The MacNeil/Lehrer NewsHour

MR. MAC NEIL: Good evening. I'm Robert MacNeil in New York.

MS. WARNER: And I'm Margaret Warner in Washington. After our summary of the news, we go first tonight to the Senate debate over new ways to limit lawsuits and liability. We're joined by two Senators plus advocates for consumers and business. Then we have a report on the religious cult in Japan accused of poison gas attacks, and we conclude Charlayne Hunter-Gault's series of conversations on affirmative action. Tonight, author Shelby Steele. NEWS SUMMARY

MS. WARNER: The death toll from the Oklahoma City bombing has now reached 152. At least 25 people are still missing, including three babies. Today, recovery crews began what they described as the final stage of their work. Officials said they expect to end the search tonight and fear they may never account for all the missing. Timothy McVeigh is still the only person charged in the bombing. The FBI is seeking a second man they call John Doe No. 2. Yesterday they released Gary Land and Robert Jacks, whose recent travels paralleled McVeigh's. At a Washington news conference, Attorney General Reno commented on FBI efforts.

JANET RENO, U.S. Attorney General: The Bureau has a large number of leads and is pursuing each lead. At this point, John Doe 2 has not been identified.

REPORTER: How much of a disappointment was Jacks and Land?

JANET RENO: When you talk about a disappointment, it is a disappointment that John Doe 2 has not been identified or taken into custody, but it is also important that people who are not guilty, who are not implicated, are quickly clarified as such, and so I'm glad that that process worked where those very unusual coincidences took place.

MS. WARNER: Reno said the FBI hotline has received more than 14,000 tips. Robin.

MR. MAC NEIL: Legal reform legislation was deadlocked in the Senate today when two attempts to end debate failed. The votes came after President Clinton said he would veto the measure if it passed in its current form. The bill began as an attempt to limit product liability. Opponents said it became too broad when the Senate passed an amendment yesterday putting a cap on punitive damage awards in all civil lawsuits. We'll have more on the story right after this News Summary.

MS. WARNER: California Governor Pete Wilson has admitted that he and his first wife failed to pay Social Security taxes for an illegal immigrant they hired in the 1970's. Wilson made illegal immigration a central issue in his 1992 re-election campaign. He said he will pay taxes and penalties of about $3,000 for the former employee. Wilson is expected to declare his candidacy for the Republican presidential nomination later this month. Rupert Murdoch won a major victory today in his battle to retain control of his Fox Television Network. At issue, is a law that limits foreign ownership of U.S. broadcasting licenses to 25 percent. The Federal Communications Commission ruled today that Murdoch did not deliberately conceal the foreign ownership interest in his company, Australia-based News Corp., when it acquired U.S. television stations several years ago. A negative ruling on that point could have forced Murdoch to restructure his holdings, but the FCC is asking Murdoch to demonstrate why the anti-foreign ownership rules should be waived in his case.

MR. MAC NEIL: The Croatian government and rebel Serbs agreed to hold peace talks soon in Geneva. That follows an escalation in fighting this week. The U.N. brokered a short-term cease-fire yesterday but today a new battle broke out in the divided town of Pakrac, southeast of the capital, Zagreb. We have a report from Paul Davies of Independent Television News.

PAUL DAVIES, ITN: The day began with optimism. With the cease- fire apparently holding, a high-powered U.N. delegation moved into the center of Pakrac, now controlled by the Croats but scene of some of the fiercest fighting with rebel Serbs. But these keepers wanted to negotiate safe passage for Serbian civilians trapped by the fighting. It was soon clear the locals had other things on their mind. Whether it was planned or not, within minutes of the U.N. patrol arriving, hostilities were resumed. Some of the Argentinean U.N. soldiers had their own cover. But most were exposed and confused. The U.N. thought they'd brokered a cease-fire in this area. Today their own soldiers are discovering that is not the case. The U.N. commanders who were originally hoping to rescue trapped civilians decided their new priority was the safety of their own men, and so they withdrew. It appears the peacekeeping mission had coincided with a Croatian assault on the few hundred rebel Serbs who'd taken shelter in the woods above Pakrac and were still putting up resistance. Tonight, the Croats are claiming that the last of the Serbs are now surrendering.

MR. MAC NEIL: Turkish officials announced today they had withdrawn almost all of their troops from Northern Iraq. About 35,000 soldiers entered Iraq six weeks ago to destroy Kurdish rebel bases there. The Kurds have been fighting for an independent country within Turkey for the last 11 years.

MS. WARNER: That's our News Summary for this Thursday. Now it's on to curbing lawsuits and liability, a fearsome Japanese cult, and a conversation on affirmative action. FOCUS - LEGAL LIMITS

MS. WARNER: We lead now with the battle over whether and how to limit civil lawsuits and liability. Under the new threat of a presidential veto, the Senate today continued work on a major overhaul of the civil justice system. Two months ago, as part of their Contract With America, House Republicans passed sweeping legislation that they claim will cut down on frivolous lawsuits and outrageous awards. The Senate began with a far less ambitious proposal, but it has mushroomed since then as Kwame Holman reports in this backgrounder.

SEN. SLADE GORTON, [R] Washington: [April 24] The debate over product liability legislation which begins here this afternoon is both important and controversial.

