The NewsHour with Jim Lehrer

JIM LEHRER: Good evening. I'm Jim Lehrer. On the NewsHour tonight, some analysis of the big civil suit filed today against the tobacco industry by the Justice Department; a NewsMaker interview with the president of Colombia, Andres Pastrana; a Y2K-ready update from Senators Bennett and Dodd; and a look at the Pat Buchanan story by political reporters Elizabeth Arnold, Ronald Brownstein, and Thomas Edsall. It all follows our summary of the news this Wednesday.

NEWS SUMMARY

JIM LEHRER: The Justice Department announced a lawsuit against the tobacco industry today. It will attempt to recover the billions of dollars in taxpayer money spent treating sick smokers. The action alleges cigarette makers defrauded and misled the public for 45 years by concealing the harmful effects of smoking. Attorney General Reno spoke at a news conference in Washington.

JANET RENO: Our goals in this lawsuit are simple: We want to recover health care expenditures paid out by the federal government to treat tobacco-related illnesses. We want to require the tobacco companies to disgorge the funds that they earned through their unlawful conduct. We want to require the tobacco companies once and for all to disclose all relevant research on smoking and health. And we want to engage in counter-advertising and other public education campaigns to better warn our young people about the dangers of smoking.

JIM LEHRER: A lawyer for one of the companies, Philip Morris, said the suit was without substance and was politically motivated. He told reporters it was being pushed by the White House, and was first mentioned by President Clinton last January.

GREG LITTLE, Lawyer, Philip Morris: If you look at the fact that the announcement of the filing was made in the State of the Union Address, I think that speaks volumes about the political nature of this lawsuit. This was not a lawsuit that was just filed. This is a lawsuit that has been trumpeted. This is a lawsuit that I think you will continue to see the administration and the Justice Department try in the press. They will try to use sound-bite litigation to persuade people that they have a legitimate lawsuit when, in fact, they have lawsuit that has no basis in fact and no basis in law.

JIM LEHRER: The civil action followed a criminal inquiry closed today into testimony by tobacco executives in 1997. They told Congress then they believed smoking was not addictive. No charges were filed. We'll have more on today's announcement right after this News Summary. Major U.S. computer systems are ready for the new century, according to the final Senate Y2K report released today, but locally glitches might occur, and sometimes those failures will be significant. Senators Robert Bennett and Christopher Dodd reached the conclusions after conducting 30 public hearings on the matter. We'll talk with them later in the program tonight. The Senate approved a new agency today to oversee the security of the nation's nuclear weapons laboratories. It was in response to allegations of Chinese espionage. The semiautonomous agency will be within the Energy Department. The House adopted similar legislation last week. In Taiwan today, strong aftershocks complicated earthquake recovery efforts. Rescue workers scrambled to safety, then returned to collapsed structures. They dug through rubble in a race to find more victims before more time passed. Helicopters ferried them to crowded medical facilities or to makeshift mortuaries. Officials said the death toll from yesterday's quake climbed to 2,000, with more than 4,400 people injured, some 2,600, missing. Earlier, emergency crews from Virginia and Florida arrived in Taipei to join the search for victims. It was another unsettling day in East Timor as troops from a multinational force tried to extend their control. We have a report from Mark Austin of Independent Television News.

MARK AUSTIN: The desperate people of Dili are resorting to desperate means-- a humanitarian supply warehouse the scene today of frenzied looting. There are simply not enough U.N. peacekeepers here to keep order, and departing Indonesian troops have no incentive to stop it, so instead they take part. In Dili, it is not the looters but the militiamen the multinational force has in its sights. Several more were arrested today, and in the port area, enraged locals violently handed over one suspect to the troops. But on the outskirts of this city and further a field, the militias and renegade Indonesian troops remain armed and out of control, attacking foreigners for the first time since the multinational forces arrived. The force commander visited the village where "Financial Times" Journalist Sandor Thoenes was shot dead by men in Indonesian army uniform. And another British journalist was also attacked by similarly dressed men in the same area. He escaped, hid in the woods, and had to be rescued by special forces in a Black Hawk helicopter.

SPOKESMAN: Thank you for your professionalism.

MARK AUSTIN: Many Indonesian troops are leaving East Timor. Today, one contingent are handing over control of the U.N. compound to British Army Gurkhas. These soldiers are leaving with good grace, but others who resent the presence of the multinational force in their country are not. They are burning their barracks and compounds before they leave.

JIM LEHRER: And that's it for the News Summary tonight. Now it's on to the tobacco suit, the president of Colombia, a Y2K computer update, and the Buchanan run.

FOCUS - TAKING ON TOBACCO

JIM LEHRER: Elizabeth Farnsworth has the tobacco story.

ELIZABETH FARNSWORTH: President Clinton spoke briefly about the tobacco lawsuit late today at the White House.

PRESIDENT CLINTON: LastJanuary, in my State of the Union Address, I announced that the Justice Department was preparing a litigation plan to recover the cost of smoking-related illnesses. Over the years, smoking-related illnesses have caused taxpayers billions of dollars through Medicare, veterans' health, and other federal health programs. Today, the Justice Department declared that the United States is, in fact, filing suit against the major tobacco companies to recover the costs borne by taxpayers. I believe it's the right thing to do. The tobacco companies should answer to the taxpayers for their actions. The taxpayers of our country should have their day in court. Thank you very much.

REPORTER: Mr. President, the tobacco companies say this lawsuit is pure politics, sir. What do you say?

PRESIDENT CLINTON: Well, if you look at the record of this administration, we've been out there on this issue a very long time. No one else ever tried to do that. And we did our best to work with them and with the Congress to resolve many of these matters legislatively, and they declined, and I believe this is the appropriate thing to do.

