The NewsHour with Jim Lehrer

MR. LEHRER: Good evening. I'm Jim Lehrer. On the NewsHour tonight, returning power to the states through block grants, Elizabeth Farnsworth runs a debate among the governor, a mayor, and two congressmen from Wisconsin; war crimes in Bosnia, we have a report and Charlayne Hunter-Gault talks with State Department official John Shattuck; and why Americans hate the media, David Gergen has a dialogue with author James Fallows. It all follows our summary of the news this Thursday. NEWS SUMMARY

MR. LEHRER: They made a spending deal in Washington today. Congressional Republicans and White House negotiators agreed on a way to keep the government running through March 15th. The announcement was made by House Appropriations Committee Chairman Bob Livingston and that committee's ranking Democrat, David Obey.

REP. BOB LIVINGSTON, [R] Louisiana: Both sides of the aisle have come together along with members of the other body and have crafted a compromise to keep the government open for the next 45 days, one which meets the needs of satisfaction or best desires of no side completely as satisfactorily but one which represents, I think, the finest of legislative endeavor, and frankly, in view of where we started, I'm somewhat amazed.

REP. DAVID OBEY, [D] Wisconsin: I'm pleased to say that the White House has signed off on, while they certainly do not agree with every provision in this bill, as I do not, they have signed off on this as a short-term compromise, and I very much appreciate both the way they have handled things and the way the gentleman from Louisiana and other members on both sides of the aisle have handled this.

MR. LEHRER: Without this temporary spending bill, there would be a partial shutdown of the government at midnight tomorrow. Both sides generally agreed yesterday to set aside their larger budget dispute and pursue incremental changes. Earlier today, President Clinton also urged Congress to pass an extension of the national debt limit. He spoke at the White House to the nation's mayors.

PRESIDENT CLINTON: We've also seen news just today of the serious consequences that could result if the Congress were to default on the debt limit. No mayor would ever consider doing such a thing. The repercussions would be far too harmful and that the Congress should not either.

MR. LEHRER: Republicans also want to add riders to the debt limit extension. House Speaker Gingrich wants to include attachments that he said would be a down payment on a balanced budget. They include child tax credits and a cut in capital gains taxes. The Treasury's authority to borrow money runs out March 1st. In the Whitewater matter today, the Senate Whitewater Committee took testimony from a former Arkansas savings & loan regulator. Kwame Holman reports.

KWAME HOLMAN: Committee Republicans asked former Arkansas savings & loan regulator Beverly Bassett Schaeffer about a 1986 note she sent to an aide to then Gov. Bill Clinton.

MICHAEL CHERTOFF, Republican Counsel: This is your handwriting, right?

BEVERLY BASSETT SCHAEFFER, Former Arkansas Securities Commission: It is.

MICHAEL CHERTOFF: And it reads as follows: "Madison Guaranty is in pretty serious trouble. Because of Bill's relationship with McDougal, we probably ought to talk about it."

MR. HOLMAN: Madison Guaranty was the savings & loan owned by the Clintons' Whitewater business partner, James McDougal, and shortly after Schaeffer's note, federal officials began action against McDougal and his S&L. Missouri's Christopher Bond said he consulted a regulator in his state who said such a note was improper.

SEN. CHRISTOPHER BOND, [R] Missouri: I said, "What if one of my big contributors was involved in a financial institution that was going down," and he said, "You'd be the last one to know." And I said, "Why?". He said, "Well, because if anybody found out that we were going to take down a savings & loan, somebody could be juggling around, doctoring the books, or mickey-mousing." He said it would be like a pitcher telling a batter what he was going to throw.

BEVERLY BASSETT SCHAEFFER: I conveyed the information so they would know what was--what I believed the condition of Madison was, like I did with the two other savings & loans in 1985. I also did not--you don't understand--in Arkansas, I mean, that's the kind of thing--somebody will call up the governor's office and, and that's not--because everybody knows everybody. Now, I know that's been talked about in terms of, you know, some sinister force, but the, the--that's not--my goal was not to protect the Clintons. I'm not interested in protecting the Clintons, wasn't interested in protecting anybody.

SEN. PAUL SIMON, [D] Illinois: When you said you were distressed by the whole affair, meaning, I assume, this hearing and what's going on, what, what causes that sense of distress for you?

BEVERLY BASSETT SCHAEFFER: You know, it's really been very personal, very vicious. It's been an effort to vicariously destroy Bill Clinton by--piece by piece, you know, ruining the people that he trusted, that worked for him, that--good people, who, who didn't do anything wrong.

MR. HOLMAN: Committee Chairman Alfonse D'Amato also criticized Schaeffer for sending a 1985 letter to Hillary Clinton, saying Madison could legally issue stock as a way of saving itself. Schaeffer said she was merely approving the general concept of a stock offering, not giving Madison permission to do it.

MR. LEHRER: Tomorrow, Mrs. Clinton will appear as a witness before the Whitewater grand jury in Washington. It is investigating the recovery of billing records of Mrs. Clinton's legal work for Madison Guaranty. The third round of the Israeli-Syrian peace talks got underway today outside Washington. Sec. of State Christopher was there, so were two senior military officers from each side. They discussed security arrangements related to a possible Israeli withdrawal from the Golan Heights. Those talks are expected to last at least through the beginning of next week. On the Bosnia story today, the NATO commander in Europe said there may be some two hundred to three hundred mass grave sites in Bosnia. Adm. Leighton Smith said NATO has agreed to guard human rights officials investigating those sites. Assistant U.S. Secretary of State John Shattuck toured the region over the weekend. He said as many as 7,000 people may be buried in graves surrounding the former United Nations safe haven of Srebrenica in Eastern Bosnia. We'll talk with Sec. Shattuck later in the program. And that's it for the News Summary tonight. Now it's on to a Wisconsin debate about block grants, war crimes in Bosnia, and a David Gergen dialogue. FOCUS - POWER POLITICS

MR. LEHRER: We go first tonight to the debate over block grants and to Elizabeth Farnsworth.

