Alyssa.

But, first, the breaking news, those court records we're getting a first look at them.

Dan Simon has the details.

(BEGIN VIDEOTAPE)

DAN SIMON, CNN CORRESPONDENT (voice-over): Phillip Garrido fantasized about raping women, one of the startling admissions he made during his 1977 rape trial.

In court documents obtained by CNN, Garrido also testified during that case that he used LSD and cocaine as sexual stimulants and masturbated in public places at the "side of schools, grammar schools, and high schools, and in my own car while I was watching young females."

Garrido made these confessions while on trial for raping then 25- year-old Katherine Callaway Hall, who told Larry King that Garrido raped her after she offered to give him a ride.

(BEGIN VIDEO CLIP, "LARRY KING LIVE")

KATHERINE CALLAWAY HALL, RAPE VICTIM OF PHILLIP GARRIDO: Just turned around the corner and pulled over. And he slammed my head into the steering wheel and pulled out handcuffs. He took my keys out, threw them on the floor, and pulled out handcuffs, and handcuffed me, and -- and said: "I just want a piece of ass. If you be good, you won't get hurt."

(END VIDEO CLIP)

SIMON: Does Garrido have other dark secrets in his past that have not been revealed? Police confirm they are investigating Garrido as a possible suspect in the disappearance of two young girls in the area, including then 13-year-old Ilene Misheloff, who went missing 20 years ago while walking home from school.

(on camera): What do we know in terms of how she was abducted?

MIKE MISHELOFF, FATHER OF MISSING GIRL: The only thing that we know, we know that she was last seen at a -- an intersection very close to here.

SIMON: Misheloff's father tells me the Jaycee Dugard case has given him renewed hope, even if it turns out that Garrido is not involved.

MISHELOFF: It shows that somebody can be found after all these -- all these years. You never know what could happen, and so (INAUDIBLE) it has reinforced our hope that -- that perhaps Ilene is still alive and we will find her.

SIMON: And take a look at this. This is a composite sketch of the suspect who abducted 9-year-old Michaela Garecht outside a store in 1988. Police say they think it resembles Phillip Garrido, though it's tough to tell with the passage of time. Michaela's mother tells CNN there are other similarities.

SHARON MURCH, MISSING GIRL'S MOTHER: The method of the kidnapping was the same. They were both dragged into cars. The description of the cars was very similar. The girls looked very much like each other. There have been points in the past where the investigations have crossed with the same suspects.

SIMON: Police searched Garrido's home for several days, but have not revealed if there is any evidence linking him to other abductions. Garrido and his wife have pleaded not guilty to rape, kidnapping, and false imprisonment charges.

Cadaver dogs, meanwhile, found a bone fragment on a neighbor's property that authorities say Garrido lived on at one time, but say it could take weeks to determine if it's from an animal or human.

(END VIDEOTAPE)

SIMON: Authorities tonight are ending the speculation on one aspect of this case. They had looked at Phillip Garrido as a possible suspect in the murders of several women in this area back in the 1990s, prostitutes. They say they looked at the evidence and determined that there is none. So, at least that part of this case is over -- Anderson. . COOPER: All right, Dan Simon with the latest on the investigation -- thanks, Dan.

Now one on the -- one of the people who crossed paths with Phillip Garrido and Jaycee for years. There's understandably a lot of guilt in the community from people who only saw pieces of the picture, a picture, to be fair, that is now only starting to come into focus, the pieces perhaps only sinister-looking in retrospect.

Deepal Karunaratne was a customer of the Garrido print shop. He dealt with Jaycee for six years, though he only knew of her as Garrido's daughter Alyssa. He joins us now.

Thanks for being with us.

You were a customer of the printing company. You met and talked with Jaycee an awful lot. What was she like?

DEEPAL KARUNARATNE, GARRIDO BUSINESS ASSOCIATE: Oh, she was a very -- she was a very beautiful person. I believe she's a beautiful person from outside and inside both. She was very pretty and very intelligent, very polite and kind, nice and professional.

(CROSSTALK)

COOPER: And there was no indication in all of your dealings with her that anything was amiss?

KARUNARATNE: No, never. I have never seen anything, any red flags. And she hasn't indicated anything to me...

COOPER: What about...

KARUNARATNE: ... or anybody else.

COOPER: What about Phillip Garrido? People have said that, in the last year or so, he became even stranger.

KARUNARATNE: Yes, I would say about last three years. He's been -- he's been strange always. He is a little eccentric person.

But last three years, he has been talking a lot, strange stuff.

(CROSSTALK)

COOPER: Such as?

KARUNARATNE: That he's talking to angels and stuff like that.

COOPER: And he -- he would tell you about this? He would tell you that he was talking to angels?

KARUNARATNE: Yes. He's -- he's -- yes, of course, yes. When I come to pick my stuff, sometimes, he jump in my car with the Bible always, trying to preach me.

So, I'm like: "Phillip, I don't have time for this. I need to get to work."

But he somehow find time to preach me at least a couple of minutes, you know. It's always like that. This happened last three years.

COOPER: You also, I know, went to the Garridos' home to pick up your orders. Did you have any sense that anything strange was going on there? I understand he -- he referred to a soundproof room he had in the backyard. But -- but you never actually saw it?