MR. HOLMAN: When Washington State Republican Slade Gorton opened debate on product liability reform almost two weeks ago, the bill he's cosponsoring with West Virginia Democrat Jay Rockefeller was narrow in focus.

SEN. JAY ROCKEFELLER, [D] West Virginia: [April 24] Product liability laws should deter wasteful suits and discipline culpable practices but not foster hours of waste and endless, endless, endless litigation.

MR. HOLMAN: As originally written, the Gorton/Rockefeller bill limits punitive damages in product liability cases to $250,000 or three times the economic losses suffered by the plaintiff, whichever is greater, and it abolishes joint and several liability in which a single defendant with greater resources can be held responsible for paying an entire judgment, even if a co-defendant is more responsible.

SEN. SLADE GORTON: It is aimed at spiraling costs of litigation, far more often than not on the part of manufacturers and sellers successful in litigation but costly and risky, nevertheless.

MR. HOLMAN: But in the 10 days since debate began, product liability reform in the Senate has ballooned into overall legal reform. On Tuesday, Kentucky Republican Mitch McConnell successfully attached to the product liability bill new limits on medical malpractice awards, and it didn't end there.

SEN. MITCH McCONNELL, [R] Kentucky: [Wednesday] Mr. President, the amendment I offered yesterday to broaden this bill to include medical malpractice reform, which the Senate approved, may have been the shot heard 'round the civil justice system but the amendment we're going to be voting on offered by Sen. Dole to extend punitive damages reform to all civil cases in the country is really the beginning of the revolution.

MR. HOLMAN: The Dole amendment would extend caps on punitive damages to include judgments against small businesses, local government, non-profit organizations, and health care providers, in addition to product manufacturers. In that sense, it's much like the legal reform bill that passed the House in March. Yesterday the Dole amendment passed the Senate but narrowly.

SPOKESMAN: On this amendment, the vote is 51 for, 49 against. The amendment is agreed to.

MR. HOLMAN: As a result, some supporters of the original product liability reform bill have backed away.

CAROL MOSELEY-BRAUN, [D] Illinois: What's happening with this bill, Mr. President, is a piling on that is broadening it and making it impossible for people who would like to see a moderate bill, would like to see product liability reform, to support this legislation. Specifically, the Dole amendment under the guise of civil justice reform would make it more difficult to bring civil rights claims under state law. It would also make it more difficult to bring claims under employment discrimination and housing discrimination laws, including claims for sexual harassment. I find that very difficult to, to understand why this is happening to what started out as a good effort in product liability, to have this expanded to any number of civil rights actions and any number of civil actions without regard for the consequences.

SEN. JAY ROCKEFELLER: This past week, frankly, has been rather astonishing to me, Mr. President. One would think that when a majority of Senators get the chance finally, without a filibuster on the motion to proceed, when we finally get to work on a bipartisan, balanced, focused piece of legislation to deal with this very serious problem, that's precisely how they would spend their time there, but, no, instead we have watched Senator after Senator come eagerly to the floor to add one more ornament to the tree.

MR. HOLMAN: This morning, President Clinton weighed in by using a statement that reads: "The bill now before the Senate might be called the Drunk Drivers Protection Act of 1995, for what it does is insulate drunk drivers and other offenders from paying appropriate amounts of punitive damages justified by their deeds." The President said of the Senate, "At the least, it should remove damage caps on lawsuits involving drunk drivers, murderers, rapists, and abusers of women and children," and added, "If this bill comes to my desk as it is now written, I will veto it." The President issued that statement just before the Senate took two cloture votes that would cut off debate on the issue and move ahead to a final vote. Supporters of the broader version of liability reform made one last attempt to attract the necessary votes.

SEN. ORRIN HATCH, [R] Utah: The opponents of change may want to shroud this issue under a smoke screen of high blown rhetoric, but when the smoke clears, there are some of the nation's trial lawyers laughing all the way to the bank. Who else could defend a system where an undisclosed $601 paint refinishing of an automobile results in a $2 million punitive damage award? Who else could defend a system where an insurance agent's misrepresentation about a $25,000 policy could result in a jury award of $25 million in punitive damages? We could go on and on, but the fact of the matter is, I'm not talking about all trial lawyers, just some, who literally have milked this system dry. Everybody knows we have to make these changes. There are excesses in the system, and these excesses are excesses that only trial lawyers, some trial lawyers could love. Runaway punitive damages is one of those excesses, so I hope and I urge our colleagues to vote for cloture on this next vote and help us to bring about the change that all America wants and only a few trial lawyers avoid.

MR. HOLMAN: Sixty votes are needed for cloture, but neither of the two attempts attracted more than forty-seven, leaving the future of liability reform in doubt.

MS. WARNER: Now we debate the issue with two Senators and two private sector representatives with opposing views. Senator Slade Gorton, Republican of Washington, is a key sponsor of the Republicans' legal reform efforts in the Senate. Sen. John Breaux a Democrat of Louisiana, opposes those efforts. They're joined by consumer activist Ralph Nader of Public Citizen, a non-profit consumer advocacy group, and Michael Roush, chief Senate lobbyist for the National Federation of Independent Businesses, an association of 600,000 small and medium-sized firms. Sen. Gorton, let me start with you. Given the two votes that you had on the Senate floor today, where you failed to cut off debate, would you say that the expanded version of this bill is dead as far as the Senate's concerned?