MS. FARNSWORTH: Although Congress has averted another government shutdown, there still is no agreement on a balanced budget. That drive has stalled for now partly because Republicans in the administration did not bridge certain fundamental differences. One of those involved how often and when to use block grants to states as substitutes for formerly federal program like welfare or Medicaid. We get four perspectives from one state now on block grants. Tommy Thompson is the Republican governor of Wisconsin. Paul Soglin is the Democrat mayor of Madison. Scott Klug is a Republican who represents Wisconsin's second congressional district which includes Madison. Tom Barrett is a Democrat from the fifth district, which includes parts of Milwaukee. Thank you all for being with us. Gov. Thompson, you've been one of the driving forces behind the whole idea of block grants. Make the case for us. Why is this such a big part of what was called the Republican revolution?

GOV. TOMMY THOMPSON, [R] Wisconsin: [Madison] I can only give you as an example of what we've been able to do in Wisconsin. We've had to go to Washington 175 times in order to get waivers and in order to do things in welfare reform and in Medicaid. In Wisconsin we've been able to use those waivers to try something new, and as a result, we've been able to reduce our welfare caseload in Wisconsin by 33 percent, probably more than any other state in the nation. And in Medicaid, we've been able to use block grants for using managed care. We started managed care on Medicaid, and as a result of that, we're saving money, saving the federal government money, saving the state money, and offering better health services and better hope for those people on welfare. That's why block grants give us as governors the opportunity, the flexibility to be innovative, more efficient, and to allow us to do better jobs for our citizens.

MS. FARNSWORTH: And you think that you are more capable of doing this in Wisconsin because you're closer to the scene, you're there?

GOV. THOMPSON: Oh, there's no question about it. And you got to realize the one-size-fits-all concept that Washington is noted for just doesn't do it because there are differences between Wisconsin and Illinois and Florida and Washington and California. And what you need is you need the flexibility at the state level so governors from California to Florida to Texas to Maine and Wisconsin are able to come up with innovative programs in these areas and be able to deliver more efficient services. And we would like to be able to expand Medicaid to the working poor. We can't do that under the existing system. We would like to be able to offer a service that's going to have co-pays and allow people that are working poor, that are not on welfare, but be able to buy into our system and get medical coverage. We can't do that under the existing system. With a block grant, we would be able to.

MS. FARNSWORTH: Okay. Before we get a response to this, Congressman Klug, do you have anything to add to this, the case for block grants?

REP. SCOTT KLUG, [R] Wisconsin: Well, I think one big case to be made for block grants are the potential savings here in Washington, and let me just give you a couple of numbers. There was a GAO study in 1995 that said there were 600 separate federal programs assisting states and local governments, 150 for job training, 77 for education, more than 200 for welfare. For example, in the area of employment training, the GAO found 163 separate federal programs administered by 15 departments which cost more than $20 billion. So I think what you can do is bundle these all up together and send them back to the states and give them the discretion to spend the money they wanted. Let me give you an example of one other quick example, and that's children's vaccine programs. We set up a new entitlement program here several years ago, the Clinton administration did, which a number of Democrats, including Sen. Dale Bumpers, were vehemently opposed to because what we did is to say the federal government is going to buy vaccines and ship 'em back to Wisconsin and other states across the country. If you talk to anybody involved in the health services in Wisconsin, they'll say we don't need vaccines, what we need is money so we can keep clinics open longer and hire more public health nurses and send vans around the neighborhoods, and maybe in a few cases spend money on vaccines, themselves, so I think what you get is more flexibility to the states, the ability of states, as the governor said, to tailor individual programs, and frankly, you get savings, because in many cases, every one of those programs that's run through Washington comes with a bureaucracy and a file cabinet and a desk drawer and all kinds of overhead that we can eliminate and just give to Wisconsin, or give to the city of Madison to spend.

MS. FARNSWORTH: Okay. Mayor Soglin, as mayor of a city, Madison, which has how many thousand people now--

MAYOR PAUL SOGLIN, Madison, Wisconsin: We're a little over 200,000 now.

MS. FARNSWORTH: Okay. Why not have block grants?

MAYOR SOGLIN: Well, let's start out with both the comments of the governor and the congressman and realize that what they've identified are problems that can be solved without the block grants. The governor I think makes a very good case for my position in saying that he has received the waivers, but there are some other social values, there are some other economic values--

MS. FARNSWORTH: What you're saying here is that the governor, if he wants to experiment, he can get waivers from the federal government to do what he wants to in a state?

MAYOR SOGLIN: And done it very effectively. But what we need to remember is this. If we start a system which is the one recommended, we're going to see what we call a race for the bottom. We're going to see a race as state after state changes requirements, changes eligibility and becomes more draconian in their dealing with the problem. The, the situation recently when Michigan made changes is reflective of that, as folks moved over to Minnesota. The other thing we have to keep in mind in regards to the, the whole Medicaid issue is we've always fundamentally said there's going to be a basic level of health service for the American people. We're going to guarantee that, and this guarantee evaporates with this block grant into the states. What we see happening, or what we envision happening if the block grant takes place, is a system whereby there will be different standards in each state and, for example, some of the things that have worked in Wisconsin, such as the commitment that the states made under the governor for child care, for transportation, for job training, and job creation, those aren't guarantees as each state is given its own flexibility, its own independence, and, therefore, we're going to see really a skewered system.

