The MacNeil/Lehrer NewsHour

Intro ROBERT MacNEIL: Good evening. Leading the news this Friday evening President Reagan led national mourning for the 37 dead from the U. S. S. Stark and defended their mission in the Persian Gulf. A former Israeli official asked a U. S. judge to excuse him from testifying to the Iran/Contra grand jury. Higher consumer prices showed inflation running at six percent so far this year. We'll have details in our news summary in a moment. Judy Woodruff is in Washington tonight. Judy? JUDY WOODRUFF: After the news summary, we devote most of the NewsHour to the military and political implications of the Iraqi attack on a U. S. ship. First, the administration's point man on the issue, Richard Murphy, Assistant Secretary of State for the Middle East. Then two Senators with opposing views, Democrat Sam Nunn and Republican Malcolm Wallop. Next, we ask two naval analysts if the navy is up to the job. Finally, a look at the Boston Celtics' decision to play Wall Street.News Summary MacNEIL: Often close to tears, President Reagan led the nation in mourning the 37 crew members of the U. S. S. Stark. In a hangar at Mayport, Florida, the frigate's home port, Mr. Reagan shared the grief of the families at the sudden loss of their loved ones in the Iraqi missile attack last Sunday. But he insisted that the U. S. naval presence in the Persian Gulf was essential to free world security. The President eulogized the dead as ''ordinary men who did extraordinary things,'' as they stood guard for freedom. PRESIDENT REAGAN: The men of the U. S. S. Stark stood guard in the night. One of our ambassadors paid them this tribute: ''They were tough. They were brave. They were great. '' They were great. And those that died did embody the best of us. Yes, they were ordinary men who did extraordinary things. Yes, they were heroes. MacNEIL: To the somber music of the navy band, the President and Mrs. Reagan then moved among the families to comfort them with an embrace and a word of condolence. [Navy Band] WOODRUFF: This afternoon, the State Department confirmed that Iraq has agreed to pay compensation for the loss of life and injury on the U. S. S. Stark, as well as damage to the ship. Overnight, there was another attack in the Persian Gulf. This time, an Iranian gun boat fired twelve rocket propelled grenades into a small freighter from the Persian Gulf state of Katar wounding three crewmen. Also, the White House took the unusual step today of disavowing a State Department official's statement on the U. S. posture towards Iran. Presidential spokesman Marlin Fitzwater told reporters that Assistant Secretary of State Richard Murphy was not authorized to say that any Iranian attack on U. S. naval forces protecting Kuwaiti oil tankers could bring on a direct conflict with the United States. Murphy said yesterday he did not expect such an attack, but there is a risk it could happen. And if it did, the U. S. would respond. MacNEIL: A former senior Israeli official asked a Washington court today to excuse him from testifying before the grand jury investigating the Iran/Contra scandal. Independent Counsel Lawrence Walsh issued a subpoena to David Kimche, former Director General of the Israeli Foreign Ministry, who played a role in shipping arms to Iran. Kimche, accompanied by the Israeli ambassador, went to court to get the subpoena quashed and said afterwards that he was free to leave the country. DAVID KIMCHE: As you can see, I'm leaving. I'm not appearing today before the grand jury. I can leave the United States when I want to, come back in when I want to, and I think that, as far as I'm concerned, is very satisfactory. MacNEIL: The Israeli government has ordered Kimche not to testify, and Prime Minister Yitzhak Shamir reiterated today that the subpoena was a clear violation of an agreement with the U. S. He told reporters that Israel had agreed to cooperate in the U. S. investigation on a government to government level that did not involve questioning individual Israeli officials. WOODRUFF: There was a grab bag of economic news released by the government today, much of it pessimistic. The inflation picture continued to worsen, with a Labor Department report that consumer prices rose 4/10 of a percent in April, bringing inflation to an annual rate of six percent so far this year. The Commerce Department put out the rest of the statistics, that the gross national product grew at a 4. 4 percent annual rate from January to March, the fastest rate in nearly three years; that the orders for so called ''big ticket'' durable goods inched up only 1/10 of a percent in March, the poorest showing in three months; and that after tax corporate profits fell five and a half percent in the first quarter, the biggest decline in a year. MacNEIL: The long trial of former Labor Secretary Ray Donovan on larceny and business fraud charges may end in a mistrial. A woman member of the sequestered jury came into court today endlessly chanting ''The Lord is my shepherd,'' and demanding to go home. Justice John Collins, who has presided over the trial for more than eight months, said he was considering declaring a mistrial. Donovan and seven co defendants are charged with stealing 7. 4 million dollars in a Manhattan subway construction contract. The charges related to Donovan's position as co owner of a New Jersey construction company, and not to his position in the Reagan administration, from which he resigned two years ago. WOODRUFF: In London, a volume containing handwritten scores of nine symphonies by Wolfgang Amadeus Mozart was auctioned today for a record price of $4. 34 million. The bidding began at 840,000 dollars, and it was all over in three minutes. The manuscripts were put on sale by an anonymous European collector, and were bought by London art dealer James Kirkman. He declined to say if the purchase was for himself or if he was acting as an intermediary. The previous record price for an auctioned music manuscript was just over half a million dollars for Igor Stravinsky's ''Rite of Spring. '' That wraps up our summary of the day's news. Just ahead on the NewsHour, the implications of the Iraqi attack on a U. S. ship: Assistant Secretary of State Richard Murphy, Senators Sam Nunn and Malcolm Wallop, and two naval analysts join us. And we close with a look at investors who hope to score with the Celtics. Crossing the Rubicon? MacNEIL: We devote much of the NewsHour tonight to the political and military issues that have come to the fore since last Sunday's Iraqi attack on the U. S. S. Stark in the Persian Gulf. We begin with the question President Reagan raised in his tribute to the 37 