KARUNARATNE: Well, no. Yes, because he -- he comes with his music. Sometimes, he bring a guitar out and start singing by my car. And then he -- sometimes he comes with a Walkman. And he asks me to wear his headphones and he play his music.

So, I asked, "Whose music is this?"

He said: "It's my music. I recorded them. I sang them. I even wrote the music and lyrics."

So, I ask, "Where did you record?"

He said, "I got a soundproof room, soundproof recording studio kind of thing in my backyard."

COOPER: What -- this was a man you had into your own home. I know you have a child. When you heard what he is being accused of, what went through your mind?

KARUNARATNE: I'm -- I'm just flabbergasted, Anderson -- not only me, my whole family, because he had access to my whole family, because he is bringing stuff to my -- my house and delivering stuff when I'm not there, and, you know, talking to my wife and my kids, and always appeared to be a very nice, gentle person.

And, I mean, we all knew he was strange, but, you know, he was -- he was nice to us. And then -- then this -- this happened and this whole thing broke out. And we are all flabbergasted. We cannot believe what happened. And I think we have all -- as a community, we are all stunned. We are all shocked and flabbergasted.

COOPER: I understand you said that you feel guilty. In what way do you feel guilty?

KARUNARATNE: What I mean by that, you know, I -- I have been around the world. And I used to be a Merchant Marine a long time ago. And I have -- I have worked different cultures, different people in different countries.

So, I have -- I know the -- I mean, I know the world. And I should have more vigilance and I would have known better and noticed some of these red flags, which I never thought was a red flag, when he would never allow anyone to go inside his backyard or never entertain any of his customers in his shop.

So, you know, those are red flags now, when I'm thinking about it.

(CROSSTALK)

KARUNARATNE: But, at the point, at the time, I -- I never thought about it.

COOPER: Of course, in retrospect, it's easy to see -- see things and see patterns -- at the time, not so easy at all.

Deepal, I appreciate you being on the -- on the program. Thank you for talking with us.

KARUNARATNE: Thank you, Anderson.

COOPER: Our conversation continues online. You can join the live chat now under way at AC360.com. I just logged on.

Up next, John Walsh on other lives may have been lost because the system fails to keep track of society's worst predators.

And, later, a live update from the Southern California front lines, looking at new video just coming in, the fire now 22 percent contained, but, as you see, 100 percent deadly. Those flames still are huge.

And their story can be told, Euna Lee and Laura Ling speaking out about their desperate fight to stay out of North Korean custody.

(COMMERCIAL BREAK)

COOPER: More on our breaking news: what court documents reveal about sex offender Phillip Garrido and the search for evidence tying him to the disappearance of two other girls.

Meantime, today, the California Department of Corrections says it is now looking into what went wrong. Why did the system fail so miserably to keep track of a known predator? How did a report of children living in the backyard of a convicted sex offender yield nothing more than a deputy's front porch visit and a warning about the backyard?

That's what John Walsh says he wants to know as well.

Erica Hill spoke with him today -- Erica.

ERICA HILL, CNN CORRESPONDENT: And, Anderson, one of the things I started by asking him was why it seems to be so difficult to keep track of sex offenders and whether there is any program out there that could actually keep them from acting out again?

(BEGIN VIDEOTAPE)

JOHN WALSH, HOST, "AMERICA'S MOST WANTED": I think we have to accept the fact, until somebody can prove that these guys are cured -- lots of them say they're cured -- for example, this guy was out on parole, and, three years, later he kidnapped Jaycee Dugard.

So, until there is effective proof, long-term studies, I know, for a fact, because I have done so many of these guys on "America's Most Wanted," so many repeat offenders, that we have to be able to monitor them.

HILL: So, is something like, let's say, a GPS monitoring anklet or a parole officer aren't enough, what will it take then to effectively monitor these people?

WALSH: Well, I think, Erica, you covered it three years ago when President Bush signed the Adam Walsh Act in the Rose Garden.

And that act has not been funded. It would create a national sex offender registry, more resources, more money for law enforcement to track these guys. Some parole officers have 100 cases. They should be able to find out where these guys live.

I mean, just -- just think about this. This guy had this girl in his backyard for 18 years, and fathered two children, was arrested for parole violation -- nobody went to his house -- served four months and got back out. And there was Jaycee still in the backyard with her two children. It's mind-boggling in this society.

HILL: We should point out, actually, there was a time that officers were called to the house, specifically for the backyard. As we have been told, they didn't investigate the backyard. Is it the fault of the police or are they also, bearing, as you mentioned, some of these parole officers, 75, 100 cases, do they have too much work in front of them?

WALSH: They absolutely have too much work. And we don't make sex offenders a priority.

HILL: Why do you think you have such a hard time, in your view, getting the funding that you need, getting some of these laws passed?

WALSH: There is no lobby for raped women, for molested women...

HILL: Why?

WALSH: ... molested and raped children.

HILL: Because I don't know if it's not a high priority enough for men.

WALSH: One other thing I wanted to ask you about, you mentioned the national registry, national database for sex offenders.

Of course, a lot of people know that you can actually go online for your local community, see if there are any registered sex offenders living in your area. The area where Phillip Garrido lived, there were a large number of sex offenders in that area. Should that have been a red flag to parole officers at all?

