The MacNeil/Lehrer NewsHour

MR. LEHRER: Good evening. I'm Jim Lehrer in Washington.

MS. WOODRUFF: And I'm Judy Woodruff in New York. After the News Summary, we take a close look at the indictments against Washington's movers and shakers, Clark Clifford and Robert Altman, for their role in the BCCI banking scandal. Then Elizabeth Brackett reports on efforts to stop dads from skipping out on child support. Next, Europe's latest refugee crisis, what to do with 2 1/2 million displaced citizens of Yugoslavia. And finally an Amei Wallach essay about the living art of Pablo Picasso. NEWS SUMMARY

MR. LEHRER: Clark Clifford was indicted today on bribery and other charges growing out of the BCCI banking scandal. So was his law partner, Robert Altman. Clifford is the 85-year-old former Defense Secretary and adviser to Democratic presidents. He and Altman, who is 45, were charged in separate New York state and federal indictments. The state charges were for bribery and for lying about BCCI's secret ownership of the Washington-based First American Bancshares. Clifford was the bank's chairman, Altman its president. The federal charges were for enriching themselves through secret sweetheart loans, among other things. Clifford and Altman issued a written statement saying the indictments were the result of mean-spirited suspicion and unfounded speculation. They said there was no credible evidence of any wrongdoing. We'll have much more on this story right after the News Summary. Judy.

MS. WOODRUFF: The United Nations inspection of Iraq's agriculture ministry in Baghdad ended today. The inspectors found no weapons- related documents or materials in the building. What they did find were signs that materials may have been removed during the three- week delay in getting access to the building. We have a report narrated by Vera Frankel of Worldwide Television News.

MS. FRANKEL: The U.N. inspectors have almost predictably drawn a blank. Nothing relating to Iraq's weapons programs was found inside the agriculture ministry. But the inspectors are concerned that some important material might have been spirited out of the building during the 17-day standoff. It's been a difficult time for the head of the U.N. Commission, Rolf Ekeus and his team. Their first attempt to get into the ministry building was frustrated by the Iraqi authorities and stalemate followed. Saddam Hussein relented only after winning concessions from the U.N. A new inspection, drawn from what he regarded as neutral countries, was finally allowed into the ministry. The Iraqis have done their best to ridicule the inspector's efforts. A television broadcast highlighted their search of unlikely places and also the burgling techniques they use to get past locked doors. Saddam claims to have won the showdown. He was even seen on television taking a symbolic victory dip in the river Tigress.

MS. WOODRUFF: The U.S. today accused Iraq of continuing to defy the U.N. cease-fire agreement with repeated attacks on its Shiite population. The U.S. is preparing a new U.N. Security Council resolution demanding Iraq stop the attacks. The U.S. Ambassador to the U.N. said the new resolution could come before the Council within the week. Meanwhile, Sec. of State Baker met in Washington with Iraqi opposition leaders. The Shiite, Suny, and Kurdish leaders have appealed to U.S. economic aid to help them in their effort to oust Saddam Hussein. The U.S. reportedly will send Patriot anti-aircraft missiles to Bahrain this week. Pentagon officials told the Reuters News Agency the missiles will protect moderate Gulf states from possible attack by Iraq. They said Iraq may still have some Scud Missiles left over from the Gulf War. The move follows a shipment of Patriots earlier in the week to Kuwait.

MR. LEHRER: The United Nations had an emergency meeting in Geneva today to deal with the Yugoslav refugee crisis. Officials said up to 1/2 million refugees could be stranded without food and water this winter. More than 2.5 million people have been displaced by the fighting. We'll have more on the refugee story later in the program. Twenty-one U.N. trucks with relief supplies arrived in the Bosnian capital today. It was the first major aid convoy to reach Sarajevo by road. It came from Croatia and was carrying about 170 tons of food. Also today, the first group of about 1,000 Canadian U.N. peacekeepers pulled out of the city. They will be replaced by Ukrainian and Egyptian U.N. forces protecting relief flights at the Sarajevo Airport.

MS. WOODRUFF: The Bush administration policy of intercepting Haitian refugees at sea was declared illegal today by a federal appeals court in New York. The court ordered an injunction be granted preventing the Coast Guard from returning refugees to Haiti without first giving them a hearing on asylum. The administration announced its forcible repatriation policy in May. Some 30,000 Haitians have fled the country since President Jean-Bertrande Aristide was overthrown last September.

MR. LEHRER: The Ford Motor Company today reported a $502 million profit for the second quarter of the year, its best earnings showing in two years. It had lost more than $300 million during the same period a year ago. Ford Chairman Harold Pohling said he remained concerned about the rest of this year, because the economy is "still fragile." Yesterday, Chrysler Corporation also reported a second quarter profit.

MS. WOODRUFF: Former East German leader Eric Honecker returned to Germany today to face trial. The 79-year-old communist had been in Moscow since he was ousted from office by pro- democracy forces 17 months ago. He is accused of ordering the deaths of hundreds of East Germans trying to flee to the West. Honecker ruled East Germany for 18 years.

MR. LEHRER: And that's it for the News Summary tonight. Now, it's on to the BCCI indictments, deadbeat dads, Yugoslav refugees, and an Amei Wallach essay. FOCUS - WIDENING - BCCI - WEB?

