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ANDERSON COOPER 360 DEGREES

Interview With American Trapped in Afghan Prison Riot; New Orleans Celebrates Mardi Gras; Where Has Katrina Relief Money Gone?

Aired February 28, 2006 - 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: And good evening, everyone. Thanks for joining us.
Larry, even back in New York, they are getting into the spirit. Take a look -- The Empire State Building done up in the colors of Mardi Gras. It brings back a lot of memories, good ones, of course, also the scene on Bourbon Street, one small slice here of life in New Orleans. Bourbon Street is packed.

In about three hours from now -- or two hours from now, the police will clear it. But, as for now, the party is in full swing, the scene, that Empire State Building, reminds us of all the New York City firefighters and police and doctors who came down here to New Orleans to be part of what turned into a national outpouring of health and kindness and goodwill.

It's also really a reminder of how interconnected people have become and how little distance matters anymore.

There's a flip side to that notion, of course. I got a dramatic and chilling phone call today from an American, a former colleague of mine, who is in an Afghan prison, caught in the middle of a prison riot and fearing for his life. His name is Ed Caraballo. And you will hear that call in just a moment.

How he got there, however, in the middle of danger, in a prison on the outskirts of Kabul is in a story of itself.

(BEGIN VIDEOTAPE)

COOPER (voice-over): Pulacharke prison, it looks medieval, but was built when the Soviets occupied Afghanistan in the 1970s. The conditions inside, according to a U.N. report a couple of years ago, some of the worst on Earth.

We don't know how many prisoners are actually in there. But we're told some 300 of them are members of the Taliban or al Qaeda. They began rioting over the weekend, after being told they were going to have to wear prison uniforms. Inside the prison, along with the rioters, veteran American cameraman Ed Caraballo.

RICHARD CARABALLO, BROTHER OF ED CARABALLO: The project that he was working on was a documentary on the war on terror.

COOPER: But Caraballo went to Afghanistan with Keith "Jack" Idema. Idema, a former soldier, billed himself as a counterterrorism consultant, but had a checkered past. Idema claimed he and his assistant, Brent Bennett, were working with the U.S. and Afghan governments to track down terrorists, which the U.S. government denies.

But the Afghan government said Idema, who had named his group Task Force Saber 7, was acting on his own, running his own private prison. All three men were arrested, tried and convicted.

After appeal, Caraballo got a two-year sentence. His brother says he didn't get a fair trial.

R. CARABALLO: He's just a -- a filmmaker shooting a film.

COOPER: Idema was able to run this Web site from his cell, actually giving updates on the riot.

Caraballo gave up the relative comfort of that cell and began distancing himself from Idema. He converted to Islam and moved to a different cell block, home that was taken over by the rioters.

R. CARABALLO: I'm worried sick.

COOPER: Richard Caraballo is worried about his brother, worried that, despite Ed's conversion to Islam, he will be targeted by some of the prisoners who want to send a message to the Americans.

R. CARABALLO: He's -- he's the perfect brother. Through rough -- rough times in life, he has been there for me. And I have tried to do the same for him.

(END VIDEOTAPE)

COOPER: I worked with Ed Caraballo for years at ABC. He has never shied away from the hot spots. And this is certainly one of them.

He's a long way from home, in the wake of rioting, barricaded against other prisoners, some of whom may wish to hurt him. He is under stress, to say the least, and possibly under duress, from people or forces unknown. Keep that in mind for the next few minutes, as we play back Ed's call to me earlier today.

(BEGIN VIDEOTAPE)

EDWARD CARABALLO, JOURNALIST: They rioted and took prisoner two officers, women, wives of two police officers.

And, yesterday, they -- I believe, today, they released those hostages. And, also, they out the wounded. There were four people killed, three people killed in block two and one person killed here.

COOPER: And -- and where are you right now? What is your situation? E. CARABALLO: I'm in my room. I have a private room that the Afghan police provided me with, because I'm an American, and there has been many threats against my life here. So, they keep me pretty well protected.

COOPER: And -- and you're literally barricaded in your room right now?

E. CARABALLO: That's correct, Anderson.

COOPER: What happens? I mean, what happens now? Are you -- obviously, your life is in danger.

E. CARABALLO: Well, I have been -- I have been -- they..

COOPER: Are they threatening you?

E. CARABALLO: At first, when -- when they first took over this block, and the police (AUDIO GAP) calmed them down, they shot some of the -- they shot into the (AUDIO GAP) more upset, and they ripped down all the gates.

So, all the -- all the floors are open to all -- you know, the gates are all open. Every -- the prisoners are all walking around, heavily armed, with chains and knives and whatever they can -- they have to -- to fight.

And now they're afraid that the police are going to storm in and kill more people. So, today, you know...

(CROSSTALK)

COOPER: The...

E. CARABALLO: You know, I had been walking -- I had been walking a -- a thin line, Anderson, because everybody -- you know, all the prisoners know I have a mobile.