ELIZABETH FARNSWORTH: And here to discuss the suit and its potential impact are Mary Aronson, head of the Tobacco Policy & Litigation Research Firm in Washington, and Martin Feldman, a tobacco analyst with the Wall Street firm Salomon, Smith, Barney.

Mary Aronson, tell us more about what the government is claiming and what it's asking in this suit.

MARY ARONSON: The government is asking primarily for repayment of medial expenditures under a variety of federal programs, including Medicare, various Department of Defense programs, and federal employees' health benefits programs, and the like, and a disgorgement of ill-gotten gains by the industry for possibly as long as the past 45 years. I believe there was some discussion of that today. It's bringing its case under three important statutes: the Medical Care Recovery Act, which was initially established in 1962 to help the government sue for primarily, I think, then for military people who had been injured and for which the government had to foot the bill; under a civil RICO claim; and under the Medicare Secondary Payer.

ELIZABETH FARNSWORTH: Martin Feldman, anything first to add on the claims and the demands?

MARTIN FELDMAN: Well, just one quick point; the government is also claiming that the industry should reveal all the documents that it believes have not yet been made public and also fund anti-smoking campaigns, which we've clearly seen the states do exactly the same thing, so much of those two aspects of the claim have, in fact, been satisfied, I think, as a result of the state settlements of last year.

ELIZABETH FARNSWORTH: Martin Feldman, how do you see the legal basis for this? And just briefly say what RICO is.

MARTIN FELDMAN: RICO came out of a different type of litigation a long time ago, but it's racketeering, and its claim here is or the allegation is that the industry conspired to act together to withhold information from the American people on the dangers of smoking. I think the real problem is that in 1964, the Surgeon General published his report saying very clearly smoking will kill you. Government went on until 1974 handing out free cigarettes to the military, subsidizing the growth of tobacco leaf, debating whether or not to raise tobacco taxes, so there are -- it's slightly disingenuous, I think, the attempt to bring this claim, given the way it's acted as a partner for the industry over all these years, a tacit partner, at that.

ELIZABETH FARNSWORTH: Mary Aronson, disingenuous?

MARY ARONSON: Well, you know, maybe the government had some sense that smoking was dangerous, maybe it had a lot of information about the dangers of smoking, but who had the best information? Who had the most complete information? And I think that was clearly the industry. And the industry, according to the claims made today, withheld that information, made promises to make it public, made promises to do research, and according to the complaint made today did just the opposite.

ELIZABETH FARNSWORTH: Ms. Aronson, how big a threat is this to the tobacco companies, compared, for example, to the various suits they faced before, in the states, for example?

MARY ARONSON: Well, ever since I've started looking at tobacco, one of the big threats was what was going to happen in Washington and what would happen in the courtroom, and you know, five years ago, we started hearing all of this negative information about the industry, whistleblowers, documents coming forward, and the like, and as a result of that, I think a lot of attorneys felt free to litigate against the industry in what I call "boutique" cases -- the state cases, the federal government case, third party insurer cases, and the like. Certainly, certainly, the federal case is the case of the hour; it's the biggest thing that's out there, and it really dwarfs the state cases -- I believe it will dwarf -- even though we haven't heard what the price tag is. But even if it is settled and even after it is completed, I think we're still going to have the lingering threat of individual smokers going forward with their injuries, and the punitive damages that can be assessed. Two cases earlier this year had punitives assessed at $50 million in one and I think about $70/80 million in the other. So I think there's still problems out there.

ELIZABETH FARNSWORTH: And Mr. Feldman, how do you see the threat to the tobacco companies?

MARTIN FELDMAN: Well, I see the biggest threat to the tobacco companies, agreeing with Mary, with the individual cases. After the Minnesota case was settled last year, the industry made public a lot of documents that clearly showed misconduct and tough behavior of the 50's and 60's, and I think that that has rearmed a number of individual plaintiffs. I think on a case like this federal claim the Health Care Recovery Act does not appear, on its face, to allow for an aggregation of the claims. So, in other words, I think that the industry has some quite good technical defenses to keep the plaintiff out of court, and simply allow the plaintiff instead to seek compensation on a one-plaintiff-at-a-time basis. But the individual cases are out there. They could grow in number. I think the industry will win some and lose some. I think to date we've never seen any money paid off as a result of a loss. I think in years to come that will probably change. The industry can clearly afford some losses, but for me that's the bigger threat than these cases, because on the individual cases it's tough to keep the plaintiff out of court. Anyone has a right to bring a claim and even the industry doesn't deny that.

ELIZABETH FARNSWORTH: And, Mr. Feldman, just briefly, we heard what the argument of one attorney for Philip Morris was. What are they arguing about this? We heard the argument that this is a political case. What else will they be arguing?

MARTIN FELDMAN: Well, again, to reiterate my previous comment, I think they will be arguing that the plaintiff has very little right to bring his claim in court. In other words, the Health Care Recovery Act doesn't allow for an aggregated claim. It doesn't -- some of these claims don't allow for employees that perhaps are not federal employees of the government, and that's only at the initial stages. I think then if they fail on those grounds, they will fight it substantively and they will argue that then the federal government knew as much about the dangers of smoking as they did from the period 1953 to the late 70's, the period that perhaps represents most doubt.

ELIZABETH FARNSWORTH: Mary Aronson, do you have anything to add to that about their argument?

MARY ARONSON: Well, my sense on something that Martin said -- my sense in reading about the Medical Care Recovery Act is that it doesn't prohibit aggregations; it's simply silent on aggregation.

ELIZABETH FARNSWORTH: Explain aggregation.

MARY ARONSON: Grouping of cases.

ELIZABETH FARNSWORTH: As opposed to individual cases.

MARY ARONSON: Exactly. And given that the Medical Care Recovery Act does provide an independent cause of action to the federal government, it would seem that aggregation is obviously the most efficient way for the federal government to go -- and because it is an independent cause of action, you would think -- I believe that -- you know -- the aggregation issue isn't all that clear, as Martin would suggest it is.

