There is now a criminal investigation into the failure of the New Orleans levee system during Hurricane Katrina. With the Louisiana's attorney general leading one of several investigations, local reports say charges and lawsuits are likely.
Was it corrupt contractors skimping on construction material? Did the Army Corps of Engineers cut corners while building the walls that were designed to protect the people of the city?
On Friday, 'Scarborough Country' Guest Host Monica Crowley talked with New Orleans City Council Vice President Cynthia Morrell, 'Washington Post' Reporter Mike Grunwald and FBI Agent James Bernazzani about the latest in the investigation.
To read an excerpt of their conversation, continue to the text below. To watch the video, click on the "Launch" button to the right.
MONICA CROWLEY: Cynthia, let me begin with you, because you are there in New Orleans. What is this investigation all about?
CYNTHIA MORRELL, VICE PRESIDENT, NEW ORLEANS CITY COUNCIL: Well, looking at the construction of the levees, we know now that they were not meant to meet the standards that were needed for even a category 3. And when you look at the failure -- when you go up to where the breaches are, you can see the shoddiness of the construction. And it's just eye-opening.
CROWLEY: Mike, I know that you have written extensively on how the money that was to intended go to the levees and the construction, and also taking care of those levees, making sure that they could withstand this kind of storm. You have been writing about how that money was actually spent. Can you talk to us about how that?
MICHAEL GRUNWALD, "THE WASHINGTON POST": Well, sure.
The Army Corps of Engineers spent more money in Louisiana than any other state, including California, which I think has eight times the population. One of the problems was just that a lot of that money was being spent on navigation projects that had nothing to do with flood protection. A separate problem is it seems that even where they were spending money on these levees that were supposed to protect the city from a Category 3 storm, the levees were not up to snuff.
CROWLEY: (James), what kind of tips are you getting about possible malfeasance here with the levees?
JAMES BERNAZZANI, FBI SPECIAL AGENT IN CHARGE: Well, we're receiving a lot of information from the public. And it's important for the public to report to the FBI regarding all types of fraud, to include potential allegations of fraud as it relates to the levee system.
But you have to understand that the FBI, working very closely with the Army Corps of Engineers and the Department of Justice's Katrina Fraud Task Force, we do not have any preconceived ideas or theories, and we do not go into this assuming a crime has been committed. This is merely a fact-finding mission, specifically as it relates to potential violations of federal law.
And if we do surface violations of federal law, we will present those findings to the United States Attorney's Office for prosecution.
CROWLEY: James, how broad of an investigation is this? I'm understanding that the feds are looking into the possibility of corruption in the design of the levees, also in the construction and the maintenance of those flood barriers. Is all of that true?
BERNAZZANI: Yes.
Our focus right now is very broad. We are looking at it in two major others, government fraud, basically contractual fraud, whereby individuals agreed, by affirmation of a signature, agreed to perform certain functions. We're going back to determine if those functions in fact were performed.
And the second issue is public corruption. Now, the FBI has sent a very strong message that, whether you're federal, state or local, whether you're elected, appointed or hired, any official in public office who misuses his or her position for profit will be aggressively investigated. And we're going to take a look at those public officials who had responsibility to not only the construction of the levee system, which was about 40 years ago, but for the maintenance of the system to insure that it was up to specifications.
CROWLEY: Cynthia Morrell, on the question of how the money was spent and perhaps misused, how much of the blame for what happened in New Orleans actually goes to the Orleans Levee Board? Aren't they supposed to oversee how all of this money is being sent?
MORRELL: The money really came down through the Corps of Engineers, and while the Levee Board worked with them, the design was governed by the Corps of Engineers. And the contracts were awarded to-through the Corps of Engineers.
So, again, we had some input, but I think the majority of the problems, if you looked at the levees right after the flood, as I did, have to do with design, have to do with faulty construction -- well, I don't -- the construction was faulty.
... Bear in mind, the 17th Street Canal and in London Avenue Canal, those projects were completed in 2004, so they don't go back too far. And that's right where the breaches happened.
BERNAZZANI: The point I'm trying to make is, we're looking at the entire levee system.
And we're making no presumptions right now relative to culpability, if in fact there is. We're going to go where the facts take us. And where the facts think us will dictate what type of action we will take. And where there is violations of federal law, we will present those findings to the United States Attorneys' Office for prosecution.
CROWLEY: Mike Grunwald, the conventional wisdom after Katrina and what we saw in New Orleans is that the levees were overtopped, that water in fact spilled over the levees. And now we know in fact that the water broke through cracks actually in the levees. So, if that's true, then who do you believe is to blame?
GRUNWALD: Well, as the councilwoman said, the Army Corps of Engineers is in charge of this system.
And one reason people were under the impression that the levees had overtopped after Katrina was that the Army Corps of Engineers said so. They said, this was an overwhelming storm. There was nothing we could do about it.
It turned out that, on the east side of town, some of those levees were overtopped. But, around the lake, those levees were not even close to overtopped. There was clearly three or four feet of freeboard. So, that's what shows you that there's some sort of design and construction problem. It doesn't necessarily say that there's some kind of criminal malfeasance, but it does show that the levee system did not do what it was supposed to do.
CROWLEY: And, also, Mike, is it true that the levees were not drilled as far down into the ground as they should have been?
GRUNWALD: ... I think there are right now eight separate investigations of these levees, four criminal and four kind of forensics, looking at what happened.
But one thing that everybody who's talking publicly is saying is that it looks like these sheet pilings should have been a lot deeper than they were supposed to be, and that they weren't even as deep as they were supposed to be. So, there are kind of two separate problems. They weren't designed deep enough and they weren't built even as deep as they were designed.
CROWLEY: James Bernazzani, let me ask you, if -- and I know that this is in the early stages of this investigation -- but if in fact it pans out that the Army Corps of Engineers was somehow liable for the criminal negligence here in the design or the construction of these levees, who do you hold accountable in that instance?
BERNAZZANI: Again, I'm not going to speculate right now.
There's a lot of bad intelligence around New Orleans. And what I don't want to contribute to is the cycle of innuendo and rumor. We need to surface the facts. And we are not there yet. But, once we do, again, we will present these findings and we move forward accordingly.
And I would like to make one point that the fellow from "The Washington Post" said there's four separate criminal investigations. There are four components that are working this criminal investigation together. We are working it together in the Katrina Fraud Task Force, which was initiated by the Department of Justice, and we are working Attorney General Foti and District Attorney Eddie Jordan to get to the bottom of this.
So, from the criminal side of the house, we are working this collectively as a task force.