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ANDERSON COOPER 360 DEGREES

CIA Director Resigns; Hurricane Aftermath

Aired November 9, 2012 - 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: Good evening, everyone. It's 10:00 here on the East Coast.

And we're coming to you tonight from the borough of Staten Island in New York, where it is freezing colleague and a lot of people are suffering. Here across the region, hundreds of thousands still without power, nearly two weeks after superstorm Sandy hit.

And part of this ongoing disaster is manmade, and I want to tell you about that tonight. We're "Keeping Them Honest."

But, first, we begin with breaking news, a story that has blindsided the American intelligence community, and it's still developing at this hour. General David Petraeus resigned today as director of the CIA after admitting he had an extramarital affair. A U.S. official confirmed to CNN that the FBI has been investigating a trip that Petraeus was involved in an affair with a woman named Paula Broadwell, his biographer.

Its counterintelligence unit launched the investigation to see if there was a potential security risk, in other words to see if Petraeus could possibly be blackmailed.

CNN has been unable to reach Broadwell and it's not clear that she is the woman with whom Petraeus having an affair. Petraeus is a highly respected retired four-star general who commanded forces in both Iraq and Afghanistan. He was sworn in to run the CIA a little over a year ago with Vice President Biden and his wife, Holly, at his side. That was the swearing-in. They have been married 37 years, have two grown kids.

So how will this revelation exact the U.S. intelligence community?

Joining me now is Fran Townsend, CNN national contributor and member of the CIA's External Advisory Committee, and Bob Baer, a former CIA officer and CNN contributor, and Suzanne Kelly, CNN's intelligence correspondent.

Suzanne, let's start with you.

What more can you tell us about this probe into this alleged relationship with Paula Broadwell? What would the FBI have been looking for, and do we know how long this was going on for?

SUZANNE KELLY, CNN INTELLIGENCE CORRESPONDENT: We don't know how long it was going on, but just the fact that the FBI was investigating something like this tells you a few things.

One, it was the FBI's counterintelligence unit that was carrying out this investigation, so they're the ones that would look into any sort of accusations of inappropriate access to classified information. They look into individuals who hold clearances. Are they doing what they need to be doing to make sure that information stays safe? Is there any opportunity whatsoever that information could be exploited by either a spy or anyone else who shouldn't have access to that information?

So the fact they were the ones looking into this tells us they were concerned about some e-mail things. Let's back up for just a moment. This was a tip given that there was a relationship going on between the two, so what they would have dug into are things like e- mails and texts and things like that.

If it does turn out to be Paula, and we can't confirm that it is. We just know that a tip was given using her name. They would be looking at communications between the two over the years, and especially since, as you mentioned, General David Petraeus has taken over the directorship of the CIA which happened in September of last year -- Anderson.

COOPER: And, Suzanne, again you said we don't know how long the FBI was investigating. Do we know if the Obama administration knew about this before the election?

KELLY: No, but wouldn't we all love to know the answer to that? Because that really is a burning question. It's just days after the election and something like this comes out. But clearly, something like this had been going on for a while.

It wasn't -- you know, it's not likely that a couple days after the election, General Petraeus had sort of a crisis of conscience and decided this is the time now for me to come clean on everything, which also makes you wonder, did other people know about this, and was there a possibility they could have used this against him or to blackmail him in any way?

That would have spoken directly to his ability to hold a security clearance and protect those secrets as well, Anderson, so lots of unanswered questions, but I'm told more will be coming out in the coming days.

COOPER: I guess the other question is, did the administration, if they did know about it, decide not to let this be announced before the election because they didn't want to do anything that would impact the election and if that raises any security concerns.

Fran, I should reiterate that CNN is not reporting that Petraeus admitted to having an affair with this woman Paula Broadwell, just that he admitted to having an affair. He did not say publicly with whom. The FBI investigated a tip that he was involved in an extramarital affair with Broadwell.

All of that said, you know Petraeus. I have interviewed him a number of times. You're on the CIA's External Advisory Committee. Did the general's cooperation with Paula Broadwell on her biography of him ever raise eyebrows among people you knew in military intelligence circles?

FRANCES TOWNSEND, CNN NATIONAL SECURITY CONTRIBUTOR: Anderson, she had incredible access. She spent a year over in Afghanistan, and so in Washington, unfortunately, any sort of very professional, competent woman who has that kind of access and is that successful, there's bound to be some sort of sniping and gossiping.

But I don't think anybody took it seriously, Anderson. He seemed beyond reproach. He worked incredibly hard, he was incredibly competent. Dianne Feinstein today called his resignation tragic. And I think that's right, I think his resignation is a real loss to the country, this aside, right?