ELIZABETH FARNSWORTH: Ms. Aronson, the criminal investigation that had been underway was dropped today, as Jim Lehrer said earlier. Can any of the evidence gathered in that, in the grand jury, for example, be used in the Justice Department's case?

MARY ARONSON: I think the Justice Department, the federal division, was going out of its way -- I think the reports a few weeks ago -- they were going out of their way to hire FBI personnel who were completely divorced from the criminal investigation, and so I'm not exactly sure what that means in terms of -- it didn't sound like the evidence is going to be carried over; maybe it will be discovered independently. But, you know, that's my sense.

ELIZABETH FARNSWORTH: Mr. Feldman, what's been the effect so far on tobacco stocks of this suit?

MARTIN FELDMAN: Well, when the President announced the claim on January 20th at his State of the Union Address, the stocks fell sharply. Philip Morris, the biggest tobacco stock, probably gave up $6 on a $46/$47 price over the course of the subsequent two weeks. Today the stocks were weak -- Philip Morris down about $1.50, I believe, at the close, slightly more than the market today. So much of the bad news was already in the stock prices. From here, the market is obviously going to be nervous about this case. I think as the market begins to evaluate the risks, you might see the stocks recover from their current lows, but clearly this does represent enormous uncertainty. There's a case in Miami, called the Engel case, a class action, where the court has allowed an aggregated claim, obviously much smaller than this, but to go ahead, and that's worried investors as well. This represents a bigger form of the same claim. For me, the biggest worry is, however, the individual cases where I think the industry's defenses are perhaps less obvious than they might be in this federal claim or in the class action in Miami.

ELIZABETH FARNSWORTH: All right. Thank you both very much for being with us.

MARY ARONSON: Thank you.

NEWSMAKER

JIM LEHRER: The country on the front line of America's drug war-- we start with this report by Kwame Holman.

KWAME HOLMAN: The South American country of Colombia produces three-quarters of the world's illicit cocaine and two-thirds of the heroin sold onthe streets of the U.S. As part of its war on drugs, Washington this year tripled its anti-narcotics assistance to Colombia to $289 million. That makes Colombia the third largest recipient of U.S. military aid, behind Israel and Egypt. In July, the American-backed drug war in Colombia exacted its first U.S. military casualties. An army surveillance plane went down in remote southern Colombia, killing five U.S. soldiers. The crash added fuel to a partisan political debate in Washington over the U.S. role in Colombia's drug war. The White House drug czar, Retired General Barry McCaffrey, was in Colombia in August, and called the drug situation there an emergency. McCaffrey wants an additional $1 billion in U.S. military and civilian aid to go to Colombia and its neighbors over three years. And McCaffrey defended efforts by Colombia's president, Andres Pastrana, to reach a settlement with antigovernment guerrillas. Columbia's civil war between the government and at least three competing guerrilla groups has resulted in some 30,000 deaths just in the last decade. An estimated 1.3 million people of Colombia's population of 40 million have left their homes because of the fighting. Many fled to neighboring countries. The economy also is suffering, with the peso losing a quarter of its value versus dollar this year. Unemployment is at 20 percent, and Colombia's current recession is said to be the worst in 70 years. McCaffrey acknowledged the government's talks with the rebels, known by their Spanish acronyms FARC and ELN, have been slow-moving.

GEN. BARRY McCAFFREY: There's been no gesture of goodwill on the part of the FARC guerrillas. It's outrageous. And yet in saying that, I do not imply that we should do anything but be entirely supportive of continuing to engage on a negotiated... support Pastrana and his colleagues on a negotiated end to the FARC, ELN, and paramilitary struggle against the government.

KWAME HOLMAN: On Capitol Hill, Republicans say Pastrana's peace overtures have failed to curb violence, and that the Colombian president destabilized the situation further when he effectively gave a portion of land to the rebels. Today, the guerrillas control about half the territory in the country. Indiana Republican Dan Burton, chairman of the House Government Reform Committee, is a leading critic of the Pastrana government and U.S. policy.

REP. DAN BURTON: It's unfortunate that it took the tragic deaths of five U.S. Army personnel in Colombia to enlighten this administration that there's a problem down there. A blind person could have seen there's a problem. If we haven't learned anything throughout history, we ought to learn this: Appeasement does not work.

KWAME HOLMAN: Republicans also blasted the administration for failing to deliver state-of-the-art Black Hawk helicopters promised to Colombia to help it fight the drug growers. This week, President Pastrana is in the U.S. asking for more help. Speaking before the U.N. General Assembly and meeting with U.S. officials, he requested $3.5 billion in international assistance to fight the drug war.

JIM LEHRER: And Colombia's president, Andres Pastrana is with us now. Mr. President, welcome.

PRESIDENT ANDRES PASTRANA: Thank you much, Jim.

JIM LEHRER: How would you spend the $3.5 billion?

PRESIDENT ANDRES PASTRANA: Roughly, I think, the figures of this $3.5 billion, 55 percent are going to be invested in fighting drugs, in narco-trafficking -- another 45 percent in social investment, in education, alternative development, housing, infrastructure, and creating alternative development in the areas in which we have right now illegal crops.

JIM LEHRER: How would this money make it possible... what would this money make possible for you to do that you're not doing now to fight the drug situation?

PRESIDENT ANDRES PASTRANA: I think that we need to invest in our economy, because we need to create back again the structure to put the economy back on the track of development, growth, employment -- avoid people going from the urban areas and the rural areas to cultivate coca or poppy fields. So I think that if we invest in them in alternative development, in creating new jobs in the country, enhance the commerce between Colombia and the United States, we're going to get more jobs, and we're going to get these people out of this illicit business.

