The MacNeil/Lehrer NewsHour

Intro

ROBERT MacNEIL: Good evening. These are the day's top headlines. Egypt saidg Libya had a clear connection to the hijacking in which 59 people died. Malta said the hijack leader is alive and recovering from wounds. A drop in defense contracts drove factory orders down sharply in October. The British envoy trying to free U.S. hostages in Beirut met Vice President Bush. Details of these stories coming up. Jim?

JIM LEHRER: After the news summary tonight we examine the growing hostility between Egypt and Libya, conduct a newsmaker interview with the head of Texaco, look at the freedom of the press to criticize the University of Kentucky basketball team, and hear Robert Strauss, Democrat, and Melvin Laird, Republican, prescribe a new way to elect the president of the United States.News Summary

MacNEIL: Malta said today that survivors of the bloody Malta hijacking have identified a man recovering from wounds as the leader of the hijackers. Fifty-nine of the 97 people on board the Egyptian airliner died. Two were executed by the hijackers; 56 died when Egyptian commandos stormed the plane, and one Israeli woman shot in the head is clinically dead. Survivors reportedly identified a 20-year-old Tunisian, Omar Marzouki, as the leader of the five gunmen. At the airport on Malta the damaged Egyptian Airline's plane remained where the commandos stormed it, with some other reminders of the battle. Flight operations returned to normal, and the focus of the story moved to Cairo, where President Hosni Mubarak said it was clear that Libya was involved in the hijacking. He spoke at a news conference.

HOSNI MUBARAK, President of Egypt: The connection is very clear, but I don't want to say definitely until I reconsider all the situation.

REPORTER: This is definitely, and if you are going to come public, is Egypt just going to stand by and let Libya do these terrorist acts, or what?

Pres. MUBARAK: No, we will never leave any terrorist action take place without giving them punishment anyway.

MacNEIL: Mubarak also said the hijackers belong to a renegade Palestinian group and their leader was staying in a hotel in Tripoli, the Libyan capital. In Washington the State Department declined to speculate about any Libyan connection. Jim?

LEHRER: Terry Waite met with Vice President Bush today at the White House. Waite is the Church of England official who is trying to negotiate the release of the Americans being held hostage by Shiite Moslem terrorists in Lebanon. Waite talked to reporters after the meeting.

TERRY WAITE, hostage negotiator: I do believe that there is a way forward which could bring about their eventual release without the compromise of principle.

REPORTER: Did you bring any secret communications from Islamic Jihad to the United States government?

Mr. WAITE: I didn't bring secret communications, no, but I was able to discuss with the administration ways in which I think this problem can be taken forward and hopefully resolved. I do want to repeat, and these can be my last words, that progress has been made, the situation remains highly dangerous, that we are not through yet at all, and why I'm being so careful in what I say is because a false word on my part or a false step could lead to disaster. I keep repeating that, but it's true.

LEHRER: Waite also said he was sure four of the six missing Americans are alive and well. They are Terry Anderson, the Reverend Lawrence Jenco, Thomas Sutherland and David Jacobsen. The other two are William Buckley and Peter Kilburn. There have been unconfirmed reports Buckley is dead, and nothing has been said about Kilburn. Also on the Middle East today, the possibility of a meeting between Israeli Prime Minister Shimon Peres and King Hassan of Morocco all but disappeared. Hassan said yesterday he would be willing to meet with Peres. Peres said today, "Fine, we will meet," but Hassan then said no, not unless Israel is willing first to give up occupied territories and support Palestinian self-determination.

MacNEIL: In economic news, the government said that factory orders fell 2.1 in October, the third month out of four that they have declined. The drop was attributed to a sharp decline in defense orders. With defense left out, factory orders would have been virtually unchanged.

On Wall Street, trading stopped for an hour in the shares of Texaco, the nation's third-largest oil company. Heavy selling of Texaco shares followed a published suggestion that the company might have to seek bankruptcy because it didn't have the assets to post a $12-billion bond required by a Texas court. That bond would enable Texaco to appeal last week's court award of $10 billion in damages to Pennzoil. Texaco later issued a statement saying bankruptcy was a very extreme step to be considered only after all other legal steps were exhausted.

LEHRER: Election Day holidays were among changes recommended today in the presidential election process. They came from a bipartisan commission headed by former Democratic Party Chairman Robert Strauss, and former Republican Congressman and cabinet officer, Melvin Laird. One of their recommendations was accepted and acted on immediately by the chairman of the national Democratic and Republican parties. Paul Kirk and Frank Fahrenkopf met and signed an agreement to co-sponsor 1988 presidential candidate debates. That idea did not go over well today with the League of Women Voters, sponsor of previous presidential debates. League President Dorothy Riding said political parties are hardly suitable sponsors of non-partisan presidential forums, and she predicted they would never come off anyhow because politics would surely interfere.

MacNEIL: Yelena Bonner, the wife of the Soviet dissident Andrei Sakharov, returned to Moscow today after 19 months of exile with her husband in the closed city of Gorky. Mrs. Bonner, who suffers from eye and heart problems, is being allowed to go to Italy next week for eye treatment, and later to the United States for heart surgery.

LEHRER: The Pentagon held a post-summit briefing today on SDI, the Strategic Defense Initiative. It was apparently designed to answer critics who claim it'll never work. The briefer was the Air Force general in charge of the project.

JAMES ABRAMHAMSON, Director, Strategic Defense Initiative: While it's a good news story that there is a lot of progress being made in many areas, I don't want to leave a wrong impression saying we're there, but I can assure you that the thousands of people in universities, in research labs and in industry who are working on the program are making things happen at a rate that is just really incredible, and in that sense I think all of us ought to be proud of the technical capability that we can bring to bear.