You asked Suzanne about when would the White House have known, and I think that's exactly the right question. Whenever the FBI opens a counterintelligence or a criminal investigation of a senior Cabinet official or administration official, they have got to make notifications of that, especially if there is some counterintelligence concern.

We have heard that that would have been to director of national intelligence, Jim Clapper, who likely would have notified either the White House chief of staff or the national security adviser. So they would have been aware of this, Anderson, because of the very concern of a breach of some sort of national security information that they were investigating.

COOPER: And, Bob, you're a former CIA officer. I know you say this is an extraordinary event. The fact the FBI was investigating this alleged affair by the CIA director, does that add up so far to you? What do you want to know that you don't know?

BOB BAER, CNN CONTRIBUTOR: No. There is something missing. The FBI does not, as a matter of routine, look into the affairs of CIA officers, nor the director.

It's not criminal on the face of it. I'm quite sure, and this is sheer speculation, that there was some sort of leak, there was some sort of criminal investigation or CIA investigation based on a solid piece of information that there was a leak, that Petraeus was talking too much to this woman, that somebody else was monitoring the relationship, something else was there.

I have never seen in my career or afterwards a CIA director investigated like this. John Deutch was because there was misuse of computers, but that was a fairly minor affair, and as far as affairs go, there's only been one reported, and that was Colby, and that came out after he had died.

And the other thing is, normally when a CIA director resigns under this sort of pressure, he would do it quietly. He would say that he was doing it for family reasons. He would go off, we would never hear any more about it. Someone would write a book 10 years later, but to use it in his resignation letter is extraordinary.

COOPER: And it makes me wonder if he wanted to get out in front of it just from a public relations standpoint or if there is more, if there is another shoe to drop or more information to come out, and rather than having it come out in drips and drabs, Bob, he just felt get ahead of it and just admit it.

BAER: That's one way to get ahead of it, but there's also the question of Benghazi. There was a lot of echoes around Washington that he was going to take the fall for the death of the ambassador and the fact that the CIA controlled the compound there.

I know the CIA was leaking right and left on the timeline of what happened in Benghazi. Did it offend the White House? Did this contribute to releasing the FBI investigation about his affair? We just don't know now.

COOPER: Suzanne, what do you make of that? There is a lot of chatter, obviously, online about Benghazi and a lot of conspiracy theory about it.

KELLY: I would push back a little bit on that. And I take a very cautious approach to the Benghazi effort.

The person who is going to now sit in the hot seat and answer the questions coming out next week before the Oversight Committee is going to be Mike Morell. And he's someone who has been very closely involved in this obviously since the beginning, putting the CIA's timeline and whatnot.

But the president, if he really need a fall guy for Benghazi, that would have happened before the election, somebody to say, all right, I messed up. I really don't think we have seen any strong evidence yet that the CIA made such fatal mistakes in Benghazi that somebody had to take a fall like this. This is so significant that I think you just have to have a really strong body of evidence to prove something like that.

COOPER: Fran, the question of the timing is really interesting though because if this investigation has been going on for a long time, and we don't know, but it's hard to believe that the administration, that the White House would not have known about it before the election.

And that raised the question if there was a security risk or there were security concerns, would it have been dealt with sooner?

TOWNSEND: Right.

Anderson, make no mistake about it. There are protocols that require the investigation of the opening of such an investigation to someone inside the White House. It may have gone through the director of national intelligence, Jim Clapper, but you rest assured because of the potential security concerns, at a minimum the White House chief of staff would have known. It wouldn't have been widely briefed for many good reasons. He would have kept it in a very tight circle, but you be sure that someone at the White House at a very senior level would have been made aware of it, frankly in an effort to be sure they were watching any interactions with the president, anything that seemed out of the ordinary so that they could have reported that into the FBI investigation.

The other thing is, these are -- if the FBI was looking at e- mails and text messages, the sort of natural investigative steps they would have taken, whether going back to when he was -- she was writing the biography, this would have been a substantial body of material that would have taken some time to get through. So this wasn't a new investigation, and it wasn't done quickly. It would have been taken very seriously.

COOPER: Yes. Well, obviously more questions, I guess, right now than answers.

Fran Townsend, appreciate it. Bob Baer, Suzanne Kelly, appreciate your reporting.

Let us know what you think. Follow me on Twitter at @AndersonCooper, where I have been tweeting about this already tonight.

Up next, the company responsible for about 150,000 people in the New York area still being without power. We're going to tell you about a damning report on how unprepared that company was for a storm like Sandy. We're "Keeping Them Honest."

(COMMERCIAL BREAK)

COOPER: Hey, welcome back.