WALSH: Absolutely. And they need the resources. And -- and, still, the Adam Walsh Act says that, if you go from state to state, if you're a convicted sex offender in New York, and you move to New Mexico, you have to register, or you're in violation.

That parole officer and those law enforcement agencies in that area, and particularly the next-door neighbors, don't know that this guy is a serious repeat offender or a level three sex offender. That law needs to be implemented, so neighbors and law enforcement and parole officers can say, oh, my gosh, we have got a level three sex offender that's come into this area.

It has to be enforced. And, again, it's not for the guy that urinated at Mardi Gras. It's not for the 18-year-old boy that had consensual sex with a 16-year-old girlfriend, and the father doesn't like him. It's for level three sex offenders and rapists, like this guy, so the public can know where they move before they kidnap your child.

And I just want to say one thing, Erica, that's really important. There are two little girls that went missing in that area in 1988 and 1989. We did both those cases on "America's Most Wanted." This guy should be scrutinized under a microscope as we speak.

HILL: And there is some talk about possible similarities, not just because of the proximity as to where these girls disappeared and where Jaycee Dugard disappeared. But even Michaela Garecht, there has been some talk about how she and Jaycee at that age looked a lot alike.

When you were doing those cases for "America's Most Wanted," were there any other similarities that stood out?

WALSH: Well, these guys usually have a pattern. And there was a lot of similarities about these two cases.

The sad thing is that they have never been solved. They have been cold cases. And no one's really looked at them for years. Now you have got a guy with a track record that kidnapped an 11-year-old girl and kept her for 18 years. He's a sexual deviant. He admitted it to his parole board. These cases need to be kept on the forefront. They need to be looked at closely.

I say that Jaycee Dugard is perfect proof that you never give up. You never give up looking for your child.

HILL: Well, let's hope that this eventually will make your job a little easier. But you do great work every day. And we thank you for it. John Walsh, appreciate your time.

WALSH: Thank you, Erica.

(END VIDEOTAPE)

COOPER: Well, a lot more to cover -- new voices speaking also out on this case, including Ed Smart, who went through a similar deal, also an expert cults and mind-control techniques.

And what Phillip Garrido's ex-wife says about his current wife, Nancy, and her role in this nightmare.

We will also have the latest from the Southern California, where firefighters have slowed that massive wildfire, but are far from stopping it -- a very famous house now in harm's way. We're live with the latest.

(COMMERCIAL BREAK)

COOPER: Our breaking news tonight: Court documents from Phillip Garrido's 1977 rape trial and conviction a fixation not just on the grown women he raped, but also on girls as young as grade school age, confessions, his own words describing what he did in his car outside school yards as the girls went by -- his drives and motivations no mystery, whether or not he is convicted of any of the 29 felony charges he now faces.

He's also made those urges plain in a document he sent to a friend's employee.

Less apparent, though, what role did his wife, Nancy, played in all this.

More on that angle now with Erica Hill.

(BEGIN VIDEOTAPE)

HILL (voice-over): An unassuming, seemingly dutiful wife now a prime suspect in a disturbing case of abduction and rape.

MARIA CHRISTENSON, GARRIDO BUSINESS ASSOCIATE: She was kind of quiet and stayed in the background. Whatever he said, she said yes.

HILL: Yet, her brother-in-law told "The San Francisco Chronicle," Nancy Garrido was a robot who would do anything her husband asked.

Psychiatrist Gail Saltz is not involved in the case, but says that behavior often has specific roots.

DR. GAIL SALTZ, ASSOCIATE PROFESSOR OF PSYCHIATRY, THE NEW YORK PRESBYTERIAN HOSPITAL AT WEILL-CORNELL SCHOOL OF MEDICINE: A woman who seems very subservient to her husband and is quiet and withdrawn, you would certainly wonder about abuse. You might also wonder about psychiatric illness.

HILL: Whether Nancy Garrido was abused isn't known. But Phillip Garrido's first wife, Christine Murphy tells "Inside Edition" he did abuse her, saying the physical violence started shortly after the high school sweethearts eloped in 1973.

She believes Nancy Garrido is knew exactly what was happening.

(BEGIN VIDEO CLIP, "INSIDE EDITION") UNIDENTIFIED FEMALE: Do you think that Nancy Garrido could have been brainwashed by Phillip Garrido?

CHRISTINE MURPHY, EX-WIFE OF PHILLIP GARRIDO: You still know, as a human being, right from wrong. She must have been really in love with him or so infatuated with him that she, you know, was willing to do anything.

(END VIDEO CLIP)

HILL: Nancy and Phillip Garrido married in 1981 in the visitation room at Leavenworth Prison, where he was serving a 50-year sentence for a 1976 abduction and rape.

SALTZ: A woman who seeks a relationship with a man who is in prison for rape, you know, probably has incredibly low self-esteem, is searching for someone to make her feel powerful.

HILL: However he made her feel, Nancy Garrido stood by her man.

When he was released early in 1988, they returned to California, where state health officials tell CNN she was a certified nurse's assistant, though it's not clear where she worked.

Almost three years later, Jaycee Dugard was kidnapped. Now, after 18 years, Nancy and Phillip Garrido face equal counts for her abduction, captivity and rape, begging the question, just how much did this quiet wife know?