MS. FARNSWORTH: Okay. Congressman Barrett, do you have anything to add to that?

REP. TOM BARRETT, [D] Wisconsin: [Capitol Hill] Well, I think Mayor Soglin made a good argument as to why we shouldn't move away from the block grants, in particular from Medicaid. All four of us are familiar with the perceived problem, a real problem for some in the last decade, where people from other states that had higher welfare benefits, for example, moved to the state of Wisconsin. The legislature and the governor acted to stop that because we did not want to become a magnet for other states where their benefits were lower than those in the state of Wisconsin. So if we lower the benefits or take away that safety net altogether, I agree with the mayor, you're going to see a race to the bottom, and you will have some states that will try to remove any type of protections at all, and encourage their people to move to states like Wisconsin that have had a history of doing a good job. I think the governor's comments that he has received 175 waivers shows that the Clinton administration is open to experimentation. The fact that he has received those waivers I think shows two things: It shows first of all that they're willing to listen to those states that are making a case for trying new things, but second, it also shows that that safety net needn't be removed, because if Wisconsin and other states that are so above that basic level are not in the least big hampered by that basic level, we're not hurting anybody; we're not--we're not causing any harm by having that safety net there. I'm afraid if you take away that safety net for the first time in decades, you're going to have poorer people in this country who aren't going to have that basic guarantee, and if you have a situation or an economy in a particular part of the country go sour, you might have a situation where they simply run out of money. And I think that we have to have more flexibility absolutely for the states, but at the same time, we have to make sure that the people have at least a safety net. Very quickly on block grants for programs like law enforcement, when we had the law enforcement block grants two or three decades ago under President Nixon, one of the things that Sen. Proxmire, again a politician all four of us are familiar with, gave one of his famous Golden Fleece awards to was some of this money was used for a $27,000 study as to why prisoners wanted to escape from prison. I don't think we want to go back to those open-ended block grants, and I think by targeting the money to those areas where they're needed I think makes sense.

MS. FARNSWORTH: Okay. Gov. Thompson, two questions. First of all, what about the race to the bottom that you're hearing about here?

GOV. THOMPSON: Well, that's just not true, and I think if you would ask the mayor and the congressman who are opposed to my position on block grants, they would say that they never have to worry about Wisconsin. Wisconsin is doing an excellent job. Our benefits are very high, and they know full well that we would not have a race to the bottom, but I think there's a bigger question. I think something should be laid on the table here. I'm negotiating right now with three Democratic governors and two other Republican governors, and we came into this negotiations, we were not making any progress, when we were using the words entitlement and block grant, so we made an agreement amongst ourselves not to use those words, those buzz words which polarize and cause partisan differences, and--

MS. FARNSWORTH: You're negotiating about--

GOV. THOMPSON: Now--

MS. FARNSWORTH: Describe what you're negotiating about. You're negotiating about Medicaid, right?

GOV. THOMPSON: Medicaid, right, for the national government. At the--under the auspices of the White House and the leadership in the Congress, and we're making a great deal of progress right now because we're not using those buzz words. We're developing a system that's more user friendly, more flexible for the states, allowing for some general guidelines and guarantees, and we think we can develop a program without the buzz words, and once you use the buzz words, you immediately have people dividing up. And I think we should get beyond that and develop a system that's going to give states more flexibility, allow some broad guidelines in which we have to meet as states, and I think we can do it, and I think we could come out of this on a bipartisan basis. I would throw that out to the Congressman.

MS. FARNSWORTH: Okay.

REP. BARRETT: Let me say that I was encouraged when I saw the report say that you did have three governors from each party doing that, because I think the governor is moving in the right direction. You have to have that basic protection of a safety net. But at the same time, the governors are correct; that they should have more flexibility so that they don't have to come to Washington every single time they want to make a change in a program. But I think the point that those of us in Congress had said is you simply can't take away that safety net altogether. That's just not acceptable to many of us in Congress.

MS. FARNSWORTH: Okay. I want to come back to the negotiating in a minute, Governor.

GOV. THOMPSON: Sure.

MS. FARNSWORTH: But part of the reason that you're--that this negotiating is happening the way it is is because of the impasse so far on block grants, and I want to get clear why that impasse happened. Could you just quickly give us a couple of examples of programs that you think have worked very well, very briefly, in Wisconsin that have involved innovative, something you've done that's been particularly innovative.

GOV. THOMPSON: Well, I think our Children First program in which we got a waiver under the Bush administration, and we've been able to increase the amount of child support we've been able to collect from fathers, usually fathers that have not really done a good job in paying their child support. We've been able to set up some other programs that have been able to get mothers off of welfare, and give them more hope and more training, and we've been able to do this. The Job Trainings Bill is a prime example there. I believe Congressman Klug said there was about 150 different variations. If we can get that down and make it more flexible and put it all consolidated into a jobs department, we can serve more people with less money and still meet some of the guidelines that are set down by Congress. If they're general guidelines that are held, we can be held accountable but we can do a better job of implementing the programs at the state level.

MS. FARNSWORTH: Okay. Can the states do a better job? What happens in your city that shows that they can't?

MAYOR SOGLIN: Okay. It depends on the specific state administration, and that's the whole point. For example, so long as we have a state legislature or a state government that in one particular area is prepared to maintain quality child care, transportation, job training, and job development, then it'll work. But you don't have a guarantee that one administration following another will do that, and you don't have a guarantee that local economic or regional economic conditions are going to change those factors and change the mix.