And I have been letting whoever, whatever prisoner call -- call their family to let them know they're OK. And that has been able to -- so, I have been able to keep my mobile. They sort of see me as one of them, so, because I'm Muslim, so, they -- they haven't bothered me.

But they -- they said, it's nothing personal, najib (ph). You know, we know you're our brother, but you -- we want to talk to the American ambassador.

COOPER: What -- what is it that they want the Americans to do or the American ambassador to know?

E. CARABALLO: They want to stress that they were not trying to escape. They were just protesting conditions here.

COOPER: The last report that we had was that Afghan units had actually pulled back from the perimeter of -- of the prison. It didn't look like -- according to this last report I read, it didn't look like that they were going to try to move in. Have you seen any efforts to regain control of the prison?

E. CARABALLO: No. I -- I -- and the American -- the American authorities -- I have spoken to the U.S. consul, Adrian Harchek (ph). I have been in contact with her constantly throughout the past couple of days.

She has done a really good job at keeping me safe. But she says the Americans can't extract me, that that's not their -- their job. It's up to the Afghans.

COOPER: Well, how much more do you have on your sentence, Ed?

E. CARABALLO: Four months.

COOPER: It is said that there are many al Qaeda prisoners in this prison. Is that the case? I mean, can you describe what that is like?

E. CARABALLO: Well, there are two blocks, block one, which has the criminal side, and block two, which has the al Qaeda, political criminals.

And it's block two that started the uprising. And they're in communication (AUDIO GAP) this block and that block, in communication just by yelling from (AUDIO GAP) floor to each other.

COOPER: How close are you to the al Qaeda prisoners?

E. CARABALLO: Right outside my door, Anderson.

COOPER: They're right at your door?

E. CARABALLO: That's correct.

COOPER: What do you want people to know, Ed?

E. CARABALLO: Well, I want people to know that...

(LAUGHTER)

E. CARABALLO: I don't know.

I -- I just want to just -- I -- I would say to the American forces or any -- or the Afghan forces that they should not storm the prison at this point. The prisoners just want to get their message across, and they have asked me to do that for them.

So, I'm calling -- I'm allowing the media to call me and ask me any questions they have.

COOPER: Is -- is there anything else you -- you want to get across?

E. CARABALLO: I love my family very much. And tell them I'm safe right now.

(LAUGHTER)

E. CARABALLO: And I don't blame anybody for this, if anything happens to me. I just -- I'm just a journalist that -- in the wrong place at the wrong time, I guess.

(END VIDEOTAPE)

COOPER: With us now in Washington, Peter Bergen, CNN terrorism -- terrorism analyst.

Peter has actually been to the prison. Peter is the author of the book "Osama" -- "The Osama bin Laden I Know: An Oral History of the World's Most Wanted Man."

Peter, you have been to this prison. What is it like?

PETER BERGEN, CNN TERRORISM ANALYST: Well, it's pretty dreadful.

I -- I actually spent a fair amount of time with Ed Caraballo and Idema and Brent Bennett on two occasions, in October of 2004 and January of 2005. And one of the things that disturbed me my first trip there was that we were in a -- a waiting room in which people were coming and going.

And, at one point, we were told to leave, you know, worrying for our safety. There were Taliban, al Qaeda in the prison block. And, then, a month later -- actually in December, there was a very serious riot there, Anderson, as you may recall, in which the Americans in the prison were targeted. Four members of al Qaeda, one an Iraqi and three Pakistanis, were shot to death in that much smaller riot, which was really directed at the Americans.

But this is an extremely dangerous prison, where there have been riots before. And we're seeing, again, a -- a very worrisome situation for the prisoners, and particularly the Americans, in the prison.

COOPER: What was Ed Caraballo doing, and what was this guy Keith Idema doing?

BERGEN: Well, I mean, that is a -- a complicated tale.

According to the United States and the Afghan governments, they were running some sort of freelance operation with a private prison in Kabul. I wrote a piece for "Rolling Stone," looking at some of those allegations.

And I have got the tell you that I -- having gone into it thinking that there was some truth to these allegations, I came away thinking the picture was much more complicated, that the U.S. government, elements of it, did know what the Americans were doing. They certainly had some say-so from fairly senior Afghan officials that what they were doing was the right thing. And, also, they were finding terrorists. And, then, the trial that actually ensued was in -- was pretty farcical. It was not a -- you know, the sort of trial that you would get in the United States. Certainly, the Afghan judicial system is very weak. Their trial -- the sentences of these guys were very high, initially 10 years each, in the case of Idema and Bennett, eight years for Caraballo. They have been reduced.

As Ed said to you in the phone call just now, his -- he has only got four months to go. It would be a horrible tragedy if something were to go wrong so near the finish line for him. He has already had to put up with so much already.

COOPER: I -- I found it incredibly chilling when I asked him where the al Qaeda prisoners were, and he said they were right outside his door.

BERGEN: No doubt.

I mean, I -- I went through some of those cells. And some of the people that I saw, they all looked like, you know, Mullah Omar's brother. It was clearly -- there were a lot of Taliban in the prison. You mentioned the figure 300. I think that's a good one.

