The MacNeil/Lehrer NewsHour

MR. LEHRER: Good evening. Leading the news this Monday, the East German exodus and demonstrations continued despite government reform actions. And the U.S. Supreme Court cleared the way for $2.5 billion in payments in the Dalkon Shield case. We'll have the details in our News Summary in a moment. Robin.

MR. MacNeil: After the News Summary we examine the new East German exodus and its impact for East Germany and the West with East German Amb. Gerhard Herder and two observers just back from East Berlin, James McAdams of Princeton University and Thomas Palmer of the Boston Globe. Correspondent Elizabeth Brackett reports on the bitter race for mayor of New York City. We'll have a News Maker interview with Nicaraguan opposition candidate Violeta Chamorro, and we close with a musical remembrance of legendary pianist Vladimir Horowitz, who died yesterday at 85.NEWS SUMMARY

MR. MacNeil: East Germany made another attempt today to persuade its own citizens not to give up on their country. The embattled Communist Government unveiled a new law allowing 30 days a year of unrestricted travel. The move was seen as an effort tostem the permanent exodus by thousands of East Germans to the West. More than 20,000 relocated this weekend and thousands more are expected to leave. The new measures did not stop hundreds of thousands of East Germans from marching through the streets again this evening. In the City of Leipzig 1/2 million people braved a rainstorm, many carrying banners demanding free elections and unlimited travel to the West. Pro-democracy protesters condemned the latest government gestures saying it wasn't enough to win the trust of the people. Others called for the resignation of the ruling politburo. The emigration of thousands of East Germans is now raising concern in West Germany. A spokesman for Bonn's social democrats appealed to the refugees to stay home and push for change in their own country. Ernst Bright, head of the National Trade Federation, said, "We've made it clear to the refugees that West Germany is not paradise." Chancellor Helmut Kohl said, "We hope that things will change so that people will not have to leave their homeland to find happiness." We'll have more on the story after the News Summary. Jim.

MR. LEHRER: The U.S. Supreme Court today ended the Dalkon Shield case. The court let stand a $2.5 billion settlement against the maker of a faulty birth control device, A.H. Robins Company. The money will be distributed to thousands of women who claim they were injured as a result of using the now outlawed device. The governor of California today signed an earthquake relief package into law. It includes a temporary sales tax increase that will raise $800 million.

MR. MacNeil: The government announced new rules to prevent more failures of savings & loan institutions. The rules require S&Ls to keep more capital on hand to cover the loans they make. If an S&L does not meet the new requirement, the government will put restrictions on its growth. S&Ls have continued to lose billions of dollars this year. A government economist monitoring the industry said today the losses for the 3rd quarter of this year amount to $2 1/2 billion. That's slightly less than the amount lost during the same period last year.

MR. LEHRER: Lebanon has a new president but the Christian's major military leader, Gen. Michele Aoun, has refused to accept him. Aoun called a strike in the Christian Eastern Beirut section to protest the election. We have a report narrated by Tom Browne of Worldwide Television News.

MR. BROWNE: Rene Mawed spent the day meeting parliamentary deputies and discussing the peace plan with Arab League officials. Outside the reaction to Mawed's election was mixed. Christians and Muslims had come together for the first time in 7 years to support is candidacy. But it was a decision that seemed set to split both communities. In East Beirut, flag waving supporters took to the streets to celebrate. But elsewhere Aoun's supporters burned tires and held street protests and there were reports of churches being raided. Some Christian sections of the city shut down in a general strike called to protest Mawed's election. He inspires such actions because of his pro-Syrian leanings. Aoun is adamant that Syrian troops must leave Lebanon as threats to continue the arms struggle pose a major problem for the new president.

MR. LEHRER: The prospects for preliminary Israeli-Palestinian peace talks turned murky again today. Yesterday the Israeli inner cabinet approved a U.S. proposal for such talks that included a demand that the Palestine Liberation Organization not be a part of that peace process. White House Spokesman Marlin Fitzwater welcomed the Israeli action, but a Palestinian leader on the West Bank told the Reuters News Service the acceptance of such a condition would kill the proposal.