sailors killed on the Stark -- why they were there. Pres. RONALD REAGAN: Even in moments like these, we must address directly the reasons the U. S. S. Stark and her men were there in the Persian Gulf. You're entitled to know the importance of the role that their valor played in keeping our world safe for peace and freedom. There's a reason why since 1949 American ships have patrolled the Gulf. Every American President since World War II has understood the strategic importance of this region. It is a region that is a crossroad for three continents, and the starting place for the oil that is the lifeblood for much of the economy -- especially those of our allies in Europe. Even more important, this is a region critical for avoiding larger conflict in the tinderbox that is the Middle East. And our role there is essential to building the conditions for peace in that troubled, dangerous part of the world. And it is this objective that has guided us, as we have sought to end the brutal war between Iran and Iraq. A war that has gone on for over 6 l/2 terrible years and taken such an awful toll of human life. Peace is at stake here. And so, too, is our own nation's security and our freedom. For a hostile power ever to dominate this strategic region and its resources, it would become a choke point for freedom -- that of our allies and our own. And that's why we maintain a naval presence there. Our aim is to prevent, not to provoke, wider conflict, to save the many lives that further conflict would cost us. The fallen sailors of the U. S. S. Stark understood their obligations. They knew the importance of their job. MacNEIL: For more on the administration policy in the Gulf, we turn to the State Department's Middle East point man, Assistant Secretary of State Richard Murphy. Secretary, thank you for joining us. RICHARD MURPHY, Assistant Secretary of State: It's a pleasure. MacNEIL: Yesterday, the Senate passed a resolution by 9l to 5, refusing to approve the administration's plan to provide protection for Kuwaiti tankers in the Gulf until -- under American flags -- until the administration tells the Congress how the U. S. ships would be protected and what the rules of engagement would be. Will the administration give the Congress that information? Sec. MURPHY: I think the administration has effectively already answered that by the process of consultations that we've had under way for the last several weeks. We will continue those consultations. We will respect the will of Congress to have them. In fact, the President has directed us to be fully forthcoming, and we will do that. MacNEIL: Can you describe to us what the rules of engagement will be? Sec. MURPHY: I cannot describe the rules of engagement. Let me just say this -- that we have a whole range of options that we can undertake, whether individually or collectively. These are under study right now, and I will have to leave it at that. MacNEIL: How do you respond to criticism that the administration up until now has not clearly thought through the risks involved in this -- that in the words of one columnist, this is an uncalculated risk? Sec. MURPHY: I don't agree with that. We recognize that there are risks in that war. As a superpower, we do face a number of responsibilities. The President has addressed those in his speech in Florida today. But we have thought through the risks, and we will not be deterred from fulfilling our responsibilities as superpower in the Gulf. MacNEIL: The danger that some commentators on this point to, is that you put U. S. flags on those Kuwaiti ships, and you protect them by the U. S. Navy. And that that puts -- in the eyes of the Iranians -- the U. S. firmly on the side of Iraq, her enemy, because Kuwait is an ally of Iraq, and therefore might invite attack by Iran on the U. S. Navy protecting ships -- or on the Kuwaiti ships bearing U. S. flags. What happens if Iran attacks those ships? Sec. MURPHY: As a technical point, these ships will be American flags. They will be owned by an American corporation, they will meet the standards set by the U. S. Coast Guard for their registration for their flagging. Now, we are not taking sides in this war. Our policy has been, is, and will continue to be neutrality. Our goal is to bring this war to the most rapid end possible, and to obtain that goal we are working both diplomatically at the United Nations -- where we're taking the lead for a resolution which will call for a cease fire, and we expect to call for additional measures if that cease fire is not respected. So it is going to be a mix of actions that we have taken. We will continue to pursue a leadership role at the United Nations, pursuing our Operation Staunch, which is designed to keep weapons from reaching Iran as the recalcitrant party in this conflict, and we have undertaken at the request of Kuwait to accept 11 of the tankers owned by the Kuwait Petroleum under the American flag. They will be afforded the protection of American flag carriers. MacNEIL: Well, to clear up this apparent disagreement between you and the White House, what does happen if Iran attacks one of those ships carrying a U. S. flag, or one of the U. S. Navy ships protecting them? Sec. MURPHY: Our policy is deterrence. There is no conflict between me and the White House. There is no split within the administration on this. Our policy is pure and simple deterrence in the Gulf. I would note that for the last several years of the war the Iranians have given a wide berth to the American flagships, to the American Naval ships, and I would expect that to continue. What we are engaged in is escorting our flag carriers, on innocent passage in international waters. And there are no belligerent cargoes, no war materials to be involved. MacNEIL: Well, the last thing the United States expected was to have one of its ships attacked by Iraq. Can you rule out the -- what you don't expect in this case -- if Iran, which has waged its war very unconventionally so far with Iraq, chose to attack one of these ships, what would the United States do? Sec. MURPHY: The attack by the Iraqi plane on Sunday night was by all evidence an accident. We have an investigating team leaving Washington tomorrow for a review of what happened, what brought about that accident, with the Iraqi authorities. And we will take every measure possible to avoid any such accidents in the future. One cannot be fully certain about Iranian intentions. But as I said, the history of Iranian activities to date has been not to confront the United States, not to threaten our flag. MacNEIL: Well, thank you. We'll move on. Judy? WOODRUFF: As Robin said, on Capitol Hill there is