And these are -- this is the most hard-core prison in the Afghan prison system. This is the sort of -- the Florence, Colorado, or the Fort Leavenworth of the Afghan prison system, except that it's -- doesn't really have the security that's needed. And, you know, the Afghan state obviously can't really sustain this prison. It's -- it's just not working at the moment.

COOPER: Peter Bergen, appreciate you joining us. Thanks for your perspective.

Tonight, the story is here out of New Orleans, people in the final hours of Mardi Gras. It has been a welcome break from the pains of Katrina. We will show you the sights and the sounds of Mardi Gras coming up. We will take a look at what has changed in the city since the storm hit. We will even revisit some streets once covered in water, show you how they look now.

Plus, billions of dollars have been designated for Katrina relief. When you look around and see all the damage, it's only natural to ask, where is the money really going? We're "Keeping Them Honest" tonight.

And it was one of the most disturbing stories to come from the storm. Why did 34 patients die in a nursing home? Were staffers even told to evacuate them? New leads on this horrible tragedy -- when 360 continues.

(MUSIC)

(COMMERCIAL BREAK)

COOPER: And you're looking at a live picture of Bourbon Street. (AUDIO GAP) Fat Tuesday (AUDIO GAP) way -- the street is (AUDIO GAP) packed with thousands (AUDIO GAP) And I think more than a few have had a -- well, a little bit to drink.

New Orleans has gone through so much hardship in the past six months.

We have a helicopter passing overhead, which certainly is a familiar sound for those of us who were here six months ago -- so, much hardship here in the last six months from Katrina itself, to the many failures of the relief effort.

But you would never know it, looking at the party going on just beneath where I stand. At least for one night on Bourbon Street, Katrina is a distant memory.

CNN's Randi Kaye is downstairs, enjoying the party from a balcony. She joins me now.

Randi, what is the scene?

RANDI KAYE, CNN CORRESPONDENT: Anderson, it is quite a party here on the balcony.

You can see, just if you take a look here, on the street below me, this is the biggest party in town right now. You can see people down there. This goes on for probably about 20 blocks. People are getting beads. Beads are dropped off the balcony. People are just trying to put the disaster that happened six months ago behind them.

And there is no better way to do that than to have one massive party here along on Bourbon Street. We have been staying here on -- at a hotel on Bourbon Street for the last week. And this is definitely the largest crowd that we have seen.

As you walk the streets here, you talk to people, some of them are tourists. Some of them are locals, just trying to celebrate, trying to put it all behind them. You can collect beads; you can collect boas; you can collect what have you.

But, about three hours from now, local time, midnight, this party ends. The police will come through. They will -- they will close off the street. And right behind them will be the street-sweepers with hoses. And, at that point, the party is over until next year. Everybody has to get off the street.

But this is really quite a party. Just -- if -- if you could only imagine walking about, oh, I don't know, maybe 20 or 30 blocks here on Bourbon Street, a lot of the people today are in costumes, because it's Fat Tuesday. A lot of people -- there was a big costume -- costume celebration in a local park here today -- so, lots of folks especially wearing their costumes, and -- and wearing them proudly tonight -- Anderson.

COOPER: Well, for the -- let's remember that most of the people out there that you're seeing are tourists. They are not locals here. The real Mardi Gras is what happens away from Bourbon Street, out on the side streets. For the tourists there tonight, Mardi Gras is all about the party, all about the beads, and what you can do to get them.

But there's really more to the celebration than the -- the wild times that -- that you're seeing there on Bourbon Street. Mardi Gras -- Gras goes far beyond that street. And for the people who survived the storm, it is so much more than just a party.

(BEGIN VIDEOTAPE)

COOPER (voice-over): In the city used to suffering, for a few hours today, some of the old New Orleans came back. Away from the tourists and the T-shirt shops, New Orleans residents dressed up and stepped out.

There were side-street soirees and corner costume parties, families and friends...

UNIDENTIFIED MALE: Bloody Marys. Yes, you're right.

COOPER: ... revelers of all ages gathering to celebrate not just Fat Tuesday, but survival itself.

UNIDENTIFIED MALE: We need to tell people we're still here. We're here. We're crazy, but we're still here.

UNIDENTIFIED FEMALE: The people here need Mardi Gras. You know, without it, there wouldn't be the life that there is. You know, this is the soul of New Orleans right here.

UNIDENTIFIED FEMALE: Can I give you a kiss on the cheek?

COOPER: All right.

(LAUGHTER)

UNIDENTIFIED FEMALE: Thank you so much.

(CROSSTALK)

UNIDENTIFIED FEMALE: Happy Mardi Gras.

COOPER: All right.

(LAUGHTER)

COOPER: Do I have lipstick now? Is that -- people are going to talk if I have lipstick on.

(voice-over): The costumes were handmade. So was the humor.

UNIDENTIFIED MALE: Sir, can I see some I.D.?

(LAUGHTER) UNIDENTIFIED MALE: Put the stick down.