As I said, we're live on Staten Island tonight. And here on Staten Island and across the bay in Rockaway, and out on Long Island, people have been enduring far more than most of us ever will. On top of the body blow that superstorm Sandy dealt them, they are suffering from a manmade disaster.

And as always, it did the have to happen. There was ample warning, a year ago in fact and years before that even, signs that went unheeded. I want to tell you about them, and that's why as always, tonight we're "Keeping Them Honest."

The worst of it involves one utilities company's failure and their contractors' failure as well to restore power to tens of thousands of customers, about 150,000 customers in all. The company's name is LIPA, the Long Island Power Authority.

The contractor which does the actually operational work is called National Grid.

Here's what New York's Governor Andrew Cuomo has to say about it.

(BEGIN VIDEO CLIP)

GOV. ANDREW CUOMO (D), NEW YORK: We gave them a franchise because they represented themselves as experts at doing this. They failed and they should be held accountable for their failure.

In the meantime, they should be doing everything humanly possible to improve their performance and get these people out of the pain and suffering that they have been subjected to.

(END VIDEO CLIP)

COOPER: What they have been subjected to includes more than just a dozen days without power. It's service calls the customers say are going unanswered, crews that don't show up, a company that seems not to know where the problems even are.

(BEGIN VIDEO CLIP)

UNIDENTIFIED MALE: The governor and the president of the United States to come into this area to see the devastation that is Katrina without the bodies.

UNIDENTIFIED FEMALE: We have got to turn our angry to LIPA. The president, your vice president, everybody that is working there, we need people to take care of our community. They're screwing up. We're angry and we're not taking it anymore.

QUESTION: If you can say something to LIPA right now, what would it be?

UNIDENTIFIED MALE: You stink.

UNIDENTIFIED FEMALE: Thank you so much for nothing. You're fabulous.

UNIDENTIFIED MALE: One worker told us it was going to be maybe Thanksgiving. So, yes, it's very rough. Very, very rough.

UNIDENTIFIED MALE: There's no inspectors, you don't know where an inspector is, and we're not flooded.

(END VIDEO CLIP)

COOPER: It's so bad that some local officials want the military and U.S. Department of Energy to step in and temporarily take over LIPA management. LIPA they say just can't hack it.

A recent New York state investigation depicts a company saddled with antiquated technology that neglected vital maintenance and did not budget enough for disaster response. Paper maps like this one were pretty much state of the art, according to the report. Paper maps they're using. LIPA has lagged behind other utilities, not using smartphones, tablets or even printers and FAX machines.

Paper memos were preferred and slow dial up Internet access the rule. Even worse, according to the report, LIPA's power outage management system runs on a 25-year-old mainframe computer. It was blamed in part for LIPA's slow response last year to Tropical Storm Irene.

The state report also casting doubt on how seriously LIPA and National Grid took the lessons from Irene. A consultant who helped prepare the report said, and I quote, "All of these things were identified," meaning the shortcomings, "but they all cost money." That includes simple preventative measures like trimming trees around power lines and inspecting utility poles.

The report says LIPA lacked even basic procedures for repairing downed wires, keeping call centers open and communicating open with customers. By the way, our repeated calls to LIPA went unanswered.

However, in a press conference late tonight, National Grid speaking for LIPA denied it's failing its customers, National Grid saying the company is progressing very well based on the unprecedented storm.

However, a lot of people disagree and Deb Feyerick managed to speak to some of them.

(BEGIN VIDEOTAPE)

UNIDENTIFIED FEMALE: Do you want to hear what I have to say or no?

DEBORAH FEYERICK, CNN CORRESPONDENT: Anger, frustration and despair in the Rockaways, as people demand to know why their neighborhood remains dark as nearly more than 12 days after superstorm Sandy hit this boardwalk community.

UNIDENTIFIED FEMALE: I can't get light on, anything for my kids. I can't get power, heat, garbage pickup, nothing?

FEYERICK: Workers from the Long Island Power Authority known as LIPA are visible but still can't seem to get the electricity back in 150,000 homes, especially those in the flood area. New York's governor has threatened to pull the company's operating license.

CUOMO: We paid them and we gave them a franchise because they represented themselves as experts at doing this, and they failed. And they should be held accountable for their failure.

FEYERICK: At the Mt. Carmel Baptist Church next to a public housing complex, volunteers worked hard to serve hot meals and keep up morale. Many left before sunset. The trains are still not running this far out. One woman told us it feels like martial law here with people bolted inside their homes after dark.

JANNICK BROWN, QUEENS: There is no power, no light. You could barely see in front of you. It's difficult. You have a hard time. So usually you try to get in before the sun goes down.