SEN. SLADE GORTON, [R] Washington: [Capitol Hill] The interesting fact is that each of the proposed expansions, punitive damage limitations and medical malpractice reform, was supported by a majority of members of the Senate, but a bare majority. The collection of all of these together clearly was not, and so next week, the debate, I believe, will be back over the original bill which is limited to product liability, a subject the Senate has discussed before, a subject the Senate I think is comfortable with, and I believe next week we will pass a product liability bill not much different from the way we started two weeks ago.

MS. WARNER: Well, you were the author of the narrower version, just product liability, and yet, you voted for these expanded ones. Why?

SEN. GORTON: I voted for the expanded ones because I believe that punitive damages is a sport in the law. Only here do we have a situation in which a jury can vote unlimited amounts of punishment. In our criminal code where people are protected by all kinds of constitutional limitations, there's always a limit, there's a maximum sentence. In punitive damages there is no maximum sentence, and I think that that's wrong. I also believe that there should be more protections, you know, for physicians and for hospitals, for people in our health care professions, and so I voted for that expansion as well. But I am convinced, and I am dedicated to the fact that there should be some significant legal reform, and that significant legal reform will be narrower, but I believe that it will be approved next week.

MS. WARNER: Sen. Breaux, do you agree with Sen. Gorton that if the Republicans scale this bill back to just defective products liability that they can get the 60 votes they need in the Senate?

SEN. JOHN BREAUX, [D] Louisiana: I really think the results will probably be the same, because I think a majority of the people in the Senate feel we already have product liability reform, and it's being done by the states, where it should be done. You know, the Republicans, I think, are in an untenable position because they're saying when it comes to the crime bill, let's block grant the programs to the states, when it comes to welfare reform, they say, let's block grant the program to the states, but when it comes to people who are injured by defective products, they say, no, the states don't know how to handle that, we're going to bring that to Washington, because Big Brother Washington knows best. I think that my own state of Louisiana is an example. We've done product liability reform. As a matter of fact, there are no punitive damages in my state for product liability suits. Let's leave it to the states. It's been there for 200 years, and it's working.

MS. WARNER: Sen. Gorton, how do you respond on that point, because even some of your fellow Republican Senators -- I'm thinking of Sen. Thompson from Tennessee -- made the same point, that, that this is kind of counter to the Republican philosophy of returning power to the states?

SEN. GORTON: I think it's very important to point out that this is not a strictly party line matter with Republicans on one side and the Democrats on the other. Sen. Rockefeller is the primary sponsor of this bill, and he leads a minority of Democrats, but a large number of Democrats, who think that we do need to do something, and there are Republicans, you know, who don't want to make any changes at all. So we've faced the proposition in the last two years that company after company has abandoned the search for new cures, has abandoned the search for new products, because of the fear of 50 different product liability systems in 50 different states. Now we have a national market. We need a national set of rules for something which is involved in interstate commerce, a field that the Constitution explicitly grants to the Congress of the United States. Reform is necessary to drive our economy forward and to bring justice to people. It's needed because at the present time, 60 percent of all the money that goes into the system goes to lawyers and adjusters and only 40 percent to the victims, and that is a terribly distorted system.

SEN. BREAUX: That's only half right. Let me interject here on the argument of uniformity that some have said. The bill only is uniform for those who make the products, because the bill specifically says that if a state wants to have standards that are more restricted to people who are injured by the product, the state has the right to do that. They can be more restrictive on punitive damages, they can be more restrictive on comparative negligence, they can be more restrictive in a lot of areas, but the only consistency on uniformity is for those who make the product. But for the people who are injured by a product, you could have 50 different sets of standards by 50 different states, so we ought to have a bill that is at least fair in the uniformity question.

SEN. GORTON: Well, of course, I think the bill has nothing to do with doctrines like comparative negligence. States can be more liberal or less liberal. What it does do --

SEN. BREAUX: What about the --

SEN. GORTON: -- is provide a degree of certainty that punitive damages will never exceed twice the total amount of damages that an individual suffers, and it says that people won't be charged for something that's not their responsibility, that someone is 10 percent responsible for an accident can't be charged for 100 percent of all of those damages, and one that says that after 20 years, the manufacturer of a piece of machinery that may have been totally and completely changed around can no longer be charged with some kind of negligence as a result of that machinery. You know, we've had experience with one national product liability bill. Last year, we changed the product liability law relating to small aircraft. The present system had driven 95 percent -- a 95 percent cut in the production of those aircraft. Now that we have a national rule, the business is in a comeback mode.

MS. WARNER: Senators, let me get the two non-Senators in this. Mr. Nader, you've opposed all of these limitations on lawsuits. Do you think the civil justice system needs any serious reform?

RALPH NADER, Public Citizen: Yes, it needs to be expanded so nine out of ten Americans who are wrongfully injured by defective products and now don't even file a legal claim and don't get anything have some justice in the courtroom not only against the perpetrators of their harm but to make the society safer for all of us. Look at what these lawsuits have accomplished. Asbestos is being phased out. All kinds of products are being taken off the market that are dangerous like Pinto fuel tank, Dalkon Shields, silicone breast gel implant, flammable fabrics, hazardous machinery. It's a great deterrent for all of us. But you see -- notice, the people who want -- the corporations, the lobbyists in this country who want this bill in Congress want to tie the hands of judges and juries in our state courts -- they're the only ones who hear, see, and evaluate the evidence on a case by case basis - - and they want to tie the hands against the innocent plaintiffs, the injured people, the homemakers, consumers, workers, and in favor of the defendants, many of whom are wrongdoers.