growing unease with the U. S. commitment in the Persian Gulf. Unease reflected in yesterday's 91 to 5 Senate vote demanding the administration inform Congress before the U. S. Navy begins escorting Kuwaiti tankers through the Strait of Hormuz. Two men in the middle of the political and military debate are Senator Sam Nunn, Democrat of Georgia and Chairman of the Senate Arms Services Committee, and Malcolm Wallop, Republican of Wyoming, and one of the five in opposition on yesterday's vote. Senator Nunn, since you were for what happened yesterday -- let me begin by asking you -- what does this mean -- in laymen's terms, what did the Senate vote? Sen. SAM NUNN, (D) Georgia: In laymen's terms, it means if you want us to be in on the landing, you'd better bring us in on the takeoff. That's what it means. Because we could very well get into hostilities, we know that. It's a dangerous part of the world. We are undertaking a fundamentally different mission now with the flagging of Kuwaiti vessels and the protection of those vessels. And the Congress is saying we do not want to expose our fighting men to a war in the Middle East without the American people being informed and without the Congress knowing what you're doing and making sure we'll all together on this. WOODRUFF: Why was that necessary? Why can't you trust the administration to do what it believes is appropriate? ?: Well, someone may have been consulted on Capitol Hill. I don't foreclose that possibility. As Chairman of the Arm Services Committee, I have not been consulted. What we have been -- what we have gotten is information -- the administration has announced their intention publicly to the world before they have consulted or asked the Congress to even give an opinion on this new mission. It may be that I end up agreeing with it. It may be that it's sensible. But all we're saying is we want to know about it. And when you get Senator Dole, and when you get Senator Byrd sponsoring the resolution and 91 Senators voting for it, I'd say that's a pretty overwhelming sentiment. WOODRUFF: You were pretty outnumbered, Senator Wallop. Why didn't you go along with it? Sen. MALCOLM WALLOP, (R) Wyoming: As is often the case, I was asking the wrong question. The first question that should have been asked, what were the rules of engagement that existed for the ship before. What may be a different set of rules, and how does that come into play. The second thing is that the more the Senate fusses with this thing, the more the on scene commander becomes strangled by two sets of policy, and he suddenly becomes the one who is likely to be court martialed if he engages and causes an international incident, becomes a sort of surrogate Secretary of State with very short judgment. And the second thing is that if he does not engage, he risks being criticized for having lost more people, as on the Stark. One last thing -- what the Senate should have been asking is ''Where in the hell are the allies?'' Ten percent of our oil -- fifteen percent, some small figure -- comes from there. It is a free world problem that belongs to France, it belongs to England, it belongs to Germany, it belongs to Japan. Now, I think that's the more appropriate question for us to be asking. WOODRUFF: Now, let me take those points one at a time. Senator Nunn, what about basically his first point -- that by imposing whatever restrictions Congress is talking about, you may be in a way tying the hands of the military men on the scene, and perhaps making them more vulnerable? Sen. NUNN: Well, let me say that I agree with everything Malcolm says, but I don't think any of it relates to that resolution. The resolution said we want to be informed before you undertake a new mission. What my good friend from Wyoming is talking about is the accident that occurred in the Persian Gulf. And I would agree completely -- we have every right to be in the Persian Gulf. I would agree that we should be there for our national security. I would also agree that we need to have clear rules of engagement, and I'm not sure we have absolutely clear rules of engagement. That has to be revisited. And I also totally agree that our allies ought to be helping defend that part of the world, where they're far more dependent on the flow of oil than we are. But I do think in case they are not militarily inclined or capable, they ought to help foot the bill. So we don't have disagreement, but I read a different resolution. The resolution didn't tie anyone's hands. It simply said to the administration we want to be informed before you undertake what is a new dimension and that is the escort of these Kuwaiti vessels, which very well could be taken by the Iranian side as Americans injecting ourselves on the side of the Iraqis. WOODRUFF: Senator Wallop, could you be making more out of this than there was? Sen. WALLOP: I don't think so. Again, I will just say where the resolution went -- perhaps an alright thing to do -- but the one thing that I worry about is that it will put us into the posture of wallowing with no clear policy, no (unintelligible). The senate worry should be our ultimate purpose, clear to everyone to whom it should not be clear -- and that is to those to whom we might engage. I don't think there's a place for public debate. WOODRUFF: Senator Nunn? Sen. NUNN: Well, I'm afraid if we get into a conflict, we'll have about the same number of senators supporting the policy as voted against that resolution. If we don't have consultation we'll have about 5 supporting the administration and most people will be opposed. If you're going to commit American forces to the dangerous part of the world with a different mission that increases the danger, there has to be consultation. The American people have to understand why we're there. Now, I thought President Reagan did a splendid job today in his speech on a very sad occasion of explaining why we're in the Persian Gulf and why it is important to our national security. He didn't touch on the question of why we should now escort Kuwaiti vessels. And that's the dimension that the Senate is worried about. No one is questioning -- at least not many people are questioning -- the presence of American ships in the Persian Gulf, which is an historical position, and it is in keeping with the Carter Doctrine as well as the Reagan Doctrine. WOODRUFF: What about Senator Wallop's other point about the allies and where are they in this? Sen. NUNN: I agree completely. I think when the Japanese are getting 80% of their oil through the Persian Gulf, the Europeans getting 50%, America's getting 5%, then we have every right to ask where are the allies. And the