FEYERICK: Kenneth Gonzalez, a registered nurse, is now crammed into his living room, one he now shares with three other people and the few belongings he could save.

KENNETH GONZALEZ, QUEENS: If someone comes in here with guns to take the little I have left, what am I supposed to do? It's like Armageddon or something. They just forgot about us. How are we to survive?

(END VIDEOTAPE)

COOPER: And Deb Feyerick joins me now.

Deb, as you well know, it is bitterly cold in these areas. People talk a lot about looting. There is a real fear here in Staten Island and elsewhere I know about looting. How much is that fear based on reality? How many cases do we know have there been? Is it really widespread or is it kind of more a fear of what might happen?

FEYERICK: Actually, Anderson, it is the only crime over the last two weeks that has actually gone up in numbers, according to the police department.

Burglary is up 7 percent. Even murders are down during this particular period, but you have got burglary that is up. It's a crime of opportunity. You have people who are either going to homes and they're seeing if anybody is inside, or what you also have is you have people sort of stealing things that are being left out. People are trying to take copper wires from refrigerators, from freezers, anything that they can really get their hands on.

So it is a palpable number that people are afraid. But think about it, Anderson. Even if you look, this is a floodlight. That floodlight over there, that light is in a place where there are usually six or seven lights, so people really are in the dark.

And that is a problem. Now, we do see a lot of police cars out here, and they are being mobilized to the heavily hit areas. We are seeing the sanitation trucks trying to get those streets get back in order. The housing, the HRA brought some extra resources out here to help people get extra food stamps and benefits, because 25 percent of all the public housing in Queens is actually here in this part of the Rockaways.

So there is really a socioeconomic component to this and it's one where people really feel like they have been abandoned, Anderson.

COOPER: Deb Feyerick, I appreciate the reporting.

Many Americans are opening their wallets. A warning tonight, though, and we want to warn you about fraudulent charities. To add insult to injury, the fact there are fraudulent charities targeting you and using Sandy to get your money, Drew Griffin investigates ahead. Stay tuned for this.

(COMMERCIAL BREAK)

COOPER: Many of the victims of superstorm Sandy have lost everything. Their needs are enormous right now, food, clothing, medicine, shelter and a lot more. But now the FBI is warning that scam charities could be steering relief away from victims by targeting those who want to help. This is just outrageous.

We have been a lot of reporting on charities and bad charities for months, but what we didn't know about and what Sandy has exposed is the extensive business in these pop-up charities that surface in the wake of a disaster. They're designed for one reason, to prey on your generosity and take your money.

Here's what Drew Griffin found.

(BEGIN VIDEOTAPE)

DREW GRIFFIN, CNN INVESTIGATIVE CORRESPONDENT (voice-over): The scams start according to Internet security special Johannes Ullrich even before the storm form. As soon as the National Weather Service announces names to be used for upcoming Hurricane Sandy, the Internet is abuzz registering those very names or their domains.

JOHANNES ULLRICH, PRESIDENT, SANS SECURITY: You have no idea who these people are.

What you do notice is that they do register hundreds of these domains, in parts trying to trick people to go to these domains and then donate the money.

GRIFFIN: From his home in Jacksonville, Florida, he's already tracked more than 1,000 Internet domains with the words Sandy or relief. Some registered early, but most as soon as the forecast predicted this would be a killer storm, sites that pop up like this one registered in North Carolina, urging people to donate to help victims in Jamaica, linking the would-be donor to a PayPal account.

ULLRICH: I couldn't find out who was behind it. For example, you can check who registered the domain name, and there is this tool called WHOIS that tells you who registered the domain name. Let's just look this up here and see what comes back.

It's here, a person in North Carolina that hasn't registered, but whether or not that's real, who knows.

GRIFFIN: We checked. The charity is not registered with the state of North Carolina, as the law requires. Some sites are even more blatant, personal appeals on crowd-sourcing sites creating a Web page just asking for money.

On this site called Indiegogo, there were 32 pages of pleas for cash. "We left the city and headed south towards family in Pennsylvania," writes one. "We were finally let back into Salem and our home was destroyed."

Or this. A man in the Bronx, he wants $60,000 to repair damage to his business. There is simply no way to determine if any of these pleas or people are real. And before you think no one would send donations to blind sites or unknown charities, think again.

ART TAYLOR, BETTER BUSINESS BUREAU: Most people respond to charities because they are asked by a letter.

Art Taylor, who heads the Better Business Bureau's Wise Giving Alliance, and who has been following our reporting on bad charities, says 70 percent of Americans who give money donate that money without ever checking to find out where it's going.