MacNEIL: President Reagan left Washington today to spend the Thanksgiving holiday at his ranch in California. With him went his dog Lucky, now grown too uncontrollable for sedate White House life, to live permanently at the ranch. When reporters asked why Lucky was wearing a balloon for his last ride on Air Force One, the President said, "It's his parachute."

LEHRER: And that concludes our summary of the news of this day. We move on now to a longer look at what's cooking between Egypt and Libya, a newsmaker interview with the head of Texaco, a report from Kentucky on a newspaper war over basketball, and the electoral reform views of Melvin Laird and Robert Strauss. Egypt Accuses Libya

LEHRER: We go first tonight to the war of words between Egypt and Libya, to see what lies behind them and maybe ahead of them. The immediate issue between these two unfriendly neighbors is the Egyptian airliner tragedy. Egypt accused Libya of being involved in the hijacking, Libya denied the charge and accused Egypt of massing military equipment on the border between the two. The latest and most direct Egyptian charge came today from President Mubarak at a Cairo news conference. Here is an extended excerpt from it.

REPORTER: Mr. President, Cairo radio has announced that the Egyptian government has proof that Libya was involved in this hijacking. Could you be a little more specific about what exactly do you know in this regard?

Pres. MUBARAK: I'd like to speak in Arabic.

REPORTER: It'd be nice if you could do a little English, please.

Pres. MUBARAK: I'd like to tell you all the indications I have are that when we contacted the foreign minister of Libya, he said that, "We have nothing to do with this, and we are going to inform you -- to inform us, I mean -- within 15 minutes about this." I didn't give an answer at all. Second point is, the Libyan ambassador was called upon by the hijackers to come to the plane to make a dialogue with them. His government refused, and they recalled him to return back to Tripoli from Malta. And I have no more comments on that.

REPORTER: And how would you characterize the Egyptian commando attack on the plane?

Pres. MUBARAK: Very highly trained, did their utmost while avoiding to injure anybody, trying to save the lives of the people. They released only seven bullets; three of them on the chief of the hijackers, two on the other one, and another two when being scattered here and there. But most or nearly all the people who are killed, I can assure you, not a single Egyptian bullet killed anybody. It was the phosphoric hand grenade. It's very dangerous, with a temperature of about 1,500 degrees centigrade. It is very dangerous. It is not permitted to be usedeven in the wars internationally.

REPORTER: Did the Egyptian commando units have knowledge that the hijackers had these phosphorous grenades before their attack?

Pres. MUBARAK: We haven't, and this is for the first time to hear that the hijackers could have such phosphoric hand grenades with them. It never happened in any plane which have been hijacked before.

REPORTER: Mr. President, there's been reports that the Egyptian army is on full alert and troops have been moved to the Libyan border. Would you comment on this?

Pres. MUBARAK: No comments.

REPORTER: Are you denying it or confirming it?

Pres. MUBARAK: No comments.

REPORTER: Then what's the next move? Given that you feel assured that Libya had an involvement in this hijacking, Libya's been trying to pull some terrorist activities here against the Bakoush, what is going to be Egypt's next move?

Pres. MUBARAK: Just Egypt's next move will be discussed sometime in the future. Any other questions?

REPORTER: We'd really like to know a little bit more about the Libyan connection, because it's all been vague up to now.

Pres. MUBARAK: It's very clear. The connection is very clear. But I don't want to say definitely until I reconsider all the situation.

REPORTER: And if it is definitely, and if you are to become public, is Egypt just going to stand by and let Libya do these terrorist acts or what?

Pres. MUBARAK: No, we will never leave any terrorist action to take place without punishing them anyway.

REPORTER: From your reports, how did these hijackers get their weapons on the plane?

Pres. MUBARAK: This, I can't tell you; needs some further discussions.

REPORTER: It's not clear yet?

Pres. MUBARAK: Not clear for me yet.

REPORTER: You were explaining why the list of the dead or wounded hasn't been given over to some of the Egyptians who have been waiting at the airport, not knowing what's happened to their relatives.

Pres. MUBARAK: Frankly, the hijackers took all the passports as soon as they declared the hijacking the plane. They took all the passports, all the identification of the whole passengers, and they were burned. So we don't know who is who. So that's why we couldn't know from what nationalities died. We knew only those who were saved.

REPORTER: And do you know when the wounded, the Egyptian wounded, will be returning to Egypt?

Pres. MUBARAK: I think those whose situation permits us to take them back, we are going to take them back immediately. We are sending a group of doctors to treat all the wounded people from all nationalities which were on board.

LEHRER: For analysis of those words and others and the growing hostility between Egypt and Libya we have Lisa Anderson, a specialist on Libya, who is a professor of political science at Harvard's Center for Middle Eastern Studies. She joins us from public station WGBH in Boston. And Roy Atherton, who was the United States ambassador to Egypt from 1979 through '83.

First to you, Ms. Anderson, in Boston. Does a Libyan connection with this hijacking add up to you?

LISA ANDERSON: Yes, actually I think it's a relatively plausible charge on the part of the Egyptian government, and the evidence at this point is circumstantial, but it includes the having landed in Malta, which has had close ties with Libya in the past and the involvement of a Tunisian and other kinds of aspects like that.

LEHRER: What other aspects make it plausible to you?

Prof. ANDERSON: Well, it's also true, and perhaps this is the most important context for this sort of action, that Qaddafi has for some time been interested in embarrassing --

LEHRER: That's the head of Libya, Muammar Qaddafi, right? Okay.

Prof. ANDERSON: Right. That he's been interested in embarrassing the Egyptian government and particularly recently in embarrassing the Mubarak government. And I think they felt that this kind of action would serve that purpose.

LEHRER: Mr. Ambassador, what's it look to you? Does it make sense to you that Libya would be behind this?