SALTZ: Either she is psychiatrically seriously impaired, or she is criminally culpable, even if she was an abused woman.

HILL: A decision the courts will ultimately make.

Erica Hill, CNN, New York.

(END VIDEOTAPE)

COOPER: Well, the question is, how -- how did Phillip Garrido gain such power over his wives and his victims?

In a manifesto delivered to the FBI just days before his arrest, Garrido boasted he could somehow control minds with sound. The facts are likely much more ordinary and brutal, an 11-year-old abducted, isolated, terrorized, abused over the course of 18 years.

Now suddenly free, experts say Jaycee Dugard's biggest challenge may still be ahead of her.

We're digging deeper now with Ed Smart, father of rescued kidnap victim Elizabeth Smart, and cult expert Janja Lalich.

Thanks very much for -- both of you, for being with us.

Professor Lalich, a lot of people out there are asking, how did this happen? I mean, how can a man kidnap an 11-year-old girl, and then get her to the point where she no longer wants to leave him? You use the term coercive influence. What does that mean?

JANJA LALICH, CULT EXPERT: Well, I think, if we look at the situation, Jaycee was 11 years old. That is a very impressionable age. She was removed from everything she ever knew. She was sexually abused, taken to this backyard and -- and confined.

And whenever you're under the control of that kind of delusional, violent, abusive personality, and especially if you're that young, that kind of human relationship -- all the human relationships we have around us when we're young are very powerful.

She had only one relationship. And that was with him and to, whatever extent, with the wife Nancy. But he totally controlled her every movement every day. And, year after year after year, that's going to create patterns in her and -- and get her to believe and understand that this is her life. Her survival was tied to him.

And after time -- after a time, I would imagine she probably forgot somewhat about her -- her original family, and -- and started losing those memories. And her world became completely enveloped in the world that this man created for her.

COOPER: Ed, Jaycee Dugard's stepfather has talked about the guilt that Jaycee feels for bonding with her captor. That has got to be something that a lot of kidnap victims, even like your daughter Elizabeth, had -- had to deal with.

ED SMART, FATHER OF ELIZABETH SMART: You know, I think that, for a lot of victims, that is something that is very real. You know, in Elizabeth's case, I don't think that that bond ever occurred. She -- she kept this diary and wrote in it, at the bottom, in French. They would tell her what to write.

And, at the bottom, she would write, "You know, I hate this man, and I love my parents." So, I don't feel like, you know, she changed.

But, absolutely, I completely understand how somebody would. It's a matter of survival. Plus, you think about having two children. I mean, I don't know that there's a -- a stronger bond than between a mother and her children, and how she wanted to care for them and make sure that -- that nothing happened to them.

So, I -- I completely understand how he would be so controlling over her, because he had her whole life and everything that was there in it.

COOPER: Professor Lalich, I guess, I mean, adding kids into -- other kids into the mix, having two children with this man, I mean, it's got to -- for these children, kind of, the adjustment to a new life has got to be, in some ways, even more difficult, because the entire life they have known is -- has been this man.

LALICH: Yes, absolutely.

I think all three of them will certainly have a -- a huge adjustment to go through. But, in -- in Jaycee's case, she had those 11 years in a so-called normal world, with her family, going to school, having friends, you know, having a life. And -- and she can draw on that foundation now, as she tries to rebuild her sense of self, whereas the two children, all they knew was that life. That was their entire world. They didn't know anything different.

I think what -- what's important is, you know, they did apparently go out in the world. They apparently were just at some birthday party at a neighbor's. And -- and they must have wondered -- I mean, they must have wondered, if they went into other people's houses, and then went back home to that -- that pitiful backyard, like, why are we living in this backyard, when other people seem to have these...

(CROSSTALK)

LALICH: ... houses?

COOPER: Well, I wonder, too, if there is a certain amount of anger toward Jaycee. And, again, I mean, I don't want to go down the road of speculation, because frankly, we -- we just don't know the situation is.

But if they believed -- if they did not know the backstory, which I assume they didn't...

LALICH: Right.

COOPER: ... know, that Jaycee had been kidnapped and everything, then she essentially had not told them the truth. And I wonder if there is some anger there. I guess, you know, who knows.

LALICH: Yes, that is a speculation. We don't really know.

I mean, I do know that, when people come out of these situations, they go through a wide range of emotions, and that -- excuse me, I have a little bit of a cold -- they go through a wide range of emotions, and it really is a roller coaster of, you know, sadness and loss and grief and depression and anger and frustration and fear and terror and worrying -- worrying about this new world that they're entering into...

COOPER: Yes.

LALICH: ... and sometimes longing for that other world.

COOPER: Ed...

LALICH: So, it will -- it will be a ride.

COOPER: Ed, I mean, you have been through this. What works? What helps?

SMART: Well...

COOPER: What helps you get through it? What helps a young girl get through it? SMART: Yes, I think the most important thing that Elizabeth has taken on is -- is realizing that it was not her fault, that she doesn't deserve any of the guilt that -- it's very easy, I think, for victims to feel guilty, because they have been forced into a situation and forced to do things that they did not want to do. And, so, I think there's a lot of guilt.