MS. FARNSWORTH: Well, then you've said that cities suffer the most under this. Why is that?

MAYOR SOGLIN: Well, let me--

MS. FARNSWORTH: Okay, go ahead.

MAYOR SOGLIN: Let me start and come to that.

MS. FARNSWORTH: Okay.

MAYOR SOGLIN: In this whole debate, in this whole discussion which started three, four years ago. When we talked about the federal mandates, for example, on one as far as I know said a federal mandate is the same as the disengagement of the federal government from our lives. The federal government has a role in setting national standards and national minimums. Otherwise, we get the race to the bottom. Look at the community development block grant. Yeah, it works. The community development block grant has been around for 20 years. The block grant program is based partially on population, partially on need, and--

MS. FARNSWORTH: Administered by HUD, right?

MAYOR SOGLIN: It is administered by HUD. There is no additional bureaucracy in the middle, and it is a program that sets certain national goals so that we're all working towards the same end, so that we don't have fragmentation, so that we don't have an absence of purpose. If we start block-granting these programs to the states, I mean, the governor knows full well that people in his own party in his last session of the legislature made it quite clear that there were a sufficient number of Republicans in the state assembly who were vindictive and mean-spirited in terms of dealing with Wisconsin that we lost funding, we were punished because folks didn't like us, and we will be subject to that kind of I could best describe it as whim, and so will other cities around the country.

MS. FARNSWORTH: You're saying that block-granting gives state legislatures too much power and not enough regulation and when it's in the federal system, there at least is something quite consistent?

MAYOR SOGLIN: As bad as the federal system may be, it's far superior to the type of, of shall we say impulsive and in some cases vindictive actions by legislatures.

MS. FARNSWORTH: Okay. Congressman Klug, what do you think about that?

REP. KLUG: I think that's exactly the same case here. Congress has been very bit of capricious and that the one reason that Gov. Thompson and Gov. Engler, Bill Weld out in Massachusetts, Pete Wilson in California have had such a difficult time creating innovative programs is because of the mandates Washington puts on top of them; 60 cents out of every dollar in Medicaid is already spent by federal mandates before it gets to individual states. And I guess I disagree with the fundamental assumption that somehow if you put this in the hands of the legislature and the governor, it's going to be a race to the bottom. To the contrary, one of the larger fights we've had now in terms of block grants is to figure out the formulas that go back to the state and to create a formula frankly that rewards low cost, innovative states like Wisconsin. We run our welfare program very efficiently. We run our Medicare and Medicaid system very efficiently because we've been very aggressive in terms of using managed care. So I think frankly if you look at Wisconsin, given the flexibility, we can run a program more intelligently and more cheaply than Washington can design without all kinds of bureaucracy, without kinds of fingerprints, and you don't have to wait--some states have waited, like Texas, like California, for three and four years for approval for Washington to try something I think the legislature, the governor, the mayor and the city council should have a right to do in the first place.

MS. FARNSWORTH: Mayor.

MAYOR SOGLIN: Well, all I can tell the Congressman is to remind him that in the last six or seven years Wisconsin's per capita expenditures compared to the rest of the state went from above average to 11 percent below average and our reward for it is continual punishment of higher taxes on a local basis and less of the state resources, and, and with that as a living example over the last half dozen years, I don't know how he expects me to believe it's going to be any different when there's even more resources to add to the state kitty in terms of the federal funds.

MS. FARNSWORTH: Okay. Congressman Barrett, on this general question of whether state legislatures are more in touch, you've been a state legislator, and now you're in Congress, what do you have to say about that?

REP. BARRETT: Well, I can remember my days in the state legislature coming from Milwaukee, where there was basically a block grant from the state to Milwaukee County dealing with juvenile crime, and we used to argue for more money all the time in order to get, in order to get sufficient funding from the state. We used to joke it's not like we have to--these kids are hired to commit crimes so we can get money from the state, so I don't know that the block grant magic works particularly well. I also think that sometimes the states go overboard in claiming that they are lovers of local control because in Wisconsin, as both the governor and the mayor know, the state legislature just passed a law that took away local government's abilities to regulate guns and also to regulate pesticides, so I think what this comes down to, when you strip away all the fancy words is who's holding the power, and I understand where the governors want to hold the power. I understand where the mayors want to hold the power, I understand where Congress wants to make sure that there are basic safeguards, and they want that power. But I don't--I am not convinced that the state does a particularly better job. Just another quick example- -

MS. FARNSWORTH: Let me interrupt you one second. I want to go over to Gov. Thompson here for--on this question of the Clinton negotiations.

GOV. THOMPSON: Yes.

MS. FARNSWORTH: These are negotiations since the Medicaid bill is stalled, the Medicaid is part of the whole--

GOV. THOMPSON: It is probably the most difficult, it is probably the most difficult one to solve.

MS. FARNSWORTH: You're trying to fashion now something which might go, right, and have you backed off? You said you're not using the words block grant, but are you--have you backed off the concept of block grants?

