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ANDERSON COOPER 360 DEGREES

Sorority Bombshell; A Convenient Oscar; Target Iran

Aired February 26, 2007 - 23:00   ET

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


JOHN ROBERTS, CNN CO-ANCHOR: Good evening again. Anderson is off tonight. I'm John Roberts.
KIRAN CHETRY, CNN CO-ANCHOR: And I'm Kiran Chetry.

Coming up in this hour, how insurance companies can turn your auto accident into a financial train wreck, what a 360 investigation discovered about secret practices for maximizing profits and minimizing payouts.

ROBERTS: First though, getting ready for a war with Iran. Right now two U.S. aircraft carriers, the Stennis and the Eisenhower are on maneuvers within striking distance of Iran.

And back at the Pentagon, war planners are said to be laying out strike options.

This, we ought to underscore, is something that war planners do constantly. The White House says it doesn't want war with Iran. That said, the planners do seem busier than ever.

Investigative Reporter Seymour Hersh writes about it in this week's "New Yorker" magazine.

Seymour joined me earlier tonight.

(BEGIN VIDEOTAPE)

Sey, you've been writing about this topic, possible military action against Iran, for the better part of a year now. What's different about it now?

SEYMOUR HERSH, "THE NEW YORKER": Well, we have to say it's absolutely right. It's an old story. We're talking about contingency plans. I'm not saying there's any execute order.

But now the president has changed the game in a couple of ways. First, he's brought the planning in to a small unit inside the -- parts of the planning are now inside the joint chiefs -- offices of the joint chiefs. There's a unit there. Before, the last few months, there wasn't such a unit.

Secondly, he asked them to, among other things, give me a 24-hour package. In other words, he wants to get up at 7:00 in the morning and say I want action by 7:00 tomorrow, not some, you know, three weeks or four weeks in advance. So he's getting that. That's still contingency. And the other thing that's going on right now is, of course, there's an enormous increase in aggressive actions towards the Iranians. So this is some of the classified covert stuff that I was getting into.

We're grabbing many more Iranians, literally hundreds, and interrogating them and collecting intelligence. Those Iranians inside Iraq, we're also going cross border much more actively, much more aggressively.

I don't know whether the intent is to force Iran or hope they'll respond so we can do something. But although this is going on, it's a pretty significant escalation.

And one final thing, John. The planners have been told, we always are looking for the nuclear materials that they call counter- proliferation targeting. We're always looking for ways to take down the administration, the government of Iran. They call it basically decapitation, kill the leadership. Now they've also been asked in the last month or so to go after terrorist targets inside Iran as a justification.

All of this inches us closer to something.

ROBERTS: Now, it's pretty much become standard operating procedure that you write an article, the White House comes out and denounces it.

Here's what the White House had to say about it today.

DANA PERINO, DEPUTY WHITE HOUSE PRESS SECRETARY: One thing I can say about Seymour Hersh is that he definitely has a wanton disregard for the truth.

The president has said from the beginning, and is reiterated by all of his cabinet officers and his military advisers, that we are on a diplomatic path with Iran. We believe we can solve this diplomatically. And that's exactly what the advisers are doing right now, talking with the U.N. security council about next steps in terms of the U.N. security council resolutions.

ROBERTS: I talked with White House officials later on today, Sey. They said that all options are on the table, but the only thing being served right now is diplomacy.

HERSH: The problem is you also have this planning going on which you can call normal. But I can tell you inside the military there's enormous anxiety about the planning and about what the intentions are of the -- I don't know about the president. What I do know -- we heard what Cheney said the other week and just the other day when he was in the Southeast Asia and Australia. He certainly hasn't gotten the same message the White House is putting out. He's just banging it on, you know, like (UNINTELLIGIBLE) at the U.N., banging his shoe on the table. So he's not on the same track.

The other thing is, the military is in this incredible position where right now they have two carrier groups in the Gulf and one carrier group in the Straits of Hormuz, which is this little narrow channel where all of the oil flows. Well, until 1990 -- I think I'm close -- accurate about that -- 1990, we, the Americans never sent an aircraft carrier in this group of six or seven destroyers and other boats with them into the straits because they're so narrow, very hard to maneuver. You're very vulnerable to enemy attack.

And if we do hit Iran, what do the Iranians have? They have anywhere from 700 to 1,000 little PT boats that they could turn into suicide boats tomorrow and go after our fleet. And there's no stopping that. And I can tell you this has been looked at high up in the joint chiefs and they're very worried about it. And that doesn't mean it's going to happen.

But this, as you know also from this article, that we're also doing a lot more aggressive stuff towards the Shiite community.

The president is, you know, putting the pedal to the floor again.

ROBERTS: Always interesting, Sey, to read your articles. They always provoke a lot of thought and certainly no shortage of controversy, either.