TAYLOR: We welcome the public scrutiny that is coming to this. We welcome, you know, the media for getting involved in this because if you don't, I worry that things are going to get worse. People are going to continue to be duped by, you know, unscrupulous claims.

GRIFFIN: Which leads us to the real victims of charity scams, the people who really need charity, like these people lined up at the Bethel Assembly Church of God not far from downtown Newark, New Jersey.

A Missouri-based charity called Convoy of Hope is here handing out coats, blankets, food, water, real help for real victims. Any donations mistakenly sent to a bad charity or a scammer is a donation not committed here.

JEFF NENE, CONVOY OF HOPE: You will find good apples and bad apples, and you do your best to be one of the good guys. You do your best knowing that, hey, there's going to be others out there that do things wrong, that do things for the wrong reasons that are unethical, but when you go in with the right heart in the first place, everything works out.

(END VIDEOTAPE)

COOPER: It's so outrageous. It makes me so mad. I hear there's even a charity using CNN's name.

GRIFFIN: Yes, we have just heard about this.

It's an e-mail that is being sent out. And what you will see is an e-mail that seems to show our home page, CNN, A.C. 360, with breaking news about Hurricane Sandy.

What we're told is this is actually a way to try to infect your computer, put in some malware and eventually get your banking information. So they're even using CNN, hurricane Sandy, at a time like this.

COOPER: It's so outrageous.

GRIFFIN: Yes.

COOPER: And we've heard a lot -- obviously there's been a lot of talk about asking people to donate to the American Red Cross. There's been criticism of the Red Cross as well. Where is the money going?

GRIFFIN: They're the biggest. They get the most money, $117 million donated in pledges so far to the Red Cross to date.

Look, we look at these rating systems, charitynavigator.com. They tell us that they get about 92 percent of the funds donated actually go to programs to help people. Three out of four stars. You know, the Red Cross is pretty good. And in a disaster like this, they're pretty big. They can handle it.

COOPER: They do -- they don't target for particular things. I mean, like, you give to the Red Cross, right?

GRIFFIN: This is the big criticism --

COOPER: Right.

GRIFFIN: -- that they use Sandy to raise tremendous amount of funds that go to other disasters, other programs, other overhead that might need it.

They tell us, and we've been in contact with the Red Cross, no. The Sandy money is going to sandy victims. They guarantee that. They've got 300 trucks out, served 3.5 million meals so far. They're in 10 different states.

We don't se them here, there's been a lot of complaints, but the Red Cross is saying if you donated to hurricane Sandy, your money is going to help hurricane Sandy victims. We'll keep on it.

COOPER: Yes, Drew Griffin, amazing. Thank you so much for the reporting. It's so important.

We're going to continue on these charities. In addition to the Red Cross, we've got a couple more places to find legitimate charities and other resources for helping the people here.

We've got a couple, the first is charitynavigator.org. This I say, you got to go charitynavigator.org, and they basically rank these charities and give you a sense of which ones are transparent on our Web site, at "Impact Your World" -- CNN's site, "Impact Your World." Just got to CNN.com/impact, you also can find a list of other groups.

But charitynavigator.org really gives you a sense of what charities are out there and how much money actually goes to help people.

It's sickening. I mean, it's just sickening to think that fraudsters are cashing in on the flight of Sandy's victims.

Joe Ingenito lives here in Staten Island. I spoke to him just a short a while ago.

(BEGIN VIDEOTAPE)

COOPER: How do you deal with this every day?

JOE INGENITO, STORM VICTIM: I survive. I'm in survival mode. Like, you know, you're trying to live in survival mode. You got people moving. You know, I caught a guy coming out of one of my neighbor's houses with a sack of IDs, security card, picture IDs. They got to move out, you know? COOPER: Right. And what do you --

INGENITO: I stay out here all night long and patrol the block.

COOPER: You patrol the block.

INGENITO: That's right. You can ask any one of my neighbors. I'm out here all night long patrolling the block, doing the best I can. I want to protect the little we have. You know, people are taking things. We have nothing now and they're taking what little we have left.

COOPER: No one wants to leave their house because they're afraid someone will come and take their stuff.

INGENITO: Right, exactly. So I stay out here with my friends, and my son stays by my side 24/7.

COOPER: And when do they say you might see electricity or anything?

INGENITO: They don't know. They've given us no answers whatsoever on that. They don't know themselves, I guess. They don't know themselves. I know they're cutting all the mains off. They just came to my house and took the meter and cut that, so I can't get electrical and when it's coming.

COOPER: What's it like to see your community like this. I mean, you've been here --

INGENITO: It breaks my heart. I put that cross up.