JIM LEHRER: Why do you believe it's the responsibility of the United States and other countries to help you?

PRESIDENT ANDRES PASTRANA: Because this is a war that is not only of Colombia. This is a global problem. I will not stay only in the supply demand...

JIM LEHRER: Go ahead. That's fine.

PRESIDENT ANDRES PASTRANA: I think we go a step further. What's good and what's bad. And I think that it is bad to cultivate like what is happening in Colombia, but it's also bad to consume as is happening in the United States and in Europe. And that's why we're not asking aid. I think this is a strategic alliance between Colombia, the United States, Europe, Asia. This is the largest business in the world, it's a $500 billion business.

JIM LEHRER: $500 billion?

PRESIDENT ANDRES PASTRANA: And that's why we need to unite all the countries of the world to eradicate drugs from the face of the earth. And this is not only your problem.

JIM LEHRER: So when you talk to U.S. leaders, whether it's General McCaffrey or whether it's President Clinton or Secretary Albright or whoever, you say, "hey, wait a minute, there is a supply problem, and we're working on that but there's also a demand. You reduce if demands and help us reduce the supply." Do you think the U.S. is doing everything it can to reduce the demand?

PRESIDENT ANDRES PASTRANA: They can do more. And I think you can see in the public opinion of the United States that they want more investment also in avoiding consumption in the United States. And that's why I think we need to unite all the efforts, Colombia, the U.S., Europe, Asia, to fight this problem.

JIM LEHRER: Mr. President, I know just on this program for the last 20-plus years, we've been talking about... talking to people about doing things about the drug problem, the drug trafficking, the drug growing in Colombia. And it seems to have gotten worse and worse and worse. What gives you any confidence that $3.5 billion or any other effort could finally stop it?

PRESIDENT ANDRES PASTRANA: I think this is the starting point. I think that we've been fighting, for example, in Colombia in the last 18 years, we've been in the front lines against drugs. We have lost, you've seen many times - I imagine-on this program, our best journalists, our best politicians...

JIM LEHRER: They've all been killed.

PRESIDENT ANDRES PASTRANA: Killed. Even myself - I've suffered personally the violence of drugs. I was kidnapped by the Medellin Cartel at the end of the 80's. But I think that we have the commitment, and we're wishing to fight and eradicate drugs from Colombia, from the U.S., and the world. And that's why I think we need to unite all of the efforts of all of the countries that have been affected right now by drugs to eradicate this problem. And I think it's not a pointing at one country, or accusing one country. I think if we unite all these efforts, not only military efforts, I think we also need to invest in social justice, in recovering our economies, invest in the people, we are going to get rid of this problem on the face of the earth.

JIM LEHRER: Now, what is the connection between the drug problem, the drug traffickers, the drug growers in your country and the guerrillas?

PRESIDENT ANDRES PASTRANA: Right now I think that most of the finest of the guerrillas and the vigilantes, militias in Colombia are financed by drugs.

JIM LEHRER: They need each other you mean?

PRESIDENT ANDRES PASTRANA: That's right. I said that that is a convenience matrimony that they have right now. They take care of the plantations. They take taxes from the drug lords taking care of the labs. So I think that if we attack direct narco-trafficking, we are going to avoid the weavers of money that are going to the insurgency or are going into other actors of the conflict in violence, not only Colombia, but also the United States and other parts of the world.

JIM LEHRER: What do you say to several U.S. Congressmen who say, "wait a minute. You cannot separate these. If we go in there and increase our aid and assistance to Colombia in the narco-war, we are in fact also involving ours in the civil war?"

PRESIDENT ANDRES PASTRANA: That's why, Jim, we create what we call the special anti-narcotics battalion of the army. Right now police and army are involved in drug trafficking against drug trafficking, and that's why we separate the aid to these anti-narcotic battalions that is going to work hand in hand with the police in eradicating drugs in Colombia, and all the aid, all the support of the United States is going to be to these special units, united with the government. And with the society, we are going to fight narco- trafficking in the country -- avoiding money that will be going to the army. That is why we are creating a special anti-narcotics unit. We hope by the end of the next three years we can have between 4,000 to 5,000 specialized training men of the army and the police fighting together to eradicate crops from our country.

JIM LEHRER: No danger that the U.S. could get sucked into the other war?

PRESIDENT ANDRES PASTRANA: That's why we're trying to split. This aid will go directly to these special units.

JIM LEHRER: What about critics like Congressman Burton we just saw on the tape who accuses you of appeasement in the way you have dealt with these guerrillas by giving them a huge part of your country, et cetera?

PRESIDENT ANDRES PASTRANA: I control and my government controls the whole territory of Colombia. But what is not fair is that I've been working for the peace process only one year. If you compare the peace process of Colombia with Northern Ireland or the Middle East, they've been centuries before sitting at the table of negotiation. In one year, I have with the FARC agreed on an agenda, 12-point agenda, and we hope very soon to start our negotiations with the FARC. Sometimes people are expecting soon that we could achieve peace in Colombia, and this is a difficult process. To achieve peace you have to work, you have to build. You have to create environment. We've been in this internal war for 40 years. And people are expecting...

JIM LEHRER: Forty years?

PRESIDENT ANDRES PASTRANA: Forty years, and people are expecting that in eight months or nine months while I've been in government only for one year... and in the last eight months, I think that we have advanced more than in fifty years. So I think that this is a good starting point, and we hope to get negotiations very soon.

JIM LEHRER: As a practical matter, is a military solution even possible?

PRESIDENT ANDRES PASTRANA: I agree with President Clinton. The problems of Colombia, you cannot solve the problems through a military solution. It's through a political solution that we are going to solve our problems.

JIM LEHRER: But does the other side really want peace? Don't they really want to control part of that country? Don't they want to continue drug...