original intent when we took on the new Carter Doctrine, that we were going to do more in the Persian Gulf, the allies were going to do a whole lot more in Europe. I have yet to see that. WOODRUFF: Senator Wallop, what about a point that some are now raising. The question about how prepared are the American people to back up our forces when they are put in a delicate, in a dangerous situation over there. Sen. WALLOP: There again, that's one of the reasons why I worry about us wallowing in debates that's sort of outside the point. I don't know whether we're going to have a new mission or an old mission. I don't know as either of us knows what the old mission was. And certainly the (unintelligible) commander didn't. If he's going around with his defenses down and not in active condition so he was unable to defend his ship. It seems to me that what we should have been asking are other questions. I don't quarrel with the idea that if we're going to have a new mission, we might want to know what that is. But I hate to see the Senate and the Congress all give in to a whole wrangle that takes us the rest of the summer to decide and in the meantime that war goes on and our policy's unclear to all sides. And the Soviets, who are a real presence there, and escorting ships right now, will become the dominant factor in the Gulf. WOODRUFF: What about that, Senator? Sen. NUNN: Well, strangely enough, there are places in the world where the United States and the Soviet Union occasionally have a mutual interest, and this may be one of them. I think we need to at least take that into possibility of account. I don't want to see a huge Soviet military presence there. I don't want to see new Soviet bases there. But the Soviets are probably if anything more worried about radical fundamentalism than we are in this country. They're probably more worried about Iran than we are. And so I don't think we ought to inject a Soviet U. S. dispute everywhere in the world. We've got enough problems without doing that. WOODRUFF: How much of your concern, Senator, has to do with this question of whether we may now be tilting toward Iraq rather than toward Iran? Sen. NUNN: It may be time to tilt towards Iraq. I'm saying that if we're going to make that tilt, we have to know there's danger. If we're going to inject American forces as protecting Kuwaiti ships, and Kuwait is aligned, of course, with Iraq, then we need to be sure we have enough military force there. Clearly we do not now. We need to make sure we have enough of the right kinds of ships there. Clearly we do not now. We need to make sure the American people understand why, so that if we get attacked and we have to respond that we will then have the support of the American people. We need to have clear rules of engagement. I'm not sure that we do now. We need certainly to give our captains of the ships out there more of an idea of exactly who our enemies are and how they are to respond even to accidental attacks. So all of those things have to be done. Perhaps I'm coming from a background now, having sat through three weeks of hearings on Iran of becoming convinced that there is a certain impulsiveness in this administration about foreign policy, and ad hoc kind of reaction. And I'm not sure they thought through it. We may have enough information in the next few weeks to understand that they have thought through it, that they contemplate all these things. But right now we simply don't know that. WOODRUFF: Okay, Senator Nunn, Senator Wallop, stay with us. Sen. WALLOP: Could I just say one thing. I really just want to say that those were the questions that I think the resolution should have asked. WOODRUFF: Good. We'll come back to you both. Secretary Murphy, you're still with us. You heard what Senator Nunn just said about there being a certain impulsiveness in administration foreign policy. Does he have a point? Sec. MURPHY: Well, with all respect to Senator Nunn, I don't agree when we're talking about our policy in the Persian Gulf and in the Gulf War. Our policy is clear. We have had consultations for the last -- over the last several weeks. We will continue those with the Senate, with the House. But let me just say that our policy is -- early into that war -- the instruments we're using are diplomatic at the United Nations, and with our friends and allies together and Operation Staunch underway -- which is to cut arms to Iran. This is not an East West dispute, I completely agree with that. And yet as I look out and based on the talks we have had with the Soviets I see no Operation Staunch run by Moscow with its friends and allies, and that we'd very much welcome. WOODRUFF: But what about the other -- Secretary Murphy, what about the other points that Senator Nunn made? The first one being that the administration has not done a good enough job of explaining why this escort service for the Kuwaitis is necessary. Sec. MURPHY: I look forward to discussing that with Senator Nunn and with all of his colleagues, as will others in the administration in the coming weeks. What's at stake here, among other interests, is not allowing any state to use the oil weapon as the Iranians are trying to use it against the state of Kuwait. They're trying to cut the economic lifeline of Kuwait by targeting in particular over the last 8 months Kuwaiti shipping. Some of those ships are now going to be under our flag. What we are supporting is the principle globally of freedom of navigation and we will not seek any provoca -- to make any provocation. Our policy is deterrence. WOODRUFF: What about his other point -- that it's not clear what to us the rules of engagement are? Sec. MURPHY: The rules of engagement I cannot discuss in public. But we will take the opportunity to fully review those with the Congress. WOODRUFF: Senator Nunn also made the point that he's not sure at all that the United States has the forces, the ships, the troops to back up the policy that the administration is pursuing. Sec. MURPHY: This is a subject that we will be discussing within the administration -- is under active review right now, studies being made at the Pentagon of all possible contingencies. WOODRUFF: In other words, you can't be more specific about it? Or the administration hasn't made up its mind, or what? Sec. MURPHY: I can't be more specific about it. WOODRUFF: All right. And finally, Secretary Murphy, why is it that the White House accuses you of acting without authori -- speaking without authorization yesterday? Sec. MURPHY: I think in the context that I was speaking, there was some misinterpretation by, frankly, some in the media, and perhaps it was misunderstood. My