Thanks. Appreciate your being with us.

HERSH: No problem.

(END VIDEOTAPE)

CHETRY: And John, if as Seymour Hersh said, the order comes down, the question then becomes one of execution. Can U.S. forces pull it off or are they stretched too thin?

As CNN's Jamie McIntyre reports, the nation's highest ranking military officer is now sounding a warning about that.

(BEGIN VIDEOTAPE)

JAMIE MCINTYRE, CNN CORRESPONDENT (voice-over): The chairman of the joint chiefs still stands by what he said publicly three months ago.

GENERAL PETER PACE, JOINT CHIEF'S CHAIRMAN: The United States military can today and tomorrow handle any additional challenge that comes our way.

MCINTYRE: But CNN has confirmed that recently General Peter Pace secretly upgraded to significant the risk that the U.S. would have trouble responding to a major new security threat.

In that classified assessment, Pace insists, as he did in public, that the U.S. could still win a third war, just that it would be messy.

The problem, as outlined in a Senate hearing two weeks ago, is that the Army and the Marine Corps are maxed out.

SEN. CARL LEVIN (D), ARMED SERVICES COMMITTEE CHAIRMAN: Simply stated, our ground forces are stretched thin and equipment is wearing out faster than planned and is not being replaced in a timely manner.

MCINTYRE: Those are the two critical shortages, combat-ready ground troops and their equipment.

The top brass has been worried for a while.

UNIDENTIFIED MALE: I am not satisfied with the readiness of non- deployed forces.

We're not doing amphibious training. We're not doing mountain warfare training. We're not doing combined armed live fire maneuver, such as would need to be the case potentially in another type of contingency.

MCINTYRE: So what if the U.S. had to respond to Iran or repel a North Korean invasion of the south? The plan now is to rely heavily on air and sea power, which is not nearly as stressed by the war in Iraq.

PACE: If you had to go fight another war someplace that somebody sprung upon us, you would keep the people who are currently employed doing what they are doing and you would use the vast part of U.S. armed forces that is at home station, to include the enormous strength of our Air Force and our Navy against the new threat.

MCINTYRE (on camera): It's a fine line the Pentagon has to tread, acknowledging the clear reality that the wars in Iraq and Afghanistan are taking a heavy toll on U.S. military readiness, while not showing any public sign of weakness that could embolden America's adversaries, such as Iran or North Korea.

Jamie McIntyre, CNN, the Pentagon.

(END VIDEOTAPE)

CHETRY: So with that on the table, some perspective now from William Cohen, author and former defense chief. We spoke earlier tonight.

(BEGIN VIDEOTAPE)

Secretary Cohen, thanks so much for being with us on 360 tonight.

General Peter Pace, the chairman of the Joint Chiefs of Staff, upgraded the level of risk that the military faces in defending the nation from moderate to, quote, "significant." What does that mean?

WILLIAM COHEN, FORMER SECRETARY OF DEFENSE: It means that if we had to face another contingency, that the risk involved would be significant in the sense it would take longer in order to complete and also involve more risk in terms of perhaps to our forces itself. But not that it couldn't be completed. It would just take longer and be more difficult to accomplish.

CHETRY: And General Pace attributed that to additional stress placed on the armed forces by the ongoing wars in Iraq and Afghanistan.

In your estimate, are these open-ended conflicts? Or can you see a time in the future where there is success in one or both places and our troops can come home?

COHEN: Well, success is going to take some time to achieve, depending upon how we're defining it. But obviously, in Afghanistan, by way of example, we actually need more forces rather than fewer.

NATO needs to come up with additional forces or so-called boots on the ground. That's not a country in which you can win this war against the Taliban or the insurgents, al Qaeda, from the air alone. So you're going to have to have actually more forces in the short term rather than fewer.

With respect to Iraq, the president is calling for a surge in the short term. So once again, we're looking at more forces rather than fewer.

Can this be sustained over a long period of time? That's open to debate. You have some choices to make. You can either cut down the areas that we're committed to. You can reduce the -- those areas of up tempo, so to speak, or you can increase the force, which is going to take several years to do. Or you can then change what we call the truth to tell ratio. That means putting more people in the combat element, taking them out of administrative support.

But there are no real quick fixes to this. This is going to trying and stretching our forces for some time to come.

CHETRY: Right and certainly when you take a look at some of the other scenarios in that risk assessment, increased violence in Iraq or Afghanistan for one, also the threats posed by al Qaeda, the Iranian involvement in terror, North Korea, you know, it seems like there are so many other concerns that are not just U.S. concerns.

So what about the militaries of other countries?

COHEN: Well, this is something that they're going to have to face up to. For too long now this has been seen as the United States having to wage the so-called war against terror when, in fact, the entire world is subject to this kind of terrorism, that we're all on the front lines.