PRESIDENT ANDRES PASTRANA: They're not controlling 30 percent of the country.

JIM LEHRER: Okay. You dispute...

PRESIDENT ANDRES PASTRANA: What is happening is that they have presence in 30 percent of the country. But we have absolute control of the whole territory of Colombia. What we created with what we call the distention zone is a zone in which insurgency and government, journalists and members of the international community go there or could be there to start this negotiation process.

JIM LEHRER: What are you doing about all these people that are fleeing your country?

PRESIDENT ANDRES PASTRANA: The problem is that for the first time in the history of Colombia, as you said also in your report, we have a link between insecurity and economic crisis. Colombia has been is a very...our economy has been growing for the last 70 years, but for the first time we inherit a economic crisis. Unemployment right now in Colombia is 20percent. That's why we think if we enhance the commerce with the United States, new products of Colombia, new employment in Colombia, we're going to have new employers in our country, and in that way, we are avoiding people going out of the country, looking for new alternatives or a way of living, because we have to be aware that many of the displaced people that we have right now in Colombia because causes of violence are not in Miami or Washington or Canada or in other Central American countries, they are in Colombia, and that's why we need to create new employment and put back the economy on track and growing.

JIM LEHRER: How would you characterize the response you've received at the U.N. Yesterday, and here in Washington today?

PRESIDENT ANDRES PASTRANA: Excellent, excellent.

JIM LEHRER: They're going to help you?

PRESIDENT ANDRES PASTRANA: Yes. President Clinton was committed to help. Even today, Senator Coverdale and Senator DeWine, they proposed $1.5 billion for the next three years as help to Colombia. So I think that's a very good first step. But we also want them to ask international community to be involved and get involved in this program. Colombia is putting into this plan $4 billion. 40 percent of my budget of the defense in Colombia is dedicated to drug trafficking. What we're asking is the world, not only the United States, why don't you help us or why don't we create this strategic alliance to fight drug trafficking and to end violence in my country with $3.5 billion in the next three years.

JIM LEHRER: Well, Mr. President, thank you and good luck to you, sir.

PRESIDENT ANDRES PASTRANA: Thank you very much.

UPDATE - Y2K - THE MILLENNIUM BUG

JIM LEHRER: Still to come on the NewsHour tonight, a millennium bug update, and candidate Buchanan. Our business correspondent Paul Solman has the millennium story.

PAUL SOLMAN: As we near January 1, a Senate panel today issued its 100-day report on the Y2K computer problem. Joining us to talk about the report are its authors: Robert Bennett, Republican of Utah, and chairman of the Senate Special Committee on the problem; and Christopher Dodd, a Connecticut Democrat, and the committee's vice chairman. .

PAUL SOLMAN: Gentlemen, welcome to you both.

SEN. ROBERT BENNETT: Thank you.

SEN. CHRISTOPHER DODD: Thank you.

PAUL SOLMAN: Senator Bennett, how reassured or worried should we be at this point?

SEN. ROBERT BENNETT: Well, if you're thinking in terms of the vast national systems like the power grid, the telephone system, the banking system and so on, I think you should be fairly well reassured. We are not going to have a major meltdown. On the other hand, that is no assurance that you're not going to have a problem there your backyard because there are still parts of the system, parts of the economy that could feel a Y2K impact. So I say, it's not going to roll across the country, but it may be just across your street.

PAUL SOLMAN: Senator Dodd, what are you most worried about? What do you think we haven't done yet that we need to be doing or that I should be worried about in my backyard?

SEN. CHRISTOPHER DODD: Well, there's one area I think that Bob... Senator Bennett and I are probably most concerned about in terms of system-wide problems. And that is in the health care area. I think as Bob has said, telecommunications, transportation, utilities and the like are in very good shape -- federal agencies, Social Security, Medicare, the Defense Department, all in very good shape. But health care and the international scene I think are probably the two areas of most concern. In health care, there are some 800,000 physician and 50,000 doctor's offices, 16,000 nursing homes, some 6,000 hospitals in the country. And in too many cases in our urban and rural hospitals, doctor's offices, we have very little assurance and very little information that these places have become compliant. In fact, there was a story today out of Massachusetts that indicates that 51 percent of the hospitals had not finished upgrading their biomedical devices. 48 percent did not have contingency plans ready in the event of power lights to go out. So there still are areas in the health care area that are troubling. Medicaid, for one, there are too many states and too many of the systems on eligibility, management systems and children's health which are just not in good shape - yet with 100 days to go.

PAUL SOLMAN: Would you personally be worried if you were in a hospital. I'm not suggesting anything, but on January 1, or I was in the hospital, any of us?

SEN. CHRISTOPHER DODD: I would want to check. This is the kind of question...this is where consumers come in and they can do an awful lot, as Bob Bennett has very accurately said, if you're going to stockpile anything, stockpile information, to quote the chairman of the committee. And this is where good common sense by consumers, talking to their physician - making sure, calling their hospital and asking whether or not the equipment they have is compliant. In many places it is. I don't want to suggest that this is all across the country, but there are too many places where there are too many unanswered questions. And too many of these systems do rely on computer systems that are going to operate accurately. Unfortunately, we don't have that information. So we have to list it as an area of significant vulnerability.

PAUL SOLMAN: Senator Bennett...

SEN. ROBERT BENNETT: Come to Utah. Their health care is going to be just fine in Salt Lake. I've already checked it out.

PAUL SOLMAN: All right. I'll be sure to make a note. But can I fly that day on my way to Utah? I read something that 47 percent or 41percent of computer scientists weren't going to fly on January 1st.