MS. WOODRUFF: First tonight are some prominent indictments in the BCCI banking scandal. BCCI is the Bank of Credit & Commerce International, a $20 billion financial institution that operated in more than 70 countries until last year, when regulators around the world shut its doors amid charges of fraud and corruption. In the United States, law officials have focused on BCCI's illegal control of three banks, including First American Bancshares of Washington, D.C. Monday, one of the key figures in that takeover, a former head of Saudi Arabian intelligence, pleaded guilty to violations of banking laws. Today, two prominent Americans found themselves facing criminal charges for their alleged involvement with BCCI. 85-year-old Clark Clifford is one of the elder statesmen of Washington, and adviser to Democratic presidents from Truman to Carter. Sec. of Defense under Lyndon Johnson, he was a power broker with an impeccable reputation until the BCCI scandal. His former law firm specialized in helping corporate clients find their way through the bureaucracy of the federal government. Clifford began representing BCCI in the late 1970s with the help of his young protege and fellow attorney, Robert Altman. Altman is also well known in Washington social circles for his marriage to actress Linda Carter, star of the 1970s television series "Wonder Woman." In 1977, Clifford and Altman represented Jimmy Carter's budget director, Bert Lance, before the Senate on ethics charges relating to Lance's alleged improprieties at his Georgia bank. Soon after, Lance introduced them to Pakistani banker Aga Hasan Abedi, founder of BCCI, who wanted to penetrate the lucrative American banking industry. Clifford and Altman then began to represent a group of wealthy investors openly backed by BCCI. They were trying to take over a Washington bank company, Financial General Bancshares. With federal regulators leery even then of BCCI's questionable banking practices, the efforts were unsuccessful. Then in 1981, Clifford and Altman went to the Federal Reserve with a new, expanded group of Middle Eastern investors who wanted to buy Financial General. Still suspicious, regulators wanted to know if BCCI was behind the plan. Clifford assured them "I know of no present relationship with BCCI. I know of no future relationship." The deal went through. Clifford became chairman of the newly renamed First American Bancshares. Altman was named president and their law firm was retained as general counsel to the bank, collecting legal fees of several million dollars. A 1991 Federal Reserve Report showed that many of the 1981 investors were acting all along as fronts for BCCI. Clifford and Altman answered that they, like everyone else, had been duped. But today, Clifford and Altman were indicted on both federal and state charges for allegedly concealing their knowledge of BCCI's involvement in First American, and for enriching themselves through secret loans and other deals in the process.

JAY STEPHENS, U.S. Attorney: At the heart of today's indictment is an alleged conspiracy by Mr. Clifford and Mr. Altman to deceive federal banking regulators in order to prevent the unraveling of Mr. Clifford and Mr. Altman's banking empire and to protect their millions of dollars in personal sweetheart loan transactions and stock transactions with BCCI.

MS. WOODRUFF: The Federal Reserve Board also announced that it was beginning proceedings to decide whether to bar Clifford and Altman from ever again working in American banking. This afternoon, Clifford and Altman pleaded innocent to the New York State charges and issued a written statement. "The bringing of these indictments is a cruel and unjust abuse of the prosecutorial function. Instead of these charges being based on reliable and credible evidence, they are the result of mean-spirited suspicion and unfounded speculation. The prosecutors have no credible direct evidence of any wrongdoing by us. There are no 'smoking guns.' We understand the prosecution's case is based entirely on circumstantial evidence. We totally and categorically deny all charges. These cases reflect an intense competition that developed between New York, Justice, and the Federal Reserve -- each seeking public acclaim for their role in fighting BCCI corruption and to deflect criticism for past failings. We became the most visible, convenient targets for government bodies that wish to demonstrate that BCCI wrongdoers will be brought to justice. In the process, however, political considerations and public posturing have overwhelmed the merits of this matter. Disregarding the policies normally applicable to such cases, we are now confronted with multiple prosecutions by three powerful agencies which have enormous resources. We shall fight to establish our innocence and expose the distressing manner in which these agencies have conduct themselves." To respond to that and to lay out today's charges is the man who has led the ongoing investigation of BCCI's activities in New York. He is Manhattan District Attorney Robert Morgenthau. Mr. Morgenthau, thanks for being with us. In layman's terms, what are the crimes that you are saying -- and I'm asking you to put it in simpler terms than you would have today at the news conferences -- what crimes are you saying these six men committed and in particular Mr. Altman and Mr. Clifford?

MR. MORGENTHAU: Well, there are two separate indictments, one involving Clifford and Altman, Nakfe, Abedi, and Foulage, and they are charged with a scheme to defraud, to defraud regulators and depositors as to the true nature of the ownership and control of First American Bancshares. And incidentally, First American Bank has 42 branches. In New York, you can stand on the steps of the state capitol in Albany and look East on Main Street and you'll see two branches of First American Bank. Then there is a second --

MS. WOODRUFF: But those names you've mentioned, Mr. Nakfe and the others, are foreign nationals.

MR. MORGENTHAU: They are.

MS. WOODRUFF: Who were officials of BCCI.

MR. MORGENTHAU: No. They were -- Nakfe and Abedi were -- the third man, Mr. Foulage, was a Kuwaiti businessman who was acting as a nominee we allege for BCCI. There's a second indictment which is an enterprise corruption indictment charging Abedi, Nakfe, Farone, and Foulage as being part of a corrupt enterprise, whose purpose was to gain money and power throughout the world by bribing central bank officials and contemporaries in Pakistan and Senegal and the Ivory Coast and the Argentine and seven other countries to get deposits to defraud the International Monetary Fund and the World Bank and other banks.

MS. WOODRUFF: And again the additional name in that second indictment is Mr. Farone.

MR. MORGENTHAU: That is right.

MS. WOODRUFF: Who's a Saudi businessman.

MR. MORGENTHAU: Right.

MS. WOODRUFF: Who was not specifically an official at BCCI.

MR. MORGENTHAU: No. He was the front man in acquiring the National Bank of Georgia, and the Independence Bank in Encino, California.