ROY ATHERTON: I think I would agree with Dr. Anderson's analysis. I obviously have no inside information --

LEHRER: Sure, sure.

Amb. ATHERTON: -- but I wouldn't be surprised.

LEHRER: Well, the idea of embarrassing Mubarak. Why would Qaddafi want to embarrass Mubarak?

Amb. ATHERTON: I think you have to look at a long history of antagonism between this regime and Libya and Egypt ever since President Sadat came to power. Libya, and Qaddafi particularly, have opposed all of the policies that Egypt has followed; the Sadat policies, which are also Mubarak's policies -- peace with Israel, close relations with the United States. It's been an ideological opposition, and it has been manifested in attempts to destabilize the Egyptian government.

LEHRER: Explain the ideological division.

Amb. ATHERTON: Basically, Qaddafi is a diehard on the question of peace with Israel. His whole position has been that anyone who makes a peace treaty with Israel is a traitor to the Palestinian cause, the Arab cause. He came to power thinking of himself as the next Nassar, in many ways, the leader of Arab nationalism. He has not obviously borne that mantle as Nassar did, but he has nevertheless continued to try to represent himself as the leader of Arab nationalism, the cause against Israel, against Western influence. And of course Egypt stands for all these things.

LEHRER: You agree with that, Ms. Anderson?

Prof. ANDERSON: Yes, absolutely. I think this is a long-standing dispute between the Egyptian and Libyan governments, and I think there's a subsidiary aspect to it that's worth keeping in mind, that Cairo is now one of the principal places of refuge of the opponents of the Qaddafi regime, and Qaddafi has historically and continuously made efforts to control that opposition to, as he puts it, liquidate the stray dogs --

LEHRER: Meaning Libya. You're talking about Libyans now, right?

Prof. ANDERSON: Opponents of the Libyan regime, exactly. And so that from the point of view of the Libyan regime, one of the other complaints against the government in Cairo is their willingness to support and protect the exiled opposition to Libya.

LEHRER: Like who? What kind of people do you mean?

Prof. ANDERSON: Well, most recently we've seen several efforts on the part of Libyan, what we call, hit teams to assassinate former Prime Minister Bakoush of Libya, who lives in Cairo, and these efforts have failed, and that has embarrassed the Libyan regime. And so in that sense they're also interested in a sort of counter-embarrassment of the Egyptian regime.

LEHRER: Mr. Ambassador, you said also that Qaddafi has been trying to destabilize the government of Egypt. How has he tried that?

Amb. ATHERTON: Well, I think these attempts to pull off assassinations within Egypt, on Egyptian territory, training terrorists in Libya, the whole panoply of efforts dealing against countries that are friendly to Egypt. Before the recent change of government in the Sudan, for example, Qaddafi was working very hard against the Numeiry regime, which was strongly supported by Egypt. So it's been both direct and perhaps even in many ways more indirect efforts to get at Egypt from its neighbors and through its neighbors.

LEHRER: All right, let's go to the tough question of what's likely to happen next. Mr. Ambassador, you know Mubarak. You dealt with President Mubarak on many occasions for many years -- several years, at least. He said -- we saw him in his news conference. What's the next move? Well, "The next move -- " you heard what he said. What do you think the next move will be?

Amb. ATHERTON: It's very hard to second-guess a chief of state, as you know.

LEHRER: Sure.

Amb. ATHERTON: And I wouldn't want to -- I've learned over many years that the crystal ball in the Middle East is a very cloudy thing and attempting to be predictive can be dangerous. But Egypt's policy has been relatively cautious in terms of military confrontation with Libya. It's been political confrontation, it's been the kind of incident that Dr. Anderson referred to, where the Egyptians led the Libyans to think that their attempt to assassinate the former prime minister had succeeded, embarrassed Qaddafi. They have mobilized on the border. But the last actual military clash, if I'm not mistaken, was way back in 1977, long before President Mubarak became president. So I would not expect him to do anything precipitate or anything rash. I would not, obviously, rule out, and it's clear President Mubarak didn't rule out, some kind of bloodying of the nose. But, again, I don't want to get out in front, obviously, of the president of Egypt.

LEHRER: Well, define bloodying of the nose in this context.

Amb. ATHERTON: Well, it could be done in the border area. Some people talk about the possibility of an all-out military confrontation, but if you look at the distance along that North African coast that a military operation would involve, it's a major --

LEHRER: Well, we don't have a map, but explain to me, give me a feel for what you're talking about there.

Amb. ATHERTON: I'm thinking in terms of, perhaps, a retaliatory strike along the border area, something like that.

LEHRER: An air strike, or with troops?

Amb. ATHERTON: The last time, it was I think, both air and ground.

LEHRER: You wouldn't -- you do not expect --

Amb. ATHERTON: I don't want to say that I'm predicting this.

LEHRER: No, I got you on to this. You've got every qualification in the world there. Ms. Anderson, you want to join the game here? What do you think is going to happen next?

Prof. ANDERSON: Well, I think at this point it's relatively unlikely. I agree that Mubarak is a very cautious political figure and unlikely to commit himself to a major military involvement with Libya, and in fact there's really, from his point of view, not any particular value in that yet. He's clearly saying to Qaddafi that he's beginning to lose patience, that he has been -- made efforts to be more cautious and lower the rhetoric of the Sadat period and so forth, and if Qaddafi isn't willing to cooperate in sort of lowering the rhetoric, lowering the activities in Egypt and so forth, he is going to lose patience, and that's essentially what he's saying. I think at this point he hasn't decided whether he's lost patience yet.

LEHRER: Well, you're a student of Qaddafi. How would Qaddafi likely react to a bloodying of the nose as defined, but not predicted, by Ambassador Atherton?