SEN. ROBERT BENNETT: My guide there is if the airline is willing to put the airplane in the sky, they know better than I do. They have a greater vulnerability with all of the liability there and their own crew with their lives at risk. If they're willing to take that risk, I'm willing to take it with them. I'd be a little careful about destinations. There are some places in the world where I wouldn't fly, but interestingly, those airlines that serve many of those places have already announced they won't have an airplane in the sky that weekend. So if you're flying to an American destination or a Western European destination, on a reliable carrier that's willing to take the risk, I think you should be willing to, too.

SEN. CHRISTOPHER DODD: For our report, by the way, I think with the 670 airports in the country, licensed airport, the only area of any concern and it's relatively minor -- is the landing light area. And they're already making the correction there. So we're in very good shape on domestic flights and what Bob said internationally is accurate.

PAUL SOLMAN: Senator, what about this international scene problem that Senator Dodd was referring to. In your report, you say you're worried about what happens in other countries and how it might affect us. Could you explain that.

SEN. ROBERT BENNETT: Yeah. The thing that has come home to us all as we've gone through this experience is how interconnected the world is or in tech language how wired we all are. And as a result of that, if you have a problem in one part of the world that frankly you don't think about or whose name you can't even pronounce, it can turn up in the international supply chain. It can trip some kind of a trip wire in the process of providing raw materials or finished goods to something that is made some place else and then incorporated some place else. You know, the old line for want of a nail, the shoe was lost and so on can apply here. Now, that's ameliorated somewhat by the fact that the major multinational corporations are all checking their suppliers. They understand this every bit as well as Senators do, maybe better. And so they've gone two, three, four levels deep in checking their suppliers to make sure that they don't have a particular problem. But there's no question, there are some countries where they're going to have difficulties, and inevitably some of those difficulties are going to spill over into the world chain of commerce.

PAUL SOLMAN: Senator Dodd, when you were here in March, both of you were here, and you were telling us the problems at that time, you worried about this interruption of supply from abroad with respect to American pharmaceuticals specifically. Still worried?

SEN. CHRISTOPHER DODD: I am a bit. Again, I think there's been sort of a lackadaisical attitude in too many countries around the world about this issue. And in our view they have not taken this as seriously as they should have. I have to share a story 245 came across the wires today. Indonesia's international or national electricity board was recently asked whether or not it was Y2K prepared. The reply is really a gem. The fellow said, "we can observe what happens at midnight 1999 in Western Samoa, New Zealand, and Australia, and still have six hours to make plans." And that sort of says it all. I mean, if there... there are businesses and countries that have been working a decade to get ready. So if your attitude is you can respond in six hours, we get some indication of the kinds of problems that can ensue.

PAUL SOLMAN: Back in March, Senator Bennett, you said some people will panic, and the panic will end up being more disruptive than the Y2K problem would be. Still think that?

SEN. ROBERT BENNETT: Well, I'm hoping that the issuance of this report will help alleviate that, because the only real antidote to panic or complacency, and frankly we're a little worried about that too, the only antidote is good information. Senator Dodd and I have tried to make sure that this committee would become the repository of accurate information about Y2K. And we think we've gone a long way in that direction with this report. So we say to anybody who is tending to panic, look it up. Look at the report. If the report doesn't answer it, go to our web site. Go to our hearings. All of this information is public. The administration has a web site. And we think if people become properly informed, they will make intelligent contingency plans. And when you have a contingency plan, not one that you've cobbled together in six hours, you then don't tend to panic. You've got it under control.

PAUL SOLMAN: Briefly Senator Dodd, how do you respond to someone who's listening and says, hey, what else would the government say but that we shouldn't worry about these things? Why should we believe what we're hearing?

SEN. CHRISTOPHER DODD: If you listen to what Senator Bennett and I were saying a year ago and talking about the information highway here, I think both of us would have said based on what we knew a year ago, we were looking at a 50-car pileup. Today I think our assessment would be as far as our own country is concerned, maybe what we'd call the fender bender problem. It's been reduced substantially. The federal government has spent over $8 billion. Worldwide over $600 billion have been spent to deal with this issue. And we believe we've come a long way to reducing the potential threat that issue posed. But let me tell you, the one thing I think I would bring up in the closing minutes here that people can make a difference in their own lives on, there are scam artists out there who will take advantage of this situation, this Y2K problem, and call people and solicit bank information, credit card information, which they will then use to strip people of their resources, financially and otherwise. If people get unsolicited calls requesting that kind of information related to Y2K, they ought to hang up the phone or ask the people for their number and say they'll call them back. But don't share that information by anyone who calls you under the guise of Y2K.

PAUL SOLMAN: Well, thank you both, gentlemen, very much.

SEN. ROBERT BENNETT: Thank you.

SEN. CHRISTOPHER DODD: Thank you.

FOCUS - COMBATIVE CANDIDATE

JIM LEHRER: Finally tonight, Terence Smith has the Buchanan story.

TERENCE SMITH: In the past few weeks, Republican presidential candidate Pat Buchanan has been making the rounds on the Sunday morning television talk shows, putting out the word that he may soon jump the GOP ship.

PAT BUCHANAN: We are taking a hard look at leaving the Republican nomination run and running for the Reform Party nomination. The decision has not been made yet.

TERENCE SMITH: This is Pat Buchanan's third presidential run in 1992, he ran a close second to then President George Bush in New Hampshire, and later stole the spotlight at the Republican convention with a speech whose hard-line conservatism surprised even some Republicans.

PAT BUCHANAN: There is a religious war going on in our country. It is a cultural war as critical to the kind of nationwe shall be as the Cold War itself.

TERENCE SMITH: Buchanan ran again in 1996, and beat Bob Dole in the New Hampshire primary; it was the high point of a campaign that fizzled in the later primaries. Now Buchanan is eyeing the nomination of the Reform Party, founded in 1992 and funded by billionaire Ross Perot. Perot so far has not publicly endorsed any candidate for the 2000 run. Privately, aides say he favors Buchanan. But the route to the nomination will not be smooth. The Reform Party's leading elected official, Minnesota Governor Jesse Ventura, is hostile to both Buchanan's conservative views on social issues and to his potential candidacy.

