The MacNeil/Lehrer NewsHour

MR. LEHRER: Good evening. Leading the news this Tuesday, Congressional leaders said Soviet trade benefits remain tied to Lithuania, and the Soviet foreign minister announced the withdrawal of 1500 nuclear warheads from Europe. We'll have the details in our News Summary in a moment. Robin.

MR. MacNeil: After the News Summary, we have a documentary look at China [FOCUS - STILL DEFIANT] a year after Tiananmen Square, and Judy Woodruff gets the personal views of student leader Chai Ling and journalist Liu Binyan. Then [FOCUS - DOING BUSINESS] San Francisco correspondent Peter Graumann looks at the impact Pres. Gorbachev made on American businessmen and Kwame Holman updates the saga of Washington Mayor Marion Barry [UPDATE - TRYING TIMES] now on trial for cocaine use. NEWS SUMMARY

MR. MacNeil: The fate of the U.S.-Soviet trade agreement signed at last week's summit remains tied to the situation in Lithuania. That was the message from Democratic and Republican Congressional leaders who met with President Bush at the White House this morning. Afterward they told reporters that while there was no formal linkage of the two issues, the situation in the Baltic republic would be crucial to Senate ratification of the treaty.

SEN. GEORGE MITCHELL, Majority Leader: I believe that there will have to be some moderation of Soviet policy with respect to Lithuania before the agreement is approved and most favored nation status granted. I hope that does occur. I think that question now is in the hands of President Gorbachev and the Soviet leadership.

SEN. ROBERT DOLE, Minority Leader: Call it linkage or call it reality, I think when it comes to Congress even after they codify the emigration policies, if the Lithuania or Baltic problem is not resolved, then I think it will become a matter of great concern in the Congress, bipartisan.

MR. MacNeil: Speaking of emigration policy, passage of a new Soviet emigration law, another condition for freer trade, was put on hold today. The Soviet legislature postponed adoption of the law until September at the earliest. President Bush has said the Soviet Union must lift emigration restrictions before the U.S.- Soviet trade agreement can be ratified. White House Spokesman Marlin Fitzwater said the delay was not necessarily a bad thing. He said the administration had not expected it to happen right away. Soviet President Gorbachev arrived back in Moscow today. He sent a message to President Bush saying he was pleased with the outcome of the super power sentiment. He predicted their meetings would bear good fruit. There was ethnic unrest in another Soviet republic today. At least 11 people were killed and more than 200 injured in the republic of Kirghizia in a battle over land dispute between two predominantly Muslim groups. A state of emergency has been declared in the area, but troops have not yet been able to stop the fighting. Jim.

MR. LEHRER: Sec. of State Baker talked with Soviet Foreign Minister Shevardnadze today about Germany. They met at a human rights conference in Denmark. They did not resolve the issue of NATO membership for a united Germany. The United States and Germany want it; the Soviet Union does not. But Shevardnadze said today compromise is possible. Before the meeting he announced new Soviet arms cuts. He said the Soviets would unilaterally withdraw 1500 nuclear warheads from Europe by the end of the year. Baker said he needed to study that proposal.

MR. MacNeil: China today reopened Tiananmen Square. It had been closed to the public for the last few days to prevent anyone from honoring students killed there last year when Chinese troops crushed the pro-democracy uprising. We'll have an update on China right after the News Summary.

MR. LEHRER: Greyhound Buslines has filed for bankruptcy. This country's only national inter-city bus company did so late yesterday in Brownsville, Texas. Officials of the strike bound company said the move was necessary to prevent creditors from repossessing buses and closing terminals. Bus ridership and revenues have dropped since the company's 6300 drivers went on strike in March. A Greyhound spokesman said there would be no interruption of service while the company reorganized under bankruptcy court supervision.

MR. MacNeil: And that's our summary of the day's news. Now it's on to China a year later, Gorbachev and American business, and the trials of Marion Barry. FOCUS - STILL DEFIANT

MR. MacNeil: First tonight China revisited. A year ago Government tanks rolled in to Beijing's Tiananmen Square ending a massive student protest there. In just a moment we will hear reflections on the Tianaman massacre and its aftermath from two prominent Chinese activists. But first a documentary look at the China they left. The reporter is Alan Able of the Canadian Broadcasting Corporation's program The Journal.

MR. ABLE: Rewriting reality is an ancient Chinese art. Today they are shooting a mini series called Special Policemen, designed to present the Officers of the Public Security Bureau as defenders of socialist order against anarchy and chaos as if they not the students were the heros of last Springs uprising. Director Ma-Jung has the task of getting his audience to believe this.