GOV. THOMPSON: Well, the concept of block grants is more flexibility, and more ability to try innovative things. We haven't, we haven't backed away from that. We just don't use the buzz words. What we're trying to do on a bipartisan basis, and we're not only dealing with governors, yesterday I had the privilege of meeting with 22 Republican and Democrat U.S. Senators, 11 from each political party, and they also were encouraged by what we were able to accomplish, so if you get away from the nomenclature of block grants and entitlements and guarantees and put out there what you really want to do to administer programs and give some national standards which governors have to comply and be held accountable to or towards, I think we can develop a plan that is going to be one that's acceptable on a bipartisan basis through Congress. Everybody, I believe, realizes there's just too many rules and regulations. To give you an example, Oprah 87, dealing with nursing homes, is a statutory bill that has five pages, but it has 15,000 rules and regulations. Now those 15,000 rules and regulations, I don't even think Tom Barrett would say that you need all of them, and he is certainly on the opposite end of the spectrum from me. I think we need more flexibility, we can develop a better program, and I think what we both have to do, both sides, Republicans and Democrats, have got to develop new nomenclature, new words to describe what we're trying to do. And once that's done, I think we've gone a long ways towards solving this problem.

MS. FARNSWORTH: Thank you, Governor, and thank you all for being with us.

MR. LEHRER: Still to come on the NewsHour tonight, war crimes in Bosnia and a David Gergen dialogue. FOCUS - WAR CRIMES

MR. LEHRER: Now, the investigation of war crimes committed during the war in Bosnia. Charlayne Hunter-Gault has the story.

MS. HUNTER-GAULT: Some of the most serious war crime allegations stem from the Serb capture in July of the predominantly Muslim town of Srebrenica. At least six possible mass grave sites have been reported around Srebrenica. We begin with a report from the area from Jane Bennett Powell of Independent Television News.

JANE BENNETT POWELL, ITN: Off the main road, halfway up this track in Northeastern Bosnia lies the sixth site believed to contain the mass graves of Muslims. It's in a deserted Muslim village, and it would provide another piece of the jigsaw of what happened after the fall of Srebrenica. In the first extended filming in Srebrenica itself, the signs of the people who used to live here lie everywhere. The town, the former Muslim safe area, now houses around 6,000 Serbs, themselves refugees from fighting elsewhere. This girl told us there was no glass, only plastic, in the windows where she lived. This man said they were forced to leave their homes just as the people here were forced out. The new Serb inhabitants have dumped most of the reminders of the past. Up until six months ago, there were 40,000 Muslims living here. Then in the middle of July in the face of Serb attack, they fled down this road behind me, and it's estimated that some 6,000 are still unaccounted for. This week, the local military police escorted us as we filmed at these sites again. Six months on from the forced evacuation, there was no attempt to prevent us photographing the place where eyewitnesses allege they saw Muslim men lined up and shot by Serb soldiers. With the Bosnian Serb soldiers was the Serb mayor of the area who organized food for the Srebrenica people and buses to transport them to Muslim territory. He told us the numbers were overwhelming. He commandeered more trucks but denied there was any violence against the Muslims.

LJUBISAV SIMIC, Mayor, Bratunac: [speaking through interpreter] If there had been some shooting, even sporadic, I would have heard it. If I hadn't seen it because of the mass of people, I would have at least heard it.

MS. POWELL: The town of Bratunac is the center of his administration. With a civilian minder from the police station, we filmed a deserted school which is now a refugee center but where last July, Muslims alleged men were held after the fall of Srebrenica. It's near the football field where Muslims say 4,000 men were held. Testimonies speak of hearing shots there. We filmed the locked changing rooms under the stand. The walls are riddled with bullet holes. The mayor said no one from Srebrenica was brought here. There is fear and mistrust of Srebrenica Muslims in this town. Many Serb soldiers and civilians have died since 1992, killed in attacks launched, they say, from the Muslim enclave a few miles away. Many Muslim fighting men who were captured in the woods and hills around Srebrenica were taken according to Muslims interviewed last autumn to a warehouse at Kravika, 10 miles to the Northwest, and reportedly shot. Their bodies, according to those same testimonies, were buried in a burnt out village nearby called Glogova. Without a military escort, we filmed a field dressing on the frozen ground which was clearly recently excavated and a limb exposed beneath a piece of clothing. Heavy machinery had clearly been used too on a site on the other side of the track. We saw a shoe and what looked like an army jacket.

MAYOR LJUBISAV SIMIC: [speaking through interpreter] What can I say? If there really was something going on there and there really were some soldiers dying, and were buried there, what can I say? If such a thing really existed, then it shall be investigated by the military to find out how these things happened.

MS. POWELL: American satellite pictures pinpoint another alleged site. Three houses top left stand near a white patch marked by an arrowing suggesting disturbed earth. On the ground the three houses. Nearby, signs of heavy excavation in a site otherwise untouched in a deserted hamlet near Nova Casaba. By the river another tract of ground gouged out by heavy machinery. This site yielded few artifacts, but American intelligence and war crimes investigators believe Muslim bodies may be buried here. It's not been tampered with recently, and grass is beginning to grow again. The Bosnian Serb military court system has been established to try crimes arising from the war. Army personnel staged a session for us. Over the last four years they told us they'd tried 2,000 cases, including murder, and heard 450 appeals. But so far, there were no cases involving the deaths of Muslims in the aftermath of Srebrenica.

COL. NOVAK TODOROVIC, Bosnian Serb Military Court: About Srebrenica I don't know anything exactly because we have nothing about Srebrenica in our court here and in our courts in the first level I know that we have nothing.

MS. POWELL: Do you think it will be a possibility?

COL. NOVAK TODOROVIC: I don't know, really I don't know. I, I hear that international court in Hague has something about that. If they give us, we shall consider that case and, and where to go and make sentences and--

MS. POWELL: But the colonel also says that while he is willing to proceed with such cases, they must be instigated by the Bosnian Serb state prosecutor. The Bosnian Serbs put faith in their own military justice and prison systems. They have little time for the Hague which they say is biased against them, but today a senior member of the Bosnian Serb leadership ventured for the first time to cooperate with the Hague tribunal.