MS. WARNER: Mr. Roush, what about that point that these lawsuits have gotten some very dangerous products off the market?

MICHAEL ROUSH, National Federation of Independent Businesses: We don't -- we don't dispute that. In fact, we're not trying to change the system so much that those kinds of deterrent functions of the judicial system are removed. We're just trying to recalibrate, if you will, the scales of justice. Nine out of ten small business owners in a recent Gallup Poll believe that the civil justice system is skewed to those people who bring lawsuits. Part of what this debate is about and part of what a civil justice system to function needs is, is the perception of justice. Right now, at least the perception of justice in this system is not there among small business owners. They feel that much, much too often because of something called joint and several liability, where if you can get in --

MS. WARNER: That's is if there is a sort of deep pockets defendant --

MR. ROUSH: That's right.

MS. WARNER: -- he may have -- that company may have to pay all of the damages --

MR. ROUSH: That's right.

MS. WARNER: -- if the other one can't.

MR. ROUSH: Exactly. And, and even as reputable an attorney and as good a Senator as Sen. Bumpers, a Democrat from Arkansas, said in the civil rights debate in 1991, I believe it was, that as a trial attorney, he, himself, brought cases because of their settlement value, and he said -- asserted at that time that any honest attorney would admit that they also brought cases for their settlement value, and from a small business owner's perspective, what that means is that they're legally blackmailed, essentially, into settling out of court because of the costs and fear of going to trial.

MR. NADER: The judges are in charge of the courtroom. They don't allow this kind of blackmail. If there's an unfair case brought, they dismiss it all the time. You notice, in all the talk about this, there's no figure. There are 40,000 product liability suits for product defect damages brought on the average in this country every year. There are seven to fifteen million businesses. Far less than 1 percent, far less than 1 percent of any business in this country has a product liability suit pending. The total payout to all the victims in product defect cases, pharmaceuticals or hazardous, flammable fabrics, dangerous toys, defective cars, you name it, amounted in 1993 to $4.1 billion in insured and uninsured payouts by corporations. That's less than what we spend on dog food. That is less than what one company, Ford Motor Company, made last year -- $5.3 billion.

MS. WARNER: What about that point, Mr. Roush?

MR. ROUSH: But I don't represent Ford, of course. I represent small employers. In the same Gallup survey that I indicated, from firms between twenty and forty-nine employees, small businesses, about 50 percent of them have either been sued or threatened with suit. In fact, in that group, a third have been sued. The majority of those suits are personal injury suits, the second most common type of suit is service-related suits, and the third is product suits, and that comes to about 10 percent, I believe.

MS. WARNER: Let me ask you about the key provision of the product liability bill that, that Sen. Gorton has proposed, which would cap punitive damages, i.e., damages over and above the economic loss you suffered, to three times, either $250,000 or three times the economic damages. What's wrong with a limitation like that?

MR. NADER: Well, that's adequate for small businesses to deter and punish them when they are recklessly negligent or they engage in criminal behavior, but for companies like GM, for Exxon in the Exxon Valdez, for companies that mutilated hundreds of thousands of women like the Dalkon Shield manufacturer, that's a slap on the wrist.

MS. WARNER: All right, Mr. Roush, what about that point, for big companies it's nothing?

MR. ROUSH: Well, I'm here defending small businesses. I would say, in fact, that the $250,000 or three times economic damages, whichever is greater, is, in fact, too great for the majority -- vast majority of small businesses and the vast majority of kinds of cases they're involved with. Our typical small business owner, our member, grosses $250,000 a year. Thirty percent of them have annual incomes of less than $25,000 a year. So if we're talking about punitive damages to extract a punishment, well, I would argue that it should be scaled, based on how much it's going to hurt the perpetrator, and in that case, I would say that small business, most small businesses, the threshold should be substantially below $250,000 to extract the same pain as -- from Ford.

MR. NADER: But notice what President Clinton said. Sen. Dole's amendment to expand the cap on punitive damage to all civil cases - -

MS. WARNER: To all lawsuits.

MR. NADER: -- means that a whole brace of criminals, whether it's doctors who happen to molest their patients or nursing home abusers or drunk drivers or financial criminals, will come under this limitation when they are sued in civil suits, including a lot of unsavory characters.

MS. WARNER: But, Mr. Nader, we just heard Sen. Gorton, himself, say that probably the Senate is not going to pass something like that, they're just going to the product liability.

MR. NADER: But it already passed. They're going to have to shear it up.

MS. WARNER: I know, but they're going to have to -- they're going to roll it back.

MR. NADER: But it did pass the House of Representatives.

MS. WARNER: Yes, it did. Let me get the Senators in on this dispute we've been having here about what impact it will have on business if the product liability bill is passed and does become law. Sen. Breaux, how do you think businesses will respond if something like this goes through?

SEN. BREAUX: Well, my main point is that, No. 1, this is not a big problem. Less than one half of 1 percent, one half of 1 percent of the civil suits that are filed in this country deal with product liability cases, so there's no explosion of civil litigation regarding product liabilities. The juries are being more responsible, the judges are being more responsible, the states are addressing this throughout the United States. As I mentioned, my state and many other states have already addressed this question. This is simply a, a statement of the fact that Washington does not know best. We do not have to have a national law that affects the people of the various states. The state legislators are addressing it, and I think they're doing a fine job.