MA-JUNG, Public Security Bureau: [Speaking through Interpreter] Since the upheaval last year especially since the upheaval we need to improve the image of the policemen. It is important for us to remind people that the policeman works hard to protect the people.

MR. ABLE: Incessant propaganda on television. The Party's voice speaking unchallenged in magazines and newspapers. Fables about heroes soldiers. For the Chinese it is all to familiar. Martial law may be over. Fewer troops are on the streets but tough new laws are in place banning all forms of protest and public demonstration and surveillance cameras still scan the avenues. A hurricane of change is blowing from Prague to Pretoria but all the Chinese can do is put their heads down and peddle in to the wind. One of the few Chinese unafraid to speak out Pop Singer Ho Dejien says the Government media campaign is alienating the people even more.

HO DEJIEN, Dissident: They hate that. Some people just turn it off. We can hardly bare all this lousy propaganda. Nobody believes that. We can do nothing but turn it off.

MR. ABLE: Many reliable sources of information have been cut off. BBC and Voice of America Broadcasts are frequently jammed. Nicolai Ceausescu was an old chum of China dating back to the era of Mao Tse Dung and Ju An Li. When he and his wife were overthrown and executed in December the Chinese media did not report it but that did not stop the shock waves from reaching Beijing. Some Chinese dared to send congratulatory letters to the Romanian Embassy. Globe and Mail Correspondent Jan Wong found that not only were Chinese Students excited by the events in Romania there was evidence that the Government was shaken by the downfall of its old friend.

JAN WONG, Toronto Globe & Mail: During the Romanian uprising the Army was supposed to be on first degree alert here. It was hard to see. It is not the kind of thing you can see driving the streets. They were supposedly sleeping in their uniforms, their trucks were ready to go and they had the ammunition packed.

MR. ABLE: Last May it was hunger striker Wuer Kai Shi who confronted Premier Le Fung. Don't ignore our demands for freedom he shouted. The Government replied with tanks and troops.

WUER KAI SHI, Student Leader: When we talk with students in Beijing with telephone they said this kind of government, they cannot control the country any more. And to take care of this we were talking in to the telephone we said we know. No problem. We know this Government doesn't have a future.

MR. ABLE: Thousands of students are still paying in prisons all over China. The Human Rights Groups Asia Watch estimates that 10.000 protestors are still in custody condemned for revolutionary deeds and thoughts. Detained without charge, tried in secret under a legal system that Asia Watch calls pre-modern. Captured leaders of last years uprising have been separated and scattered among the prison population. Literature Student Gau Sin a Communist Party Member who joined last Springs protest was held for three months before his fiancee was informed that he wasn't dead just imprisoned in a cell with murderers and common thieves. Released in January Gau speaks carefully with reporters. He says that the Government's repression will eventually backfire.

GAU SIN, Dissident: [Speaking through Interpreter] China is like a reservoir with too much water in it. You can either let the water flow out gradually or you can keep building the dame higher and higher. If the Government keeps building up the dam around the people, sooner or later there will be a huge flood.

HO DEJIEN, Dissident: What I wish is our Government don't push us to over throw them. It is just like if they don't learn from Ceausescu then we Chinese have to learn from the Romanians.

MR. ABLE: Adding to the political crackdown is another enormous problem, the economy. The Communists have flip flopped so many times between centralized control and market reforms the result has been confusion and stagnation. Construction projects halted, factory workers laid off without sufficient benefits. State Television may show the Party Secretary pointing to special stocks of food for the New Years Holiday but with foreign loans and investment cut off since last summer and with much of China's hard currency reserves squandered to buy luxuries for corrupt Party officials the next explosion could come not from students but from workers and farmers.

JAN WONG, Toronto Globe & Mail: They are very afraid that the workers will rise up and I heard that in some of the Northeast Industrial Cities you have tens of thousands of workers who want to go on strike. This is what we hear here and I also think that the big problem is going to be the peasants. Agriculture is in real trouble. They said it was a record grain harvest. This is the Official account and I am afraid, I am very skeptical of that.

MR. ABLE: Trapped between a failing economy and disgusted public the Chinese Government relies on its army.

WUER KAI SHI, Student Leader: They have three million soldiers and they have maybe 40 million Communist party Members but they have lost billions of people in China and maybe some day just like Romania, Army will back the people.