MR. MacNeil: The United Nations confirmed today that representatives of the Nicaraguan-Sandinista government and contra rebels will meet at the UN later this week in an effort to renew a cease-fire. Nicaraguan Pres. Daniel Ortega suspended the cease- fire last week claiming the rebels had renewed their attacks. Ortega has said the cease-fire could be resumed if an agreement to disband the contras was reached at the UN talks. Later in the program we'll have a News Maker interview with a Nicaraguan opposition candidate, Violeta Chamorro. But first the East German exodus and New York's race for mayor. FOCUS - FLIGHT TO FREEDOM

MR. LEHRER: The East German story is our lead story tonight. More than 20,000 left their country for the West this weekend bringing the total to 70,000 since the Exodus began in August, Thousands more demonstrated for democracy and reform in East German cities following a weekend rally of more than a 1/2 a million in East Berlin alone. Where it is all leading is among the questions we pose tonight. First to East Germany's Ambassador to the United States Gerhard Herder in a News Maker interview recorded this afternoon. Mr. Ambassador, welcome. How would you describe what is going on your country right now?

GERHARD HERDER, Ambassador, East Germany: I think what's going on in my country is the reflection of the overall changes in the World. The general change people are striving for peace, cooperation and better understanding and my country is trying to fit in to this situation.

MR. LEHRER: Why are so many people, It was approximately 20,000 left your country over the weekend. 70,000 or more now since August. There was a rally over the weekend 500,000 people participated in East Berlin. What is their basic complaint as you read it? Why are they leaving?

AMB. HERDER: Well, we have come to a turn in my country . After many years of positive development and in the course of the further relaxation of tensions in Europe new problems have come up. Internationally the arms agreement, the general feeling that something positive is happening in cooperation between people in Europe and internally. As you know, we are a highly industrialized country with one of the highest standards of living in the world. We are one of the few countries which has developed high technology producing it in its complexity. So new problems have come up and demand for change to make our society more effective. And the demonstrations that are now taking place are an expression of this felling that their should be a change. The appeal of my Government and the Head of State is finding a lot applause and support by our population. And as far as the leaving of people is concerned, I think this has to be explained by several factors. Last year, I don't know whether Americans are aware of it, we had about 7 million citizens of my country traveling to the Federal Republic of Germany.

MR. LEHRER: To West Germany.

AMB. HERDER: Yes. 7 million visits from citizens of my country and about 5 million people visiting the Federal Republic of Germany. Because I am telling it because some people think there have been restrictions. People could not travel there, were no allowed to travel. That's simply not true. We had already 10,000, millions of people traveling. But now we are going a step further. We are introducing new regulations making travel even easier and some people, young people, do not yet believe. They have not the necessary trust in regulations which have been published, the draft has been published. Then many of those who are going are young. They think that the grass might be greener on the other side. than on our side. They are used to living in a society almost free of problems. They had education free of charge, good salaries.What bothered them was travel and they thought that they could not travel as they wanted.

MR. LEHRER: Some people have estimated with these new rules that just went in to effect. The new relaxation of the rules, I should say. That a half a million more East Germans may leave and go to West Germany permanently. Do you agree with that?

AMB. HERDER: That's pure speculation. You see, we have already an experience that a lot of those who have left are thinking about coming back. And that's why we have appealed to all of those who have left when ever you want to come back please come back.

MR. LEHRER: Come back.

AMB. HERDER: You see, they don't know that in West Germany there is a big high unemployment rate. West Germany has 4 million unemployed. Something they don't know from my country because the Government grants a job.

MR. LEHRER: What effect is this exodus having on your country economically and socially now. because you say they are young people. The descriptions of them have been they are well educated, many of them technicians, engineers people like that. What effect is that having?

AMB. HERDER: It will have a negative effect on the development of the economy and the society of my country. But we are 70 million and even if a few of them, 100,000 or more, are leaving, this can be compensated. We have enough resources. We are introducing high technology. So we can simply shift people from one area to the others. But of course it is not easy to fill this gap. On the other hand we have had offers already from Poles and other countries who would be happy to GDR and take over a job in the GDR. So I think it's regrettable but it does not mean a catastrophe or something that shows our society or economy is in trouble, that's not true.

MR. LEHRER: You say the Government and the leadership of you country is now trying to react to these reforms to the demands of the people in many cases. Do you believe that we are seeing a transition of your country to a democratic pluralized society that has just been created in Poland and Hungry.

AMB. HERDER: That's something I don't see this way. We are GDR and not Poland and Hungary. We will introduce a number of reforms, political reforms, economic reforms, but never, it could never be the same as Poland and Hungary is introducing. It is important to say that our democracy will develop on the basis of socialist ways. Some people think that this movement, this development is a trend back to capitalism. I think that's something that will not happen and cannot happen. Because even those participating in the demonstrations, the overwhelming majority is in favor of socialism but they say a more attractive socialism, a more effective socialism and I think that on this there is no difference between the leadership and the masses of the population.