Prof. ANDERSON: Well, I think at this point he would clearly attempt to respond in kind. That is to say, if there were, oh, air strikes, then he would attempt to respond with air strikes against Egyptian border troops or something like that. His problem is that I think increasingly he is not as confident as he was in '77 or even several years ago in the loyalty of his own military establishment. So I think he too would tend to caution on issues of direct military engagement with Egypt.

LEHRER: Mr. Ambassador, why would Mubarak not want to go to war with Qaddafi? Here Qaddafi is the enemy of the United States; obviously the United States would help Egypt in a war with Qaddafi. They've been trying to get rid of him for a long time. Why? Why avoid a war?

Amb. ATHERTON: Because war is -- it's easy to start one, it's very hard to know how it's going to come out, and I think it would not be necessarily the most popular thing in Egypt, either with his military or with his population. I think that the country right now, I would guess, is probably rallying rather strongly around President Mubarak and his strong action in this incident. To launch a military operation, a major military operation, has unpredictable consequences. And I think he's basically, as Dr. Anderson said, he's basically proven himself a very cautious man who will think very carefully about the consequences of any action, the long-run consequences. He has other important things to worry about, such as Egypt's economic situation, his own domestic situation, the peace process which he's trying very hard to get underway. This could be disruptive.

LEHRER: Some people have the impression, Ms. Anderson, that Qaddafi is egging for a fight with somebody, and why would he not want to go ahead and just take on Egypt now?

Prof. ANDERSON: Well, I think on the one hand it's probably fair to say that he's perhaps egging for a fight. Certainly he does want to torpedo any continuation of the peace process, and in that sense he is in exactly the opposite position of Mubarak. But, as I say, I think he's not as confident as he was several years ago in the loyalty of his own military establishment. There have been repeated coup attempts in Libya coming out of the military in the last couple of years, rumors that the operations in Chad have been unpopular, and I don't think that he thinks that there's really any point in pushing this at this point. All he would need is to try and have a major military operation against Egypt and find that his troops all deserted.

LEHRER: How do they stack up militarily, Mr. Ambassador?

Amb. ATHERTON: Oh, I think there's no question Egypt has got a much larger army and it's a well-equipped army. In terms of military parity, Egypt has clearly, I think, got a very large edge.

LEHRER: All right. Well, I think what the two of you have told us tonight is comforting, not to expect a war at least any time soon between these two. And thank you both for being with us.

Amb. ATHERTON: Thank you.

Prof. ANDERSON: Thank you.

LEHRER: Robin?

MacNEIL: Still to come on the NewsHour, a newsmaker interview with the president of Texaco, a documentary report on Kentucky's basketball scandal and the newspaper which blew the whistle, and the ideas of two party chieftains on how election law should be changed. Taking Shelter?

MacNEIL: As we reported, a hint that Texaco, the third-largest oil company, might file for bankruptcy threw Wall Street into a spin today. Texaco shares fell, trading was suspended until the company issued a statement saying bankruptcy was a very extreme last resort. The man who raised the possibility in the first place was Texaco president Alfred DeCrane, who joins us now for a newsmaker interview.

Mr. DeCrane, let's start at the beginning. Last week a Houston court ordered Texaco to pay $10.5 billion, an extraordinarily large award, in damages to Pennzoil. Texaco wants to appeal that, as I understand it. To appeal that you need to raise a $12-billion bond, and you were saying to the Texaco newspaper that published this, the Dallas Morning News, that Texaco couldn't meet the $12-million bond out of its assets.

ALFRED DeCRANE: Robin, that's generally correct. I think we have to go back, though, and set the stage just a little bit more specifically. What happened last week was the jury entered a verdict after a 4 -month trial in this case. That judgment now by the court has not yet been issued on that verdict, and the judge has set late next week as a time to listen to the arguments of the various parties, and we will be making a vigorous argument that that outrageous award should be set aside and other action should be taken. So appeal is down the road and beyond the point where the judge acts and tells us what he will really do in light of the jury's recommendations.

MacNEIL: So the question of a bond of $12 billion being required by a court would be when?

Mr. DeCRANE: Somewhere in the future, and perhaps no $12-billion bond ever really being required. In our opinion, in light of the facts in this case, the way it was tried and the issues that are before the court, any such bond would really be, I think, contrary to law. It could very well raise very serious constitutional issues. I would expect that before appeal or before the appeal process there are many possibilities of changes.

MacNEIL: But the theory is, in Texas law, that in such a case if you wanted to appeal you'd have to post a bond equal to the size of the damages you were initially required to pay, plus legal expenses.

Mr. DeCRANE: In certain circumstances, it's my understanding that that would be the requirement. In this case, if in fact at the time of appeal we were still talking about something in the range of this $10-billion proposed verdict, I think a bond in the face of that amount of money would really raise serious constitutional and practical and business issues, and I would not expect the court to impose it.

MacNEIL: But you were saying today, in this very hypothetical case, you were saying to the Dallas Morning News in this very hypothetical case, that if such a bond were required, that would be more than Texaco's assets, and that would lead you into the remote possibility of bankruptcy.

Mr. DeCRANE: Yes, in the discussion with the press, and because this is an important issue not just in Texas, but across the country, I think, to our shareholders, our employees and investors in general, I have been talking to certain press groups. In the course of the questioning, they asked, well, what could happen? If in fact we were to speculate that the court went along all the way and the judicial process finally arrived at this $12-billion bond, despite all the protections which we see in the law before we would get there, what burdens would that place on the company? I said that I felt we'd have to take some heroic efforts to continue to pursue our legal rights, and I was asked whether bankruptcy or Chapter 11 was in that category of a heroic effort. I said it certainly was.

MacNEIL: I see.