(CROSSTALK)

UNIDENTIFIED MALE: Step back.

COOPER (on camera): How is it keeping law and order here?

UNIDENTIFIED MALE: There is no law and order today.

(LAUGHTER)

UNIDENTIFIED MALE: This -- this is Mardi Gras. And it's a celebration. And this is what we do.

COOPER (voice-over): FEMA bore the brunt of more than just a few jokes.

UNIDENTIFIED MALE: Inspecting the flood damage.

UNIDENTIFIED FEMALE: We're looking for the Convention Center.

COOPER: Away from the French Quarter, in the Ninth Ward, we found a small band of Mardi Gras Indians, trying to keep alive a traditional African-American celebration.

They had no elaborate costumes, and only a few of them remained, but they were here, and that was something. Elsewhere, however, there were no parties, just debris and the memories of what happened.

(on camera): So strange being back in New Orleans nearly six months after Katrina, because just about any street you go down has some association with the storm. Some -- some memory comes flooding back.

We're in the Ninth Ward right now. And I remember being on this exact spot nearly six months ago. At first, I couldn't tell, because it was all flooded with water, and we were traveling in a boat. But then I remembered this stop sign.

(voice-over): Charlie (ph), my producer, had to hang on to that stop sign to keep our boat from tipping over. A Coast Guard helicopter was overhead, trying to rescue some people stranded in their home.

(BEGIN VIDEO CLIP)

COOPER: I don't know if you can see that. They're right there on -- look at there -- look at there on the porch. There they go.

He's going down again. The rescuer is going down. We believe there may be at least two more people in the house. He reenters the water, and then walks into the house, wraps protective bindings around the people, and then hoists them up. It is remarkable to see.

(END VIDEO CLIP) COOPER: Around the corner, there was a man's body, badly decomposed on the roof of a car. It was a shocking sight. He had been left out, abandoned for more than a week.

(on camera): This is the exact spot where, nearly six months ago, we saw that man's body sprawled out on top of the car. It's so strange. It's -- it's -- there's no memorial of it. There's no marker. There's nothing to indicate the horror that happened here. People just drive by. They weren't here then. They -- they would never know what happened here.

That's the concern of a lot of people in New Orleans. They don't want the -- the memories, the -- the images to just be forgotten, to be swept up and cleaned up and bulldozed away. If -- if it's forgotten, some people here will tell you, it very easily could happen again.

(voice-over): For the residents of New Orleans, this Mardi Gras is not happening in spite of the storm. It's happening because of it. Mardi Gras this year is a joyful act of decadence and defiance.

(SCREAMING)

COOPER: On Sunday night, I rode in the Endymion Parade, tossing beads for hours. It was an unforgettable experience. Standing on the float, staring into a crowd several generations thick, after a while, you stop hearing the screams. All you see are the faces, tens of thousands of smiles.

Time seems to slow. You toss the beads, shake people's hands. You make a connection, one person to another, the present to the past. These parades, this party, is not about forgetting. In fact, it's a way of remembering those not here, the faces in the crowd now gone.

Mardi Gras is a celebration of life, a life no storm can ever truly take away.

(END VIDEOTAPE)

COOPER: And while the partying rolls on here in New Orleans, we are "Keeping Them Honest." You wouldn't know it to look at this battered city still half-empty, still full of debris, but tens of billions of dollars have already been spent on disaster relief.

So, the question is, where has all the money gone? Tonight, we are on the money trail.

Also, the nursing home tragedy that still haunts us all, but was it a crime? Did the owners get clear orders to evacuate everyone in their care before Katrina hit?

Coming up on 360 -- live from New Orleans.

(MUSIC)

(COMMERCIAL BREAK) COOPER: Billions of dollars already spent to help the victims of Katrina, so, why isn't there more to show for it? We're "Keeping Them Honest" -- 360 next, live from New Orleans.

(COMMERCIAL BREAK)

(MUSIC)

(BEGIN VIDEO CLIP)

RAY NAGIN (D), MAYOR OF NEW ORLEANS: In a city that is special, New Orleans, the brand that not only locals marvel at, but the nation and the international community marvel at, that's the New Orleans we're going to build.

(END VIDEO CLIP)

COOPER: That was New Orleans Mayor Ray Nagin talking about the future of this city.

As for how Mayor Nagin and other politicians did six months ago, when Katrina hit, here's some feedback from New Orleans residents in a CNN/"USA Today"/Gallup poll released today.

Fifty-four percent said they approve to how the mayor handled the response to Katrina, while only 33 percent approve of the work done by Louisiana Governor Kathleen Blanco. And just 23 percent say President Bush did a good job.

But FEMA really got the worst of it, in the public eye, with only 22 percent giving the federal agency a thumbs-up for its response to Katrina.

For more than a week now, the people in this battered city have been trying to look beyond the blame and the ruin around them, to the celebration that is a big part of this city's soul and budget. In an ordinary year, Mardi Gras usually brings in about $300 million from visitors. This year, slash about $100 million off that figure, according to some estimates.