And what I've tried to do since leaving office, to be sure, is to remind those countries that everybody is at risk. That when you're talking about terrorism, we've seen that terror has been democratized. Just a few people can cause horrific damage.

So what we have to do is persuade other countries that they need to join in this effort. And contributing more troops to the NATO effort is one very clear way they can make a contribution. CHETRY: But is it -- when you talk about persuading, nations don't believe this is their problem? I mean, even things such as the North Korean crisis with Japan and China?

COHEN: I think it depends on where we're looking. For example, if we're worried about failed states, that -- countries that are on the edge of poverty and disease and malnutrition and no employment or very little employment, those are potential areas for the breeding grounds of terrorism.

CHETRY: All right. Some good insight tonight from Secretary Bill Cohen, former secretary of Defense.

Thanks so much for joining us on 360 tonight.

COHEN: Pleasure to be with you.

(END VIDEOTAPE)

CHETRY: As we mentioned, William Cohen is a prolific author of thrillers and now this, "Love in Black and White." It's a memoir of race, religion and romance -- John.

ROBERTS: Just ahead on "360," you pay for insurance for peace of mind, but a 360 investigation found that's not always what you get.

(BEGIN VIDEO CLIP)

ROBERTS (voice-over): A 360 investigation. Why a simple fender bender could break your bank account.

DREW GRIFFIN, CNN CORRESPONDENT: So if you wanted to increase profit, you would try to chop the small claim?

DAVID BERARDINELLI, ATTORNEY: Sure. If you could take a thousand dollars off of a million claims, do the math.

ROBERTS: What a 360 investigation uncovered about the two biggest auto insurance companies. 360, next.

(END VIDEO CLIP)

(COMMERCIAL BREAK)

ROBERTS (on camera): Traffic accidents are a fact of life. So is dealing with insurance companies. You pay them to protect you. That's the idea.

But some accident victims say they are being forced to settle or go to court because their claims are being denied.

We wanted to know the facts. And in a CNN investigation, we looked into whether some big name insurers are more interested in profit than policyholders.

CNN's Drew Griffin tonight, "Keeping them Honest." (BEGIN VIDEOTAPE)

UNIDENTIFIED MALE: There's an accident in this country every five seconds.

DREW GRIFFIN, CNN CORRESPONDENT (voice-over): It happened in Santa Fe, New Mexico, much the way Allstate describes it in its commercials.

Roxanne Martinez, driving down Cerrillos Road about noon, when the SUV pulled out from Tasuka (ph) Drive.

ROXANNE MARTINEZ, ACCIDENT VICTIM: I remember, you know, like hitting the driver side window. And then I just, I don't know...

GRIFFIN: The passenger side had been sideswiped. On the driver's side Roxanne was smashed against the window.

MARTINEZ: I had upper back pain. I went to chiropractors, physical therapists, massage therapists, acupuncture. They told me that my spine was damaged.

GRIFFIN: The person driving the SUV that hit Martinez was ticketed and had insurance, Allstate. That was good because Martinez was racking up bills, plenty of them -- C.A.T. scans, doctor visits, x-rays, all bills she thought Allstate would cover.

But after three years of fighting over the bills and still hurting from the accident, Allstate came with a take it or leave it offer, $15,000.

MARTINEZ: That was for, I guess, the car, medical -- I mean, that was everything. You know, I thought they'd pay all your bills and, you know, keep on paying your medical bills.

GRIFFIN: Roxanne Martinez was battling Allstate, the second biggest auto insurer in the nation. What she didn't know was that both Allstate and the largest auto insurer, State Farm, had changed the way they handled so-called minor crashes like hers.

(on camera): In an 18-month investigation across the country, CNN found that if you are injured in a minor accident, chances are high the two companies would challenge your medical claim, offering you barely a fraction of your expenses.

(voice-over): They would do it by forcing people into court, dragging out court cases for years and by convincing the public it was all designed to fight growing fraud in the car accident business.

But documents examined by CNN indicate the motive was profit. And Allstate has gone to great lengths to keep those documents secret. In two states where Allstate has been sued, the company has defied judges' orders to make the documents public.

According to Nevada Insurance Law Professor Jeff Stempel, the new get tough strategy is adding up to billions in profit for the insurance companies and little, if anything, for the public.

JEFF STEMPEL, UNIVERSITY LAW PROFESSOR: We can see the policyholders, individually, are getting hurt by being dragged into court on fender bender claims, and yet we don't see any collateral benefit in the form of reduced premiums even for the other policyholders.

So, I think now we can say to continue this kind of program is, in my view, institutionalized bad faith.

GRIFFIN (on camera): We wanted to ask Allstate and State Farm all about this on camera in an interview, but they both said no.