HO DEJIEN: There has been several times during the past hundreds of years in China violently changed the power, the government as has brought us nothing concerned with freedom, democracy or any basic human rights. So I feel pity for ourselves that we still now need heroes to do for our basic human rights while the other countries the other people's were resolving their problems peacefully like Eastern Europe.

MR. ABLE: Freedom loving friends we can change everything. naive lyrics from last spring. This year Ho Dejien sings at home he has been barred from preforming public. In other lands the old order is crumbling but in China freedom is just a word in a song. For The Journal I am Alan Able.

MR. MacNeil: That young singer as well as the young literature student disappeared last week. Their friends don't know whether they have been arrested or gone in hiding. Yesterday Judy Woodruff got the personal views of two Chinese about the Country they have left.

MS. WOODRUFF: We bring together two key figures in Chine's history of dissent and protest. Liu Binyan has for many years regarded as the journalistic conscience of his country. He is one of the few Chinese investigative reporters and has spent years in prison and labor camps because of his articles. In 1987 he left China after he was stripped on his Communist Party Membership. He is now on the faculty at Trinity College in Connecticut. Chai Ling was primary leader of the Democracy movement at Tianaman Square, She and her husband were in the square during the massacre and helped lead survirors out and spent ten months in hiding and two months ago arrived in the West. She is in Washington to meet members of Congress and Officials of the Bush Administration. Many people are curious to know how you were able to escape. To escape there and to escape from your country.

CHAI LING: Our pictures were shown in all kinds of places. In all cross roads they have to examine our IDs so it was very difficult. Also at the ports and boundary places we could barely take a single step it was very difficult.

MS. WOODRUFF: But you made it out. So there must have been some help from ordinary Chinese citizens who helped you?

CHAI LING: Indeed that is true. They only wanted to do something that is worth doing in their life. Many people from the Government and also public security people, soldiers. I can tell you during my escape I had a real ID card made for me. This was impossible during the cultural revolution and there were also many very interesting stories.

MS. WOODRUFF: I am sure. I want to ask you about something. There is still a great deal of Mystery about what exactly happened in Beijing on June 4th. There has been a recent report done by a researchers at Asia Watch. Most of those massacred were not students but workers on approach roads in Western Beijing perhaps as many as a thousand and in an area immediately in the square there were several dozen people who died in the Square in self. Is that your understand of what happened.

CHAI LING: It is like this. At Tianaman Square they said that nobody died at the Square this was a lie. They wanted to cover the slaughter and the massacre at the Square and other places around the square.

MS. WOODRUFF: Does it matter this debate whether there were students or workers who were killed and what does that say about the actions of the Government in Beijing.

LIU BINYAN: It is very obvious that the Government was most afraid of the workers. The workers participated in the uprising rather late. Late may in fact. People who died on that day were workers but it doesn't mean that the students were not as brave. At the Plaza of course the Citizens and the workers were the first to resist troops but we must never forget that the Students played a very important role in this movement. In this respect the leaders did not report adequately about the workers. They kept the attention only to students. To me it is not important how many people die. To me what is important is the characteristics of the movement.

MS. WOODRUFF: Is it your view that this massacre had to take to place. That the students were right to stay there to hold their positions as long as they did and thereby risk the deaths of many people.

LIU BINYAN: The leadership was a tragedy because it feel on the shoulders of the students. I believe that the students were not responsible for the failure of this movement. All those 40 or 50 or 60 years old intellectuals should be responsible. We are now recalling the movement and trying to learn some lessons from it. In the future we will not repeat the same mistakes. Therefore I came to the conclusion that the General public was not prepared for this movement. It is correct to say that nobody was expecting such a movement on such a scale.

MS. WOODRUFF: Ms. Chi do you and other leaders of the movement have regrets that you waited there and held your positions as long as you did or did you feel that was the right thing to do.

CHAI LING: About this question I have thought about this over and over during my escape about the decisions we made at the time. Too early to draw conclusions about that. We have to wait a while before we can see. As a participant our feelings during those days. The first time we experienced the air of freedom. And we wanted to do something for our country. We grew up in this culture. We were only allowed to love the great leader and be a good cog in the machine but during the those days the Students and residents of Beijing realized that they have close ties with the people of the country and they are tied to the fate of the country. So I want to say those who have participated in this movement and faced it and who survived. I am not talking about those who did not participate in this movement. These people who survived their way of thinking is very different from the way of thinking of people who lived in Beijing for the last 40 years. What I want to do now I want to give the greatest value of those people who died in the cause. These participants wanted to tell the people of the country and the whole world how they felt that we wanted to give our life and blood to the cause. It was their own decision. As a participant I have the same feeling. I want to tell everybody the words these people didn't have a chance, didn't have time to tell others. After I came out I felt very lonely. There are many things that I do not understand.