MS. WOODRUFF: What is this -- what do today's indictments represent that go beyond what you and others were saying last year? I noticed that at one point in the press release, news release your office put out, that you said, this is not just a criminal fraud enterprise; it's much more than that. What did you mean by that?

MR. MORGENTHAU: Well, what we said was that it was a corrupt enterprise and comes under a New York statute which covers corrupt enterprises and what we're saying it was not just a scheme to defraud but really a corrupt enterprise from beginning to end in July of 1991.

MS. WOODRUFF: And why is it something that average Americans should care about if they didn't happen to be a depositor --

MR. MORGENTHAU: Well, I think for two reasons --

MS. WOODRUFF: -- with one of these American banks?

MR. MORGENTHAU: And this is really the reason that we got involved. The United States government and the states and cities spend literally billions of dollars to try to prevent drugs from coming into this country and then prosecuting drug dealers when they do receive the drugs. And last year, New York County, we prosecuted 30,000 people for dealing in drugs and possessing drugs. It's equally important to find out who was transmitting the profits of these drug dealers. And if you can't cut off that economic benefit, you can prosecute the street dealer until the cows come home. So it was very important to look at who's transmitting this money and you can't -- I don't think you can say, well, it's a foreign bank, it's bank secrecy, it's too difficult. It also goes to the credibility of government. I mean --

MS. WOODRUFF: Which is supposed to be regulating these sorts of things.

MR. MORGENTHAU: Which is supposed to be regulating and also saying, you know, are you going to go after the big guy as well as the small guy. And to -- I think people who deposit their money in a bank want to know who owns that bank and they were deprived and defrauded of that information.

MS. WOODRUFF: Let me ask you about -- just quickly about the points in Mr. Clifford and Mr. Altman's statement today. Among other things, they say, cruel and unjust abuse of the prosecutorial function. They say you have no reliable or credible evidence, it's a mean-spirited -- and so on.

MR. MORGENTHAU: They will have their day in court and under the American system they can make all of those arguments and if the court and the jury believe them, then the charges will be dismissed. If they don't believe them, then they'll be convicted. So I'm not going to answer that on any news media program. That's a matter, that's an argument to be made in court, and it will be made and they will get a fair hearing.

MS. WOODRUFF: So when they say circumstantial evidence, no direct credible evidence, unfounded speculation --

MR. MORGENTHAU: They will have their day in court to make that argument and if they are correct, they will be acquitted. If they're not, they will be convicted.

MS. WOODRUFF: What about their other point, one of their other points, that reflects this intense competition, they say, that was underway between your office, the New York District Attorney's Office, the Justice Department, and the Federal Reserve?

MR. MORGENTHAU: That's an argument for them to make in court, but let me say this, when we worked very closely with theJustice Department for the last eight or nine months, we worked very closely with the Federal Reserve. Our announcement today was the counsel to the New York State Federal Reserve Board, key man in the Department of Justice. My executive assistant was down at the Washington announcement. We are working very closely together. I'm sure they hope we're not but this is a cooperative venture and we all, all of us in government are being paid to serve the people and we're going to do the best job we can.

MS. WOODRUFF: Earlier on though was there not criticism of the Federal Reserve, the Justice Department, for not moving quickly enough on this?

MR. MORGENTHAU: My memory only lasts about nine months, and I can tell you for the last nine months, we've been working very closely together.

MS. WOODRUFF: Was there any effort by either the attorneys for Mr. Clifford or Altman, any discussion of any sort of bargaining arrangement to work out a plea on their part, on either what the charges would be, or what they would plea?

MR. MORGENTHAU: When lawyers come in and talk on behalf of their clients, I don't think that should be discussed unless it's made in open court. But I can tell you that we must have had half a dozen meetings with lawyers for Misters Clifford and Altman and they had a fair hearing. I'd like to just mention that also, you know, we announced today that one of the key figures in the takeover of First American, Sheikh Camelot Am, has pled guilty, is paying a $105 million fine. But even more important, he's agreed to fully cooperate with us and with the Justice Department, agreed to testify in the grand jury and at trial, if required.

MS. WOODRUFF: Is that pivotal to this case?

MR. MORGENTHAU: It's important. I mean, this is an extremely important development. He's somebody that we could not have extradited from Saudi Arabia, a very prominent man in Saudi Arabia, and the fact that he came forward, pled guilty, entered into an agreement to testify is an extremely important development.

MS. WOODRUFF: Well, Robert Morgenthau, we thank you for being with us.

MR. MORGENTHAU: Thank you for asking me.

MS. WOODRUFF: Jim.

MR. LEHRER: Now, the views of two reporters who have been covering the BCCI scandal, Douglas Frantz of the Los Angeles Times, co-author of the book "A Full Service Bank, How BCCI Stole Billions Around the World," and Alan Friedman of the Financial times. Mr. Frantz, first, there are also some federal indictments today in addition to the ones that were made in New York. In simple terms, what do they allege?

MR. FRANTZ: They're fairly similar to the New York statement. They allege simply that Clifford and Altman concealed BCCI's ownership and control of First American Bank when they lied to the Federal Reserve Board in 1981 at the initial hearing and at various points beyond there, and they also allege in the federal indictment that Clifford and Altman concealed lucrative side financial deals that they struck with BCCI. They allege in the federal indictment that they concealed those arrangements, particularly a $10 million stock deal, in order to avoid attracting federal regulatory attention that might have brought down the curtain on this scheme earlier.

MR. LEHRER: The team that the assistant attorney general used was "sweetheart deal." What was he talking about?