SEN. GORTON: We don't have to -- we don't have to talk about theory in this. We can talk about what really happens. Sen. Breaux said that his state doesn't allow punitive damages. Neither does mine. Businesses are not more dangerous or more reckless or do things worse in our states than they do in other states. There's no evidence that, that whether or not there are punitive damages has any impact on that kind of safety. And I come back to the one example of the one business where we have changed the law. The system Mr. Nader thinks is so good that we ought to expand it in20 years resulted in a reduction by 95 percent in the number of piston-driven aircraft produced in the United States. It bankrupted and drove those manufacturers out of business. Last year, we gave them some national relief. Now they're building new factories. We're back in the business again.

MR. NADER: In the --

SEN. GORTON: That is what happens in the real world. We will have --

MR. NADER: Senator --

MS. WARNER: Just let him finish, please. Mr. Nader, what about this point that in states without -- that already have these caps - - he believes these companies don't act more recklessly. Do you have evidence to the contrary?

MR. NADER: We know that punitive damages deter, because lawyers for the companies tell us punitive damages deter some of the more reckless products considered for the marketplace, but when Sen. Gorton talks about the light aircraft, how come all the foreign light aircraft companies roared into this market of ours and sold a lot of light aircraft to American business? They had to adhere to the same standards of liability. The light aircraft companies were [a] exposed to devastating foreign competition and [b] they were mismanaged, a lot like the auto companies were years ago or the steel companies.

SEN. GORTON: Boy that's an awful facile answer to the argument.

MR. NADER: Oh, really.

SEN. GORTON: When those foreign companies are much more difficult sue, when the change the law -- when the companies, themselves, said it was product liability that drove them out of business, and we've modestly reformed product liability, they began to get back into the business. What a marvelous coincidence that that is because there was no relation but they just suddenly got better management. That's a lot of nonsense. Here is one that the system drove out of business, we changed the system, and they come back into it. It's clear as crystal.

MR. NADER: It isn't clear, because the only thing they did in Congress was to say that after 18 years, you couldn't sue a manufacturer if a plane was operating for 18 years. Listen, there are planes now -- USAir flies planes that are over 28 years old. Nuclear power plants are designed to last 40 years. Elevators are designed to last 30 or more years. Do we really want to immunize those products from lawsuits?

MS. WARNER: Let me get back to the bill that's under consideration. Do you think, Mr. Roush, that your companies can expect lower insurance costs if product liability reform is passed?

MR. ROUSH: Well, currently, insurance -- liability insurance costs generally are the fifth most serious problem that small business owners face. And that's one of the reasons we're so actively involved in this issue. The hope certainly is that with product liability reform, that relief on insurance rates will be there. I can't sit here and assert absolutely that that's going to be the case, but many of our members believe it, and we tend to believe it. It will be the result, and if it were broadened somewhat, we think it would bring rates down even further.

MS. WARNER: Quickly on that point.

MR. NADER: According to the National Association of Insurance Commissioners, product liability insurance premiums have gone down 47 percent since 1987. It's declining.

MR. ROUSH: All I can point to is the surveys of our members --

MR. NADER: There is a --

MR. ROUSH: -- there is a serious problem.

MR. NADER: You have Senators who want to count a lifetime of pain and suffering for medical malpractice fixed to $250,000. There are corporate executives of the insurance companies like AIGInsurance who make $250,000 a week without any pain and suffering. You have to search for medieval metaphors to see the kind of cruelty against the most -- the most inculpable, innocent people in America who happened to be in the wrong place and the wrong time in a hospital or using a dangerous product.

MS. WARNER: Sen. Gorton, before we go, give me your political assessment now of the prospects. If the Senate passes your original narrower product liability bill and you go to conference with House Republicans, a lot of House Republicans say they're going to try to put the tougher stuff for the more -- the broader aspects back in the bill. Is that something that could happen, or would you counsel them to just take what they can get?

SEN. GORTON: Obviously, we have three parties in this struggle. We have the House and the Senate, and we have the President of the United States, who has the right to veto a bill, and when we go to conference, it seems to me that we will get the greatest degree of legal reform that we possibly can that President Clinton is likely to sign. My own view is that that's going to be pretty close to the bill that Sen. Rockefeller and I started out with.

MS. WARNER: Which is strictly product liability?

SEN. GORTON: Yes.

MS. WARNER: Yes. And Sen. Breaux, what's your assessment of the President's veto threat?

SEN. BREAUX: Well, I think what's going to come back from the conference is going to be clearly something that is more restrictive than what the Senate is able to pay us, if we pay us anything. I think that is very clear that more and more members of the Senate realize that the system is working, there are fewer lawsuits, the states are addressing this, and this is clearly a case where Washington does not know best, and we should leave well enough alone.

MS. WARNER: But do you agree with Sen. Gorton that the President would be inclined to sign it if it was strictly limited to product liability?

SEN. BREAUX: Well, I think that the President has indicated that he's willing to look at something that he would be willing to sign, that he's capable of signing, but it's not going to be the broader veil, that those are things that they were attempting to do on the Senate floor yesterday and today, but I think he's indicated that there might be some reforms they would be willing to sign, yes.