Allstate did send us an e-mail. In an e-mail, Allstate told us it did not believe it would "have any real opportunity of being successful in getting you (CNN) to do a balanced report."

State Farm sent an e-mail too, saying, "We take customer service seriously and seek to pay what we owe promptly, courteously and efficiently, and we handle each claim on its own merits."

And State Farm also added this. "Any attempt to generalize that State Farm has adopted consultant recommendations as other insurers is just plain wrong."

Who is the consultant State Farm refers to? The giant of the consulting industry, McKinsey & Company, hired by both State Farm and Allstate.

McKinsey & Company said it does not discuss any of its clients' business.

And at the same time Roxanne Martinez thought she was in good hands with Allstate, Allstate was being advised by McKinsey in writing to put boxing gloves on those good hands.

That strategy, says Martinez's lawyer, was to take valid claims and pay pennies on the dollar.

Attorney David Berardinelli has written a book about it and is challenging Allstate's strategy in what he hopes will be a class action lawsuit.

(On camera): So if you wanted to increase profit, you would try to chop the small claim?

DAVID BERARDINELLI, ATTORNEY: Sure. If you could take a thousand dollars off of a million claims, do the math.

GRIFFIN: A lot of money.

BERARDINELLI: A lot of money.

GRIFFIN (voice-over): Shannon Kmatz was an Allstate claims agent in New Mexico before she became a cop. She says she was trained by Allstate to treat most minor accident victims as frauds and offer them as little as possible.

SHANNON KMATZ, FORMER ALLSTATE CLAIMS AGENT: A hundred dollars, yes. I've offered people $50. They have minimal damage to the back of their vehicle and they're claiming that they're hurt.

GRIFFIN: Then Kmatz got to see the insurance strategy firsthand from the other side.

KMATZ: I turn around and get in a car accident myself. My car has minimal damage and I can't walk. And I realize, whoa, what am I doing? This is not right.

JIM MATHIS, FORMER INSURANCE COMPANY INSIDER: It really came down to three basic elements. A position of delay, a position of denying a claim and then ultimately, of course, defending that claim that you denied.

GRIFFIN: The three D's.

MATHIS: Exactly.

GRIFFIN: Jim Mathis is a former insurance company insider who now testifies against insurance companies in court.

And the profits are huge?

MATHIS: The profits are good. And as long as the public allows this to occur, the insurance companies will get richer and people will not get a fair and reasonable settlement. Period.

ROBERT HARTWIG, PRESIDENT, INSURANCE INFORAMTION INSTITUTE: Insurers don't blanket and deny claims on any grounds whatsoever.

GRIFFIN: Robert Hartwig is president of the Insurance Information Institute, an insurance industry trade group.

HARTWIG: What insurers are trying to do is monitor costs. And every insurer is under the same pressure to do it.

GRIFFIN (on camera): And this Allstate training manual obtained by CNN details how that was going to be done, by forcing what the manual calls smaller walkaway settlements.

(voice-over): The walkaway settlement for Roxanne Martinez was a take it or leave it offer of $15,000 that came three years after her accident. She said that would pay a little more than half of her costs.

MARTINEZ: It's kind of hard when you're thinking, like, you know, are they going to leave me broke or, you know what -- I mean, that's what -- that was very stressful.

(END VIDEOTAPE)

ROBERTS: And when we come back, we'll tell you what can happen when you take an insurance company to court. Also ahead, a sorority that's taking heat for pushing nearly two dozen members out the door. The sorority says the women weren't recruiting enough new members. The women say the reason they were kicked out is skin deep, pure and simple.

When 360 continues.

(COMMERCIAL BREAK)

ROBERTS: Before the break, we introduced you to a woman who says she was put through the wringer by car insurance giant Allstate. She said that Allstate wanted her to settle for thousands of dollars less than what she was entitled to.

She refused the deal that they offered and went to court. And that's where she says the battle got even tougher.

Her case isn't an isolated one, however. As our reporting reveals, accident victims across the country are fighting back against the insurance companies they thought would protect them.

Once again, CNN's Drew Griffin.

(BEGIN VIDEOTAPE)

GRIFFIN: When Ann Taylor's car was rear-ended...

ANN TAYLOR, ACCIDENT VICTIM: I woke up the next morning. I couldn't move. I had severe pain in my back, down both legs were numb and tingly.

GRIFFIN: The doctor diagnosed herniated disk muscle tears, and the treatment would mean time off work, therapy and medical bills.

The person who hit her was a State Farm employee driving a State Farm car. So Taylor thought at least financially she'd be covered.

It added up, said Taylor, to $15,000. But after dragging out her claim, State Farm offered her only $2,000.

TAYLOR: I was just very insulted.