MR. FRANTZ: Well, I think primarily he's talking about a 1986 stock transaction in which Clifford and Altman were permitted to buy 18 million dollars worth of stock in the parent company of First American. To buy that they used an $18 million BCCI loan in which they put up no collateral, they put up no money of their own. BCCI took all the risk and Clifford and Altman took none. Eighteen months later, they sold the bulk of that stock and pocketed a $10 million profit. Now, that's a transaction in which they had no financial risk of their own. You know, I talked with a lawyer yesterday about that transaction and he said, "My clients pay me; they don't pay me off." That's a transaction that looks more like a pay-off than a legal fee.

MR. LEHRER: But there's never been any question about that having taken place. The only question now is whether or not it's legal or not, is that right?

MR. FRANTZ: Well, there's also a question in the federal indictment about whether Clifford and Altman told the Federal Reserve Board about that. The Federal Reserve and the indictment allege that they concealed that transaction as well from the Federal Reserve to avoid attracting attention to what was going on at BCCI and First American.

MR. LEHRER: Okay. And that's a separate offense from having actually -- having done it.

MR. FRANTZ: Yes, it is.

MR. LEHRER: I see. All right, Alan Friedman, let's go into some of the -- as Judy said -- Mr. Altman and Mr. Clifford have not made a statement. They have not spoken today in person, but they issued this written statement and they -- they're supposed to have a news conference in the morning, but what about this idea of the intense competition that they allege that existed between the Justice Department and the New York people as well as the Federal Reserve? Is there anything to that, from your perspective? You've been on this story from almost the very beginning.

MR. FRIEDMAN: Yeah. I've covered this story and I don't think I perceive competition as such. I've always perceived the Federal Reserve doing an excellent job. I'd certainly perceive Mr. Morgenthau's office as being miles ahead of anyone else in the world on this case. And I have to be honest and say that one year ago, the Justice Department was accused by Mr. Morgenthau and by others, and I think rightly so, of dragging its feet. The New York District Attorney was way ahead of the indictments, brought a year ago today the first massive fraud indictments. The Attorney General Thornburgh and now Mr. Barr have come under enormous criticism. Mr. Morgenthau was very diplomatic before and he said his memory only goes back nine months. The truth is the Bush administration has come under a lot of criticism for not prosecuting different questions raised about whether this had to do with former CIA connections with BCCI or what, it's not clear. The point is there has not been competition. There have been problems.

MR. LEHRER: Yeah. Mr. Frantz, what about the idea of what Mr. Morgenthau said, that at least in the last nine months there has been superb cooperation? Does your reporting bear that out?

MR. FRANTZ: Oh, sure, it does. It bears out the earlier problems that Alan mentioned and when Bill Barr became attorney general, he responded to the criticisms by moving this up to the front burner. He put Bob Muller, the head of his criminal division, in charge of it, and they finally got after the BCCI case the way they well could have in October of 1988, when the first federal indictments against BCCI were brought down in Tampe.

MR. LEHRER: All right. All right. Let's talk about the evidence here. Both of you, as I say, have followed this case. Alan Friedman, is there a smoking gun here, or if there's not a smoking gun, what is it, based on your knowledge that the government, the federal government, the state government, and the Federal Reserve have in a general way to back up these very serious charges against these people?

MR. FRIEDMAN: Well, I think my understanding is that both the New York District Attorney and the federal government are in possession of a series of statements and filings made by Misters Clifford and Altman on behalf of First American and on behalf of their clients to the bank regulators. That's on the record. We know that Mr. Clifford repeatedly said there was no BCCI involvement, but there are also --

MR. LEHRER: Excuse me. The reason that is important because if he's made a certain statement, then what they have to do is prove that he knew otherwise when he made that statement that that statement was false when he made it, correct?

MR. FRIEDMAN: Exactly.

MR. LEHRER: Okay.

MR. FRIEDMAN: But also we're looking at a strange, what they call a triple role that Clifford and Altman filled. Clifford and Altman were at the same time the people who were brought in by Bert Lance to originally help take over this bank in Washington. They served as lawyers to BCCI. They served as lawyers to First American. They served as chairman and president to First American. They had a whole melange of roles that seemed to conflict at times and it's very hard for the average man on the street to manage them not knowing this. But, furthermore, there are documents which I have seen and which the Senate has released and maybe there in the evidence that Mr. Morgenthau has -- I don't know -- that clearly show Mr. Altman at least being privy to a series of BCCI meetings around the world, Vienna and elsewhere, where they're talking about First American as part of our family. There you have Mr. Altman sitting together with Mr. Abedi and these BCCI people supposedly not knowing anything about their ownership of the American bank and instead, they're planning how to hire a vice president, they're getting into a lot of detail. That may be circumstantial, but it's certainly interesting.

MR. LEHRER: Anything to add or subtract to that?

MR. FRANTZ: I think if there's not a smoking gun, there may now be a smoking sheikh. We have Camelot, the former head of Saudi intelligence, who's now agreed to plead guilty and cooperate. That's very important. Documents are difficult for juries to understand. Documents, even signed papers, can be disputed by defense attorneys, but if you've got Camelot Am sitting there, talking about a decade's worth of meetings with Clark Clifford, Robert Altman, Aga Hasan Abedi, and the rest of the crew, I think you've got a very potentially important and potent witness.

MR. LEHRER: And that doesn't -- doesn't that immediately take it out of this complicated situation that we put the average person in -- my goodness, I'll never understand that -- but they can understand this.