intent was to stress that we are following a non provocative policy. We will defend, as the President has said, we will defend our interests, we will defend our ships. WOODRUFF: Secretary Murphy, we thank you for being with us. Robin? In Harm's Way MacNEIL: Now we turn more specifically to the military question raised by the attack on the U. S. S. Stark. The attack called attention to the U. S. Navy build up in the Persian Gulf. It's a dangerous place for ships of all kinds, given the 7 year long war between Iraq and Iran. In the past three years, some 300 civilian merchant ships have been attacked by one or other combatant. This year, Iran has attacked 2l ships. Iraq has hit 18. At the same time, the U. S. Navy Task Force in the Gulf, the symbol of U. S. determination to keep the Gulf open to all shipping, has grown from four to seven ships. The Task Force includes a command ship, three guided missile destroyers, and three frigates, one of them the Stark. Commissioned in 1982, the Stark was loaded with high tech weaponry and defensive systems. These include missiles, the Phalanx anti aircraft gun, and cannon. But weapons alone were not enough to defend against a sudden attack that no one had reason to suspect would occur. REPORTER: Could you at least clarify the question of whether the ship's crew knew there was a missile coming. You said they may not have had (unintelligible), but in their other radars, did they see something coming, and did someone yell out, ''We're about to get hit. '' Was there a warning at all? Rear Adm. HAROLD J. BERNSEN, Mideast Task Force: There was a warning, and it was just about like that. But I'm not sure. REPORTER: Like what? Adm. BERNSEN: Like someone said, ''We're about to get hit. '' MacNEIL: Now, the fleet and the mission may be expanded. An aircraft carrier is moving to the Arabian Sea not far from the mouth of the Gulf. And potentially able to provide air cover for the U. S. warships in the Gulf. And as we've heard, the U. S. has proposed to escort Kuwaiti oil tankers which would be flying the American flag through the Strait of Hormuz. For more on the Navy's role in the Gulf, we turn to two Naval analysts, who have also done duty aboard warships. Retired Rear Admiral Gene LaRoque served 32 years in the Navy. He's now Director of the Center for Defense Information, a defense policy organization often critical of administration policies. Harlan Ullman is Director of the Maritime Policies Studies Program at the Center for Strategic and International Studies in Washington. He also has served in policy jobs in the Defense Department. Admiral LaRoque, you just heard Senator Nunn say clearly there are not enough of the right ships in that area now to do the task. What do you say? Rear Adm. GENE LAROQUE (Ret), Center for Defense Information: Well, I so frequently -- The Senator is -- he's correct on that issue, too. We have ships that ought to be operating in a task group rather than individually. These individual ships that are in the Gulf right now are designed to be part of a battle group, escorting a carrier, or with a battleship. They were never designed to go off and operate individually. So I think our policy is flawed in that area.If we're going to maintain naval ships in that area, we'd better have about 30 of them in the area. But I think we'd be much better advised militarily to keep our ships outside the Gulf, working with the aircraft carrier and selecting the targets we want to hit. We cannot -- no matter what we put in that Persian Gulf -- prevent an attack by an Iraqi or an Iranian against a merchant ship. There are simply too many merchant ships. If we stay in there, we hazard our ships, we take on a burden without a benefit to us directly. I think they ought to look at our old naval policy in that area. MacNEIL: Before we get to the wider policy, on the ability of these ships to defend themselves, the implication has been left, I think, with the public this week that if the Stark had had more warning or if her high tech defensive systems had been switched to automatic, she would have been okay. What is your view of that? Adm. LAROQUE: That would be true only if the Stark had been permitted to fire at the aircraft carrying the missile. There is simply no adequate defense against a missile once it has been launched and is headed for the ship. We have this little simple 20 millimeter Gatling gun which has a range of only about a mile and a half. We have about 10 seconds to shoot it -- to destroy a missile. If, however, we're permitted and know who the enemy is, we can shoot down a plane before it launches its missile. We have missiles for that. MacNEIL: Well, but -- so in other words, if the commanders of the ships in the Gulf equipped like the Stark were given permission to shoot down hostile aircraft, then everything would be all right. So in other words, they can defend themselves. Adm. LAROQUE: They can defend themselves, but they cannot unless you tell them that they may shoot at anybody in the area that is not a friend. Now that may get to be a bit of a problem identifying friend from foe. In a war in the open ocean, it's very simple for us to differentiate between friend and foe with our electronic equipment. We could not, however, in the middle of the night, differentiate between an Iraqi or Iranian plane. And so our ships would be still hazarded by an attack from an (unintelligible) missile. MacNEIL: Let's ask Mr. Ullman how he sees it. First of all, on the Admiral's point that these ships weren't designed to operate alone, and they really need to be a part of a big, big task force, say 30 ships, to carry out the mission they've been given. HARLAN ULLMAN, Center for Strategic and International Studies: I think we're confusing the political conditions that the ships are operating in in the Gulf and military capabilities. The ships are not on a wartime footing. It seems to me there is a slight risk in continuing to operate the ships in the Gulf, but we're faced with two unattractive political options. The first is to keep the ships there, knowing that they may be having some risk. And the second is to withdraw them. My analysis concludes is if we withdraw them, it seems to me the risks are going to be greater, and therefore we are faced with the prospect of keeping them there. Now, I also believe that the chances of our ships being engaged by accident are fairly remote. And I think that if we do escort the Kuwaiti ships that have U. S. flags, there are ways to protect those ships using U. S. Air power from the aircraft carriers, with a fairly high degree of confidence. But there is still some degree of risk in