LIU BINYAN: China is a complicated problem. in China many truths are being covered up. It is hard for an outsider to understand. Before the student movement last year many people thought China was hopeless. Once the movement broke up they were amazed at the strength of the movement and then they took a complete change of attitude but they continue to over simplify the China problem. They thought that depending on the students themselves they can solve the problems of China. If I were 20 years old I also would be influenced. Now I believe that a few individuals can not solve the problems. I of course myself have high hopes for China. Perhaps we ourselves simplify the matter. perhaps our view has become more realistic. What I am saying now I believe China is hopeful but whether the Regime will collapse or reform. I believe the day will come soon. Even in the days of complete change of political process we must still pay a great price.

CHAI LING: Can I add a few words concerning this as this is a very meaningful topic. I would just like to mention one fact. At the time well know intellectuals and scholars wanted to offer their suggestions but a lot of their ideals were not the same as the students who actually lived and struggled in the Square. One well known intellectual is now in prison. I can not mention his name for the fear of getting on trouble. At the time at the last minute when we were about to withdraw from the Square he said only now do I understand. One day when he comes out of prison I hope that he will speak of his feelings and understandings himself to his friends it would be much more forceful. During my escape I noticed a lot of problems. In Chinese families the authoritarian attitude is no less harsh than in the country as a whole. So if the democratization of China is to make a substantive progress the change of power or who is to rule is not the most important thing. Nor can we solve the fundamental problems. Only when the Chinese has developed the concepts of equality, freedom and fraternity can China begin to make good progress.

MS. WOODRUFF: Let me ask you both one question, one more question, and that is, one year after the events of last June 4th, do you think the cause of democracy has been moved forward or set back as a result of the student demonstration and the crackdown last year? Mr. Liu.

LIU BINYAN, Journalist: [Speaking through Interpreter] Let me speak first on the question of the future of China. To me, China seems to have been going back twenty or thirty years. This is an undeniable fact from the surface, however, China has also make some progress. There are several facts attesting to these observations. The people's attitude toward the Communist Party have changed. Even they are hopeless, angry with the Communist Party, they still cherished some illusions about Deng Xiaoping, himself. They think that the Communist Party is good, leadership is good. So long as they have this attitude, China will be a very difficult situation. I believe the massacre at Tiananmen has caused many even to change their view of the party. For example, in 40 years we have never seen any underground organizations. The underground publications, now they are available everywhere. Also this would cause the contradiction within the Communist Party to necessitate.

CHAI LING, Student Leader: [Speaking through Interpreter] The June 4th incident happened because there was 10 years of reform and opening up, so the contradictions become sharper and the movement broke out, so that all these people participated in the democratic movement. After June 4th, the Chinese people held a passive resistance attitude toward the government. I can tell you a story. During my skit in the middle school the students must take political lessons, the teachers tell them that without Communist Party, there will be no new China, but the students told the teacher, that teacher, you're telling a lie. This is just one example. And there the underground organizations are expanding and becoming stronger also. On June 3rd and 4th and after that, the students fell in front of the tanks. These people who faced death and went beyond death who survived, they are scattered all over China. That was why I was able to escape. They could see a good future. Now people like Deng Xiaoping are really in a very sad mood. They are having power struggle. There's not one minute thought of the peace and freedom that the students raised during the movement. All they thought of was to arrest more people, kill more people, execute more people. They are wrong. This is a nightmare for these old people. Now China needs a liberation of the human nature. The people have the demand for freedom and equalities. During June 4th, the attitude was demonstrated in the contradiction between the people and the government. This was a very vigorous feeling among the people. China needs to liberate herself. The Chinese leaders need to liberate themselves too. They should stop arresting people, stop executing people. Maybe they could enjoy some love before they die.

LIU BINYAN: [Speaking through Interpreter] This is a fact that we have paid price for this today. Many people were arrested. The newspapers have also lost their independence. All these, I must admit, are lost to us. Even if the students had not developed to the extent of last June with the massacre as a result, whether Deng Xiaoping, or our opposition, whether can peacefully continue their days, I believe they, themselves, would reflect on this process.