MOMCILO KRAJISNIK, Bosnian Serb Parliament: [speaking through interpreter] We are fully prepared to start a trial against any person against whom it is firmly established that he's committed a crime or a murder or abused his position.

MS. HUNTER-GAULT: Assistant Sec. of State John Shattuck was in the area over the weekend. Among the sites he inspected was the mass grave at Glogova and a building four miles away in Kravika, where as many as 2,000 Muslim men may have been murdered. Sec. Shattuck returned from Bosnia yesterday and joins us now. Secretary, thank you for joining us. Tell us what you saw when you visited those sites in Bosnia.

JOHN SHATTUCK, Assistant Secretary of State: Well, I traveled across the Drinja River from Belgrade into the area where reports of those who had survived mass execution attempts had been made to me back in July of last year when I was in Tuzla, and we went to see whether we could corroborate these reports, and we followed the route South towards Srebrenica, which is reverse from where the refugees were going. I had with me two investigators from the international war crimes tribunal, andI made a condition of my trip that we be allowed to go everywhere we wanted to go. We didn't announce to the authorities who escorted us in advance where we were going. We didn't give them any information until we went across the river. The first site we came to was a schoolhouse in a gymnasium which had been described by two survivors of mass executions as the place where they had been held. It was in a small village. There was very little evidence of any tampering of any kind with the schoolhouse. It was a place that all of the aspects of it corresponded very precisely to the way in which the people had described it, including rooms in which people had been beaten with iron bars, and places where they had been taken out after being blindfolded and loaded into trucks and taken away, two miles away, to be shot in a mass pit, where they, where they were then pushed into it. Later on, we came to the warehouse in Kravika, which you saw in the footage earlier, which is probably the most graphic example of corroborating the stories that we had heard from refugees in July. There in this warehouse were enormous holes in the wall of a concrete and steel structure where clearly large weapons had been fired, hand grenades had been reported to have been thrown into this warehouse, up to 2,000 people were said to have been in there. These were people who came down out of the hills and were coaxed to go into the warehouse by individuals with megaphones who were wearing blue helmets which they had taken from the UN, saying that the ICRC, the International Committee for the Red Cross, is here to receive you and please enter into this warehouse. When they did, these weapons were fired inside. Probably the most ghastly aspect of what I saw was, and the war crimes tribunal investigators pointed it out to me, evidence of blood on the ceiling of the warehouse which is about 30 feet above the floor. So one can only imagine what that must have meant in terms of what was going on on the night of July 13th, when these executions are said to have occurred.

MS. HUNTER-GAULT: And how many such places like that exist?

SEC. SHATTUCK: Well, I hope that there are not many but certainly the stories that we have from survivors of Srebrenica indicate that up to 7,000 people may have lost their lives in this stream of refugees coming out of this, some of them of course taken away in trucks from the town, itself.

MS. HUNTER-GAULT: And where are the bodies?

SEC. SHATTUCK: Well, there are mass graves.

MS. HUNTER-GAULT: I mean, did you go there?

SEC. SHATTUCK: We visited on mass grave, the site at Glogova, which again appeared on your film footage here, and there we could see, indeed, pieces of clothing, a shoe, a human bone that was sticking out of the ground, and there was very little evidence of any--that any tampering of this site had occurred, except for the fact that clearly at some point within the last six months, presumably six months ago, there was a mass grave that was dug.

MS. HUNTER-GAULT: And, and you think that there's--you saw enough and you think there's enough evidence there so that when human rights investigators do get in there in the Spring, when it starts to thaw out in the Spring, there'll be enough evidence to collect to make cases?

SEC. SHATTUCK: Well, the investigation that was conducted by the two tribunal investigators who were with me in terms of filming of all of these sites was very extensive so that evidence has already been collected, and I think when they go in in the Spring, certainly there's an opportunity to excavate the mass graves to find out more about how these persons were killed.

MS. HUNTER-GAULT: And is this all just in the Serb-held areas, all Muslim--atrocities committed against Muslims, or are there other sites and cases where Muslims may have committed atrocities?

SEC. SHATTUCK: This--the area that I'm describing is where the Muslims were fleeing from Srebrenica, behind the line of confrontation where no fighting was going on, and so clearly, the evidence that I saw indicates that these were executions. There are, however, plenty of other sites, and including some in the Croatian area. This, this month the war crimes tribunal is beginning investigation of a mass grave site in Croatia, where Serbs were, were executed presumably by, by the Croatians, so this is a very difficult and, and broad process that is being initiated by the international war crimes tribunal to find all such cases.

MS. HUNTER-GAULT: But in terms of what you saw, is there any doubt in your mind that there was a campaign of mass executions in this area?

SEC. SHATTUCK: What I saw so clearly corresponded to what I had heard from the people who fled from that town that I can't call it anything other than sheer murder of a large number of people; how many we still don't know, that remains to be found from the investigators.

MS. HUNTER-GAULT: And not, as the Serbs say, just the result of people being killed in a civil war? That's their defense.

SEC. SHATTUCK: This was not an area where there was any fighting at that time, or at any, at almost any other time. This was an area well within the Serb control.

MS. HUNTER-GAULT: How hard is it going to be to determine how and prosecute the people who are responsible for this?

SEC. SHATTUCK: This is going to be difficult, but it's an essential part of the peace process, and I think what we've seen and the pain throughout the land there is so great, the need for truth as well as justice to go along with peace is really essential, and the truth fact finding aspect of what's happening now is very important I think to all the parties and then ultimately justice in terms of finding those who were responsible for these crimes.