COOPER: You put a cross up there.

INGENITO: I put that cross up, OK? And five minutes later, a priest walked up my block, and that's the truth. He blessed my home. I said, Father, look, I just hung up this cross and then he blessed my home, an out-of-town priest. He came from out of town, a church, to help out. It's been amazing.

COOPER: There have been a lot of volunteers here, which is amazing.

INGENITO: Unbelievable. But they have other lives, they have to work. People have to work, you know? They can't be here every day.

COOPER: Yes.

INGENITO: But I'm here every day. I'm retired, you know, so I'm here every day just doing what I can do. I'm by myself with my son.

COOPER: Do you think this block will come back?

INGENITO: I'm not leaving. I've been here 20 years. I have two families here. I'm going to live upstairs until we rebuild downstairs. COOPER: So you're going to rebuild?

INGENITO: Yes, I'm not going nowhere. I'm not going nowhere.

COOPER: Thanks. Appreciate it.

INGENITO: Thank you.

(END VIDEOTAPE)

COOPER: Well, when you're standing here in Staten Island where so many homes have been lost, where people are still without power, living in the freezing cold, one of the striking facts is that Manhattan is so close. For those who aren't familiar with this area, I want to show you what I'm talking about. Times Square Manhattan was more or less dividing line during Sandy. South of 39th Street, power went out. It was restored last week.

And Staten Island sits just southwest of Manhattan. You can take the ferry back and forth. That's how close we are. But in the wake of Sandy, it seems like a world away. International aid group Doctors Without Borders, who have done a lot of work over the years, internationally, they are on the scene bringing medical relief to storm victims and other hard hit parts of New York and New Jersey.

It's the first time they've responded to a disaster in the United States.

Sophie Delaunay is the executive director of Doctors Without Borders. She joins us now.

When I think of Doctors Without Borders, I think of the work -- I mean, I've worked with you guys in Niger and Rwanda and all around the world. What's it like to work in the United States?

SOPHIE DELAUNAY, DOCTORS WITHOUT BORDERS USA: Well, it's a bit surrealistic, I must say. But we learned our lesson from Katrina when we thought medical needs would be covered, and when we realized that there were gaps, it was too late for us to react. So this time, we decide to do monitor the situation and to be able to respond and try to fill some of the medical gaps that we see.

COOPER: So, what were you doing? You guys were in the Rockaways, which was very badly hit.

DELAUNAY: Yes, we've been supporting some shelters in Hoboken, in Staten Island here. With the help of the community, we've been working with shelters in Brooklyn. But in other ways, this certainly is a most, you know, difficult situation for us, because we have to cover large areas, and it's not about working in shelters where people are regrouped, it's really about reaching out to the population who are homebound in high-rise buildings, who can't move, and who have been without electricity nor heating nor any contact with the outside world for almost two weeks now.

COOPER: And they're in these high-rise buildings, they have no power, they can't use the toilets in many cases. And these are people who the storm hit right at the end of the month. A lot of them received public assistance, that they would have gotten their checks, and their medicine would have been sent at the beginning of the month, so they're without their medicine.

DELAUNAY: That's exactly the problem, and 60 percent of the kinds of patients we've met were actually about drug refill and prescription refill. We have a lot of diabetic patients, hypertension, asthma patients that desperately need their medication at this moment.

COOPER: Right. If someone is HIV positive and they miss their medication even one day, that can have a very serious health impact on them.

DELAUNAY: That's true. We had one patient today who was in need of an HIV medication and could only get it from Manhattan. So we are only able to get it tomorrow and bring it back to them.

COOPER: I'm surprised there's not, you know, health workers from the city health department going door to door checking on people, but you don't see that.

DELAUNAY: Well, that's a very complicated story because there are actually a lot of people on the ground, lots of community. The mobilization of the community is absolutely phenomenal.

COOPER: There's no health clinics on various blocks.

DELAUNAY: There are mobile health clinics but there's clearly a lack of coordination. You can't ask the NGOs and the local community to take care of the coordination and to do the planning for the coming days.

COOPER: Right, somebody needs to be organizing it --

DELAUNAY: The borough gets the public services to do that, and it's been very, very hard to mobilize them on this front.

COOPER: It's ridiculous that two weeks after the storm, that that kind of organization from the city isn't in existence, and hopefully getting some attention on it will help. I appreciate all you're doing. Thank so much.

DELAUNAY: Thank you very much, Anderson.

COOPER: It's an excellent organization, Sophie Delaunay.