Yet, now, more than ever, the city needs every penny. With all the talk of the billions of dollars in Katrina relief funds, we have been wondering where it has gone.

It's part of our promise to "Keep Them Honest."

Tonight, CNN's Tom Foreman.

(BEGIN VIDEOTAPE)

TOM FOREMAN, CNN CORRESPONDENT (voice-over): In the outpouring of donations after Katrina, charities took in $3.6 billion, but more than half has been spent on just meeting the basic needs of a population set adrift, not even starting the rebuilding -- that according to Indiana University's Center on Philanthropy.

Gene Tempel is the executive director.

EUGENE TEMPEL, EXECUTIVE DIRECTOR, INDIANA UNIVERSITY CENTER ON PHILANTHROPY: Food, shelter, clothing, medical care, those kinds of things that -- that will be consumed by the family, and there's nothing left to show for it, except a family that might -- that might be better off than it were if the -- if that money hadn't been there.

FOREMAN: So far, about 25 billion federal tax dollars have been spent, again, largely on immediate concerns, housing, medical care, debris removal, disaster loans, and payouts under the National Flood Insurance Program.

All that spending has given some in the Gulf reason to celebrate. Property values in many areas are soaring above pre-storm levels, as residents return much faster than anticipated.

AMY LIU, CENTER ON URBAN AND METROPOLITAN POLICY DEPUTY DIRECTOR, BROOKINGS INSTITUTION: Well, I think, at the six-month anniversary, there are some promising signs that families are really eager to come back to this region. But there are also troubling signs that rebuilding is really stalled.

FOREMAN: That's the catch. Analysts say, for long-term success, many billions more are needed to move along levee rebuilding, to complete the cleanup and encourage housing reconstruction.

Only some schools, hospitals and shops are open. The tax base is a shambles. That's one reason Mardi Gras matters.

DOUGLAS BRINKLEY, PRESIDENTIAL HISTORIAN, TULANE UNIVERSITY: This city has been losing since the Katrina about $15 million a day in the tourist industry. And they needed to show that this is still a big tourist town.

FOREMAN: Simply put, a new phase of fund-raising and tax spending is starting, focused on long-term commitments, especially for the hardest-hit places.

TEMPEL: It may be 20 -- 10 years, it may be 20 years before we fully get these communities back to -- to the state that they were in formerly.

FOREMAN: For six months, though it may not seem that way for storm victims, the money has been flowing like water on the Gulf. And if there appears to be little to show for it, that is a measure of how many more years the money may have to flow.

Tom Foreman, CNN, Washington.

(END VIDEOTAPE)

COOPER: Well, so much left to do, but, tonight, a break for celebrations. We will have more from Bourbon Street in just a moment.

But, first, Erica Hill from Headline News has some of the other stories we are following right now -- Erica. ERICA HILL, HEADLINE NEWS CORRESPONDENT: Hey, Anderson.

President Bush heading to India and facing the worst approval numbers of his presidency. A CBS News poll shows just 34 percent of those surveyed approve of the way Mr. Bush is handling his job. Now, earlier today, in an interview on ABC with "World News Tonight"'s Elizabeth Vargas, the president dismissed those numbers and addressed one of the sore spots of his second term, the government's failures after Hurricane Katrina.

(BEGIN VIDEO CLIP, "WORLD NEWS TONIGHT")

GEORGE W. BUSH, PRESIDENT OF THE UNITED STATES: I agree that we didn't do as good a job as we could have done on Katrina. And, so, while I can't predict 100 percent success on a catastrophic event, I can say that lessons learned from Katrina were being implemented quickly.

(END VIDEO CLIP)

HILL: Meantime, at the Kennedy Space Center in Florida, concerns that the next space shuttle launch might be delayed.

NASA says a lot of work needs to be done to fix a problem with foam breaking off the shuttle. That, of course, is the problem that doomed the Columbia flight three years ago. NASA remains hopeful that it can meet the May launch date.

And a 12-year-old boy, I mean, talk about leaving your mark. He left his on a valuable piece of art during a school trip to a museum in Detroit. The boy stuck a wad of gum on a $1.5 million painting. That gum left a little goop -- that is the scientific term for it, by the way. The museum is now figuring out to get rid of it.

The boy was suspended from school. His parents have disciplined him.

Apparently, it left a -- a mark like the size of a quarter. And they're analyzing the gum now to see exactly what they need to remove the stain to counteract those chemicals on the painting.

COOPER: You know what they say, Erica. The children, they're our future.

(LAUGHTER)

HILL: Oh, and it's a good future, isn't it?

(LAUGHTER)

COOPER: Yes, I know, exactly. With kids like that, we're in good shape.

Erica...

(LAUGHTER) HILL: Yes.

COOPER: ... thanks. We will talk to you later.

Here -- here...

(LAUGHTER)

COOPER: ... in New Orleans, two men kings for a day in a city badly in need of healing, of rebuilding -- they share what this Mardi Gras means to them.

Also, a deadly decision in the hours before Katrina -- the nursing home that didn't evacuate. Thirty-four people died. Should the owners go to prison? The latest on a case that haunts -- coming up on 360.