MS. HUNTER-GAULT: And you think that can be done?

SEC. SHATTUCK: I think it can be done. I think that's the task of the international war crimes tribunal which the United States very strongly supports. Justice Goldstone, the chief prosecutor of the tribunal, was here today, and has been meeting with high-level officials in our government. We are completely behind the work of this tribunal, and we see it as an essential element of the process of peace-making and reconciliation in the former Yugoslavia.

MS. HUNTER-GAULT: Has the NATO role in this been cleared up? I mean, are the troops going to help secure these areas to keep them from being "sanitized" and also assist the investigators and protect them in their work?

SEC. SHATTUCK: Well, it's made very clear in the Dayton accords that one of the tasks of the international force is to provide a secure environment for international organizations such as the war crimes tribunal and Justice Goldstone has had good discussions with Adm. Smith, who is the commander of the IFOR force in Sarajevo last week when I was there--

MS. HUNTER-GAULT: He was saying that this wasn't their job.

SEC. SHATTUCK: Well, they issued a statement together, which I think very much clears up any, any misconceptions. I think it is their job to help provide a secure environment by patrolling in the area. It is the job of the tribunal to conduct the investigations.

MS. HUNTER-GAULT: And will they stand outside of these sites and make sure that no one tampers with them?

SEC. SHATTUCK: Well, I think this is a subject that needs to be discussed further between the tribunal and the, and the international force. That was what, what Adm. Smith and Justice Goldstone agreed to do. But clearly there will be security provided.

MS. HUNTER-GAULT: Is it true that the U.S. investigations of, of these atrocities go all the way up to the Serbian president, Milosevic? I mean, might he be implicated in these massacres?

SEC. SHATTUCK: Well, the U.S. has agreed to provide all information that's appropriate and necessary to the conduct of this tribunal investigation, and that includes information relating to anyone who is involved or in, in authority at the time.

MS. HUNTER-GAULT: Is that investigation of him going on?

SEC. SHATTUCK: Well, this is an investigation that's being conducted by the war crimes tribunal. I can't tell you exactly what they're--who they're focusing on or where they're going, but we've made it very clear that we believe that the tribunal's task is to go wherever the evidence leads it.

MS. HUNTER-GAULT: How much faith do you put in the Bosnians today, Serb leaders saying that they're going to cooperate up to the maximum and prosecute anyone accused of murder or other crimes?

SEC. SHATTUCK: Well, let me say I think it was very significant under the Dayton accord that I was able to travel to this area, and that I was able to have President Milosevic make a commitment to assure with the Bosnian Serb leaders--police that I could travel freely in the area, and he made a further commitment at the end of my visit that he would fully cooperate with the war crimes tribunal in its investigations.

MS. HUNTER-GAULT: Well, Sec. Shattuck, welcome back and thank you for joining us.

SEC. SHATTUCK: Thank you. DIALOGUE

MR. LEHRER: Finally tonight, a Gergen dialogue. David Gergen, editor-at-large of "U.S. News & World Report," engages James Fallows, Washington editor of the "Atlantic Monthly" and author of Breaking the News: How the Media Undermined American Democracy.

DAVID GERGEN, U.S. News & World Report: Mr. Fallows, you issued a very tough indictment against the national press corps. Essentially, you've been arguing that the press is full of bread and circuses now, or spectacles and scandals, and that's driving the public away from the public square. What's gone wrong with journalism?

JAMES FALLOWS, Author, Breaking the News: I think the same thing has happened to our business, yours and mine, as has happened to some other businesses and cultural groups in the last decade or two. You saw in the military in the aftermath of the Vietnam War a kind of crisis where what was good for the individual officer ended up being bad for the whole institution. Similarly, in the carmakers 15 years ago the way that an executive could maximize his earnings was at the expense of the business in the long run. I think something similar has happened to us, but what is best for the individual journalist financially and in terms of notoriety ends up being bad for sort of public life because it turns things into sort of a snarling contest, and also bad for the credibility of journalism. And I think the evidence is the decreasing audience that news shows of all kind are claiming.

MR. GERGEN: And that--one of the phenomena which you describe in your book that I have found both in journalism and days in government is there is a tendency in contemporary journalism to take issues of policies and turn them into issues of politics, who's ahead, who's behind on a particular--on the balanced budget fight, for example. Is Gingrich and Dole, are Gingrich and Dole winning, or is Clinton winning? Is it going to help the Republicans or help the Democrats, as opposed to how will this affect the country?

JAMES FALLOWS: If you take reporters as a, as a group, the one thing in which most of them are most interested and most expert is the politics of life, i.e., who's going to win the next election, who's being clever and managing a bill through the Congress, things of that sort, and that is one legitimate part of public discourse. It's something that should be covered, but it often, especially over the last 15 years, it's driven out other considerations and so you have this sense when any kind of issue comes up, a new crime bill, a health bill, a dealing in Bosnia, a dealing someplace else in the world, the main thing that people want to compete with each other for the best interpretation is what this means politically. It's as if the only story that really matters is how do the events of the last day affect the next presidential election. That's part of reality, but only a part.

MR. GERGEN: And with it has come a change in attitude, or what you call--the story approached with attitude as a--

JAMES FALLOWS: Well, I think there's been a very--this term attitude had a strange history over the last say twenty or twenty- five years. Part of the function of journalism and the part of the reason why journalists are never all that popular even when they're doing their job as well as they can, is they're supposed to look into some of the bad sides of life. They're supposed to expose truths people in power may not want exposed, but in the years since the Watergate expose, I would say, some of that real investigative zeal has been replaced by a kind of lazy attitudinizing, i.e., at a White House press conference you may be asking a question that's all just about operational politics or a question that the President knows is coming, but if you ask it in a snarling and hostile sounding and suspicious sounding way, that makes you seem tough. It's a kind of bogus toughness and bogus attitudinizing, as opposed to real investigation.