CHAI LING: [Speaking through Interpreter] In the 40 years the Communist Party has used fear to rule this country but after June 4th, everything changed because more Chinese people are no longer afraid of death, so after June 4th, the Communist Party's foundation of rules have more or less disintegrated.

MS. WOODRUFF: Well, we thank you both so very much for being with us. Mr. Liu, thank you, and certainly, Ms. Chai, we thank you and we wish you will. Thank you both for being with us.

MR. MacNeil: Still ahead on the Newshour Gorbachev and American business and the trials of Marion Barry. FOCUS - DOING BUSINESS

MR. LEHRER: One last summit word from and about Mikhail Gorbachev is next tonight. The Soviet President ended his five day summit American trip with a stop in San Francisco yesterday. He met there with business people and encouraged them to invest in the Soviet economy. But some in the audience said investing in perestroika can be a risky business. Peter Graumann of public station KQED-San Francisco reports.

MR. GRAUMANN: Everything was smiles and promises last August, when a Soviet trade representative signed a deal with a young California firm to set up a chain of computer showrooms, from Leningrad to Tashkent. The U.S. partner, California Microelectronic Systems, agreed to provide American computersand training. The Soviets would contribute the customers, Soviet industry such as the ministry of publishing. Seven of fifteen planned showrooms have opened. This company provided videotape is from Leningrad. Though the Soviet market is small now, CMS Chairman David Hodgin believes its potential is enormous.

MR. HODGIN: It's a capital stream. It's a country bigger than ours physically. It has a larger population than ours and they need everything we've got.

MR. GRAUMANN: Yet, 10 months into the joint venture, a deal that culminated several years of preparatory work, sales are only a twelfth of what the Americans projected.

DAVID HODGIN, California Microelectronic Systems: We thought that we would start all kinds of business a number of years ago, but it took us a couple of years before we really began to build the liaisons and have the contracts and so forth to establish business. Now in the last nine months we have started shipping product to the Soviet Union and we have a substantial backlog of product that they want and it's being shipped as quickly as they can arrange for payment.

MR. GRAUMANN: That's the hang up right now, they can't pay for it?l

MR. HODGIN: Absolutely. Big demand over there for hard currencies and limited amounts available, and so companies there that wish to buy are scrambling to get their hands on hard currency.

MR. GRAUMANN: The Soviets' lack of convertible currency limits even giants like Hewlett-Packard. HP did manage to sell $30 million worth of hardware to the Soviets last year. Most of that was medical equipment. American computer manufacturers are forbidden from selling the Soviets all but their least powerful models. The reason is export restrictions that the U.S. enacted to deny new technology to the Soviet military. While computer makers are lobbying to loosen export restrictions, the Soviets have retained advisers like Steven Puthuff to help them make their economy attractive to Western investors. Puthuff is a California entrepreneur and a former Commerce Department official. He now chairs a group calling itself Americans for the Success of Perestroika.

STEVEN PUTHUFF, Soviet Business Consultant: It's my definite understanding and feeling from discussing this with the ministries that to a person that Americans are the investors or partners of choice of the Soviet Union right now, and so we have a window of opportunity, and I believe it's a very narrow window of opportunity, to work with them in helping an economic infusion in the Soviet Union that would tie our two countries together economically, and that is really our purpose. The purpose is to obtain economic inter-dependence between our two countries so that we can provide billions of dollars from our military machines into the benefit of our people.

MR. GRAUMANN: Three days before President Gorbachev arrived in California, I asked Puthuff what he hoped the Soviet leader would say.

MR. PUTHUFF: I would hope that he addresses private ownership, private sector, privatization of major business opportunities, and hopefully he is prepared to announce maybe not at this particular time, but the agreement of signing the treaties that would guarantee investments in the Soviet Union, and those kinds of issues I think are very very important to the corporations here in Silicon Valley.

MR. GRAUMANN: One hundred fifty of Northern California's top capitalists were invited to hear Gorbachev's pitch for American investment in perestroika. To convince the executives, Gorbachev spelled out specific measures the Soviets are taking.

PRESIDENTGORBACHEV: [Speaking through Interpreter] In the process of phasing out state property, in the process of introducing new laws on property and land which call for various forms of ownership, we will be creating the kind of conditions that will enable American business and Western business in general to feel, normally to feel that it is acting in a normal and regular so to say, commercial and economic environment. We are now developing laws on monetary matters, patents, shareholding, and other economic areas. All of these will be ready by the end of this year. We are moving also toward convertibility of the ruble. We used to think that this is something for a rather distant future, but now we think that since we have decided to move toward a market economy, since we have decided to integrate ourselves in the world market and become an organic part of the world economy, we will have to achieve convertibility of the ruble in a shorter period of time.