GOV. JESSE VENTURA: Pat Buchanan I don't believe is necessarily a good fit because Pat Buchanan puts social issues on the front burner.

TERENCE SMITH: Ventura reportedly has been contacting possible alternatives, including the actor Warren Beatty, former Governor Lowell Weickert, and more recently, real estate tycoon Donald Trump. Buchanan's flirtation with the Reform Party has coincided with the furor caused by his controversial new book, "A Republic, Not an Empire." In the book Buchanan, analyzes the U.S. role in foreign affairs and takes some typically incendiary positions. He questions, for example, whether Hitler ever intended to attack the United States, writing: "...After the Royal Air Force won the battle of Britain, the German invasion threat was history." Buchanan also repeats earlier criticisms of the pro-Israel lobby, writing: "After World War II, Jewish influence over foreign policy became almost an obsession with American leaders." The book has revived questions within the media about whether Buchanan's views approach anti-Semitism. He was questioned this week on CNN's crossfire by Republican host Mary Matlynn.

MARY MATLYNN: What do you think it is about either your presentation or what you produce in print that raises these accusations, as has been the case day after day, show after show, that these charges of anti-Semitism and racism?

PAT BUCHANAN: Well, first let me say, look, there's not a trace of bigotry in that book and there's not a trace of bigotry in my heart toward any individual or group of individuals. Pat Buchanan all of a sudden may break through and get a Reform nomination to be President. Now, good old Pat, oh, my goodness, and all this garbage and stuff like that is thrown at you. The idea is to stop me and smear me and tell the Reform Party people, "you can't take him, you can't take him."

TERENCE SMITH: Buchanan's views have him once again front and center in the national news. He concedes that he courts the attention.

PAT BUCHANAN: Well, I benefit from the fact that I am controversial and I do have high name recognition, for good or ill, and I take controversial stands.

TERENCE SMITH: It's that high name recognition that could make him an attractive candidate for the rank and file of the Reform Party. Buchanan has said he will decide by October 15 whether to run for the reform nomination, and the estimated $13 million in federal matching funds that comes with it.

TERENCE SMITH: For more on the Buchanan saga, we're joined by three veteran political journalists: Thomas Edsall of the "Washington Post," Elizabeth Arnold of National Public Radio, and Ron Brownstein of the "Los Angeles Times." Welcome to you all. Tom Edsall, let me begin with you. Explain to us why Republican Pat Buchanan is or may be running for the Reform Party nomination.

THOMAS EDSALL, Washington Post: Pat Buchanan for two elections was able to be Mr. Conservative. He was the guy who challenged Bush first, almost caused a lot of problems and really caused his defeat you could argue. He did the same thing to Dole. And he was the center of attention. In this election he has really faded. He's competing with about three or four others, Steve Forbes, Gary Bauer, Alan Keyes, Dan Quayle, all for the same conservative mantle. He's not doing well. The Reform Party offers him a chance to get into the general election as a full-fledged candidate to be in the debates possibly, to have $12.6 million, which he's never seen before. And he would be facing two candidates where he would be the one opposed to the two of them on trade, immigration. He would be the one popularizing the event. This is just the kind of... this guy loves to be in the fight, and this would put him right in the fight.

TERENCE SMITH: Ron Brownstein, if that's the logic of it, what are the prospects, what are his chances of getting the Reform Party nomination?

RON BROWNSTEIN, Los Angeles Times: Well, handicapping the Reform Party presidential primary is a little bit daunting task because the Reform Party itself is kind of a permanent floating crap game. What it is as any given moment is not what it was six months ago. But with that caveat, Buchanan begins with two principle problems and three principle assets in doing this. The problems are that on some issues he is simply not a good fit for the parity. It is silent in its platform on social issues, and many of its leading figures tend to be pro-choice. He is, of course, staunchly anti-abortion. Secondly, he has Jesse Ventura, as your piece mentioned, the leading elected official in the party, sort of searching for a tag team partner, somebody to go into the ring against Pat Buchanan. Warren Beatty has already said, no, he's not going to run for the Reform Party nomination. Donald Trump and Lowell Weickert are the liveliest possibilities he has at this moment. It's not clear whether either of them will get in either. The assets Buchanan have are also formidable though. As you mentioned, Ross Perot through his running mate in 1996, Pat Choate, his running mate, is actively... Pat Choate is actively supporting Buchanan. Many read that as a sign that Perot wants him in. Secondly, Buchanan's economic nationalism message, his protectionist message on trade is broadly in tune with the party, certainly where Perot and Choate took it in '96. Finally, the rules of this rather Byzantine rules of this election process for the Reform Party nomination benefit a candidate like Buchanan. The electorate is an amorphous concept in the party. Anybody that asks for a ballot in 2000 will be allowed to vote in their "primary." That means a candidate like Buchanan who has an existing mailing list of 250,000 or so names has a great advantage, because he can simply mail to all of his supporters, many of whom may not go with him because they're Republicans, but many of whom might. They can then request a ballot. He can in effect stuff the ballot very legally. That puts pressure on anyone who wants to run against him.

TERENCE SMITH: Elizabeth Arnold, what do you think? Is there a logic here, and does it make sense from the way you see it?