MR. LEHRER: Richard C. Hutlin who is a former CBS correspondent who went to East Germany recently for the 40th anniversary celebration of your country wrote in the Christian Science Monitor the other day, "The story is simple. The German democratic republic invented by Joseph Stalin has never earned popular support. Its time has run out". Do you agree?

AMB. HERDER: That is not the only view of this kind. I have listened also with great attention to what Brezinki said.

MR. LEHRER: What did he say? I'm sorry.

AMB. HERDER: That socialism is dead, has lived out is time. That's simply nonsense. Those people who are writing such things simply don't understand the situation in my country. They completely underestimate what we have achieved during the 40 years of development. Such achievements which only a few countries can point out in the world and most of them are still giving education free of charge, health care free of charge, low rents for comfortable modern apartments. That is something no body will give up. So we should see this move in the GDR,this development towards improvement of socialist values making it more effective more attractive.

MR. LEHRER: And you believe that those moves will result in the stopping of this exodus and not only will the people quit leaving, but some of the people who have left will come back?

AMB. HERDER: I think that this will calm down after people will be assured that they can travel wherever they want, after they will know and have assurances that whenever they want to immigrate they will understand it and they will draw the necessary conclusions from them.

MR. LEHRER: So in conclusion, your view is what's happening in your country, as you said, there are changes going on but hardly a revolution.

AMB. HERDER: Yes. Yes.

MR. LEHRER: Mr. Ambassador, thank you very much.

AMB. HERDER: Thank you.

MR. MacNeil: Now, two other perspectives on the newest East German exodus. A James Mc Adams is an Assistant Professor of Political Science at Princeton University. He returned this weekend from a trip to East Germany where he met with several senior Government Officials. He joins us in Princeton, New Jersey. Thomas Palmer is a foreign correspondent for the Boston Globe. He also recently returned from East Berlin and Budapest. He joins us from Public Station WGBH in Boston. Prof. McAdams, you've heard the Ambassador. He's confident that socialism will survive. East Germany will not follow Hungry and Poland for the reasons he gave. What do you think?

A. JAMES McADAMS, Princeton University: I think the simple answer is time will tell. Right now we can't say what form socialism in East Germany will take in the future or even I think if East Germany will remain socialist in the classic parts of the Leninist sense that these are issues that are currently being resolved, I think, before us on a daily basis. Many people in the Government themselves, I think, aren't sure what kind of a future they have before them.

MR. MacNeil: Do you have an observation on this Thomas Palmer?

THOMAS PALMER, The Boston Globe: Well, many of the opposition representatives that I talked to in a trip a couple of weeks ago said basically what supports what Ambassador Herder said which is that not all of them want immediate democracy. Many of them want a more pure form of socialism. But a lot of those leaders are middle aged and many of the younger generation, their children, in fact, are the ones who are not going to be quite that patient. And they are the ones that are leaving. And I think the Ambassador also said that East Germany has one of the highest standards of living in the World. I'm afraid that's not true, and those young people know that is not true and that is why they are leaving.

MR. MacNeil: On the democracy question we saw the crowds tonight in Leipzig just as prominent in their banners and their signs for freer travel were demands for free elections. Prof. McAdams is that becoming a larger ingredient.

PROF. McADAMS: Yes this is clearly quite important at this time. I think that the government had hoped that by engaging in a kind of more open freer dialogue with the population that it could somehow re-establish its relationship with its people. But what has happened recently is that the East German populace, itself, has simply gone further than the government had ever anticipated and the demand for free elections outstrips anything, I think that the Government has in mind. Somehow it has to figure out a way of both preserving its socialist intentions as Ambassador Herder has rightly described and at the same time addressing this question of elections.

MR. MacNeil: Let's come back Thomas Palmer to the people who are fleeing. Are the eased travel opportunities announced today. Are they going to stop the young people from running away?

MR. PALMER: I think that the conventional wisdom was that after Honeker resigned and there was a new leader Mr. Krentz that some of the departures would cease. That really hasn't happened. And it may be that the democracy is ultimately what these people will be demanding.

MR. MacNeil: I see. What do you think, Prof. McAdams are they going to stop trying to get out now that they know that they can travel freely as that has been one of the principal demands.

PROF. McADAMS: I think we have to recognize here that for a while for a couple of weeks the East German Government had essentially closed access to most people. So that I don't know exactly what their calculations were, but I imagine they thought that we will have to deal with a period perhaps lasting weeks which thousands of people will still use this exist point to go to the West. The gamble is though by instituting a new law that guarantees regular travel to the West that people will get what they want, and this is a theme that average East German's have been obsessed with for years and years, that they will get what they have always wanted and therefor be more inclined to reconcile themselves with their own Government.