MR. GERGEN: But that's rewarded within the industry.

JAMES FALLOWS: It is rewarded in the industry. It is rewarded both partly in the sense that you're not in the tank, which, of course, is the fate no one wants to have at any, any cost. Also, it's rewarded in, in one, one sub-category of this business which has begun to be the tail wagging the dog, which is if you are peppy seeming and energetic seeming on TV, in a TV press conference, then it's more likely you'll be on TV talk shows, journalist panel shows, which then leads to the lecture circuit, and so there's the kind of perverse reward system for seeming to have that kind of a daytime talk show spirit in your journalistic way.

MR. GERGEN: Now, many journalists would say, you know, this is really coming from the new competition that exists within journalism, all these outlets on television, all these different competing magazines, or various forms of print journalism, that the only way they get the audience's attention is to be more provocative, to have food fights on television, or the like, but your argument is that there is also a personal incentive.

JAMES FALLOWS: Sure. There's, I think, the institutional argument, you need this to attract an audience, that is really a doomed case, because if a news magazine, if a TV news show is trying to out National Inquirer the National Inquirer, or out Oprah, Oprah, they're doomed. They can never do it, that Oprah can always be a better version of Oprah than a news show can be, and so institutionally, I think this is a losing competition. Individually, there is now a powerful incentive for journalists to get into this kind of argument talk show because there is a whole financial empire which is connected to that.

MR. GERGEN: Talk to me a little bit about that, because you have a chapter on the gravy train and I'm mentioned in that chapter as someone who's been on the lecture circuit, which I have been, but let's put the issue on the table, and what you think about it.

JAMES FALLOWS: Right. The fundamental point I'm making here is that if as a print journalist you want to increase your income by a large magnitude, by a factor of four or five, there are two ways to do that. One is the role of the dice of writing a best-selling book, which happens to one or two people per year. The other is to get on the corporate lecture circuit where there are--there's a large income, several hundred thousand dollars a year, people can make that way, and the transmission belt, the way you can get from the world of print to the world of lecture circuit is TV talk shows. There really is--they don't have big audiences nationwide but they are influential among the people who are arranging these bookings. I think this has a corrosive effect on the way journalists do their work. There's not that much time to do actual reporting, also on the image of journalism. I should say for the purpose of your viewers that I very much applaud what you do, of having disclosure of these engagements you have and who you've been talking to, and for how much money, because I think the refusal to do that by journalists in general is a terribly corrosive thing which undermines public faith in them.

MR. GERGEN: I went through a disclosure of the money I've made through lectures both to corporate groups as well as to universities and others when I went into government in the Clinton administration in 1993, and I must tell you I am now in favor of much more public disclosure. I think it--this is an issue over which I happen to view--believe it is, not a, not a serious conflict of interest, or not a conflict of interest. There are some people who believe it might be, and that disclosure is the best way to deal with it. But my own personal experience was that disclosure didn't, you know, there was life after disclosure. You know, I got- -I took some hits from a few people, a few people--eyebrows went up, it's cited in your book, but you still feel more comfortable at the end of the day. You feel this is the right way to do it.

JAMES FALLOWS: Well, I think there is a useful analogy with

MR. GERGEN: But public life is not going well?

JAMES FALLOWS: It is not going well, as the philosophers have put it, and so it is going to go on though, and there we all have a stake in making it go better than it is now.

MR. GERGEN: At the end of your book, you argue that the answer perhaps is public journalism. Can you explain that?

JAMES FALLOWS: Yes, there's a movement that's especially strong at small newspapers and smaller broadcast outlets called the public journalism movement or civic journalism movement, and it's been very controversial in the newspaper business. Fundamentally, what it's saying is that journalists have to take seriously the effect of what they do on public life. For example, if they present all political issues as just being a mud fight among politicians, they have to recognize what this will do to the public sense of politics in the long run. So I think this movement, it has strong points, and it has weak points, but its basic argument that journalists need to think about their impact on public life in the long run is a sound one.

MR. GERGEN: Do you--can you cite an example where you think it's worked well?

JAMES FALLOWS: I think there in your own native state of North Carolina, the "Charlotte Observer" has done a number of stories where they've tried to approach political issues not from the sheer horse race perspective but I'm saying what issues, environmental, economic development, race relations, et cetera, are most at stake in our next senatorial election, our next gubernatorial election, and try to make people feel they have some lever, some handle, some understanding of the consequences of choosing one politician or the other, and they have found that it affects the kinds of campaigns the candidates run. They are sort of forced to run a more issues- oriented campaign.

MR. GERGEN: And you think that raised the level of the Senate debate there, the Senate campaign there. I think it did too.

JAMES FALLOWS: Yeah. That is my impression. You've been there more recently than I, but that's certainly what I've heard from people there.

MR. GERGEN: Well, thank you very much for coming, and good luck as you go around the country.

JAMES FALLOWS: Thank you, David. RECAP

MR. LEHRER: Again, the major stories of this Thursday, President Clinton and congressional Republicans said they had a deal to avert another government shutdown. They agreed on a bill to keep the government funded through March 15th. The President also called on Congress to pass an extension of the national debt limit. House Speaker Gingrich said he plans to add tax breaks to that legislation. We'll see you tomorrow night with Shields & Gigot, among other things. I'm Jim Lehrer. Thank you and good night.