Mr. DeCRANE: So it's speculative, we're not filing for bankruptcy at this time; we're going down to that trial court and explain why we feel this judgment should be set aside, or this verdict.

MacNEIL: Because some observers, a number of observers, today were saying that a threat to go to bankruptcy was a tactic on Texaco's, on your part to try and create some sympathy and to get the judge, when he makes his ruling next week -- [interruption]

Mr. DeCRANE: -- to bring this to the public and to the stockholders, to let them know the prospects and the possibilities, however remote, that may be ahead. A number of newspapers, particularly in Texas, which have been following this case fairly closely had been talking about the bond, speculating as to the size of the bond, and so we were questioned about it, and I tried to answer as completely and thoroughly as I could without raising undue concerns, because I think a lot of justice is going to be done before we ever get to that place.

MacNEIL: Okay. Let's go back to the takeover in January, 1984, which gave rise to this lawsuit. Pennzoil argued that you, Texaco, stepped in after Pennzoil already had a binding agreement to buy Getty, and thus caused an illegal breach of their contract. What was your view of what happened in January, 1984?

Mr. DeCRANE: Well, you've outlined the issue in the case, but Texaco's history of its 83 years of existence, we've grown in a number of ways, including acquisitions, but we have always done friendly negotiated acquisitions. In this case, in January of 1984, we were called by representatives of Getty asking us whether we would be prepared to submit a proposal. You see, Getty had had an unfriendly tender offer filed against it or for its shares by the Pennzoil people. That tender offer was ticking away before the board of directors at a price level which they felt was not satisfactory, wouldn't provide an adequate earning or return or value to Getty shareholders. So they contacted Texaco as they contacted a number of other companies. In response to that we reviewed the situation, we talked to the company and to the principal shareholders -- the Getty Trust and the Getty Museum -- and all assured us that while they had a proposal from Pennzoil and an agreement in principle to negotiate with Pennzoil, that they would be very interested in a higher price and a different proposal, and that they had no signed contract, no final agreement, no binding contract or commitment.

MacNEIL: Pennzoil's lawyer says that you knew you were buying yourself a big lawsuit because you granted -- as part of the deal you granted Getty immunity from any damages down the line.

Mr. DeCRANE: Well, there are indemnities in some of the documents, but I think those would be the same indemnities which Texaco provides to its board of directors, the same indemnities which Pennzoil provides to its board of directors, and I suspect that Channel 13 provides to its board of directors, because they were taking acts in the pursuit of their business, and there is nothing peculiar or different about the indemnities in this case.

MacNEIL: Well, let me pursue the Pennzoil argument a step further. They say you went into this knowingly and that a lawsuit would be a cheap price for saving, Texaco saving $40 to $60 billion in what it would have cost to drill for the oil and gas reserves that you acquired at a stroke by acquiring Getty.

Mr. DeCRANE: Robin, I have to express kind of the same indignation to you for repeating that as I did from the witness stand. Our company does not do business that way. We've got an 83-year history of integrity and honest dealings. We have stood by all our contracts when many others have broken them. Our company has spent money honoring its obligations, and we do not interfere with other people's. We were assured, we had legal advice that there were no contracts concluded between Pennzoil and Getty, and I think one of the interesting things in this case is that although the issue is our intent and a claim that we interfered, we've not been able to put in the evidence which our attorneys gave us as to the kinds of advice we receive. That's been precluded. I think that's one of the things that has to be reviewed here in order to really see that justice is done.

MacNEIL: This case, the ruling last week, the jury award, attracted a great deal of attention because it was the largest single award that's ever been made in a corporate damages suit. What do you think is going to happen on December 5th when the judge makes the first hearing on that award?

Mr. DeCRANE: This is an outrageous award. Stop for a moment and think what this dispute is over. I think perhaps this is the best way to put it in perspective and then go to what the judge may do about it. Pennzoil claimed that it had an agreement with the Getty Oil Company to buy three-sevenths of the shares of Getty Oil at a cost of about $3.5 billion. Now, what the jury has said is, yes, we think they had a contract and what they ought to get is $10 billion. That's the value of the entire -- that's what we paid for all of Getty, seven-seventh's of it, and they should get it without paying anything! And that's why I call it outrageous and I think that when this is reviewed with the judge that it will be one of the arguments we make as to why this case should be set aside, despite the jury findings.

MacNEIL: Mr. DeCrane, thank you for joining us.

Mr. DeCRANE: Thank you for the opportunity. Dunking the Press

LEHRER: Next, a story about treason, freedom of the press and basketball. The scene is Lexington, Kentucky; the storyteller is correspondent Tom Bearden.

TOM BEARDEN [voice-over]: Basketball is king in Kentucky. The largest arena in America dedicated solely to basketball is in Lexington -- 23,000 seats. Every one of them is filled for every University of Kentucky regular season game. Even this exhibition game last week between the Wildcats and a badly outmanned Czechoslovakian national team drew almost a full house.

[on camera] The fans here call Kentucky basketball, "The Program." The team is a source of pride for the whole state, so when the Lexington Herald-Leader published a page one expose of alleged wrong-doing in the program, a lot of people considered it treason inside the family circle.

[voice-over] Herald-Leader subscribers got a big shock when they opened their Sunday morning paper last month. The paper reported that 31 former players had admitted to taking cash from basketball supporters in various amounts, as little as $20 to more than $4,000. The paper alleged players received what they called "hundred-dollar handshakes" in the locker room after games. There were also accusations of players receiving other benefits like free clothing and free meals in local restaurants. The university and the National Collegiate Athletic Association are investigating. If the charges prove true, the Kentucky basketball team could be suspended from post-season play. Wildcat fans were outraged. A number of supporters staged a protest rally at a local club. Few people said the story wasn't true, but many said the paper should never have published the charges. These men were part of that protest. They're still mad.