(MUSIC)

(COMMERCIAL BREAK)

(MUSIC)

COOPER: You're looking at a live shot of Bourbon Street.

And just to give a sense of where we are, we are on the roof of the Royal Sonesta Hotel, which is right on Bourbon Street. And -- and what's amazing, at least for -- for me, and all of us here on the roof, is, if you look, you can see the skyline off to my side.

Six months ago, we were sleeping underneath some of those buildings in trailers, and -- and all those buildings were pitch black. It's sort of starting to suddenly see the -- the light in New Orleans all back on, at least here in this part of New Orleans.

If you go out to Saint Bernard Parish, if you go out to the Lower Ninth Ward, not many lights at all, because all the homes are pretty much destroyed.

Six months ago, it was hard to imagine the crowds would return here to the French Quarter. It was really hard to imagine anything beyond the floodwaters and misery. The scene here tonight says a lot about resilience, no doubt about it.

We're going to check in now with Sean Callebs, who is braving the crowds down on Bourbon Street.

(LAUGHTER)

COOPER: Let's cross our figures nothing untoward happens -- Sean.

(LAUGHTER)

SEAN CALLEBS, CNN CORRESPONDENT: You know what? You read my mind. And I think this is more of a -- a scrum than a live report. Really, if you think about it, it is hard to believe that the city is reveling in the excitement, that it -- it has experienced, basically, eight of the last 10 nights. And people in this area -- and we have spent a lot of time talking with, and both the families that we saw out on Saint Charles Avenue, winding their way through on the various floats and parades, and, then these people, the tourists, really the face of a different Mardi Gras, where sin and decadence seem to thrive here on a beer-soaked Bourbon Street on a Fat Tuesday night.

They're going to have about two-and-a-half-hours more (AUDIO GAP) revelry. And, then -- I just talked with a police officer. They're going to come through on horseback, and they're going to get everybody off the streets. And they are going to have a massive job of cleaning up in front of them.

If you look -- how about that?

If you look down at the gutters, there is trash that is extremely deep. A lot of the locals tell us that, in years past, right after the evening of Mardi Gras, from night to night to night, the crews came through, cleaned up. But it hasn't been the case this year.

But, still, if it's lost on anybody (AUDIO GAP) to a person, those we have talked to, the local residents, not the (AUDIO GAP) talk about what a great time it has been, that this has been a more family- oriented event than any year they can remember, Anderson.

I know you rode on Endymion the other night. And we talked about it earlier. When you're on the float, and you have a chance to throw beads to somebody, you would think it would be very impersonal, with all those folks. But you actually make a very personal contact -- Anderson.

COOPER: Sean, I'm glad you moved, because I think there was a person just about to remove their top right behind you. So, let's get out from that at exactly the right moment.

(LAUGHTER)

COOPER: Sean, thanks.

We will have more from Bourbon Street coming up.

Now to nearby Saint Bernard Parish, one of the first awful stories -- again, we got this helicopter circling overhead, such a reminder of six months ago here.

But one of the first awful stories to emerge from the floodwaters here was the -- the story about 34 elderly patients inside the Saint Rita's nursing home. They drowned in the hours after Katrina, most of them trapped in their beds when a wall of water literally swept through the nursing home.

The question that still haunts so many is, why weren't the frail, elderly people evacuated before the storm? Here's CNN's Drew Griffin.

(BEGIN VIDEOTAPE)

DREW GRIFFIN, CNN INVESTIGATIVE CORRESPONDENT (voice-over): The storm surge was up to 10 feet, and it was Saint Bernard Parish coroner Dr. Bryan Bertucci who recovered the bodies.

Soon afterward, he told CNN this tragedy could have been avoided. The nursing home operators had refused, he said, rescue buses and refused a mandatory evacuation order.

(on camera): The bottom line, Doctor, is, the county and you called the facility and offered to evacuate those people 2:00 Sunday afternoon?

DR. BRYAN BERTUCCI, SAINT BERNARD PARISH CORONER: That's correct. And there was a mandatory evacuation.

GRIFFIN: But it's not clear whether there ever was a mandatory evacuation order.

CNN has now obtained the deposition of Coroner Bertucci, taken just last month under oath. Question: "Did you say, I recommend you evacuate?"

Answer: "No. My statement to her, the owner, Mable Mangano, was almost verbatim: 'I have two buses that will take you wherever you want to go. Do you want the buses or not?' That was my statement. Now, if that doesn't imply you should leave, I'm assuming it would, or I wouldn't have offered them the buses. But, no, I didn't say, you have got to leave. That's not my job."

JAMES COBB, ATTORNEY FOR SAINT RITA'S NURSING HOME: So, not only did he not communicate it to us. We can't find it in the record of anything of Saint Bernard Parish where they ever went to a mandatory evacuation.

GRIFFIN: Nursing home attorney Jim Cobb says, Saint Bernard Parish was in chaos as Katrina approached -- no evacuation plan. No one knew the storm's strength. In fact, that Saturday, a little more than a day before the storm hit, Coroner Bertucci says, he went fishing.