MR. NADER: I think the President is going to veto any bill that restricts the jurisdiction of state courts who for 200 years have been handling this under judge, jury, and appellate review. He said that in the campaign, that this type of law in America should be reserved for the states, and also I might his message today indicates that he's rapidly losing patience with the kind of proposals that are being made in this feeding frenzy of lobbyists all trying to get their own immunity for their industry or their company. I think that President Clinton will not challenge the very solid reasons why elderly groups, consumer groups, labor, environmental groups, and hundreds of others who have opposed this cruel legislation.

MS. WARNER: Well, gentlemen, we have to leave it there. Thank you, Senators. Thanks very much for being with us.

MR. MAC NEIL: Still ahead, the religious cult accused of Japan's poison gas attacks and our concluding conversation on affirmative action. FOCUS - CULT OF TERROR?

MR. MAC NEIL: Next, a look at the cult believed responsible for the Tokyo subway gas attack. One hundred fifty cult members have already been arrested on minor charges. Today a Tokyo newspaper reported police are now ready to ask for warrants against the cult's leader and others. Ian Williams of Channel 4 has been looking into the cult and prepared this report which begins in a village near Mt. Fuji.

IAN WILLIAMS: It's easy to understand why Mt. Fuji has such an aura of mystique for the Japanese. It's long been regarded by Buddhists as a sacred mountain, a gateway to another world. Small farming communities ring the base of the volcano. Among them, in the village of Kamipshiki, are dotted a series of ugly warehouse type structures. They have high corrugated walls and watch towers beside unsightly piles of rubbish, and those who still live and work inside didn't welcome our visit. The driver of a forklift truck wears an electronic device on his head. It's connected to a six volt battery pack which provides the shocks enabling him to communicate with his leader. He's moving freshly printed pages of a book predicting the end of the world in 1997. Wearing a T-shirt picturing their leader, somebody else notes our car registration but leaves when we approach. A mile away, another building has since late March been surrounded by hundreds of police. This is Satyan Seven, where the authorities believe the deadly nerve gas, sarin, was produced by the religious cult that owns all these buildings, Aum Shinrikyo, or "Supreme Truth." Passions exploded after police removed 53 children from one adjoining building. Many of the children wore electronic head gear. Channel 4 News witnessed cult members, mainly those claiming to be the children's mothers, chasing away the riot police. The police claimed that many of the children, aged between three and fourteen, were malnourished and deprived of sleep. We obtained one cult video produced for members which shows the cult's obsession with poison gas. The video was made before the Tokyo subway attack. The commentary claims 240 aircraft, including fighter bombers, have flown over Aum's facilities in recent years dropping gas. Chimes mark the beginning of break at the village primary school, where teachers told us of fear among children and parents. This was heightened last summer eight months before the Tokyo subway attack when several villagers fell ill. This time, traces of sarin were found, but still the authorities took no action, and also, well before the Tokyo attack, village campaigners put up posters asking for information about a couple and their baby who have disappeared. The father was a lawyer who'd been investigating the cult. His home was in Yokohama, near Tokyo, and every week for six years since the disappearance, an elderly lady has visited the apartment. Mrs. Sachio Sakamoto is the lawyer's mother. She airs the rooms, dusts around them, and checks that everything is in order, around her, presents she's bought her grandson every year, even though he isn't there. This year, she arranged a place for him at primary school, bought a satchel and clothes, all of this in the hope the family will return.

SACHIO SAKAMOTO, Mother of Missing Lawyer: [speaking through interpreter] These are the clothes for a child of six. Although they haven't been worn, I'll have to put them away now and get out the spring clothes.

MR. WILLIAMS: Her son, Tsutsumi, had been representing a group of parents who claimed their children had been kidnapped by the cult. After he disappeared, the only clue was a cult badge found in the apartment. Over the years, police could find no other evidence, and Aum Shinrikyo continued to thrive. Channel 4 News has found one mother and son who know the Sakamoto case well. Kazuo Kojima, not his real name, was a founder member of the cult. They agreed to speak to us on condition of anonymity, fearing for their lives. They've escaped from the cult but Kazuo's wife and four children remain there. He recalls asking a cult leader about Sakamoto's fate.

KAZUO KOJIMA, Former Aum Member: [speaking through interpreter] He replied nonchalantly, saying, "He's already dead." And just before I left Aum, another escapee returned, and I asked him how Mr. Sakamoto was. He said he understood that Mr. Sakamoto was buried somewhere at the foot of Mt. Fuji. I heard the same story from three different people."

MR. WILLIAMS: And he paints a chilling picture of life in the compounds around Mt. Fuji.

KAZUO KOJIMA: [speaking through interpreter] You have to cut off all human ties. That is why children and parents are separated in Aum. Conversation between people is prohibited. Inside Aum, there's no talk about quitting or not quitting, like in the real world. When I threatened to leave they kept me awake for two days and kept telling me I'd be sent down to hell.