GRIFFIN: Taylor hired Attorney Jeff Cooke and decided she would fight. It turned into a major legal battle eventually ending up in this courtroom.

Taylor's case is an example of how the two largest auto insurance companies, State Farm and Allstate, have changed the way they handle claims when people are hurt in minor impact crashes.

CNN's investigation reveals a strategy to increase profits by limiting payments to accident victims. And former insurance insiders say most of the industry has adopted the strategy.

Allstate and State Farm, the industry leaders, would not talk to CNN for this report. But Jim Mathis, a former insurance company insider, who now testifies against the insurance business in court, did. And he says cutting payments to people like Taylor has meant billions for the insurance companies.

MATHIS: It's not based on what should be a settlement value or offer to this claimant. It's not based on ethics. It's based on -- it's not based on profits. It's based on how much profit.

GRIFFIN: Taylor's case finally got to court three years after her accident. Her lawyer brought in medical testimony. To present its case, State Farm just dug deep into Ann Taylor's past.

JEFFREY COOKE, TAYLOR'S ATTORNEY: The lawyer stands up and says to Ann Taylor during her cross-examination, tell the jury about your back injury when you were 16 years old.

GRIFFIN: In fact, the attorney for State Farm raised questions about Ann Taylor falling off a horse when she was in high school. And the lawyer also asked Taylor, a nurse, about throwing out her back when she moved a patient.

(On camera): The attorney even brought up personal things that Ann Taylor had to sell a horse, that Ann Taylor had to sell her house, that Ann Taylor had even broken up with a longtime boyfriend, and couldn't all these things add to stress and that could have caused her back pain?

TAYLOR: They didn't have any expert testimony. They never had a physician look at me.

GRIFFIN (voice-over): They tried to make you out to be a liar.

TAYLOR: Exactly.

GRIFFIN: The attorney for State Farm did produce one piece of evidence, very large photos of two slightly damaged cars.

TAYLOR: They expected the jury to see those and to say, she really wasn't hurt.

GRIFFIN: Michael Freeman is a crash expert, often called in to testify when insurance companies are trying to use photos to deny a crash victim was injured.

How do the insurance companies use photos? Well, take a look at a photo of a car with minimal damage, he says, and convince the jury what they probably were already thinking. That doesn't look like much. How could that person be hurt?

MICHAEL FREEMAN, FORENSIC EPIDEMIOLOGIST: You're eventually being judged by what your car looks like, not by what your doctor says or by what the impact of a particular crash has had or injury has had on your life. That's not fair. It's not right. It's fraud.

GRIFFIN: What stunned Taylor in the end is that State Farm's strategy worked. The jury didn't believe she was hurt. They awarded her just $1,500, less than what State Farm originally offered.

We contacted three of the jurors. They said this photo played a big part in their verdict. And they thought the insurance company had already paid its share and Taylor was only trying to get more.

Why did they look at her and must have assumed this lady is trying to rip off the insurance companies, she's a fraud.

COOKE: When she walked in the courtroom and she walked to the jury box and she walked to the testimony box and she walked out of the courtroom at lunch and at the end of a day, they assumed that she was not significantly injured.

GRIFFIN: It's a case straight out of the McKinsey playbook, the three D's. By denying her claim, State Farm forced Taylor to hire an attorney and sue. After a three-year delay, Taylor walked into a courtroom with no noticeable pain. And by defending the case for years, State Farm forced her attorney to front expensive litigation costs, which in the end he didn't get back.

FREEMAN: They make these cases so expensive to litigate that attorneys won't want to take them.

GRIFFIN: Indianapolis superior court judge David Dreyer says he hears it from his colleagues across the country, courts bogged down with minor impact cases. He says the insurance companies' own lawyers admit to him they're being forced to drag the cases out.

JUDGE DAVID DREYER, INDIANAPOLIS SUPERIOR COURT: They've confided to me that they would rather settle a case, and that they aren't allowed to settle by the insurance companies that of course control the defense.

GRIFFIN: It's a strategy spelled out in this affidavit from a former Allstate attorney in a lawsuit against Allstate. She explains how 10 years ago the insurance giant was changing the way it did business, driving lawyers out.

The former Allstate attorney says Allstate's strategy was to make fighting the company "... so expensive and so time consuming that lawyers would start refusing to help clients." The president of the Insurance Information Institute says the change was need.

ROBERT HARTWIG, PRESIDENT, INSURANCE INFORMATION INST.: We have a group of attorneys, quite frankly, who are very upset because, guess what? The gravy train has ended.

MARTINEZ: She had, like, taken off the other way.

GRIFFIN: Remember Roxanne Martinez from the beginning of our investigation? She was sideswiped, and Allstate offered her $15,000 to cover her medical bills and lost wages. Her case also dragged on for years. But after listening to what her lawyer said it was a deliberate attempt to drag Martinez through the wringer, her jury awarded $167,000 plus interest.