Up next, can the men and women at these two lofty addresses hammer out a deal to head off a major crisis for the economy? Of course, we're talking about Congress and the White House. And now, should Republicans reshape themselves after this presidential defeat?

Conservatives David Frum and Mary Matalin join us ahead.

(COMMERCIAL BREAK) COOPER: Hey, welcome back. We'll have a lot more on the situation here in Staten Island and also on the looming fiscal cliff and what anyone in Congress may do about it.

We'll be right back.

(COMMERCIAL BREAK)

COOPER: I was talking to the doctors at Doctors Without Borders during the break, and one thing they said they really need was someone from the city health department or the city government, a decision maker, to answer their calls, to get in touch with them to try to help organize kind of the medical response in the Rockaways in particular, to try to get it organized because they're not organized.

So if someone from the health department or city government is listening, Doctors Without Borders would really like to get in touch with you.

Raw politics now in high stakes -- the Bush tax cuts, as you know, expire on New Year's Day and automatic budget cuts kick in, unless, that is, Congress and the White House can agree on those damaging cuts in more palatable ways of funding the government.

Well, today, both President Obama and Republican House Speaker John Boehner staked out opposing positions on taxing the wealthy.

Watch.

(BEGIN VIDEO CLIP)

BARACK OBAMA, PRESIDENT OF THE UNITED STATES: If we're serious about reducing the deficit, we have to combine spending cuts with revenue. And that means asking the wealthiest Americans to pay a little more in taxes.

(END VIDEO CLIP)

COOPER: So that was the president, and here's Speaker Boehner.

(BEGIN VIDEO CLIP)

REP. JOHN BOEHNER (R-OH), SPEAKER OF THE HOUSE: On Wednesday, I outlined a responsible path forward to avert the fiscal cliff without raising tax rates. About 24 hours after I spoke, the Congressional Budget Office released a report showing that the most harmful consequences of the fiscal cliff come from increasing tax rates.

(END VIDEO CLIP)

COOPER: What Speaker Boehner did not mention is that the CBO report said raising the top rate would only shave 1 percent of 10 percent off economic growth and only temporarily. In any case, those were the two opening positions and the highest stake Washington's showdown since the debt ceiling disaster. Senate budget negotiators reconvene next week to try, in the words of one aide, to assess where they are.

And that brings us to where Republicans are as a party post- election 2012. What now for the Republicans which in turn depends on how -- on who you ask or how you ask the question, what happened on Tuesday night?

Two views from two conservatives on that and the fiscal, GOP strategist Mary Matalin, and David Frum, former speechwriter for President George W. Bush, "Daily Beast" blogger, and author of the aptly titled e-book, "Why Romney Lost and What the GOP Can Do About It."

First on the cliff, David, President Obama and Boehner have been saying a lot of right things, talking about compromise and cooperation, but on taxes, it seems like the gap between the two sides is as big as ever, doesn't it? I mean, did the election not change anything?

DAVID FRUM, CNN CONTRIBUTOR: The election changed a lot. The election changed the underlying power dynamic between the two parties. You know that great line of Al Capone's, you can get more with a kind word and a gun than you can get with a kind word alone? The president now has a gun in his hand. The Bush tax cuts expire and that makes the Republicans sweat.

We -- it's a consequence of losing elections, and it's going to be a very uncomfortable month for the two parties.

COOPER: Mary, what I don't understand, I hear from a lot of Republicans -- well, the president doesn't have a mandate on this, but both Republicans and Democrats for months now have been saying, look, the choice was very clear between these two men. They couldn't be more different -- people have said on our program.

And yet now, all of a sudden, if the choice is so clear and before the vote, didn't the American people make that choice, and so shouldn't the president get some capital on this tax issue?

MARY MATALIN, CNN POLITICAL CONTRIBUTOR: Well, if the exit polls are accurate, and I believe that they are by almost a 10-point margin, voters said they did not want to raise taxes to reduce the deficit. Where the common ground is and where it's always been and why the president has resisted this because he'd rather have an issue than a solution is that we could raise revenues which would largely fall on the rich that he seems to want to pay so much, and we could raise more revenues more quickly without disincentivizing work by raising the top marginal tax rate.

So I think there is something there between what the president said and Speaker Boehner said, if you want to raise revenues, you can close the loopholes that largely fall on rich people and that will raise way more revenues than the top marginal rate which will disincentivize work. That's just how that works. So I hope they can do this.

But more than this, as a Democratic issue, even President Clinton said this. We have a new Congress. We have new members in both bodies who did not run on tax increases. There should be some sort of just -- let's buy some time, they can -- as if the government can't dispense with the trigger, and then come back and do real tax reform.