MR. FRANTZ: I think so. I mean, I don't view this story as quite so complicated. I mean, I think this is a story of Clark Clifford acting as a front for a foreign bank that had been refused permission to buy banks in the United States because they were shrouded in rumor and mystery because we didn't know anything about their money because they weren't regulated. They were refused permission. They hired Clark Clifford. He became their front. He said everything's okay, and so they secretly were allowed to come in here and buy three U.S. banks and a big chunk of a savings and loan down in Florida.

MR. LEHRER: But the issue, of course, as you said, Alan Friedman, as Mr. Clifford and Mr. Altman have said in testimony beforethe Senate of the United States and elsewhere, that they were duped, that they did not know what was going on, that these awful people who ran BCCI had them just like they had other people. And that's what this whole case is going to revolve around, is it not?

MR. FRIEDMAN: Yeah. I mean, Mr. Clifford and Mr. Altman have made several appearances in Congress. There's been a great deal of showmanship. They brought Linda, Wonder Woman, Carter in there, a lot of photographers, a lot of television, and they've said Mr. Clifford's basic argument is, he holds his hand up and he says, trust me, my conscience is clear, I've advised every president since Harry Truman, trust me. That may not be good enough in court. I'd like to just quickly come back to that other point about Sheikh Ad Ham. Doug is right, very important. If that Sheikh testifies against Clark Clifford and Robert Altman, as I think he may well, because he is cooperating with the prosecutors, that's very compelling stuff, and this is a very influential Saudi Sheikh, very important development.

MR. LEHRER: And very high up, Mr. Frantz, in this whole operation, in other words, he wasn't a peripheral character, is that correct?

MR. FRANTZ: He was one of the initial investors in BCCI and he was one of the initial and largest investors in First American, in that group who took it over in 1981. Ad Ham has been there from the start and Ad Ham is a very curious character because as we mentioned earlier, he was the former head of Saudi intelligence. He had very strong ties to the U.S. Central Intelligence Agency and as you look beyond the headlines on the scandal, I think we may through his participation learn a little bit more about the CIA's involvement in this bank as well.

MR. LEHRER: But the allegation about the CIA, which the CIA has denied, is, for the record, is that they just may have been one of its customers, not that they were manipulating anything, is that not correct? In other words, they used BCCI maybe to transfer money around?

MR. FRANTZ: That's what they've said. I think they used BCCI for other means also. One of the things they used it for was as a window on certain terrorist operations around the world. They watched Abu Nidal and his organization through the London offices of BCCI. And I think there may still be some more to come out about --

MR. LEHRER: Is that necessarily an evil thing is what I'm --

MR. FRANTZ: No, not necessarily. I'm not -- I don't believe the CIA was manipulating or running BCCI.

MR. LEHRER: Yeah. Yeah. Do you have anything to add to that, Alan Friedman?

MR. FRIEDMAN: Well, I would only point out that the CIA used BCCI for legitimate operations, but we also have found a lot of evidence that BCCI was used in illegal operations like Iran-Contra, and I agree with Doug, a lot more is going to come out in the future on that.

MR. LEHRER: And that's my final question. In a word, Alan Friedman, is everything going to come out? Is the thing now in motion now? Are we going to know what happened and what did not happen on BCCI?

MR. FRIEDMAN: I think it's going to take years and years before anything -- before we get near 3/4 of the story. Mr. Morgenthau said this morning we're at 50 percent of the story. I think we still need to understand relations with the CIA. We still need to understand relations with American politicians. There's a lot more to come. BCCI's story is by no means over.

MR. LEHRER: Do you agree?

MR. FRANTZ: I do agree, but this was one of the most important developments along the way of the indictment of Clifford and Altman.

MR. LEHRER: All right, gentlemen, thank you both very much.

MS. WOODRUFF: Still ahead on the NewsHour, getting fathers to support their children, Europe's new refugee crisis and an Amei Wallach essay. FOCUS - DEADBEAT DADS

MS. WOODRUFF: Child support is next tonight. The Senate Judiciary Committee held hearings on a bill today to prevent so-called "deadbeat dads" from crossing state lines to avoid paying child support. It's a subject that has received growing attention recently. Correspondent Elizabeth Brackett has our report.

MAN ON PHONE: Yeah, Ross King please.

ROSS KING: This is Ross King.

MAN ON PHONE: Hello.

ROSS KING: Hello.

MAN ON PHONE: Yeah. Is this Ross?

ROSS KING: Yeah.

MAN ON PHONE: Yeah, Ross. This is Mr. Burton. I'm calling you from International Tours. How are you doing?

ROSS KING: Fine.

MS. BRACKETT: Ross King was happy to hear he had won a big prize.

MAN ON PHONE: It's 15 days round trip air fare for two and it's $1500 in cash to spend, sir, no gimmicks. Everything's free. [

MAN KNOCKING ON DOOR OF ROSS KING'S APARTMENT]

MS. BRACKETT: But when Ross King answered his door to accept the money, he was in for a big surprise.

MAN: Mr. Ross King.

ROSS KING: Yes.

MAN: How are you doing? Ross King, Jr. Please to meet you, George Payne, Boston Sheriff's Department.

MS. BRACKETT: In Baltimore, the sheriff's department has gotten serious about enforcing warrants for parents who are behind in child support payments. This scam was part of a four-day sweep. It targeted 100 violators and picked up 96. Ross King, who owed $6,000 going back to 1988, was one of them.

MAN: Ross, how come you didn't pay any child support?

ROSS KING: I paid. I paid. I paid.

MAN: You owe money in arrears. Why aren't you taking care of your kids?

MS. BRACKETT: Baltimore also conducts early morning raids that bring in parents who have fallen far behind in their payments. The city's intensified pursuit reflects the growing effort across the country to enforce child support orders.