Cobb says, on that Saturday, Saint Rita's owners, Sal and Mable Mangano, were readying supplies and staff inside a nursing home that had never flooded. It was a conscious decision by the owners not to move their patients. Cobb says it would have killed them.

COBB: Of course, had we known then what we know now, sure, we would have gone. But nobody knew that.

GRIFFIN: What Cobb did say is chilling. The storm had passed and the patients and the building had survived. But then owners Sal Mangano walked outside. COBB: They hear this rumbling sound. It's like -- kind of like a train, a freight train. And they look down the highway, and here comes a wall of water six feet high right at them. They run back in. They take the residents, who they clustered on the inside of the facility, where there were no glasses to break, and they take them, and they put them up on mattresses, in the hope that the water, once it rises, is going to stop.

It went from no water to 10 feet of water in less than 20 minutes.

GRIFFIN: For Cobb, it is a heroic tale. But, for many, it has become a tale of the owners saving themselves, leaving the vulnerable to die. Fifty-two survived -- some were patients -- and all the family and staff.

(on camera): They saved themselves. They saved their families. It's the patients who died.

COBB: In the crush of events, and in the crush of this wall of water, you didn't prioritize. They got every single one that they could within arm's reach.

(END VIDEOTAPE)

COOPER: Well, we all know the city didn't even follow their own plan, which was to -- to make plans to evacuate these people.

How is this legal battle play ought?

GRIFFIN: On two fronts, Anderson.

Eighteen civil lawsuits have been filed against Saint Rita's, based on relatives of the dead. But the criminal charges against Sal and Mangano -- Sal and Mable Mangano, 34 counts each of negligent homicide -- that's one for everybody who drowned in there -- filed by the attorney general's office of the state of Louisiana.

That's based mainly on the assumption that there was a mandatory evacuation order. Now, we have this deposition today that challenges that. But the attorney general's office says, despite this deposition by the coroner, the prosecution is going forward.

COOPER: Fascinating.

Drew Griffin, thanks -- "Keeping Them Honest" tonight, Drew.

Back in New Orleans, this is a Mardi Gras many people will never forget, certainly, a Mardi Gras for the ages. Some of the first -- some, for the first time, had to travel a long way just to visit what was once their home. We will have one young woman's bittersweet homecoming -- coming up.

And two kings for a day -- their take on the party scene of this damaged city -- when 360, live from New Orleans, continues.

(COMMERCIAL BREAK)

(BEGIN VIDEOTAPE)

COOPER (voice-over): September 2, Waveland, Mississippi -- Charles Kerney (ph) and his wife, Germane (ph), return to their devastated home.

UNIDENTIFIED FEMALE: Oh, my God. Look at Reggie's (ph) house.

COOPER: Amidst the wreckage of their past, a ray of hope and humor.

UNIDENTIFIED MALE (singing): My house is gone.

I can't play no more. Guitar is full of water. But I got my family.

COOPER: Today, the Kerneys (ph) haven't strayed far from Waveland. They're in a temporary house, 12 miles north, in Diamondhead. And it's still family that keeps hope alive.

UNIDENTIFIED MALE: These guys are the best. They're the -- they're the best.

How have you done since the hurricane, pumpkin?

UNIDENTIFIED FEMALE: Good.

(LAUGHTER)

UNIDENTIFIED MALE: She has done fantastic. So has Chase (ph).

COOPER: Despite their struggles, the Kerneys (ph) are determined to repay the favors that kept them on their feet.

UNIDENTIFIED MALE: Don't be surprised if you see some of us on other stories you cover with natural disasters, because we look forward to paying the world, as well as the rest of our country, back.

(singing): Stuck in Diamondhead, Mississippi, back to Waveland, Mississippi.

(END VIDEOTAPE)

COOPER: Well, those are the Kerneys (ph) of Waveland. You could see, they have an upbeat attitude. And they have certainly needed it over these last several days.

We move back down to the balcony right overlooking Bourbon Street -- the parties well under way. The masks of Mardi Gras parade clubs can cloak some powerful emotions. We will peak behind them coming up.

First, let's check in with Erica Hill from Headline News with some of the business stories we are following -- Erica.

HILL: Hey, Anderson. We're actually going to start off in New Orleans -- the city bucking the national trend when it comes to existing home sales. Because of Katrina, January sales in New Orleans jumped 40 percent over a year ago. In fact, the South as a hole was up 2.6 percent, but, nationwide, a cooler market.

Existing home sales actually eased 2.8 percent. Homes on the market hit a high not seen since 1998. And, as for consumer confidence, well, taking a little hit there, too. The Conference Board survey says consumers feel good about their current situation, but they worry about the future. Consumer sentiment fell about five points in February.

Should Howard Stern have maybe kept his mouth shut? Like that's ever going to happen, by the way. CBS, though, thinks he should have. The network is suing Stern and his new employer, Sirius Satellite Radio. CBS says Stern ignored warnings to stop promoting Sirius during his final months with CBS, and then directly profited when Sirius stock soared.