MR. WILLIAMS: Little wonder then that many people in the village ask why it took the police so long to act. The answer, at least in part, lies in the status of Aum as a religious organization and the extraordinary role and privileges of such groups within Japanese society. Yet, Aum is an odd religion. It's blind, bearded guru claims to have foretold the Kobe earthquake and predicts Armageddon in two years' time. It has roots in the occult and mysticism, believing in the supernatural, but at the same time runs a variety of businesses, including this computer shop. Aum refused to grant a television interview to Channel 4 News but it did invite us into their besieged Tokyo headquarters. We were able, briefly, to film the leaders who live here. They were worshipping, Asahara, listening to his tapes, and watching videos of his teachings, while one senior member told us their rights are being abused and gave a lengthy denial of all the accusations against them. Aum has been able to attract young and well educated members. Take Hideyo Muri, Aum's minister of science and technology, who's been the subject of intense attention. He was stabbed a few days after we filmed this incident. Mr. Muri, an astrophysicist by training, designed and built the chemical facilities at Mt. Fuji. The cult has 22 ministries and half its leaders are, like Mr. Muri, university educated. Kazuo owned a large business before he joined the cult and signed over all his property. He was attracted by the promise of enhanced powers.

KAZUO KOJIMA: [speaking through interpreter] I owned a company with some 70 shareholders. I needed some confidence to help me lead so many people. This, the idea of supernatural powers, was very attractive to me. It was one of the main reasons why I joined Aum.

MR. WILLIAMS: He believes the cult from which he escaped is dangerous and unpredictable because its teachings regard life in the outside world as so meaningless. It's the actions that might result from this that so alarm the police, the villagers of Fuji, and the people of Japan, as the police tighten the noose around the cult and its leaders. SERIES - AFFIRMATIVE ACTION

MS. WARNER: Finally tonight, we conclude our series of confirmations on rethinking affirmative action. President Clinton has called for a complete review of the government's affirmative action policies amid a growing debate over the remedy in and out of government. Tonight we hear from Shelby Steele, a professor of English at San Jose State University, and the author of the book The Content of Our Character. Charlayne Hunter-Gault spoke to him recently.

MS. HUNTER-GAULT: Shelby Steele, thank you for joining us.

SHELBY STEELE, Author: Thank you for having me.

MS. HUNTER-GAULT: Do you think affirmative action should continue?

SHELBY STEELE: I don't think racial preferences should continue, gender preferences, preferences by ethnicity, and so forth. I think affirmative action that reaches out, that brings people into the pipeline to be considered for academic advancement, for jobs, and so forth, absolutely is a good thing, but I think that the use of preferences is not. One of the things that I think is often misunderstood about affirmative action is that back in the late 60's, early 70's, when preferences were first introduced, in many ways, they were America's attempt to buy out of what I consider serious developmental social reform, bringing blacks particularly, who had been oppressed for centuries, forward into equality by development, by education, by economic growth, and so forth. That, in a sense, preferences was the way that America bought it way out of the goals of the great society. And --

MS. HUNTER-GAULT: But wasn't that because the goals of the great society, however well-intentioned and well-conceived or whatever, just weren't achieving the equality that they set out to?

SHELBY STEELE: I don't think so, because affirmative action hasn't achieved it either but the great society was expensive and affirmative action was cheap. Preferences don't cost anything; they don't teach anybody anything; they don't -- they don't develop young children. They just let things pretty much stay as they are, and then at the age of 18, a preference to college, for example, is given out, which results, I think, probably in -- it explains why we have a 72, 76 percent dropout rate in colleges for black students. So the preferences I think were really a swindle -- is not too strong a word. They were the way that we bought our way out of developing the people that had been oppressed, and those people remained undeveloped, and so because they're undeveloped, they're not even benefiting from the preferences. Largely white women, who are developed, benefit from them. So I think --

MS. HUNTER-GAULT: What do you mean by that?

SHELBY STEELE: -- that's my objection.

MS. HUNTER-GAULT: You mean that, that there are more white women who get --

SHELBY STEELE: White women are well educated. And poor white women don't benefit from preferences, but middle and upper class white women who have been well educated with their brothers have been the primary beneficiaries -- I mean, far, far more than any other group in American life, certainly far more than blacks, because they were developed.

MS. HUNTER-GAULT: But I've talked to many blacks, and as you know, blacks fall on all sides of this debate, but for example, I talked to Stephen Carter, a professor at Yale, who said that he wouldn't have gotten into Yale without the kind of consciousness and without the kind of pressure that affirmative action put on institutions.

SHELBY STEELE: I wouldn't -- I wouldn't argue with that, but I don't think that, that that's really the point. Stephen Carter was the son -- from what I know -- of well-to-do parents, well-off parents, highly educated parents. I don't think he deserved affirmative action. The problem with affirmative action is that it exists in the name of poor people. It exists in the name of poverty, a program that we have in America that is supposed to answer or deal with these deep problems of poverty.

MS. HUNTER-GAULT: But what --

SHELBY STEELE: And actually ends up helping people like my children, like your children, like his children, who are not poor, who have many more advantages than many white Americans have.

MS. HUNTER-GAULT: But what about those who argue that affirmative action was not conceived as a program to get people out of poverty but as one of the tools in the arsenal of civil rights to deal with rejection because of race, that it was a racial remedy, and didn't have anything to do with class?

