This is a partial transcript of "Special Report With Brit Hume," September 16, 2005, that has been edited for clarity.

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JIM ANGLE, HOST: Everyone wants to learn the lessons of Hurricane Katrina. But some have already been down this road. Pete Wilson was governor of California when the Northridge earthquake (search) struck in January of 1994, which at the time became the most expensive natural disaster in U.S. history. Governor Wilson joins us now from Los Angeles. Thank you for joining us, sir.


ANGLE: Let me ask you first what were your first thoughts when you saw the extent of the damage in New Orleans and the Gulf area in general?

WILSON: I was stunned by it. I think that it dwarfs anything in American history. It was just — the dimensions exceed anything that I think we have ever seen.

ANGLE: Now, you had an enormous natural disaster, the most expensive at the time, the Northridge earthquake. People in New Orleans and the rest of the Gulf region are now contemplating what will be involved in rebuilding. What are the lessons that you learned from your effort? What words of encouragement can you offer them?

WILSON: Well, I think I can offer them encouragement. The first thing, is that I think there needs to be the kind of effort that the Army Corps of Engineers (search) is in fact making. Because in New Orleans you have the worst kind of aftermath. You have flooding, because of the breach of the levees. We didn’t have that after the earthquake. So that is a very different situation.

Once that is completed, once the city is actually drained, and you have to rebuild critical infrastructure. What we did in the wake of the terrible earthquake that destroyed all of the freeway bridges, the overpasses of the world’s busiest freeway, I-10 in Los Angeles, we learned that it would take two years and two months to rebuild them. That was intolerable.

What we did was to simply suspend the operation of regulations and statutes that imposed hearings to no purpose, and all kinds of delays to no purpose, that actually would have impeded recovery in an intolerable way.

That — in addition, we offered incentives to those who were bidding to do the repair work. We asked that they not only tell us how much it will cost and when they would complete the effort, but we also made them agree, the winning bidder had to agree to an additional condition. And that was that for every day that he was late, he would pay a penalty of $200,000 a day. In return for which, would he receive a bonus for every day that he was early in the amount of $200,000 per day.

The result of both suspending the needless requirements and offering those incentives meant that we actually saw a repair completed within 66 days of the earthquake, not two years and two months. I think the lesson is clear.

ANGLE: So, 66 days instead of two years with the financial incentive. Now you talk about setting aside regulations and needless hearings and so forth. In other words, you sort of not only cut through, but threw out a lot of red tape?

WILSON: That is right. I would urge federal and state officials to do that. If Governor Blanco (search) and Governor Barbour (search) do not have that clear authority, they should immediately demand it from their legislatures. The legislatures should convene an emergency session, if that is necessary to give it to them.

And there should, I think, be at the federal level, the same kind of authority is perhaps even more necessary, because when you consider all of the different federal agencies that would be involved in recovery, they all have different enabling legislation, different regulations derivative from that. There needs to be someone who can really cut through and suspend things that needless, purposeless, and will delay the recovery.

ANGLE: Now, one of the questions in all of this with Katrina and every other natural disaster is, who is in charge? As I understand it, the governors are really in charge of relief and recovery from natural disasters and call in the federal government as backup, if you will. Is that the way that it really works? How much help did you have?

WILSON: That is the way it ought to work. And we had excellent corporation with two different administrations throughout the eight years that I was governor. We had first, the first Bush administration, and then the Clinton administration (search).

In both instances, the lead agency, the lead federal agency was FEMA (search). And we had very good cooperation. And we actually used their disaster assistance centers to set up one-stop shops for all kinds of needed assistance, from all levels of government, federal, state and local. And that simply involved coordination.

We found that it worked quite well, and that we were able to actually assist one another. We were able to, in the case of the Northridge earthquake, field the number of state workers to help those who were doing some of the federal processing. We had people in tents, who were afraid to go into any structure. We set up these tents to provide shelter. And they also became, in some instances, the disaster assistance centers.

ANGLE: Just a few seconds left, Sir. So, your words of wisdom for the people in the Gulf region would be that you can do it, but you have to move quickly and move decisively?

WILSON: Absolutely. And I know there is a kind of business and civic leadership in New Orleans that is fully capable of that, and also, in Mississippi. I have seen that region provide that kind of leadership.

ANGLE: Governor Wilson, Governor Pete Wilson, the former governor of California, thank you for joining us, Sir.

WILSON: My pleasure, thanks.

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