Saying his hands were tied by law, a federal judge dismissed a class-action lawsuit against the U.S. Army Corps of Engineers over levee breaches after Hurricane Katrina, but rebuked the agency for failing to protect the city. - 17th Katrina report.

Disturbing story of fraud against federal government. Defense contractor C & D Distributors pleaded guilty to bilking Pentagon of $20 million over 10 years. Charged 38 cents for 2 washers & collected $1 million to ship. Tabacco: Culprit? Regulations!