SHELBY STEELE: Well, I think that's a common argument but a disingenuous one in the sense that the moment -- the great society programs which did try, I mean, as badly conceived as they may have been, did try to address poverty, did try to actually treat racism and poverty with development, educational development, so that people could, could not -- supposed to be equal but could, in fact, become equal. Those programs were expensive, they were time consuming, they cost a lot of money, we were fighting a war in Vietnam, and at the very moment that we began to back away from them because of their expense, we came up with affirmative action, group preferences, and I think the -- what I call the grievance elite, the civil rights leadership, the women's group movement and so forth, bought that, and what, what that's really turned out to be is almost a kind of patronage program for well off, well educated, middle class blacks and white women.

MS. HUNTER-GAULT: But those who have responded to similar kinds of arguments say that affirmative action is only one tool and it should be seen as that.

SHELBY STEELE: Well --

MS. HUNTER-GAULT: I mean, so the question is: Do you consider it a valid tool that would benefit --

SHELBY STEELE: Okay.

MS. HUNTER-GAULT: -- the middle class, because it's the middle class that, after all, prepared to go to college, prepared to take some of these positions?

SHELBY STEELE: I think it is -- I couldn't conceive of a worse program for middle class blacks who are -- who have by dent -- usually by dent of their own family struggle and effort made it into the middle class and then to give them a program that in a sense stigmatizes them and says that, that they really haven't met the standards, but they're going to be admitted anyway, and I think that it's a program that weakens the black middle class, weakens -- in a sense, it buys us into the idea of our own dependency, that we need America to offer us a certain dispensation from standards that it doesn't offer to other people.

MS. HUNTER-GAULT: What do you think would have happened in the past 30 years in terms of college admissions, entree into corporations, moving up the ladder, the kinds of things that pro- affirmative action people cite as the gains of affirmative action, what would have happened without it?

SHELBY STEELE: I think more of us would be ahead. I think affirmative action has held us back.

MS. HUNTER-GAULT: What would have caused it? What would have propelled it?

SHELBY STEELE: Because if we had not had -- if we had not allowed the -- the civil rights movement really in the height of its momentum in the late 60's and many radical black movements, if we had not allowed all of that energy to be bought off by preferences, we would have demanded the kind of development that I think we should have gotten, educational development, help overcoming poverty, this kind of thing, and we would have at the same time been able to really demand from the society that it eradicate discrimination. We ought to demand education. We ought to demand equal amount of expenditure on the education of young black children as we do on young white children.

MS. HUNTER-GAULT: Do you think that the public in general -- I'm not talking about the -- the participants in the debate -- but that the public in general understands affirmative action?

SHELBY STEELE: I don't. I think that -- I've called it an "iconographic social policy," a social policy that, that exists more for what it represents to people than for what it actually achieves, and as I've said, I think for white Americans, affirmative action has been a kind of public relations of social virtuousness. For black Americans, it's been a kind of public relations of power. I don't think we have a lot of power, and I don't think white America has a lot of social virtuousness in this particular area.

MS. HUNTER-GAULT: Yeah. But one element of white America, particularly white males, are very angry about this. Are they justified?

SHELBY STEELE: I think they -- I think that they're -- if you were a white male, wouldn't you be? I mean, we -- the civil rights movement --

MS. HUNTER-GAULT: But what evidence is there that white males have been seriously disadvantaged because of affirmative action?

SHELBY STEELE: Apparently, there's considerable evidence that they've lost jobs, not gotten promotions, and in fire departments and so forth.

MS. HUNTER-GAULT: Anecdotal evidence, anecdotal, but I haven't seen any hard statistics.

SHELBY STEELE: If the damage is not as profound as racism once was for blacks -- and I don't think it's anywhere near that profound -- it is still an institutionally sanctioned discrimination. And anybody who's in the group that's going to be discriminated against, rather than for, is going to be unhappy. And if you had a son who was a white male and was going to college like everybody else, you would want to feel that he was going to be judged on the basis of his merit, and not on the basis of his skin color, and people don't like that. We didn't like it as blacks, so I don't see why white people should like it. The point is that we've got to move to a place where as Americans we are judged on the basis of merit. That's something we've got to work for.

MS. HUNTER-GAULT: Do you think that society is ready --

SHELBY STEELE: It's cynical to say that's impossible.

MS. HUNTER-GAULT: Do you think that society is ready now to work for that, to judge everybody, as Martin Luther King said, on the content of their character and not on the color of their skin or their gender? Are we there yet?

SHELBY STEELE: The fact that America is not ready for that right now is no excuse for affirmative action and preferential treatment, because those policies keep us from getting to the point where, where we can have fairness for everybody in this society.

MS. HUNTER-GAULT: What impact do you think this debate is going to have on race relations in this country?

SHELBY STEELE: I think it's the best thing, the healthiest debate on race I've seen since the 60's, because we're examining it, and we're having to look beneath it. We're having to examine it as an actual social policy, to see whether it's effective or not. We're having to give up that pretext. We're having to deal with each other eye to eye in a way that we haven't now for twenty five, thirty years.

MS. HUNTER-GAULT: Well, Shelby Steele, thank you. RECAP

MR. MAC NEIL: Again, the major stories of this Thursday, the death toll in the Oklahoma bombing rose to 155 today. About 25 others are still missing. Officials said the search for more victims will end later this evening, and President Clinton threatened to veto a Senate bill that caps damage awards in civil lawsuits. Good night, Margaret.

MS. WARNER: Good night, Robin. We'll be back tomorrow night with Secretary of State Christopher and Shields & Gigot, among other things. I'm Margaret Warner. Good night.