MR. GRAUMANN: The San Francisco audience included the chief executives of Apple Computer, Bank of America, and Chevron, which just announced a huge oil deal with the Soviets. Among the sweeping changes that Gorbachev described was the conversion of Soviet military plans to civilian use.

PRESIDENT GORBACHEV: [Speaking through Interpreter] Those factories, those plants are as a rule our best production facilities. I think you have some people among you who know some of the products of our defense industries. I think that you will agree that they are of a rather high level because they worked for U.S.-Soviet parity, a kind of parity. Now we would like to use those production facilities for civilian purposes.

MR. GRAUMANN: Before closing, Gorbachev spoke to the risks of doing business in a country racked by turmoil and factionalism.

PRESIDENT GORBACHEV: [Speaking through Interpreter] You might be worried perhaps generally by the prospects of transition to a market economy. You are asking, you're wondering, could involvement with the Soviet Union become a trap, could you lose money as a result? First of all, you must bear in mind that I am a person who does not like adventurists. I think risk is good in politics and in business, but adventurism is bad both in politics and in business.

JOHN SCULLEY, Apple Computer, Inc.: I think we were all just absolutely overwhelmed with excitement that President Gorbachev has all of the charisma and all of the vision that we had hoped to see and even more. And we've all known that he can deal conceptually with political issues, and that he has a good instinct for timing on this, but I think we have not seen him in this role, the kinds of requirements that we need with skilled work forces. Establishing factories, the conversion of their defense industry into commercial products, allowing foreign management, the recapitalization of earnings back into the United States, all of these are the kinds of issues that we have to think about as businessmen as we look at investment decisions. You know, he had these issues at his fingertips and he had good answers.

MR. GRAUMANN: Thus far, the Soviet market has been too shaky and too restricted to attract interest from Apple Computer, but Sculley indicated that may change.

MR. SCULLEY: It's a high risk market without question. In some sense it is a third world country from an economic standpoint. But President Gorbachev was very clear on this, and he said, look, I know this is high risk, but we need you, and those of you who come in and join with us, we're watching you very carefully and we'll remember, and those of you who sit on the sidelines, we'll remember you too, and I think we all got the message.

MR. GRAUMANN: Consultant Steven Puthuff was equally enthused by the Soviet leader's performance.

MR. PUTHUFF: He broke brand new ground here. I mean, he was very specifically addressing some of the issues that we in Silicon Valley and different corporations have been asking for him to address, and I think that, in fact, his meeting with President Bush was very, very positive in promoting this kind of a position.

SPOKESMAN: [Reading Question to Gorbachev] Would you support formation of a non-governmental business community association between your Far Eastern region and our West Coast perhaps through our respective Chambers of Commerce?

PRESIDENT GORBACHEV: [Speaking through Interpreter] You know what? I think I like the idea.

MR. GRAUMANN: The Soviet leader left California having won some new allies, but they will be of little help if the reforms that President Gorbachev is counting on are not adopted as Soviet policy. UPDATE - TRYING TIMES

MR. LEHRER: Finally tonight, Marion Barry, the man who has been mayor of Washington, D.C., for the past 11 years. Jury selection continued today in his trial on 14 drug-related crimes. Kwame Holman reports.

MR. HOLMAN: Marion Barry has never lost a race, but in the wake of his cocaine arrest five months ago, Barry faces the toughest political and personal challenges of his life. As jury selection begins today in his trial, the big question in Washington is whether this time the resilient politician is headed for a fall. Last January, Barry, already publicly accused of being a regular cocaine user, walked into a law enforcement trap at a downtown Washington hotel. He was lured there by a longtime female friend, Rashida Moore, who was cooperating with the FBI and local police in the sting operation. Authorities say the unwitting Barry asked for powdered cocaine, accepted crack cocaine, smoked it, and was arrested. Hidden police cameras got it all on videotape which reportedly reveals Moore challenging the mayor to smoke the government-supplied cocaine.

MAYOR MARION BARRY, District of Columbia: [January 19] This time I've come face to face with my deepest human frailties. I've had to look my human weaknesses straight in the eye. How I wish I could trade this hour.