SPOKESMAN: We just want to make sure that it gets taken care of and there's no hassles between us so that it doesn't reflect on him.

JUDGE: Everything is settled as of today.

MAN: Yes, Your Honor.

MS. BRACKETT: Here in Colorado, collections doubled between 1987 and 1991. And Colorado and Maryland are not unusual. Nationwide collections handled by government agencies were up 75 percent, even though the number of cases handled by those agencies only increased by 26 percent. John Bernhart directs the Child Support Office in Denver.

JOHN BERNHART, Child Support Enforcement Office: We have a marvelous number of tools at the present time. We can attach people's wages. We can intercept lottery winnings. We can accept their unemployment earnings, intercept their tax returns. There are a variety of remedies, but if somebody truly doesn't want to pay support, they can make it awfully difficult to collect that support.

MS. BRACKETT: So the problem remains enormous. 1990 Census figures estimate that only half of the 5 million parents supposed to be receiving child support are actually paid in full and one quarter receive nothing at all. For these custodial parents, the majority of whom are women, the system is not working. Joann Foss is one of them. A year ago, she and her twin sons moved from Minnesota to Colorado, and her ex-husband's payments came to a virtual halt.

JOANN FOSS, Divorced Mother: It was almost a manageable amount when we moved here, but since we've moved here, it has just gotten increasingly more and more and more and less manageable and we're up to approximately $4,000 right now in arrears, most of which has occurred in the last six to seven months.

MS. BRACKETT: Foss works full-time for a marketing company, but she sorely misses the $416 monthly payment.

JOANN FOSS: What my paycheck covers is the rent, the food, the lights, the basics. There is absolutely nothing that we can afford over and above that if it weren't for my family. So it isn't a question of are we paying for the second set of roller blades or a trip to Disneyland. We're talking about basic shoes for school, pants, field trips that school sponsors that you need to send along another $10 or $2 or a picture of such and such and so and so. And those are the things that they miss.

MS. BRACKETT: Frustrated, Foss finally asked Colorado's child support office to contact Minnesota. She wanted her ex-husband's employer to begin withholding support payments from his salary. But the caseworker warned her there would be no fast solutions.

JOANN FOSS: She looked me right in the face and said, do not expect anything in 30 days, because it won't happen; I just guarantee you that. They have 90 days to reply state to state, 90 days. Then if I don't receive anything from the State of Minnesota, we take it to a state level, through Jefferson County, Colorado. They have 30 days. If there is no response from Minnesota, we go back and take it to a federal level, and then it's another 30 days that they have. What happens after that I have no idea. I didn't even dare ask.

MS. BRACKETT: At that point Foss fears that her ex-husband would challenger her claim in court or quit his job. Either move would likely mean a delay in receiving money. Troublesome interstate cases like Foss's are believed to be significantly increasing in number. One reason is that some non-paying parents move across state lines to make it harder for authorities to track them down. Also, some states have more liberal laws than others. In Rhode Island, a parent may be required to provide support until a child's 21st birthday, but in neighboring Connecticut, the maximum age is 18. So to help states deal with the nationwide problem, Congress established the Commission on Interstate Child Support. Margaret Campbell Haynes is its chairwoman.

MARGARET CAMPBELL HAYNES, Interstate Child Support Comm.: About 30 percent of all child support cases in this country are interstate, but the enforcement is out of proportion to that because only $1 of every $10 collected is in an interstate case. In fact, there are about 34 percent of these interstate cases where you don't collect even a dime.

MS. BRACKETT: The Commission spent two years studying the problem and looking for solutions promoting uniformity and cooperation among the states.

SPOKESPERSON: This deplorable ineffectiveness on the parts of the three different states and very lengthy delays in getting the support to my children has had serious repercussions on the children.

MS. BRACKETT: Next week, it will issue a voluminous report, making several recommendations. One of them is to make non-support a criminal offense in certain circumstances.

MARGARET CAMPBELL HAYNES: There are a number of cases that I call hard core cases, cases where the person has the ability to pay child support and just does not pay, particularly your self- employed cases. And we need a criminal non-support statute to give us an extra tool to enforce the case. I think we also have to emphasize the symbolic importance. Criminal laws are statements by society about what we will not tolerate and certainly non-payment of child support should be one of those offenses.

MS. BRACKETT: The Commission also endorses a program being pioneered in Washington State that targets non-payers in jobs such as construction. Companies in high turnover businesses lowered their W-4 wage withholding statements directly to the state's child support enforcement office. A computer matches Social Security information with a list of delinquent payers and immediately alerts the employers to make a deduction from the employee. That system worked with Kent Patterson.

KENT PATTERSON: He took half of all of that, all them days, and there was one I went out on they didn't take any, one they took half, and the next one they took less than half.

MS. BRACKETT: People such as Kent Patterson, a cement mason who moves from job to job, used to be hard to track. That's because they had often moved on to their next job long before the state's computers caught up with them. But if their employers are part of the program -- and most builders are -- their wages can be automatically deducted as soon as the first week on the job. Members of Congress continue to propose new enforcement laws. One proposal would make the Internal Revenue Service the central collection agency for child support. The IRS would manage a national registry of child support orders and oversee all income withholding. The legislation would also require parents who couldn't afford to pay their child support to take public service jobs. The prospect of tougher laws provokes an angry response from non-custodial parents, most of whom are fathers.

BRUCE MAUER, Divorced Father: This new bill that's coming out across the nation that's supposed to make it a felony to cross state lines if you're more than six months behind, it's not going to help out the kids. It may put a few of their fathers in jail, and you have to look at what message that's sending the kids.