JOHN BRIDGES, Kentucky fan: They make it look like everybody in Kentucky is barefooted and walking through the hills and holding $50 in their hand and waiting to shake a basketball player's hand.

JASON GIBSON, Kentucky fan: To me it comes out that we're all crooks. The University of Kentucky program, all the players are crooks. They take money for just playing the game.

Mr. BRIDGES: To get attacked like this, you know, from your hometown paper -- I was surprised somebody didn't actually carry out the bomb threat that they threatened. Not that it was justified, but I mean, you know, the fans do take it that seriously and I don't really understand exactly what the Herald-Leader was trying to get at, but I think they went about it the wrong way.

BEARDEN [voice-over]: And even another local media outlet joined the attack on the paper.

WILLIAM SERVICE, Vice President and General Manager, WTVQ-TV: Now, we certainly don't advocate breaking the rules, but given the nature and the magnitude of what's going on in the world today, we hardly think that free meals and discount clothes merit front-page treatment.

BEARDEN [voice-over]: WTVQ General Manager Bill Service broadcast an editorial belittling the importance of the story and the way the paper chose to display it.

Mr. SERVICE: We've never put much stock in the quality or the influence of the Herald-Leader, and this week's stories have done nothing to change our opinion. To those who are upset about the UK stories, we suggest simply that you consider the source, and don't let the Herald-Leader's self-serving sensationalism get you down.

BEARDEN [voice-over]: John Carroll is the editor of the Lexington Herald-Leader. Even though it's part of the powerful Knight-Ridder chain and the only daily in town, he says the whole paper has felt the effects of the reader's wrath.

JOHN CARROLL, editor: Well, at first we had a lot of phone calls. We had cancellations; approximately 375 subscribers cancelled. We've had a few extreme reactions. We did have a bomb threat. And probably most of the people who work here at the paper had some kind of a personal confrontation with a friend or a relative who was angry about it. You know, this is still a small enough town that things get pretty personal.

BEARDEN: Why do you think there was such an unfavorable reaction?

Mr. SERVICE: Well, nobody'd ever said much bad about the University of Kentucky basketball program within the borders of Kentucky before. It's almost a sacred cow here. Now, the program is extremely important to this state's sense of self-esteem. We've been a poor state. We've had some criticism of our educational system and so on over many years. And through all those dark years the one thing that Kentuckians could look at and say, we are the best in the country, has been this basketball program. So people have grown up feeling that this program is something they can hang on to and be proud of.

BEARDEN [voice-over]: And the proud image has been damaged. The Herald-Leader's story was picked up in other major national publications. Last weeks Sports Illustrated cited the violations as a reason why the University may not be able to recruit Kentucky's most promising high school guard.

Mr. SERVICE: The timing concerns me because this is recruiting time for the university, all universities. I'm afraid it may frighten some of our potential ballplayers away from us because of the notoriety it's getting nationwide.

BEARDEN: From a philosphical viewpoint, should a newspaper be concerned about the timing of a story?

Mr. SERVICE: I think if they're a local newspaper they should be. Is it going to harm the university? Are they after the university? What's the purpose of the story?

Mr. CARROLL: Well, the eventual goal of the story as far as the paper is concerned is to tell the story. It's other people's jobs to correct abuses, and it's up to the public to decide whether they think it is an abuse. We just lay the cards on the table in the newspaper and other people decide what to do with them. We're not activists. We're just telling the story.

BEARDEN [voice-over]: Even so, Carroll admits he did consider the timing of the story.

Mr. CARROLL: It ran as soon as we could get it ready, and I didn't want to let the project go on into the basketball season itself. I wanted to get it in the paper before the season started.

BEARDEN [voice-over]: Students at the University of Kentucky are also debating the proper relationship between a newspaper and the community it serves, but there appears to be more support for the Herald-Leader on campus than in the city of Lexington.

DAVID PIERCE, student: The Herald-Leader is usually known as a paper that's conservative, doesn't take any chances with their community, and I think it's great that they've gone out and done the reporting, looked into it, and it's about time, too. This stuff's been going on for quite awhile, and it's nice that it's out. And being a student, I've always felt cheated that they've got special privileges over us. They're just students like, you know, the rest of us.

BEARDEN [voice-over]: Other students understand why the paper did what it did but are upset about the results.

TINA RIFFE, student: The journalistic coverage is probably accurate and correct, but the principles and just the whole community, it was probably detrimental to the community, which -- it's like biting the hand that feeds you.

DON CHASE, student: I don't know if it was a public service or if it was for sensationalism to sell newspapers. I don't know exactly what their purpose to run the story was. But as far as the students are concerned, the majority of them feel this is a bad idea and a bad time to do it.

BEARDEN [voice-over]: Some are questioning the paper's fundamental decision-making process, its news judgment. Wood Simpson publishes a small community newspaper. He sees the expose as part of a disturbing new trend in American journalism.

WOOD SIMPSON, editor: This is glitter journalism, and they are as guilty of it as you are for being here, because you are with a national news team, and here you are in Lexington, Kentucky, and you're not talking to us about the real issues in Kentucky. You're talking to us about what happened on the front page of the local newspaper. And it's a glitter story. It's about celebrities. It's the same thing -- it's People journalism.

BEARDEN [voice-over]: It should be obvious by now that journalism and basketball are volatile issues in Lexington these days. Feelings run very deep. Intent, motivation and professional philosophies are being called into question. But there is no question the basketball program and the newspaper will survive, and University of Kentucky journalism department chairman Dr. Ed Lambeth even thinks some good will come of all of this.

ED LAMBETH, journalism professor: Both the people in the Herald-Leader and the people in this community need to reflect on the need for public debate. I think, you know, both sides have given this thing a fair airing, and a lot of the feeling of animosity will have been vented and maybe we'll all be able to, you know, look at this in a more constructive manner in the future.