MR. HOLMAN: The next morning, before Washington's International Press Corps, Barry went to court accompanied by his wife of 12 years. Eventually he was charged with 10 cocaine possession misdemeanors, a misdemeanor conspiracy to possess, and three felony perjury charges alleging he lied to a grand jury about his drug use. Within days of his arrest, Barry left town for addiction treatment in Florida, then South Carolina. Publicly, he said only that he was dependent on alcohol, Valium and another prescription drug. His planned announcement to run for an unprecedented fourth mayoral term was put on indefinite "hold". Aides ran the government for the seven weeks Barry was away. The 54 year old mayor returned in March, claiming fitness and repentance.

MAYOR BARRY: [March 19] I made some mistakes, some large, some small, many successes, but the large ones I'm still working on trying to undue. In terms of political plans, I'm not going to announce any decisions today. My political organization is still intact, notwithstanding some defections.

MR. HOLMAN: While Barry was away, some of his staunchest political allies publicly abandoned him. The feisty mayor vilified them as Judases in the press. Then in April, while still keeping his own political plans secret, Barry demonstrated his consummate political skills, stealing the show at a forum of his potential mayoral opponents.

MAYOR BARRY: What you've been treated to during this campaign and from now on out for a while is three categories of candidates. A couple of them have been very positive, got a positive program. Most of them have been Barry bashing, Washington bashing, and some of them have cried -- [Crowd Shouting Over Barry] -- do they care about our city -- [Crowd Shouting]

MR. HOLMAN: It was vintage Marion Barry, who friend and foe alike, concede is the most gifted, formidable politician to emerge from Washington's 25 years of limited self-government.

JOSEPH DI GENOVA, Former U.S. Attorney: This guy is obviously very bright. He was a man of vision. He was someone who could deal with complex problems and understood them, not just the political, but someone who understood the dynamics, the chemistry of what it is to run a city.

RICHARD COHEN, Washington Post: I felt very good about him and I also liked him personally. He was good to be with. He's funny. He's smart. He was good company.

MR. HOLMAN: But both Richard Cohen, who has written many a scathing column about the mayor for the Washington Post, and former U.S. Attorney Joseph DiGenova, who started the eight year investigation of Barry and his administration, say Barry has gone from promise to self-destruction and disgrace.

JOSEPH DI GENOVA: This is a person, Marion Barry, who came from the depths of poverty, went to school, became a chemist, a chemistry major, a man of science, a man of political vision and activism who came into power being practically thrown into office by the editorialists of this city, clamoring for new and dynamic leadership, and who has apparently since 1978 done nothing but try to figure out ways after an initial period of great energy and creativity to destroy himself.

RICHARD COHEN: Here was a guy who was proclaiming himself, mayor of the night, I'm a night owl, I party all the time, I'm out all the time, I'm super human, I get by on a half an hour's sleep. This was getting ridiculous and I think he was sending a message to a whole lot of people that, you know, the rules didn't apply, and I think they got the message. I think the guy at the top sets the tone.

MR. HOLMAN: During Barry's 11 year tenure, a dozen high city officials have been convicted on federal corruption charges. Two Barry friends are now on trial for alleged contract steering. Under the city's charter, federal not local officials are required to prosecute all crimes. Howard University Political Scientist Alvin Thornton says that distinction causes friction in predominantly black Washington, D.C.

ALVIN THORNTON, Political Scientist: The big excuse, if you will, that you read about, and I don't question its legitimacy or the lack thereof, is that Barry is being hounded by white male insensitive politicians and prosecutors. And that has been insisted in by an insensitive press, principally the Washington Post, and that's what you get. And people define these two issues as being non-indigenous to Washington, D.C., that the newspaper, if you will, is playing to the metropolitan area outside of Washington, which is overwhelmingly white, and the prosecutor has a national conservative agenda to get black politicians.

JAY STEPHENS, U.S. Attorney: This is not a political prosecution. We didn't bring a charge to have Marion Barry resign from office.

MR. HOLMAN: Jay Stephens, the current U.S. Attorney, was accused of meddlingin city politics for seeming to suggest in the days after the mayor's arrest that he'd reduce charges against Barry if the mayor resigned.

MR. COHEN: I fundamentally believe that the U.S. Attorney's job is not to pick the mayor of this town or decide who's going to be the mayor of this town. That's up to the voters and he ought to butt out.

MR. HOLMAN: Stephens, Barry and Barry's attorney declined to be interviewed for this report, but last week, Stephens issued a statement saying that whether the mayor resigns is now irrelevant to the government's prosecution. In the eight year investigation of Barry and his administration, no charges were brought against the mayor until the sting. Some in Washington say that indicates the government was desperate to trap Barry. Dorothy Gilliam is another columnist for the Washington Post. Did people say to you that they thought the sting of Mayor Barry was a fair and appropriate thing or not?