MARTINEZ: And I was happy. I thought, well, you know, all my bills are getting paid.

GRIFFIN: Industry insiders say 80 to 90 percent of accident victims don't fight. They take what the insurance company offers.

Drew Griffin, CNN, Santa Fe, New Mexico.

(END VIDEOTAPE)

CHETRY: And just ahead on 360, outrage on a college campus over a sorority's December surprise.

(BEGIN VIDEOTAPE)

CHETRY (voice over): A sorority consumed with its image.

UNIDENTIFIED FEMALE: Her whole idea is basically that you need to be more sexually appealing. You need to make the guys want you.

CHETRY: But that's not all. Twenty-three of her sisters say the sorority dumped them because they weren't pretty enough.

UNIDENTIFIED FEMALE: I've done everything I'm supposed to do. I'm a good student. I'm involved. But, you know, in your heart you take that really hard.

CHETRY: Greek tragedy or business as usual on sorority row?

Plus, winning Hollywood over.

JERRY SEINFELD, COMEDIAN: And the Oscar goes to "An Inconvenient Truth."

CHETRY: After scoring an Oscar, will there be more announcements ahead?

When 360 continues.

(END VIDEOTAPE)

(COMMERCIAL BREAK)

CHETRY: For many students -- college students, that is -- Greek life is a way of life. Thousands join fraternities and sororities every year. I did.

It's a place to make friends, to meet new people. But tonight you're going to hear allegations from women who belong to one sorority in particular. And they say they were forced out because they weren't pretty enough.

CNN's Keith Oppenheim reports in a piece that first aired on CNN's "PAULA ZAHN NOW."

(BEGIN VIDEOTAPE)

KEITH OPPENHEIM, CNN CORRESPONDENT (voice-over): The women of Delta Zeta thought of themselves as accomplished, but they knew some on campus had a mean nickname for them.

KIM LEE, FORMER DELTA ZETA MEMBER: The doghouse.

OPPENHEIM (on camera): The doghouse?

(CROSSTALK)

JOANNA KIESCHNICK, FORMER DELTA ZETA MEMBER: Yes.

RACHEL PAPPAS, FORMER DELTA ZETA MEMBER: Yes, that's the biggest one.

OPPENHEIM: That you're -- that you're a bunch of ugly women?

KIESCHNICK: Yes.

LEE: Yes.

OPPENHEIM: Rachel Pappas, Kim Lee, and Joanna Kieschnick are former members of Delta Zeta. They said, for some time, leaders from their national office had been concerned membership at the DePauw chapter was too low.

Last August, the students said those leaders suggested the way to recruit was to change their image, with appearance, with drinking, and with sex.

KIESCHNICK: Her whole idea is, basically, that you need to be more sexually appealing. You need to make the guys want you. You need to, I don't know, to get sloshed, and then have them, you know, whatever, just be more attractive. Get the men to like you. Get them to want you.

OPPENHEIM (on camera): By late November, some of the Delta Zeta began to believe that their national leaders were so consumed with image, that their ultimate goal was to get rid of most of the girls in the sorority.

Some of the former members told me that, when national leaders held an open house for freshman women, only the more attractive students were asked to stay downstairs as hosts.

KIM LEE, FORMER DELTA ZETA MEMBER: Those of us who were not chosen to give tours were asked to not come downstairs unless we were -- and, if we were, that we needed to dress really cute, make sure we had on makeup, or that we were put together, but, otherwise, they would prefer that we stayed upstairs.

OPPENHEIM (voice-over): In early December, just before exams, the bombshell: The national chapter sent a letter to 23 members, two- thirds of the sisters living at Delta Zeta, stating they had failed to meet standards for recruitment, so their status was changed from active to alumna. That meant they had to move out of the sorority house by the end of January.

The former members say, included in the 23 were all of the overweight students and three of the four minorities in the house. They say the, ones who were not told to move were generally pretty and slender.

For some, it was a blow to self-esteem.

LEE: I have done everything I was supposed to do. I'm a good student. I'm involved. And -- but, you know, in your heart, you take that really hard.

PAPPAS: Image is the new racism, of sorts. You know, image is the be-all and end-all of everything. And sorority life is just where it appears the most.

OPPENHEIM: DePauw University says, they're not sure if the Delta Zetas who got ousted were kicked out for being bad recruiters or for not fitting a stereotype. But they still sent a letter of reprimand to the national chapter.

University officials say they're investigating, and it's possible that it could be the entire sorority chapter that will be asked to depart from this campus.

Keith Oppenheim, CNN, Greencastle, Indiana.