that. MacNEIL: Even if the aircraft carrier is situated outside the Persian Gulf? In the Arabian Sea? Mr. ULLMAN: The way that you would do it would be to fly your combat air patrol over the Gulf with AWACS aircraft -- that's Early Warning Aircraft -- D2Cs, Hawkeyes, from the aircraft carriers -- be able to take those airplanes -- and those airplanes would be able to intercept any potential enemy and engage them before those enemy aircraft got into firing range. The same thing would be true of enemy surface ships. But the problem in all this is the so called unconventional threat. If, for example, somebody was to use an unconventional means of attack -- putting a bomb aboard one of the tankers, something that is not seen to be a conventional form of warfare -- that's going to be very, very difficult to take on. The problem that we face in all of these things is that conventional military forces are made to engage conventional adversaries. And when you get into an unconventional situation, there really aren't any rules. MacNEIL: Are you reassured, Admiral LaRoque, by Dr. Ullman's description of how the ships could be protected by air patrols flying from carriers in the Arabian Sea? Adm. LAROQUE: No, I'm definitely not. As long as we keep those ships sitting in that 350 mile waterway, they're going to be vulnerable to attack, either from a missile boat or a missile ship, or from an air attack. There are over 100 tankers in that area that transit the area every day. We simply cannot defend those ships. And in my view, the ships are not the problem. Of the ships you mention in the lead in, only about 40 of those that were attacked were either damaged severely or sunk. So you simply can outbuild the situation there by building more tankers. Or bringing in the tankers that are lying empty around the world. We ought not to be turning this hazardous situation into a wartime situation for us. We have no right in my view, for example, to increase the burden by putting our flag -- this sell the flag program that the Reagan administration has come up with -- it cheapens the flag, it provides a profit for the Kuwaiti companies, it provides oil to our major competitors in the world, and it is a burden that we take on without a benefit. It may be that we'll fall flat on our face and have a lot more to lose than to gain. MacNEIL: Dr. Ullman? A burden without benefit. Dr. ULLMAN: Well, first of all, I don't understand why the administration chose to reflag the Kuwaiti ships. So I would not like to say I'm in favor of that. I would like to get all the information, I'd like to know what the quid pro quo is. Secondly, it seems to me that the amount of time that those ships are going to be sailing into Harm's Way, transiting through the Gulf, given that they've got distant ports to call, is going to be relatively small. It seems to me that through sailing instructions and other ways to have exclusion zones, the physical protection of those ships with the threat that exists in the Gulf, with the deterrent statement we make, is fairly good. Now, it's not without risk. I want to -- MacNEIL: Let me ask you this. Is it good -- I mean, you just heard Secretary Murphy say he couldn't discuss the rules of engagement in public. If you want not only your own public to support it, but you want the enemy to be very clear what you'll do if they do certain things, is it not good practice to disclose and say exactly what those rules are? Dr. ULLMAN: It seems to me if an Iraqi or an Irani aircraft some 50 miles away from an escorted ship all of sudden discovered it had two F 14s on its trail, I think that would be a real discouragement. So I'm not sure that you have to have the rules of engagement that are explicit. I think that we have the capability against the relatively modest threats, and I don't think it' in the best interests of Iran or Iraq to try to go out of their way to attack these escorted ships. MacNEIL: Okay. Thank you. Judy? Adm. LAROQUE: Let me just say one thing on that. On his resolve that we're supposed to show in the area and the rules of engagement -- the military's a heavyhanded, blunt instrument. We're not diplomatics, nor quasi diplomats. And you're sending the Navy in there in a diplomatic role, you don't tell them who the enemy is, and then you want to say to them, ''Well, we'll give you some rules of engagement, fellows. If this happens, and this happens, you then can go ahead and shoot your guns. '' That's not our business. Our business in the Navy is to kill people and destroy things. And we're professionals at it. Don't put us in a quasi diplomatic role. WOODRUFF: Let's turn now to Senator Wallop. How do you respond to that sort of plea from the admiral? Sec. WALLOP: Well, unfortunately, very negatively. The admiral is one of that breed of naval officer, military officer, that we have in this country now who wants us to spend large amounts on the military, but doesn't want it to become threatened. And if threat causes us to yield territory, then we don't need a military. If a small amount of threat as described by Dr. Ullman, causes us to abandon the Persian Gulf to whatever threats may be there, then I think there's no reason to spend any money at all on the military. We just yield because the world is a threatening place. WOODRUFF: But he described these ships as very vulnerable -- they're almost sitting ducks sitting there in the -- Sec. WALLOP: In my opinion they're less vulnerable than the admiral describes. Adm. LAROQUE: I would have to dispute that. They've got one little 20 millimeter Gatling gun that shoots about a mile and a half away from the ship. That's the only thing we have to shoot down any of these Exocet missiles with. We can send up some chafe, which are strips of aluminum, which we hope will confuse an incoming missile. But we have a little three inch gun that is not designed to shoot at missiles. It wouldn't do any good anyway. So the ship is totally unarmed to deal with this Exocet missile. I don't know how long it's going to take to convince the members of Congress and our Navy that this is a fact. WOODRUFF: Senator Nunn, go ahead. Dr. ULLMAN: I think this is beside the point, because this is not a war zone, we're not refighting the battle of Jutland or Okinawa again. This is a peaceful exercise of military force in which the chances of military forces being engaged is very, very, very low. WOODRUFF: Does that satisfy you, Senator Nunn? Sen. NUNN: Judy, we put marines in Lebanon essentially on the low ground with extreme vulnerability as a diplomatic presence. And if we feel compelled, to hell with diplomatic presence in terms of the Kuwaiti escort