MS. WOODRUFF: Bruce Mauer is a divorced father of two. He has become active in the Father's Rights Movement.

BRUCE MAUER: Kids need to have a positive role model for both a mother and a father. They need both a male and female role model. And they both need to be seen in a positive light. And if the father's going to jail and told that he's not paying his child support and whatever else, and he's not allowed to see his children and they're being told it's because he's abandoned them, when it isn't necessarily the case, that's devastating.

MS. BRACKETT: Mauer was divorced from his wife three years ago. Now he visits his son and daughter in a nearby Denver suburb twice a week. He spent a night in jail when one of his support payments was late in the mail. Mauer believes many fathers fall behind because they have so little control over how the money is being spent and so little time with their children.

BRUCE MAUER: So No. 1, equal access to the children, and if you have equal access to the children, then you have equal expenses between the parents as far as child support.

MS. BRACKETT: Many fathers, such as Mauer, feel the system has treated them unfairly, that nationwide the problem is much more likely to be defined as fathers failing to pay and the resulting impact on the children.

MARGARET CAMPBELL HAYNES: You're as likely to be parted by divorce from your partner as you are by death. 50 percent of our cases end in divorce. So we're no longer in child support cases only talking about the welfare cases. We're talking about your next door neighbor, your friend, and your sister, and I think as people realize that the childsupport problems can affect them personally, they're much more likely to see it as a problem that our country needs to give priorities to.

MS. BRACKETT: And the country has become to pay more attention. The release of the Interstate Commission to the Court will undoubtedly be followed by more new federal legislation later this year. FOCUS - CASUALTIES OF WAR

MR. LEHRER: Now a further report on the tragedy of the refugees from Yugoslavia. There are now 2 million of them scattered from their homes and villages by a year of civil war in the republics that used to make up their country. Today the United Nations Commission on Refugees including representatives from Europe and the United States held an emergency meeting in Geneva. Nik Gowing of Independent Television News reports.

MR. GOWING: Two million people on the move, they are the casualties of war, homeless, dispossessed, condemned to a life with no future, no certainty, no jobs, no money, often with none of their men folk, all of them driven to flee their homes by war. They would love to go home, of course; they cannot. The gunmen will not let them. More than 2 million people seeking sanctuary now like these Bosnians in Hungary -- by autumn, it's expected there will be 3 million, Europe's worst humanitarian catastrophe since World War II, spiralling at a rate of 10,000 new refugees a day. All of them are fleeing to escape the war. They will go anywhere that will accept them. They keep traveling until they find a sanctuary. But sanctuaries are hard to find and the international community is desperately and belatedly hunting solutions to cope with the human disaster on an unprecedented scale which will not be solved even when eventually the fighting does end. The United Nations High Commission for Refugees in Geneva is overwhelmed and underfunded to tackle an unfolding disaster predicted officially now to cost an enormous amount of money which is why it's summoned ministers from 31 nations to an emergency conference designed to coordinate action and fetch new money.

SPOKESPERSON: A concerted plan of action to help the poor people in the former Yugoslavia.

MR. GOWING: By their nature, however, there can only be makeshift solutions for a refugee crisis which because of its magnitude now everyone agrees will only be solved by a political solution which ends the fighting, because without agreement to stop the war, the alternative is terrifying.

SADAKO OGATA, UN High Commissioner for Refugees: I'm afraid time is running out. For weeks and months, for too long, people have been attacked and forcibly driven from their homes. It is time and probably the last call for the world to launch a humanitarian counter offensive.

MR. GOWING: Within the former Yugoslavia, latest U.N. estimates show more than 680,000 refugees inside Bosnia. Croatia, which says it can't take anymore, has another 600,000. Serbia has 380,000 homeless Serbs from Bosnia and Croatia. The pressure has spread well beyond the former Yugoslav borders. Austria and Hungary have now taken at least 50,000 people each. And 44,000 have reached Sweden. Germany has taken at least 200,000. Bonn wants other EC countries to match its effort. The German operation at camps like this one near Duseldorf has been generous. Until today German policy has been at odds with much of the rest of Europe over refugees.

JOACHIM FINSTERBUSCH, Refugee Camp Official: Countries like France and Great Britain and the Scandinavian countries should also accept refugees.

MR. GOWING: The U.N. disagrees with the German belief in quotas because it discriminates against future refugees by setting limits. It also disagrees with the principle of transporting refugees such large distances. So it is to solutions like this former police barracks in Belgrade a new camp that the U.N. and countries like Britain are looking, refugees being accommodated with international assistance as close as war allows to the location from which they fled.

BARONESS CHALKER, Overseas Development Minister: It really does make sense to avoid the trauma, to avoid taking people away from the places they know, their families and friends, when you can actually help them there. In fact, you can help a thousand times more people on the ground in the former Yugoslavia than you could by taking them thousands of miles away.

MR. GOWING: But the dangers of such a policy are stark. These recent pictures are rare evidence of a Bosnian refugee camp which was thought to be in a safe area which then became a target for shelling by Serbian heavy guns, continuing proof of Serbian's mass ethnic cleansing policy which using one recent example the U.N. High Commission for Refugees confirmed was still taking place.

SADAKO OGATA: The mayor was asking -- organize a convoy of buses and guards to expel 4,000 Muslim inhabitants of the town on July 16th. The expulsion was done with great bureaucratic and legalistic zeal. The presents -- given documents to show that they had given away their properties as gifts and were leaving voluntarily.

MR. GOWING: The U.N. admits it is powerless to stop such ethnic cleansing, but reports continue to flow in each day of a process the leader of Bosnia's Serbs still denies is taking place.