MR. MacNeil: What do you think about that? What's your view of whether they will be reconciled?

PROF. McADAMS: It all depends upon political changes within the GDR. I don't think that at this point the Government can get away with simply engaging in dialogue and allowing them to travel to the West. The real question is how do you get these people to go to the West and then want to return. And only if they're absolutely convinced, that is to say the average citizens are convinced that they can come back to the GDR and that there is a kind of political space for them there in their own country will the government strategy really pay off. So the real question to be asked right now is what other concrete steps will be taken in the next couple of weeks to really create a bond of trust between the Government and the population.

MR. MacNeil: Do you have a view of that. Let me ask Thomas Palmer the same question.

MR. PALMER: Well predicting is tough business in this part of the world. The events of the last month have certainly showed that. Very few people would have predicted the kind of rapid changes that are taking place. But I think that there may be the reflection in the East German's minds those who are leaving that the wall may be coming down sometime in their lifetimes. And the fact that they are going to West may not mean that they can not see their families some time in the future. They may have that in mind and that may be one reason they are choosing not to stay even at a time when East Germany seems to be liberalizing some what and their lives might have some ,prospect for improving even if they stayed.

MR. MacNeil: What about the pressure the other way? The Ambassador mentioned it but he was almost echoing what some West German Officials were saying today look it isn't a paradise here don't to many of you come. Please stay at home. How many of these people can West Germany absorb? I see that something like 175,000 or about 1 percent of the East German population have fled this year. How many more can West Germany absorb.

MR. PALMER: I think there's some concern about that in the minds of West Germans. But most of those have found jobs of some sort. And it just remains to be seen whether the numbers will increase as they have recently.

MR. MacNeil: Do you have a view on that, Prof. McAdams, how many the West German economy can absorb?

PROF. McADAMS: There's a very interesting phenomenon here I think that we have to recognize and that is that East German's are very intelligent observers of the West. And it is not that case that all East Germans are simply packing their bags and going to the Hungry or Czechoslovakia to come to West Germany. It is, in fact, specific categories of workers in East Germany who know that if they come to the West they can find suitable employment there. So take doctors for example which is a major crisis for the East German Government right now. It is not all doctors who are coming to the West because in fact general physicians have a hard time getting employment in some major urban centers in West Germany but instead specific categories of doctors particularly specialists, surgeons and so forth who know that then they arrive in West Germany the economy will be able to absorb them.

MR. MacNeil: So it's almost as if they're reading the specialist want adds in the medical publications. In other words deciding their is a job for them to go to before they go?

PROF. McADAMS: That's true. That is clearly the case.

MR. PALMER: I didn't get the sense that that was true, especially among some the younger people and some even in their late teens that I spoke to in Budapest before the large number were released there about six weeks ago. Many of those people didn't know what they had a great sense that there was some opportunity. On the other hand, they knew that the grass wasn't always greener and that it was going to be very hard work for them. And they did not like the criticism that they had been hearing that they were arriving in the West and expecting to be handed a Mercedes.

MR. MacNeil: So they weren't going solely for better economic opportunity. There was something else?

MR. PALMER: They talked about two things. One they talk about economic opportunities and some West Germans say they immigrate to shop. And I think in some cases they do emigrate for material reasons. The other thing is they're tired of police state that they live in. They are tired of the plain clothes policemen and the neighborhood listeners listening in to what they are doing and saying and reporting on them. And they want a sense that their lives, their futures, are in their own hands and not in the hands of a government and a police department.

MR. MacNeil: Prof. McAdams, what is your, you mentioned it in terms of specialist doctors. What else is this exodus doing? The Ambassador conceded it was having a negative effect. What is it doing to East Germany?

PROF. McADAMS: Well, I think the most important impact aside from the obvious economic consequences is the phsycological impact. First of all, the people who remain in East Germany engage on a daily, hourly, minute by minute basis in self scrutiny asking themselves what does it mean for me to stay behind in this country. And that is a torturous experience for those who remain behind. And, remember, we're still talking about the majority of the population. After all 16 million people will still be there in the future. Secondly though, some thing that we shouldn't underestimate in the impact on the Government itself. I think we too easily look at the country's leaders as though they're simply cynical opportunists and so forth. Many of these people are people who do deeply believe that what they had done for their population in the past was right. That it was good for their population. And for them this bleeding of the GDR,as they call it, is also a torturous experience.