mission. And it seems to me we ought to make sure we do not put inadequate force in Harm's Way. We're going to have to make a lot of decisions. We're going to have to have more ships in there. We're going to have to have an Aegis Cruiser -- at least one -- we're going to have to have a battleship, we're going to have to have at least access to landbased air. So it seems to me that we have a real set of decisions to make here. And I don't think people have thought through them. I'm not against being in the Persian Gulf. I think we have every right to be there, and we must maintain our presence there. But when you take on this new mission, and it is a new mission, and it is not against an outside force -- and that was the original Carter Doctrine and Reagan Doctrine -- it is against a land power adjacent to the Persian Gulf -- in fact, dominating the whole Persian Gulf in terms of geography. So it is a new mission, and when you do that, I do not want to put American fighting men in a very vulnerable position, and believe just because they've got an American flag they're all going to be safe. That's not fair to the people we put in the military. WOODRUFF: Senator Wallop, how do you deal with that? Sec. WALLOP: In the meantime, what happens? While Congress fiddles around and waits for a policy that it can settle itself on, the military becomes more -- not less -- vulnerable. The strange thing that happens is that while we sit around, new orders are needed. And if they're needed, they should be issued. If that means new deployments, that means new deployments. We cannot wait. There are still ships in the Gulf, and if our purpose is to withdraw, then get them the hell out of there altogether. But I don't think that's an appropriate role for America and world powers to follow. WOODRUFF: Senator Nunn, Senator Wallop is saying there's an immediacy here that needs to be responded to. Sen. NUNN: Well, I think there's an immediacy in the sense of protecting our ships that are already there. But I do not think there's any immediacy about implementing a new policy which has just been announced and which in fact is not going to be implemented for several months. And that is the escort mission, which is a new policy, is a new element of danger. It ought to be thought through carefully. The Congress ought to understand it and the American people ought to understand it. We're not in any way -- I'm not -- saying that we should not take every step immediately -- I agree with my friend from Wyoming on that -- to deploy the kind of ships we need to protect our people and to clear up any ambiguities in the rules of engagement. WOODRUFF: Mr. Ullman, how do you reassure the senator and those -- many others in the Senate who share his concerns? Dr. ULLMAN: Well, I think Senator Nunn is absolutely right. I don't quite understand why the administration did not consult the Senate yet in this particular step. I don't understand why the administration has reflagged the Kuwaiti ships. Having said that, it seem to me that technically the issue of protection, which is going to require more ships and aircraft, can be carried out with low risk. WOODRUFF: Let me just finally pose this question. How do we deal with the situation where it appears that many in the Congress, representing many in the American public, are just not prepared to deal with the consequence of this sort of responsibility that we heard Assistant Secretary Murphy referring to? -- -- that we have responsibility as a world power, and that it seems at times we're not prepared to bear the burden of that. Sen. NUNN: It's very difficult in our constitutional system. The Constitution says that Congress shall have the right to declare war. And in a situation less than a declaration of war, which we got into in Vietnam and other situations, we found that we had fighting people out there performing a mission the American people didn't understand and did not back. We don't want to do that again. That's the reason we passed the War Powers Act. I voted for that act, but it's a long way from perfect. I think that we need to revisit that act. There's too much in it relating to time sequences, and I don't think you can basically say you shall be in this war for x number of days. I thought that was a colossal error in Lebanon. I think we ought to be in the keeping of the spirit of the Constitution -- and that is that administration should lay down their policy and their goals and the way they expect to implement those goals. We ought to say yes or no. I don't think we ought to have any of this repetition of 60 days here and 60 days there. You cannot do that. WOODRUFF: But what about -- should the administration invoke the War Powers Act in any form? Sen. NUNN: Close call. Close call. I think that technically and legally, it's not decisive one way or another, because the hostilities would have to be eminent. I'm not sure that word eminent is here yet, based on that accident. But as a common sense matter, if they want the American people with them on this mission, then I think they should have. WOODRUFF: Senator Wallop, you get the last word. Sec. WALLOP: I think the War Powers Act is probably unconstitutional as it is drafted, but whether or not it's unconstitutional, it makes it nearly impossible for the United States to be a responsive military power and a world leader at the same time. WOODRUFF: We thank you all four for being with us -- Mr. Ullman, Admiral LaRoque, Senator Nunn, Senator Wallop. Thank you all. Scoring with the Celtics MacNEIL: Fans of the Boston Celtics have had a lot to cheer about as their team advanced in the National Basketball Association playoffs. But those fans who put their money where their mouths are and became stockholders in the team when it went public last December have had a lot less to cheer about. The Celtics scoreboard is not being reflected on the big board on Wall Street. Paul Solman, our special business correspondent, has this report.