LEHRER: That report by Tom Bearden. For the record, Kentucky won its opening game of the season against Northwest Louisiana State by a 77 to 58 score; it plays again tonight against Chaminade University in Honolulu. Election Reforms

MacNEIL: We are far enough away now from the next presidential elections for thoughtful people to be wondering how such elections might be better run. Judy Woodruff has the story of what they're thinking. Judy?

JUDY WOODRUFF: As we mentioned earlier, a high-level commission just completed work on a year-long study of the presidential election process titled the Commission on National Elections, it was made up of prominent elected officials and party leaders as well as representatives of the news media, the advertising world, labor and business. According to the commission's co-chairman and former head of the Democratic Party, Robert Strauss, when the group began its work most members believed the process was too long, too costly and too messy. Well, here to tell us if they still believe that is Mr. Strauss, who is joined from New York by the commission's other co-chairman, Melvin Laird, former secretary of defense and Republican congressman.

Well, Mr. Strauss, I'll begin with you. Is it too long, too messy and too costly?

ROBERT STRAUSS: No, Judy, you stated it right, though, when we began. I suspect every member of that commission thought that would prove to be the case, but after taking a lot of testimony, hearing from a lot of people, doing a lot of talking between ourselves, we concluded that it was not too long, it was not too costly or too messy, that the truth of the matter is the process works very well. It needs some improving, and the reason it's big and it's long and it's expensive is that this is a big and brawling country, a very diverse country, and it takes a long time to cover it. And there's just a lot to be done if you're going to seek the presidency.

WOODRUFF: But despite the fact that so many people have the feeling that this is a process that gets started a year and half, two years before the vote -- I know next year we've got, what, caucuses coming up in the state of Michigan, three years or more than two years before the election.

Mr. STRAUSS: Our commission came down in opposition to starting before, with these caucuses starting that early. We felt that the process shouldn't begin before we got past the first of the year, January 1, 1988, sometime past that. We did feel though, however, that -- and we felt pretty strongly that when you look at the whole thing, that while many of us felt that it was started a bit by Iowa starting so early and by New Hampshire, and that it gave an undue influence to those states, there's something good in American politics about retailing, about -- instead of doing it all wholesale by television, that the idea that candidates were shaking hands and walking streets and talking to neighborhoods is a good and healthy thing in America.

WOODRUFF: Well, Mr. Laird, let me ask you. Those caucuses in Michigan next year are Republican caucuses. Is there anything you all can do about that?

MELVIN LAIRD: Well, we hope those caucuses don't take place in 1987. Our commission hopes that the Michigan people will see the wisdom in postponing the selection process until early in '88, and that was the recommendation of the commission. We really did find that the process was very good, but what we need to do is involve more people, and involving people was the most important recommendation, I believe, of our commission. Judy, I think the recommendation for a national day of registration in 1988 is very important because the commission found that 87 to 89 percent of the registered voters do go and vote for presidents, but there are only 52 of the eligible voters takingpart in the presidential elections. And we want to get more people registered, and we want the President and the Congress and the governors, the city councils and others, to proclaim a national day of registration some 30 or 40 days before the 1988 presidential election so we can get more people registered. If they're registered they'll vote.

WOODRUFF: So you're asking local and state elected officials to cooperate with you to do this. Is that right?

Mr. LAIRD: And the President and the Congress to go along with a national day of registration.

WOODRUFF: All right. Now, national day of registration, but not a holiday? But you are asking for a holiday on Election Day, is that right?

Mr. STRAUSS: We had a good deal of debate on that subject, Judy, and we came down with the decision that it would be good to try it on a one-time experimental basis, call for a national holiday on Election Day, and give the schools half-holiday on Election Day for educational purposes, and try it one time and see how that worked. We are convinced it should be tried. We aren't convinced it will be successful.

WOODRUFF: Mr. Laird?

Mr. LAIRD: We had the idea that we weren't ready to go for a permanent legislation on a national election holiday, but the majority of the commission felt that a trial basis in the 1988 election for a national holiday on Election Day would be a good idea. We looked at whether it should be Tuesday, Sunday, Saturday. We feel Tuesday is the best day of the week, but we do feel we ought to give this national election holiday in '88.

WOODRUFF: How confident are you that these elected officials, the Congress, the President and, so forth, is going to go along?

Mr. STRAUSS: Well, Judy, I think a lot of that's going to have to do with the spin that comes off this commission report. I'm pleased to say that my co-chairman Mel Laird and I had a press conference this morning. We met with reporters over breakfast and we've talked to a lot of political people around the country. Everyone seems to be enthused about it. We didn't make any earth-shaking recommendations. I think one of the most important things we found was that we gave credibility to the process. Having a distinguished group of people like we had serving with us on this commission who represent the broadest possible base of America, finding that this process does work and doesn't need major overhaul is good for the system.

WOODRUFF: You say it works, and yet voter participation has gone down in the last few elections.

Mr. STRAUSS: Well, we have to -- what I'm really trying to say is that the structure itself is right for it to work. Now, there are things we can do. The national day of registration to get more people involved is important. We do certain things with fundraising. We raise the matching funds limit from $250 to $500, which is technical, but it has something to do with trying to make it easier for the fundraising aspect of this whole venture. If we can get more people involved -- let me just make this point. I want to make one point to you. One of the problems we have is that activists tend in both the Democratic and Republican parties to dominate more than they should. We need to -- that doesn't mean they should get out, because it's a healthy thing they're in. But it means people who aren't party activists, who don't have just narrow causes, should also participate. And that's what we hope to accomplish.