With Elizabeth, we have made it a number-one priority to make sure that she understands this was not her fault. It was not her choice. And I hope -- I really hope that Jaycee gets to the point where she understands that, you know, all of this is not her fault, and that she shouldn't feel guilty, that she has her life before her, and she -- she needs to be able to take it and move on.

COOPER: Well, Ed Smart, again, I always appreciate you on the show. Thank you.

And, Janja Lalich, thank you very much. Appreciate it, Professor.

SMART: Thank you, Anderson.

LALICH: Thank you, Anderson.

COOPER: Jaycee's story is bringing hope to the parents of other missing kids. You can log on to AC360.com to read one mother's reaction.

Up next: extreme weather taking a deadly toll, the huge wildfire raging near Los Angeles tonight. Efforts to fight it just got somewhat tougher. We're back with a live report on the breaking story.

And, later, dollars for donors -- the illegal buying and selling of organs -- are eye-opening investigation ahead.

(COMMERCIAL BREAK)

COOPER: Breaking news from Southern California: That massive wildfire is now showing some signs of letting up -- some, but not nearly enough. You see the pictures, enormous flames towering into the sky.

It began last Wednesday. Tonight, the inferno has scorched more than 120,000 acres of land. It has destroyed dozens of structures. It's also taken the lives of two firefighters. Right now, there are new mandatory evacuation orders in effect, including for people living in Tujunga, California. That's where many homes are being threatened, including the one made famous in the film "E.T."

Ted Rowlands is there live. He joins us now with the latest.

Ted, what is the status of the fire? Has it grown? Where it is going?

TED ROWLANDS, CNN CORRESPONDENT: Well, Anderson, it is growing. It is growing a little bit at a slower pace. It is -- as you mentioned, upwards of 130,000 acres, which is an incredible amount of brush that has been consumed by this still-moving fire.

And you can see it from space. NASA has provided some images, and you can see that it basically covers much of the Southern California area near Los Angeles. And the smoke is moving to the east. If you look at that photo, you can see some of the little hilltops that look like mountains. Those are actually huge plumes of smoke. And we understand that the smoke is even visible tonight in Denver, Colorado, to show you the enormity of this.

The good news, which you mentioned, the humidity levels went up dramatically today. That gave firefighters a little bit of an edge, in terms of the fight of this fire. And some of the residents that had been evacuated in the towns of La Canada and La Crescenta have been allowed back into their homes tonight.

But there are still thousands of people under mandatory evacuations and told to stay out of their homes.

COOPER: But there are people who don't want to leave their homes even though they've been warned that authorities are not going to be held responsible, right?

ROWLANDS: Absolutely. We talked to some of them today. There really seems to be two sort of thought processes when you talk to these people. There is the group that -- they have everything packed. They have the SUVs or their station wagons packed to the limit, and they're just waiting for that last second. They've got their escape route all planned out.

And then there are the group that claim they are hunkering down, going down with the ship if they have to. Or they're going to fight this fire if it approaches their home. They've got their sprinklers out, and they have pumps going into pools. And those are the people that law enforcement folks are the most concerned about. They say that those people are really putting their own lives in danger.

Of course, not just people but animals have to be evacuated, especially here in Tajunga. There is a wildlife preserve here where they had to evacuate some 400 animals, including some exotic animals, including lions and bears, tigers and monkeys. That process is still going on here tonight.

Unfortunately, not all the animals made it out alive. In this home behind us, there is a barn in the back there where a horse was locked in the barn and died because of this fire.

COOPER: Terrible. Ted, appreciate the reporting. Thanks.

Along with the wildfire, there is dangerous weather to tell you about. Hurricane Jimena is weakened but remains a powerful Category 3 storm. It is now taking aim at Mexico's Baja Peninsula. Supposed to make landfall Thursday morning, and it could slam into a popular resort destination for thousands of Americans. Gary Tuchman is in Los Cabos for more. Gary, what are you seeing?

GARY TUCHMAN, CNN CORRESPONDENT: Los Cabos, Anderson, is a beautiful place. But when it comes to Mother Nature, it's a very vulnerable place, perched on the southern tip of the Baja Peninsula. It's surrounded on three sides by the Pacific Ocean, the Gulf of California. It's prone to flood, to mudslides.

So people were very, very concerned yesterday when this hurricane was a Category 4 and poised to make Category 5 and looked like a direct hit here in Los Cabos. Instead, though, it has weakened to a Category 3, passed about 100 miles to the west of here.

So right now, these are the worst winds we've had throughout. It's supposed to get better in the next hour or two. The rain stopped several hours ago, although there's supposed to be more rain today. But as of this point right now, we want to emphasize I am not Mother Nature. I can't tell you for sure. But right now it looks like it escaped relatively unscathed.

Of course, as you just mentioned, this hurricane is going to continue moving north through the Baja Peninsula. But where it's supposed to hit directly on Thursday is a relatively unpopulated area. There are about 164,000 people who live here in the southern tip of the Baja Peninsula. Thousands of tourists.

This is August, a big month of vacations. We're standing at a hotel right now where there are about 200 guests. They were ordered away from their rooms. They were put in a ballroom in cots. And this is an official shelter. There are shelters all over. And they've really worked hard at people to evacuate, because they thought the worst was going to happen.