Well, tonight, in a statement to CNN, Stern's lawyer says that the claims have no merit whatsoever.

Anderson, you got to wonder who's going to have the last word in this one. I can bet you, though, we will have many to share until we reach that point.

COOPER: I'm sure there will be.

Erica, thanks.

The wonderful costumes of Mardi Gras are supposed to mask the differences between people, between the high and the mighty of this city and all -- well, all the rest. Those differences are not erased, of course -- a look behind a couple of masks later this evening.

And, in New Orleans, justice is not only blind; it's also waterlogged, mud-covered, and generally a mess.

How Katrina damaged the court system -- when 360 continues.

(MUSIC)

(COMMERCIAL BREAK)

(MUSIC)

COOPER: And welcome back. We're live on Bourbon Street here.

You know, Mardi Gras is about putting a good face on things, literally in the case of those who wear the great masks which the celebration is famous for. Of course, there are real people behind those masks with real troubles, and many more for some of them than for others.

CNN's Susan Roesgen reports on a couple of kings of Mardi Gras. (BEGIN VIDEOTAPE)

SUSAN ROESGEN, CNN GULF COAST CORRESPONDENT (voice-over): It has been said that, while other cities hide their treasures in museums, New Orleans shares hers on the street, especially in these Carnival parades.

The riders are members of carnival clubs who socialize and network and do community service. They're New Orleans' movers and shakers, but much of Mardi Gras is an intentional mystery. You don't see their faces. And, after the hurricane, who knows what misery the masks might conceal.

ISAAC "IKE" WHEELER, ZULU KING: The first thing I have got to work on is the roof. We have got it all gutted and cleaned out and everything. We have had it sprayed.

ROESGEN: Ike Wheeler is like thousands of people in New Orleans, trying to repair his flooded home. He is also one of the most important people in Mardi Gras, this year's king's Zulu.

The Zulu Parade began back in 1909, and it's now one of the two preeminent parades, celebrating a proud African-American heritage, named after the warrior tribe in Africa. The Zulus poke fun at the serious side of life. But more than 200 Zulu members who evacuated after Katrina haven't come back. Some won't ever.

WHEELER: We have lost 10 brothers. Ten brothers has passed out of our membership.

ROESGEN: While Zulu and its kings struggle to recover, the oldest parading club in New Orleans came out of the storm nearly as strong as ever. Rex was founded 135 years ago by businessmen and, today, remains much the same. This year's king is Paul McIlhenny.

PAUL MCILHENNY, KING OF CARNIVAL: We have an opportunity for kind of a -- helping the renaissance of a great city, that -- that really has become devastated. And, if we do it wisely and -- and carefully, I think we have a chance to be -- to be back at the top of the heap.

ROESGEN: Some Rex members' homes were flooded after the hurricane, but many of the 700 members live in this area, in uptown New Orleans, mostly untouched by the hurricane.

White and black, Rex and Zulu, most treated so differently by Katrina, but they share the idea that the storm cannot defeat the spirit of the city or Mardi Gras. It must go on as it has for generations.

WHEELER: All those guys that did so much to -- for us to be able to do this, for us not to do it, and lay down, would have just been -- just been horrible. We -- that -- we just could -- that was unacceptable to us.

ROESGEN: Susan Roesgen, CNN, New Orleans. (END VIDEOTAPE)

(CHEERING AND APPLAUSE)

COOPER: We want to thank our international viewers for watching.

Ahead on 360, we have a lot more to cover -- the broken-down justice system in New Orleans. Will confessed killers soon walk free without even a trial? One public defender says it's a very real possibility. We will explain why.

Plus, we take you inside the deadly prison riots in Afghanistan. Hear the call I got from a former colleague of mine who is right in the middle of it.

And former "Playboy" Playmate Anna Nicole Smith, she appears before the U.S. Supreme Court. What is this world coming to? We will explain what the case is about -- when 360 returns.

(COMMERCIAL BREAK)

COOPER: And good evening from New Orleans, a city still partying tonight, but still in very rough shape. And it could get worse. Thousands of accused criminals may soon hit the streets.

(BEGIN VIDEOTAPE)

ANNOUNCER: Confessed murderers, violent criminals going free without even a trial, that could happen because Katrina left Louisiana's courts in shambles.

UNIDENTIFIED MALE: I know we are Third World down here in New Orleans, and I know barely a part of America.

ANNOUNCER: For lack of money, murderers could get out of jail free.

An American jailed in a remote Afghan prison, when, suddenly, riot erupt inside the walls.

EDWARD CARABALLO, FILMMAKER: There has been many threats against my life here.

ANNOUNCER: Tonight, the strange tale of how that American prisoner came to call Anderson Cooper.

And Ms. Smith goes to Washington -- how former Playmate Anna Nicole Smith asked the Supreme Court to help get nearly half-a-billion dollars from the estate of her 90-year-old late husband.

(END VIDEOTAPE)

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