ELIZABETH ARNOLD, National Public Radio: Well, I think it's sort of hard to assess what the Reform Party really is, as Ron was pointing out. It sort of gives new meaning to the phrase big tent. When you think about the candidates that they're all talking about, Ralph Nader, Lowell Weickert, Donald Trump, Pat Buchanan, think about the differences between Pat Buchanan and the party's highest elected official, Jesse Ventura - Pat Buchanan opposes abortion, opposes gay rights, opposes free trade, opposes immigration. Ventura is for abortion, he's for gay rights, he's for free trade, he's for legalization of marijuana, legalization of prostitution. Put that up against Pat Buchanan's moral crusade of the last two election cycles and you kind of wonder, what is this party really about. And at this point, it's really more about personalities than it is about a set of issues. And so they're embracing Pat Buchanan.

TERENCE SMITH: Let me ask Tom Edsall that. I suppose that the Reform Party has some concerns here, too. It wants to do well and preserve its matching funds.

THOMAS EDSALL: The main thing that Reform Party people want is to get to the next election with more money flowing and to do that, they have to get at least 5 percent of the vote. That's one of the appeals that Buchanan has, that he would break that margin, whereas Trump or Weickert, that's a big if. Jesse Ventura wants to have a lot of money, as much as he can have in the pile there so that if he decides to run five years from now, he will be well financed in that bid.

TERENCE SMITH: So perversely, he actually has an interest in Buchanan running.

THOMAS EDSALL: Actually, I think he's got more interest in Buchanan from his own personal point of view. Plus the Reform Party is both, as Elizabeth and Ron are saying, it's a vehicle, not a party. It's like a car, who drives it is just who has the keys and turns the engine.

TERENCE SMITH: Ron, if in fact he does run for and obtain the Reform Party nomination, will that make him a major player in the general election?

RON BROWNSTEIN: Well, I think he will be a player because he will have $12.5 million. He could be in the debates. He is s a very effective campaigner. The underlying climate I think is less conducive to a third party challenge than it was when Perot first ran in '92. Then you had higher unemployment. You had a very high percentage of Americans saying they thought the country was in a wrong direction; now you have a lot more economic satisfaction, a lot more general satisfaction. It's going to be, I think, harder to make the case that we need something outside the two-party system. It may be hard for him to go beyond what Perot did in '96, which is about half of what he did in '92, which is where Buchanan is polling now. But even that could tilt the balance in the electoral college especially in the number of southern and mountains states that Democrats will have trouble competing in a two-way race. If you bring down the margin you need to win because a third party candidate is pulling away some of those votes, they come back into reach potentially for Democrats.

TERENCE SMITH: Would that make sense to you, Elizabeth? Would it hurt perhaps a Republican candidate more than a Democrat?

ELIZABETH ARNOLD: That's the conventional wisdom, that if he runs as a social conservative, that hurts the Republican candidate; if he runs in the other direction and preaches economic nationalism, which is what he's done very successfully in the last two elections, that hurts the Democrat. But as Ron pointed out, I think it's really important -- this election cycle is very different. People are telling pollsters they don't want change, and they're not looking for more choices. I was with Buchanan in Michigan blast month, and you know, he used to get all these folks unemployed auto workers who were anti-NAFTA. They would have huge rallies. Well, those guys didn't turn out for some of these rallies because they're all employed now. So the situation is really different in terms of his base, and his base in the Republican Party is shrinking, and I think his base among Reagan Democrats has shrunk as well.

TERENCE SMITH: Tom Edsall, what about the statements he's made in his book and on these talk shows recently, the controversy around them -- has that made it a more difficult sell for the Reform Party or Pat Buchanan himself?

THOMAS EDSALL: He has created a real problem for himself with this argument that the United States should have stayed out of World War II, at least through 1941 and on into 1942 and perhaps through the whole thing. That is just not an argument that's going to sell. It's a complex argument he's developed in his book, but you can't make complex arguments in political campaigns. He was on for an hour on a show today, and the whole show was really about this. And you start getting veterans on these shows, and they don't like it.

TERENCE SMITH: They're not happy I'm sure. Ron Brownstein, would you think this would have an effect on him and a related question, does the press go easy on Pat Buchanan? That allegation has been made. If another candidate said anything like that, a George W. Bush or an Al Gore, he'd really feel the fire.

RON BROWNSTEIN: I think the answer is yes but not necessarily because Buchanan is part or has been part of the police. I think we almost have parallel presidential races developing, Terry. We have candidates who we think might actually be president, that we hold to one set of standards and who we scrutinize very carefully. Then we have the field being increasingly cluttered with lots of people who are using this as a vehicle to project their views and who use it as a platform to make their case to the American people. But very few people are actually ever going to be president. Those are sort of let slide in a way. I mean, we're not examining them in the same respect or dealing with their comments with the same level of gravity. You know, this is a classic case. Pat Buchanan did not need to reopen the issue over whether Charles Lindbergh should be rehabilitated in 2000. This is not really a pressing issue for many Americans: Was Lindbergh right in saying whether America should have stayed out of World War II? He's opened a problem for himself, but not as great a problem as if someone like George Bush or Al Gore had said it, because we are not applying the same standards for the candidates where there's sort of an informal consensus, this guy will not be president in all likelihood.

TERENCE SMITH: Okay. Thank you, Ron, Elizabeth, Tom. Thanks very much.

RECAP

JIM LEHRER: Again, the major stories of this Wednesday. The Justice Department sued the tobacco industry to recover billions in federal funds spent on sick smokers. A lawyer for Philip Morris said the suit was without substance and politically motivated. And Senators Bennett and Dodd said on the NewsHour U.S. computer systems were ready for the new century, but some significant local glitches might occur. To follow up on our report last night about the Defense Department School of the Americas, a House Senate Conference Committee agreed today to continue funding the school's training program. And before we go tonight, a an editor's note before we go: A reminder, that Hedrick Smith's documentary on how some communities fight crime will be shown on most public television stations later this evening. We ran an excerpt on the NewsHour last night. It's called "Solutions." Please check your local listings for the exact time tonight. We'll see you online and again here tomorrow evening. I'm Jim Lehrer. Thank you and good night.