Eight Septembers ago a Category 4 hurricane came through here. Seven people were killed. And 25 years before that in 1976, another Category 4 hurricane hit the Baja Peninsula and made its way up into mainland Mexico. Six hundred people were killed. So you can see why they're being very cautious -- Anderson.

COOPER: Good to be cautious. Gary, appreciate it. Thanks.

Join the live chat, happening now at AC360.com. A lot of folks on the blog already.

Harvesting human organs for profit. That story is coming up. It's a 360 special report. Are America's hospitals a breeding ground for criminal transplants? Tonight, new details on the dark side of organ donation coming up.

And later, California's plan to release of thousands of prison inmates is going to save money, but will it also compromise your safety? We've got one mother's heartbreaking warning, ahead on 360.

(COMMERCIAL BREAK)

COOPER: Tonight, a 360 worldwide investigation on organ trafficking and how donors are being flown here to America to sell their kidneys to American patients. Authorities say these illegal transplants are happening right now in major U.S. hospitals where few questions are asked. It is a black market for harvesting organs. It's also a booming industry where many are apparently turning a blind eye.

Drew Griffin investigates.

(BEGIN VIDEOTAPE)

DREW GRIFFIN, CNN CORRESPONDENT: When the FBI arrested Brooklyn businessman Itzhak Rosenbaum (ph), they had no idea what they say they uncovered would be so big.

(on camera) Law enforcement sources who are still investigating tell CNN Rosenbaum was running an operation called United Life Line. It was using hospitals in New York, Boston, and Philadelphia. What he was doing was selling kidneys.

UNIDENTIFIED MALE: His business was to entice vulnerable people to give up a kidney for $10,000.

GRIFFIN (voice-over): Investigators say the donors and patients in this network had one thing in common: they were all Jewish. Donors usually came from Eastern Europe, mostly poor, selling their kidneys for $5,000 to $6,000 to U.S. and Israeli patients willing to pay up to $160,000 for the kidney itself and the transplant.

Rosenbaum's attorney claims he hasn't had enough time to assess the FBI's case and offered no comment. But the lawyer did say law enforcement's account of Rosenbaum's network was inaccurate.

To those who study the illegal trade of organs, allegations of widespread trafficking and kidneys on the East Coast should surprise no one. In the recent past, according to researcher Dr. Nancy Shepher-Hughes, that has included organized crime.

NANCY SHEPER-HUGHES, FOUNDER, ORGANS WATCH: Mainly that business has been run by a kind of Russian mafia. And often they have been using Bulgarian guest workers or they have been using, you know, new Russian immigrants to kind of fuel it.

UNIDENTIFIED MALE: So I saw an ad in the paper. And the ad said kidney donor wanted.

GRIFFIN: Nick Rosen (ph) says selling a kidney in the United States was as easy as answering that ad. Nick Rosen (ph) is an Israeli citizen. He bears the scars of an operation where he says neither doctors nor the hospital asked too many questions.

(on camera) Do you think they knew? Do you think the surgeon who did the surgery knew?

UNIDENTIFIED MALE: I think they -- they may -- they may have had a feeling or a hint. But I can't say I know for sure. GRIFFIN (voice-over): A few weeks after answering the ad with a promised payoff of $20,000, Rosen said he was flown from Tel Aviv to New York, possibly to New York's Mount Sinai Hospital, where he and the patient he'd never met before told hospital staff they were cousins.

(on camera) They didn't ask for family records or anything like that?

UNIDENTIFIED MALE: No. No.

GRIFFIN: So basically, you were just two guys who came in, declared yourselves cousins?

UNIDENTIFIED MALE: Yes.

GRIFFIN (voice-over): Doctor Carbra Murphy is in charge of the hospital's kidney unit. She says screening is rigorous but...

DR. BARBARA MURRAY, MT. SINAI HOSPITAL: We're not detectives. We're not the FBI. And we don't have methods that they have at -- at our disposal. And people can on occasion steal tables (ph).

GRIFFIN: Nancy Sheper-Hughes is a University of California anthropologist who has been tracking illegal organ sales for 15 years. She says for the hospitals, it pays to look the other way.

SHEPER-HUGHES: I ask not only what about the surgery, what about the transplant coordinators? The nurse coordinators, the hospital chaplain, the bioethicist who is supposed to screen people and say, "Well, how long you have known each other?"

GRIFFIN: On the day we talked to her, she said she was learning of a young Korean man recovering in Los Angeles's Cedar Sinai Hospital, having just sold his kidney for $25,000 in cash.

(on camera) And this took place...

SHEPER-HUGHES: Last night.

GRIFFIN: Last night.

SHEPER-HUGHES: In Los Angeles.

GRIFFIN: In Los Angeles.

SHEPER-HUGHES: That's right.

GRIFFIN: With $20,000.

SHEPER-HUGHES: Yes, a kid who does not speak much English, who is terrified and shaking, and thought, maybe I made a mistake to do this. But $25,000, you have to admit, is -- is a good amount of cash.

GRIFFIN (voice-over): A source with knowledge of the deal confirmed to CNN, the surgery did, indeed, take place. The hospital wouldn't comment on specifics, due to privacy concerns, but said if at any time during the evaluation process the transplant team suspects the donor is being inappropriately paid for a kidney, the transplant is canceled.