WOODRUFF: Let me ask you, Mr. Laird, about one other of your recommendations, that the maximum individual contribution be raised from $1,000 apiece to $2,500 apiece. Now, Lane Kirkland, who's the head of the AFL-CIO, has already criticized that and said that it's going to maximize the role of wealthy contributors. Why make that change?

Mr. LAIRD: Well, I disagree with Lane. I believe that the maximum contribution should be raised to the $2,500. I'd be willing to even go it a little higher than that. I believe that the $1,000 limitation is not realistic for a presidential election campaign. Judy, I think the important recommendation that we made, though, that I hope we don't overlook, is the fact that we were able to bring the two party chairmen together, the Democratic Party chairman, and the Republican Party chairman, and set up a process to make the political parties a part of the debate process, because that's here to stay.

WOODRUFF: I do want to ask you about that, but why change the maximum individual contribution from $1,000 to $2,500?

Mr. STRAUSS: Let me take a cut at that and tell you additionally, in addition to what Mel Laird said, one of the things we've found is that the candidates are forced to spend far more time than they should, really, if they're going to spend time in discussing issues with people, they spend far too much time in fundraising efforts. And most people felt, it was almost the unanimity of opinion, that if we raised this limit from $1,000 to $2,500, we would ease that burden somewhat.

WOODRUFF: Doesn't this put the fat cats back into the political process?

Mr. STRAUSS: You don't buy anybody -- you don't buy a potential president for $2,500. You just don't do that. The old days of $100,000, $200-, $300,000 contributions are gone forever. Now, let me make one point in there. There is such a thing as soft money that goes in here that really gets through the system differently. That is a problem that we face. And let me tell you one more thing I think we did --

WOODRUFF: That's a different kind --

Mr. LAIRD: Well, Bob, I think it's important to point out --

Mr. STRAUSS: Disclosure. Disclosure, we call for in here, and that really is important.

WOODRUFF: I do want to --

Mr. LAIRD: Well, Bob, I think the important part is on disclosure. With all the automation we have now, we can get the information on who's contributing to campaigns, both hard dollars and soft dollars, to public exposure rapidly. Right now these election reports follow too far behind the contribution, and we want public disclosure as rapidly as possible, and I think that that is a very important part of our recommendation is full public disclosure.

WOODRUFF: Let me ask you now about the debate recommendation and the parties have already accepted this notion that the two political parties, the Republicans and the Democrats, will sponsor the debates. It will no longer be an outside organization like the League of Women Voters.

Mr. STRAUSS: Well, the two parties will have the responsibility for the sponsorship of the debates, but that doesn't exclude, for example, the League of Women Voters participation or anybody else that the party chairmen might decide they want to participate with this.

WOODRUFF: But you put the stamp of approval, in other words, on the party --

Mr. STRAUSS: We did put the stamp. We did feel it was important in party building; we thought it was important in the institutionalizing of debates, that they be turned over, the responsibility for them, to the two parties --

WOODRUFF: Well, as you know, the president of the League of Women Voters has already come out today and asked how can the parties put on a debate when each party is obviously going to be lookingout for the best interests of its own candidates?

Mr. STRAUSS: Well, let me point out this to you. First, the chairman of the League was a very constructive member of our commission, and I would have expected, and everyone expected, her to take an exception to this. She represents a constituency, and she should speak up for them. But certainly, you say, how could the two parties, when they each have their own interests to protect, but these debates don't go on unless you have candidates, and they also have their own interests to protect, and you manage to get debates on the air. I think this makes it easier with less debate and less hassle.

WOODRUFF: But there's no guarantee we'll ever have a debate, is that correct?

Mr. STRAUSS: There cannot be any guarantee until the two individuals guarantee it.

WOODRUFF: Mr. Laird?

Mr. LAIRD: I don't think there's any question that there will be debates. It's been accepted now in presidential politics, and I don't think any candidate can refuse to debate that's running for the presidency of the United States.

WOODRUFF: What about -- she just frankly said she didn't think the debates would ever come about, it'll be so difficult to get agreement --

Mr. LAIRD: Well, I respectfully disagree with her. She was a very valuable member of our commission, but I believe that the debates will come about, and I think under party sponsorship they will be much more successful. I'm not so sure we should have all these newsmen in these debates. I'd like to have a moderator and let the two presidential candidates go at it one on one. I think that the process needs some changing, and I think the parties can give it that change that's needed and necessary to make them more effective in the presidential election process.

WOODRUFF: Get rid of the newsmen, maybe keeping the newswomen.

Mr. STRAUSS: Let me add one thing about this debate, Judy, and that's this. That commission was made up of Republicans and Democrats, independents, liberals and conservatives, all different philosophies; and everyone, I think almost without exception, felt that the two parties should sponsor those debates. We had a first-rate commission that I think made sensible and sound recommendations. I think it would be constructive and an improvement of the process generally, an improvement of the debate process specifically.

WOODRUFF: Well, we'll be watching, gentlemen, to see just how those recommendations are carried out. Robert Strauss and Melvin Laird, thank you both for being with us. Jim?

LEHRER: And finally before we go, the Lurie cartoon of the day. It's about the recent rash of spy stories.

[Ranon Lurie Cartoon: U.S. intelligence pictured as ostrich whose eggs are stolen by foreign spies while the bird has its periscopefihead in the sand]

MacNEIL: Once again, the main stories of the day. Egypt said Libya had a clear connection to the hijacking of an Egyptian airliner. Malta said the hijack leader is alive and recovering from his wounds. A drop in defense contracts drove factory orders down sharply in October. Vice President Bush met the British negotiator who is trying to free U.S. hostages in Beirut. Good night, Jim.

LEHRER: Good night, Robin. We'll see you tomorrow night. I'm Jim Lehrer, thank you and good night.