(END VIDEOTAPE)

CHETRY: And coming up, wait until you hear what a woman who went undercover has to say about sororities. That's coming up next.

And also tonight, the return of Al. Al Gore, that is. He had a lot to say at the Oscars last night. But is his biggest speech yet to come?

When 360 continues.

(COMMERCIAL BREAK)

CHETRY: Before the break you heard young women say they were kicked out of their sorority house because of how they looked. They're claiming that only members who were thin and popular with fraternity guys were allowed to state.

To find out if allegations like this are widespread across college campuses, I had a chance to speak to Alexandra Robbins. Now, she posed as a coed and spent time in a sorority. She wrote about that experience in the book "Pledged: The Secret Life of Sororities."

Alexandra Robbins joined me earlier.

(BEGIN VIDEOTAPE)

CHETRY: Alexandra, thanks for joining us tonight.

You spent a year living undercover in a sorority. Based on your experience, were you surprised when you heard about what happened at DePauw? ALEXANDRA ROBBINS, AUTHOR, "PLEDGED": I would say I was appalled but not shocked. I regularly hear from girls across the country who are made to feel uncomfortable or who are harassed or who are forced to leave their sorority chapters because in some way of their appearance.

CHETRY: So explain that. Each sorority has a national, I guess, organization that oversees the various chapters at the schools. So, in this case, Delta Zeta was not happy with, I guess, the performance, the looks of the members that were at DePauw.

ROBBINS: According to the Delta Zeta members at DePauw University, the nationals kicked them out because of their appearance. This is basically about quota.

Too many sororities are run by -- are run like businesses. They require a certain number of girls to be in the sorority. They force a certain number of girls to live in a sorority house for a specified number of years because they focus on the bottom lines of money and image.

CHETRY: Right. I mean, they need members because members pay dues, you know, and keep the sorority going.

Now, the university sent a letter to reprimand -- a reprimand, rather, to the sorority and says that they're still investigating. And do you think that was an appropriate response by the university?

ROBBINS: I don't think it's enough. Sororities often forget that they are a part of the university. The university is not a part of the sorority. I would hope that DePauw would say, you know, we're not going to let adults treat our students this way and kick Delta Zeta off the campus.

CHETRY: So they are part of the university. They're not under a private organization where they can do what they want with their members, include who they want to and exclude who they want to?

ROBBINS: Oftentimes, Greek systems are allotted resources by a university. There's, for example, a Panhellenic Association or an Office of Greek Life, and a Greek advisor that the university provides. If a university provides resources for these groups, then they seem like they should be treated like every other social club.

CHETRY: Now, Delta Zeta is saying that they weren't discriminating, they were only trying to restructure the house to bring in more recruits. Do you buy that?

ROBBINS: I don't buy it at all, first of all, because of the recruits -- of the members that they happened to get rid of, they got rid of every single one of the overweight members and the minorities. If they really want to re-colonize to make more money, then why did they kick girls out?

ROBBINS: Right. And as I understand, it really is having repercussions throughout the campus. People are very upset. Some of the girls are saying that they're distraught, can't attend classes, and there are a lot of outraged parents.

ROBBINS: They should be upset. This is a campus that is -- has a storied tradition in Greek life.

I spoke at DePauw, to the student body in spring, and the girls there got it. They really wanted to make their sorority experience about the pillars on which sororities were founded -- service, scholarship, leadership and friendship for life. And they were dismayed that sometimes it turned out to be about image and appearance instead of substance and friendship.

CHETRY: Yes. And some of the women who were asked to leave the Delta Zeta sorority at DePauw were overweight.

Were the women that you lived with when you were in this sorority undercover concerned about body image? And if so, how much?

ROBBINS: I would say that where I was, and also taking into account the thousands of interviews I did across the country, body image is a huge concern. There are a lot of eating disorders in sororities. However, that's also something that happens on college campuses as a whole.

CHETRY: That's true as well.

All right. Alexandra Robbins, author of "Pledge".

Thanks so much for joining us tonight.

ROBBINS: Thank you.

(END VIDEOTAPE)

ROBERTS: It was the most anticipated speech of the Oscars, and it had nothing to do with the awards. Al Gore takes the spotlight and leaves us all guessing.

That's next.

(COMMERCIAL BREAK)

(BEGIN VIDEO CLIP)

AL GORE, FMR. VICE PRESIDENT OF THE UNITED STATES: My fellow Americans, people all over the world, we need to solve the climate crisis. It's not a political issue. It's a moral issue.

We have everything we need to get started, with the possible exception of the will to act. That's a renewable resource. Let's renew it.

(END VIDEO CLIP)

ROBERTS: The start return (ph) of Al Gore continues. He was a winner at the Oscars last night, but is his heart set on an even bigger prize? CNN's Bill Schneider reports.