COOPER: But, Mary, you're quoting exit polls. President Obama ran on the pledge that richer people should pay more taxes, and the American people voted for him.

MATALIN: But he said, alternately, and inconsistently -- I'm going to use these taxes to reduce the deficit, and I'm going to use these taxes to do more spending. You can't do both. If you raise the taxes on the rich --

COOPER: OK.

MATALIN: -- the way he said we would raise $10 billion -- we spend $10 billion a day and we'd raise $3 billion a year. It doesn't solve the problem. There was no discussion today about Medicare reform, entitlement reform, structural debt reform, which is really what's burdening the economy -- not these deficits.

COOPER: All right. David Frum, you said something earlier today that I found really interesting and it's getting a lot of attention. You said the conservatives have been fleeced and lied to by the, quote, "conservative entertainment complex". Explain what you mean by that.

FRUM: Well, there is a large industry that borders the line between show business and information that misleads people about where they really stand. I think that is happening again right now. I mean, our -- Mary's exchange with mine is a good example of this. There has been a real shift in power dynamics between the president and the Republican parties, the Republicans' disadvantage. And Mary and I both deplore it, but it's a fact.

You don't buying power by quoting exit polls. If the Republicans wanted to be effective here, they would need power, and they've been beaten and beaten badly. We have been beaten and beaten badly. Losing the presidency after throwing everything in this year, economic strain, losing seats in the Senate on top of the four seats that were given away by the Tea Party in 2010 that costs us the majority that was otherwise available, losing seats it looks like in the House.

The -- and all of the Bush tax cuts expiring without the president needing to sign anything, without Congress needing to do anything. This is a change in power dynamics to the disadvantage of the Republican Party. I think it's a disadvantage for the country, too. But the president has this power.

And all of it comes from structural problems in the Republican Party plus a badly executed election, which was lost not because of fancy promises the president made but because Republicans failed to deliver a middle class-oriented economic policy.

COOPER: We got to leave there --

MATALIN: Well, Anderson -- none of that is true --

(CROSSTALK)

FRUM: It's all true.

MATALIN: This is not deplorable. No, none of it's true, David. You're a friend and you're smart and you're an intellectual, but none of that is true.

We didn't turn out our vote. It was conservatives that didn't turn out. Not moderates, not independents, and we did not have a good turnout drive. So, take it from --

(CROSSTALK)

MATALIN: I've done this for 35 years.

(CROSSTALK)

COOPER: This is complex. Isn't there sort of a Republican echo chamber? I mean, the whole thing about all the polls are wrong and there's this enthusiasm, were they sold a bill of goods, viewers of these shows?

MATALIN: And what about there's no liberal echo chamber and liberal blogs and liberal tweets or whatever of that? Yes, that's the part that's ancillary. But the larger problem here --

FRUM: When Hugh Grant --

MATALIN: David, I've done this for 35 years. Romney never overcame that onslaught, that onslaught in the spring.

(CROSSTALK)

FRUM: When Hugh Grant got into trouble in that prostitution -- Mary, when Hugh Grant got into trouble with that prostitution scandal a decade ago, he made a joke on one of the evening chat shows about the people he paid that lied to him. And let us not be people that the Republican Party pays to lie to them.

This is a big defeat, and it's not just the mechanics of voter turnout, although those were bad. Why were they bad? How did that happen? Once you separate --

MATALIN: OK, that's a legitimate question. Was "The Dallas Monitor" and "The Wall Street Journal" lying to us?

(CROSSTALK)

FRUM: It's a party that has cut a connection to reality, and the assistance that the turnout the vote campaign was good, when it was bad, that's just one of the problems. Who was it that --

(CROSSTALK)

COOPER: I got to go to --

(CROSSTALK)

FRUM: -- into Mitt Romney's head. That was also a disaster, and yet truth was never told.

COOPER: David, I want to have you back on. It's a fascinating discussion. Mary Matalin as well. I got -- I appreciate it.

More news tonight. We'll be right back.

(COMMERCIAL BREAK)

COOPER: Eleven days ago, at the height of the storm, two little boys drowned here on Staten Island. Today they were laid to rest in a single casket. Four-year-old Connor Moore and his 2-year-old Brandon were swept away from their mother after their SUV got trap in flood waters. They were trying to get to higher ground.

Glenda Moore says she asked for help at a nearby house but was turned away. Her husband, Damien, who works for the city sanitation department, was at work that night. Today, his coworkers carried their sons' caskets. A friend of the family has set up a fund to help pay for the cost of the funeral. We put that on our Web site at AC360.com.

Hey, that does it for us. Thanks very much for watching.

"ERIN BURNETT OUTFRONT" starts after the break.