But to Sheper-Hughes, that's not happening enough. The World Health Organization estimates 1 out of every 10 kidney transplants in the world is illicit.

SHEPER-HUGHES: Well, I think there is stopping it. I have to say, I'm pretty depressed about it now.

GRIFFIN: Depressed because it's a business that's only getting bigger, as more of the world's desperately poor are willing to sell off a piece of themselves.

(END VIDEOTAPE)

COOPER: How prevalent, Drew, is this in the United States, buying and selling a kidney?

GRIFFIN: More than certainly I thought. More than you might think, Anderson. If the World Health Organization estimates are correct, 1,500 to 2,000 a year. That would mean that today four or five Americans got a kidney transplant in the United States with a kidney that they bought.

COOPER: And the hospitals allow it to happen?

GRIFFIN: Well, the hospitals say they try to screen these. But, you know, let's be frank. Brokers train patients and donors how to get around laws, how to fool the hospitals. In some cases -- we talked to one kidney expert, a doctor. He said he's been bribed, $5,000, $10,000 a patient either to steer patients to the brokers or to look the other way when these surgeries take place.

COOPER: Wow. Amazing stuff. Drew, appreciate it. Thanks. Drew Griffin investigating.

Stories like this one notwithstanding, there are many right ways to go about getting vital organs to people in need of them. And there are a lot of folks in need. Log on to AC360.com. You can read about the ethical transplantation and how can you help in that effort.

Coming up next, kidnapping suspect Phillip Garrido behind bars. He's been there before and got early release. Now California's prisons may be letting criminals free. In the light of what happened to Jaycee Dugard, a lot of people in California are wondering if letting criminals go out early is a good idea.

More breaking news tonight, freed journalists Laura Ling and Euna Lee reveal the raw details and events leading up to their moment of capture.

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HANNITY: Now more on the breaking news we brought you at the top of the hour. Convicted kidnapper and rapist Phil Garrido, accused in the 1991 abduction of Jaycee Dugard, now a possible suspect in the disappearance of two other young girls in the area. Phillips Garrido has been behind bars before, but he got out early.

Now, strapped for cash, Governor Arnold Schwarzenegger hopes to cut the state's budget deficit by more than a billion dollars with an early parole program. If approved, the bill would reduce the state prison population by 27,000, a move opponents fear could flood California's streets with potentially dangerous criminals. Randi Kaye has the latest in tonight's "Crime & Punishment".

(BEGIN VIDEOTAPE)

RANDI KAYE, CNN CORRESPONDENT (voice-over): April 17, 1982, the last time Colleen Campbell hugged her only son.

COLLEEN CAMPBELL, MOTHER OF SCOTT: I gave him a hug, and that was the last time I ever saw him.

KAYE: Hours later, Scott Campbell was dead, killed by this man, Donald DeMacio (ph), who was out on parole. Campbell was mixed up in drugs with Laurence Cowell (ph), who hired DeMacio (ph), the parolee, to strangle Scott.

Then, the unthinkable. They beat him bloody so the sharks would eat him, then tossed his body from an airplane into the Pacific Ocean. He was never found.

CAMPBELL: It's worth the death itself. Hunting for a person.

KAYE: DeMacio (ph) was sentenced to life with no chance of parole. He died in prison in 2007. Cowell (ph) is serving 25 to life.

CAMPBELL: My greatest fear is that other people will suffer the same losses that we have because prisoners were let out early.

KAYE: Because of her son's horrific murder, Colleen Campbell is speaking out against the possible release of as many as 27,000 California prison inmates. The governor says it could save the cash- strapped state more than $500 million. But supporters of the plan say Campbell's fear is unwarranted.

UNIDENTIFIED MALE: All of the proposals involved non-serious, nonviolent, non-sex offenders.

KAYE: But what about the case of Jaycee Dugard? Phillip Garrido, the sex offender out on parole, charged with kidnapping and raping her served only 11 years for an earlier rape. He'd been sentenced to half a century.

UNIDENTIFIED MALE: He would not be near one of the offenders that would be addressed in the governor's proposals.

KAYE (on camera): In fact, the Department of Corrections says Garrido may have been watched more closely since the plan is to provide better resources to more closely monitor dangerous parolees.

Still, critics of the early release plan see it as a literal get- out-of-jail-free card and worry nonviolent offenders could turn violent.

(voice-over) Take the case of Lilly Burke (ph), the 17-year-old killed in July in downtown Los Angeles, her throat slashed. Charles Samuel, a parolee, now charged with her murder, says he didn't do it. He had not been considered violent before.

Seventy percent of prisoners released in California go on to commit other crimes.

CAMPBELL: If you're letting out 27,000 prisoners, and 70 percent of them are going to re-offend in California, that's scary.

KAYE: Regardless of money the state might save, Colleen Campbell knows the cost of a human life can never be repaid.

Randi Kaye, CNN, Los Angeles.

(END VIDEOTAPE)

COOPER: Ahead on 360, for the first time freed from North Korea, two American journalists share details about their violent arrest and how they were treated by the soldiers. That's coming up.

And later, was the Lockerbie bomber released as part of a deal. Secret documents revealed tonight show that Libya threatened the U.K. over the Lockerbie bomber's release.