DOROTHY GILLIAM, Washington Post: Most of what I've heard has been that they felt the sting was an indication of how far the government was willing to go to get Barry. There's the feeling that it was excessive.

MR. COHEN: It's the effort involving the FBI, the DEA, the local police, U.S. Attorney's office, I mean, everybody but the Royal Canadian Mounted Police and some huskies, to get the mayor of Washington. And you turn around and what have you got them on? You've got them on a possession charge essentially. Perjury, yes. But perjury is part of a possession charge.

MR. HOLMAN: Federal prosecutors also have been criticized for enlisting a reported Barry girlfriend, apparently to entice him into the arms of the sting. According to published reports, the videotape shows Barry first seeking sex from the girlfriend, being denied, then requesting cocaine.

MR. COHEN: It bothered me. I'm still bothered by it. I essentially believe what a former prosecutor told me right afterwards, which is that, you show me the man, I'll find his weakness, and I'll set him up and bring him down.

MR. DI GENOVA: Those decisions about how far to go in an undercover operation are made after great thought, great scrutiny. Decisions are made about how far to go in a host of areas and that's really for the jury to decide in any given case.

MR. HOLMAN: But DiGenova admits the government's controversial tactics may harm the prosecution's case before a Washington jury that undoubtedly will include blacks.

MR. DI GENOVA: Blacks in this city and the rest of the country are tough on crime because they are more victimized than anybody else. They see the tragedy of it in their neighborhoods. It's much more evident to them. On the other side of that, is the other issue with regard to a black public official who is loved in many ways, and while he or she may have flaws, people still want to support that person. And so there's a conflict in the same body and soul of those potential jurors about hating crime, hating drugs, loving this individual with flaws, and it all comes into this incredible amalgam in the jury room.

MR. HOLMAN: In a move widely viewed as playing to the sympathies of potential jurors, Mayor Barry last week broke his silence about his case. On a local radio call-in show, Barry admitted for the first time publicly to smoking cocaine during the sting. He claimed the level of purity of the drug could have killed him.

MARION BARRY: It's unprecedented that the United States government would give somebody a lethal, potentially lethal dose of anything and be sanctioned by the courts to do so. We were prepared last week to have a physician testify that that could have killed me.

MR. HOLMAN: And Barry wasn't through. The next morning, the Washington Post quoted a confident and seemingly unrepentant mayor as saying, "I think the prosecutors know that in this town all it takes is one juror saying, 'I'm not going to convict Marion Barry. I don't care what you say.'"

MR. DI GENOVA: The danger here in this type of atmosphere is that jurors will not be candid about their deep seated feelings and will have a predisposition to either convict or to acquit.

MR. HOLMAN: Some Washingtonians do still have strong feelings favoring Barry. The latest poll shows him in a two-way tie for first place, supported by 23 percent of Democratic voters in a crowded field of candidates in this overwhelmingly Democratic city. Barry has suffered a huge loss of support among whites and blacks in the middle class. His remaining supporters are predominantly black, predominantly low income.

ALVIN THORNTON, Political Scientist: He's crystallized that group as a distinct group that's alienated from the political process power structure in this city. And you can go to any city and find the same thing. It's kind of a nationalistic group, culturally nationalistic, politically alienated, and prone to support those who they perceive to be taking on the system in their best interest, be it Louis Farrakhan or Marion Barry, Jesse Jackson, you name it.

MR. HOLMAN: Whatever Barry's political strength, if he is convicted and sentenced to jail or perhaps even to probation, city election law would present him from serving a fourth term.

DOROTHY GILLIAM, Washington Post: I think running, trying to run again for election would be bad for him and certainly bad for the city.

MR. DI GENOVA: This guy's very talented. He can come out of this, which is why I always thought a disposition was the right thing for him. Get rid of this case. Get rid of it. Work it out. Get a deal. Don't go to prison and then get on with the rest of your life.

MR. LEHRER: Stories about a possible plea bargain between Barry and the prosecutors persist, but so far, both sides say there is no deal. RECAP

MR. MacNeil: Again, the main stories of this Tuesday, Congressional leaders said passage of a U.S.-Soviet trade pact was tied to a resolution of the Lithuanian conflict, and the Soviet Union announced a unilateral reduction of short range nuclear arms in Europe. Good night, Jim.

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