MR. GOWING: The major problem behind the refugee crisis is what is alleged to be the ethnic cleansing. Are you saying there is no ethnic cleansing?

RADOVAN KARADZIC, Leader, Serbian Community in Bosnia: No ethnic cleansing. We just allow people to leave the battlefield if they want.

MR. GOWING: But people are being driven out. There is clear evidence of that.

RADOVAN KARADZIC: No, no. They are -- we have undersigned people, undersigned by those people who leave from the area that they did it deliberately, and no ethnic cleansing since we are committed to make possibility for the refugees to return.

MR. GOWING: What kind of guarantees can you give certainly for the Bosnians, the Muslims, and the Croatians, who are being pushed out for whatever reason, that they could return home in security?

RADOVAN KARADZIC: We give full directives according to Geneva Convention for civilians, for civilians, that those civilians are not civilians any longer after they take a gun and start to fight against Serbian people. That's the problem. And we don't trust each other.

MR. GOWING: It is that complete absence of trust and the terror it generates which will prolong the misery, create ever increasing numbers of refugees, and thereby continue to set a major challenge for an international community still struggling in its efforts to end the crisis in the former Yugoslavia. ESSAY - STILL LIVING

MS. WOODRUFF: Finally tonight, Amei Wallach, art critic for New York Newsday, has some thoughts about a 20th century giant, Pablo Picasso.

AMEI WALLACH, New York Newsday: Barcelona's favorite son, the artist, Pablo Picasso, once said that he wanted to tell stories with the most humble everyday means at hands, and those stories should be as symbolic and profound, he said, as Christ's use of parables. Picasso's parables in painting and sculpture are called still lifes, but there's nothing in the least bit still about these pictures and playing cards, these guitars, and fish, and newspaper clippings. They spin visual fables for our time. The Cleveland Museum's International Traveling Exhibition of Picasso's still lifes which is currently at the Philadelphia Museum is called "Picasso and Things." Nearly 20 years after his death, as much as 90 years since the first of them was painted, Picasso's eloquent things add up to a panoramic take on one man's tumultuous life, a tale for our traumatic century. This particular man was a pack rat. Picasso surrounded himself with a clutter of things, nothing of particular value, unless it was some painting by an artist he admired. The point was never to collect what already had value, but rather to give value to the ordinary, the throwaway that everyone else had overlooked by transforming it, by making it a character in his story. It took him a while to get the hang of it. His first still life, painted when he was 20 years old, and the century was just beginning in 1901, is just another pretty picture of a pretty good meal. But once Picasso had figured out how to make a red flower alone and out of place in a glass, portray the adolescent pathos of his blue period, his still lifes became allegories of life and love, war, aging, and death. When he was 26, Picasso and his friend, Braque, revolutionized the art of the century by inventing cubism, a radical new language for painting. He told the story of a savage struggle to catapult his art into the future through a jug and a lemon, a scull and paint brushes. The language of cubism fractured, fragmented, and reassembled the real world on canvass. It said that everything, even things we see and touch, is changing all the time. Picasso changed too. He got himself a new love, whom he called Ma Jolie, and he took the unprecedented step of inviting the real world in to tell a story. The parable of real world, real rope, real wallpaper and sheet music and paintings, a real spoon on a sculpture said that there is no difference between art and life. And then he came face to face with death. The world was at war. Eva, Ma Jolie, died in 1915, and his friends were away at the front. Picasso painted himself as a bottle of spirits forced by the bluebird's shadow to dance the dance of death. He resurrected the bird for a chilling insight into the dark shadows of his empty nest, where no fire burned on the hearth. By war's end, the bird had become a pigeon for the plucking, but life goes on. When Picasso's first son, Pablo, was born to his first wife, Olga, in 1921, he expressed for all parents the pride and terror at this fragile new life with a sacrificial cock on a table under which a scared dog waits. By 1925, his marriage was a shambles. A dear old friend had died and Picasso painted an allegory of fury and frustration. Then he nailed torn cloth to canvass, impaled it with a knitting needle and called it a "Guitar." But after he fell in love again, with a teenager, even his guitars succumbed to the joy of sex. Then the red bull of brutality brought civil war to his native Spain and World War II to everyone and Picasso's anti-war stories were told with skulls and flayed flesh. After that, Picasso never lost his fascination with skulls. By then in his 60s, his 70s, his 80s, he was struggling with aging and the fear of dying. Three years before he finally did give into death at the age of 91, he painted one of his final still lifes. It was of birthday flowers, and it raged against going gently. Hang on, it said to his century, there's still too much to do. I'm Amei Wallach. RECAP

MS. WOODRUFF: Again, the main stories of this Wednesday, former Defense Sec. Clark Clifford and his law partner, Robert Altman, were indicted in connection with their alleged role in the Bank of Credit & Commerce scandal. The two men categorically denied all charges. United Nations inspectors left Baghdad after failing to find weapons program evidence in Iraq's agriculture ministry. They said there were signs material had been removed from the building. Good night, Jim.

MR. LEHRER: Good night, Judy. We'll see you tomorrow night, but before we go, updates of two stories the NewsHour has covered recently. The Food & Drug Administration today said RU-486, the French abortion pill, that is not licensed in this country, will be made available to an American man with brain cancer. David Grow told a Washington hearing yesterday the drug may help prolong his life. The FDA said the manufacturer had decided to release the drug to Grow's doctor for medical research purposes. On another story, rap musician Ice-T has decided to drop the song "Cop Killer" from his latest album. During a debate about that recording last week, we mistakenly identified actor Charlton Heston as a board member of Time Warner. He is not. He is a shareholder, not a board member. I'm JIm Lehrer. Thank you and good night.