PAUL SOLMAN [voice over]: This can be a pretty nervewracking time of year for your pro basketball fan. You see, it's post season playoff time, and here in Boston we expect our team, the Celtics, and its leader Larry Bird to take us to the championship just about every year. In the playoffs, though, just a few unlucky breaks, and even a great team can be eliminated. So we sit anxiously by our TV sets, hanging on the fate of the Boston Celtics. If fans get nervous in the post season, however, think of how the team's owners must feel. In professional basketball, an owner's profit may depend significantly on how far the team advances in the playoff championships. [on camera] But this year, the principal owners of the Boston Celtics can relax. The reason is that they have done what a lot of smart business people have been doing recently. They've sold off part of their company to the public. And in the process, they've taken a lot of the risk out of what can be a pretty risky business. [voice over] Last winter, the Celtics owners created a limited partnership -- a sort of company with tax advantages. On December 4, here at Smith Barney, they began selling units -- stock really -- to a very eager public. By the close of business, they had laid off the risk of ownership on thousands of small investors. They sold 40% of the team's stock for $46 million. It was a record shattering price for a pro basketball team, and an entirely new way to make money in sports -- lots of money. You see, four years ago, when a financial executive named Don Gaston and two partners announced they had bought the Celtics, the price was only $19 million. But at the time, even that was a high price -- justified only by the franchise's unprecedented success under its legendary general manager Fred Auerbach. DON GASTON, Chairman, Celtics, Inc. : Fred Auerbach has run the Boston Celtics for a lot of years -- more successfully than any other sports franchise I've known has ever been run, and we would be foolhardy, I think, not to let him continue doing that.

SOLMAN [voice over]: The first year the new owners took over, the Celtics won their 15th league championship. Public enthusiasm was greater than ever. The next season the owners began translating the enthusiasm into cash. They raised ticket prices and still sold out every home game. In the playoffs alone, the team made nearly $2 million. Finally, last season, the owners again raised ticket prices, and again won the championship. Profits soared. And so, coming into this season, the Boston Celtics franchise was a very hot property. Its owner can boast championship team at the height of its romantic appeal, the most famous player in the game, Larry Bird, nearly 300 consecutive sell out crowds at home, and fat local and national broadcast contracts. AND to top it all off, there's a league limit on salaries, which means there was a limit on expenses. Financially speaking, it just didn't get any better than this. But it sure could get worse. For example, the players' salary limit is about to be renegotiated. Maybe even done away with. Broadcast revenues have been going down in other sports. You can't fill any more seats since you sell out already. You have to pay Larry Bird and his team mates their salaries whether they win or lose. Since the salaries are virtually all guaranteed, regardless of injury. And on this aging team, the threat of injury increases with every game. Thus, as this season began last fall, the team was flying high, but vulnerable. It was at this point that the team's principal owners mapped some new strategy. They would bring the game of basketball to a new and much broader pool of investment capital -- the stock market. Last fall the market was flying as high as the world champion Celtics. One private company after another was going public, issuing stock and selling it to small, wide eyed investors. The beauty of selling new stock when the market is high is that you get to cash in on everyone else's enthusiasm, while they assume the risks of your business. In the case of the Celtics, there was no shortage of enthusiasm. MAN: Ya gotta go for the Celtics. MAN: I been a Celtics fan all my life. I just flew in today from Boise, Idaho for the game. SOLMAN: So, instead of just selling tickets and trinkets to these fans, why not sell them part of the season. Last winter, then, investors were offered shares of the Celtics -- at $18. 50 a piece. The investors could expect a roughly 9% return. But as the owner pointed out, there was a risk. If the team's fortunes began to wane, so would its income. Failure to make the playoffs, for example, and there really wouldn't be enough profit to pay the new investors their 9%. But investors were undeterred. They gobbled up every one of the 2. 6 million shares being offered. Now, here's the deal that Don Gaston and his two partners had engineered. They sold 40% of the team to eager investors, who paid them $46 million. In addition, Gaston and Company retained total business control. The new investors would have no say in management of the team. And finally, the old owners would begin receiving $750,000 in management fees. All this on an investment of just $19 million -- most of it borrowed a mere four years ago. And so, this spring as we proceed through the treacherous playoffs, the owners have already cashed in. They've transferred the risk of ownership to the small, zealous investors who typically buy initial public offerings. In business terms, there's nothing at all unusual about this. Most initial public offerings are based more on romantic appeal than reason. When you sense somehow that Atari video games are going to sweep the country -- and so you buy shares in Atari as soon as they hit the market. When you sense that the Celtics are going to win again, and so you buy a piece of the Celtics. The market for new issues is primarily a market of enthusiasts and dreamers. Fans almost. Who are often quite naive when it comes to matters of business. But eventually, almost all stock winds up in the hands of more serious investor -- those interested in the return on their investment rather than the glamour surrounding it. And so today almost six months after the initial Celtics offering -- sold out at about $19 a unit -- we can see what the real investors think it's worth. In the past five months the stock market as a whole has risen about 12%, and units of the new Boston Celtics partnership? As the playoffs began, they had dropped to $14 a unit -- a fall of about 30%. In other words, fans may be willing to buy stock on the basis of sentiment, but not professional investors. To them, a basketball team -- even a winning team -- is still a very risky investment. WOODRUFF: A final look at the main stories of this Friday. President Reagan led mourners at a service for the 37 men killed aboard the U. S. S. Stark. In eulogy, he saluted their courage and defended their mission in the Persian Gulf. A former Israeli official asked a U. S. judge to excuse him from testifying before a grand jury investigating the Iran contra affair. And the federal government said inflation is now running at an annual rate of 6%. Good night Robin. MacNEIL: Good night, Judy. That's the NewsHour tonight. Have a good Memorial Day weekend, and we'll see you on Monday night. I'm Robert MacNeil. Good night.