(BEGIN VIDEOTAPE)

WILLIAM SCHNEIDER, CNN SR. POLITICAL ANALYST (voice over): Before the Oscars, the Al Gore question was, will he or won't he? After the Oscars, the question was, did he or didn't he?

It was Al Gore's night at the Academy Awards. His movie won not won Oscar, but two. One for best documentary featured...

JERRY SEINFELD, COMEDIAN: And the Oscar goes to "An Inconvenient Truth."

(APPLAUSE)

SCHNEIDER: ... and one for best song?

JOHN TRAVOLTA, OSCAR: And the Oscar goes to Melissa Etheridge for "I Need to Wake Up from "An Inconvenient Truth."

SCHNEIDER: This is liberal Hollywood. They love Gore.

ELLEN DEGENERES, HOST: Jennifer Hudson was on "American Idol," America didn't vote for her, and yet she's here with an Oscar nomination. That's amazing. That's incredible.

(APPLAUSE)

DEGENERES: And then, Al Gore is here, America did vote for him, and then...

SCHNEIDER: The big question hanging over the ceremony was, will he or won't he run for president?

LEONARDO DICAPRIO, ACTOR: Now, are you sure, are you positive that all of this hard work hasn't inspired you to make any other kind of major, major announcement to the world here tonight?

SCHNEIDER: The envelope, please.

AL GORE, FMR. VICE PRESIDENT OF THE UNITED STATES: I guess with a billion people watching, it's as good a time as any.

So, my fellow Americans, I'm going to take this opportunity right here and now to formally announce my intention...

SCHNEIDER: Meaning what exactly?

GORE: I think the moment has passed now.

UNIDENTIFIED FEMALE: Are you completely...

GORE: The music coming off and...

UNIDENTIFIED FEMALE: In the future? In the future? GORE: In all seriousness, I have -- I've said before, I don't really have plans to run for office again.

SCHNEIDER (on camera): That settles it, or does it? Mr. Gore says the moment has passed, but it could come again, especially if squabbling among the Democratic front-runners gets out of hand.

Bill Schneider, CNN, Los Angeles.

(END VIDEOTAPE)

CHETRY: And we have some breaking news now involving Americans in Sri Lanka.

The Associated Press and other wire services are reporting on a suspected insurgent attack involving the U.S. ambassador there. Reports say that Ambassador Robert Blake was slightly wounded when mortar fire hit the helicopter he was traveling in. Also reportedly hurt the Italian ambassador.

And now some other headlines in our "360 Bulletin" tonight.

(NEWSBREAK)

(COMMERCIAL BREAK)

ROBERTS: few stories have gotten more attention than our profile of Amanda Baggs. She lives with autism and communicates by computer keyboard with, we might add, rare grace and style. People have been responding in huge numbers on our blog.

Here's a small sampling.

Darilyn in Cornwall Bridge, Connecticut, writes, "How often have I looked at someone with a disability, which included the inability to speak or communicate in a way I am accustomed to, and thought, 'Is there anybody in there?' I should have known. Now I do."

Matt in San Diego writes, "Amazing, Amanda! Thank you and hang in there. I'm not aware of a more capable messenger than yourself. Take care"

And then there's this from Ruth in Reno, Nevada: "I've often thought that we would be better off not being able to use words but to simply know each other without needing a language."

And from Ray in Streator, Illinois, just a few simple words that say it all. "Amanda, Thank you for a look inside my son's world."

And as always, we welcome you views. Just go to cnn.com/360blog, follow the links, and way in for us.

CHETRY: And coming up tomorrow on "AMERICAN MORNING," the breakthrough that could have all of us women jumping for joy.

(BEGIN VIDEO CLIP) UNIDENTIFIED MALE: One of the women at the table literally leaned forward and grabbed me and said, "I need these shoes."

(END VIDEO CLIP)

CHETRY: Oh, wow. We should find out more about that, definitely. It's a new invention. It's only $10. So can it free women from high heel abuse?

I guess we're going to find out the answer tomorrow on "AMERICAN MORNING."

ROBERTS: Wouldn't that be great? Wouldn't that be great if it were only possible?

CHETRY: That's right. It doesn't have to just apply to women. OK? It's an equal opportunity. Maybe they'll make shoes comfortable for everyone.

ROBERTS: Oh, I thought you meant men who are wearing high heels.

CHETRY: Yes, that, too.

ROBERTS: OK.

CHETRY: All right. Well, a reminder. We want you to help keep them honest. If there is something that's wrong that needs to be made right in your community, just tell us about it -- CNN.com/360.

ROBERTS: Anderson is back again tomorrow night.

For Kiran Chetry, I'm John Roberts.

Thanks for joining us.

Larry King is next.

See you.

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