(COMMERCIAL BREAK)

COOPER: We're following some other stories tonight. Erica Hill joins us with "360 News & Business Bulletin."

HILL: And Anderson, we begin with the breaking news that you mentioned just before the break. Breaking news from journalists Laura Ling and Euna Lee. In an article to be published in tomorrow's Los Angeles. The women offer a first-hand account of their arrest in China after a brief excursion over the North Korea-Chinese border.

"We tried with all our might to cling to bushes, ground, anything that would keep us on Chinese soil. But we were no match for the determined soldiers," Ling and Lee write, saying, "They violently dragged us back across the ICE to North Korea and marched us to a nearby Army base, where we were detained."

Now, the women were convicted of trespassing and hostile acts against North Korea, sentenced, of course to 12 years. Ultimately, they were held for nearly five months, released last month after former President Bill Clinton met with Korean leader Kim Jong-Il.

Opposition to the war in Afghanistan is at an all-time high in this country. According to a new CNN/Opinion Research poll, 57 percent of Americans now oppose the war. That's up 11 points since April.

But it's important to point out here, nearly six in ten Americans do think the U.S. can win the nearly eight-year-old conflict.

Britain's government today releasing previously secret letters showing it gave into Libyan demands that the Lockerbie bomber be eligible for transfer home. The terrorist was serving a life sentence in a Scottish prison for the 1988 bombing of Pan Am Flight 103. Diagnosed with terminal cancer, he was released last month and given a hero's welcome at home.

Vermont is now the fourth state to allow same-sex marriage. The state's new law went into effect at midnight. Massachusetts, Connecticut and Iowa also allow gay marriage. New Hampshire's law legalizing same-sex marriage will take effect on January 1.

And Bernie Madoff's Long Island beach house is about to hit the market. The 3,000-square-foot home in Montague was described as, quote, "cottage size" by super rich standards. It was seen (UNINTELLIGIBLE) in July. Though not exactly palatial, the 1.2-acre property has stunning views and an equally stunning price. The government actually is hoping that will affect just under nine million bucks. All that would go to Madoff's victims. Turns out the Madoffs paid $250,000 for it in 1980.

COOPER: Ninety million seems a lot.

HILL: Yes, a lot of folks saying, "Keep it."

COOPER: Yes.

Up next, "The Shot." Reveal what looks like to a critter. Close encounters with wildlife, coming up.

And at the top of the hour, the serious stuff, the breaking news. We talked to a man who knew Jaycee Dugard and her alleged kidnapper.

(COMMERCIAL BREAK)

COOPER: For tonight's "Shot," we take you up close with animals. See the world through their eyes. It's called Critter Cam. Take a look.

This is life, as seen by an armadillo, doing what an armadillo does best: sniffing and running and then sniffing.

HILL: Are those its ears?

COOPER: Yes. It's the ears. A little camera right behind the ears. How cool is that?

HILL: Very cute.

COOPER: Next up, a cow licking another cow. That's what that looks like. Yikes. He said he had some -- folks in the newsroom kind of uncomfortable. Not sure why. My personal favorite: a turkey running through a sunflower patch.

HILL: Ah, the turkey in a sunflower patch.

COOPER: Who's ever seen that before? Now you have. Now you can say you know what it looks like to be a turkey.

The critter cam shots are from the Museum of Animal Perspectives. We have our own critter cam here, affixed to our scenic director, Bob. See what life looks like from Bob's eyes (ph). He's very crafty; he's wild. It's a day in Bob's life.

HILL: Raiding the vending machines.

COOPER: He reads a magazine.

HILL: Rubs the belly (ph). There we go. Catching up on gossip. Not so much.

COOPER: And what else does Bob do?

HILL: All together (ph), Bob.

COOPER: There you go. There he's eating again. All right. Thank you, Bob.

UNIDENTIFIED MALE: Thank you very much. Hard (ph) work every day.

HILL: It's not easy being Bob. It may look that way at home...

COOPER: Yes.

HILL: ... potato chips, magazines.

COOPER: Where did they put the camera?

UNIDENTIFIED MALE: On my -- on a hat on my head.

COOPER: OK.

HILL: Sounded like you were a miner with a...

UNIDENTIFIED MALE: Yes, yes.

COOPER: I appreciate you being such a good sport. As always, thank you.

You can see all the most recent "Shots" on the Web site, AC360.com.

Serious stuff coming up at the top of the hour.

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COOPER: Two breaking stories. Again, tonight the L.A. County fire slowly beginning to yield. Now 22 percent contained, according to county officials, but still reducing houses to ash. Threatening homeowners, too, homeowners who were too foolish to leave, even though they'll be taking on a wall of flames, armed only with a garden hose.

We're live in neighborhood you'll all remember from the movies. Now, it's a towering infernal for a backdrop.

We begin, however, with the haunting possibility that Jaycee Dugard was not the only girl whose disappearance will eventually be tied to alleged captor, Phillip Garrido. That and a new window into his evidently sick and twisted mind. It comes from our first look at some very disturbing court records.

The families of two other missing girls are now following every new development in the investigation. So is John Walsh. We'll hear from him shortly. Walsh will speak with the man who made extensive dealings with J.C., the woman he knew as Olissa (ph).

First, the breaking news. Court records we are getting a close look at. Dan Simon has details.