MR. MacNeil: What do you see, Thomas Palmer, that it is doing to East Germany?

MR. PALMER: Well, I don't know, certainly the numbers of population haven't left yet to say whether it will cripple the country but certainly the Government is very worried about losing its most energetic and skilled labor for the future. It was curious the ambassador said they may get some laborers from Poland, where people need jobs, some immigrants from Poland. The changes are happening so fast and the reaction so fast in East Germany I am not sure that I could say.

MR. MacNeil: I see. To come back to the West for a moment, do you think that there are going to be active moves in West Germany to try and stop the exodus from East Germany just because the pressure on the West German economy is going to get to great?

PROF. McADAMS: The West Germans are now in and have been in for some time a very complicated position. Because well before this particular crisis, they were having to contend with the fact that too many people were applying to leave the GDR permanently and in their view to many people were staying on their visits to West Germany. West Germany is in the position where its leaders find themselves tied in as a result of their own policy. West Germans have consistently for decades claimed to represent the hope, the future of the German nation. They have changed the way in which they have expressed that idea in recent years . But they still claim to have the capacity to represent not only their own citizens in the Federal Republic of Germany but also the citizens in the GDR. It politically impossible for say a federal chancellor of West Germany to say that East Germans are not longer welcome on this territory. He is politically bound by his countries commitment to this task.

MR. MacNeil: I think I get the point that you are making. You are telling me no in answer to my question in effect. And I have to cut you off there. I am awfully sorry. Professor Mc Adams and Thomas Palmer thank you both. Jim.

MR. LEHRER: Still to come on the Newshour tonight, the New York City Mayor race, Nicaraguan Presidential Candidate Violeta Chamorro and Vladimire Horwitz. FOCUS - CITY HALL STAKES

MR. LEHRER: Next New York City's race for mayor. Tomorrow's election is between Democrat Manhattan Borough Pres. David Dinkins and Republican Rudolph Giuliani, the former U.S. Attorney in Manhattan. Elizabeth Brackett reports.

MS. BRACKETT: David Dinkins is very much at home here, a rally in a black church in Brooklyn. An up through the ranks local politician, Dinkins has known voters like these a long time. They make up the political base he can count on. Across town, the Republican candidate, Rudolph Giuliani, is a big hero too but to a different group. A former US Attorney, Giuliani is already a well known figure, but not an experienced politician. He draws voters with his record as a crime fighter. And he draws some of these voters because he is white. Each man has spent many hours campaigning in neighborhoods that make up his base of support.

DAVID DINKINS, Democratic Mayoral Candidate: Because of the sensitivity and understanding and trust, trust, faith that you had in me, I have been able to come this far. Because you brought me this far, that's why. And come next Tuesday night, God willing, we're going to succeed.

RUDOLPH GIULIANI, Republican Mayoral Candidate: How many of you here are Democrats? Okay. And I'll tell you, I'm very proud that you're here, because this election is a lot more important than a party label.

MS. BRACKETT: The race for mayor will not be won in the New York of the travel posters but in the hundreds of neighborhoods that make up the fabric of the nation's biggest city, but no one neighborhood is enough. To win, coalitions among the city's almost 8 million voters must be forged. Giuliani cannot win with the white neighborhoods and Dinkins cannot win with just the black neighborhoods. Unlike other major cities where blacks have won the mayor's office, Philadelphia, Detroit, Chicago, blacks do not make up a majority or close to a majority of voters here. Doug Schoen has dealt with that reality as a Dinkins political adviser.

DOUGLAS E. SCHOEN, Pollster: In terms of registration, blacks are 30 percent of the primary vote and about 1/4 of the general election vote, so to start with blacks are a smaller share of the general election vote than they were in the primary. And even if every black in the city voted for David Dinkins and he got 25 percent of the vote, that still leaves 75 percent from other communities. Even if the vote is down an he gets 28, 29, 30 percent of the vote coming from blacks, he still needs a substantial share of the white vote to be elected.

MS. BRACKETT: Dinkins got almost 30 percent of the white vote when he beat three term Mayor Edward Koch in the primary. To win again tomorrow he must put together that same coalition of black and white voters. But Giuliani has much of the white Catholic vote locked up. That leaves Jewish voters as the white swing group that both candidates must have to build a winning coalition. So both candidates have spent hours collecting Jewish symbols like charms on a charm bracelet. Dinkins toured heavily Jewish Borough Park. So did Giuliani. Dinkins picked up endorsements from prominent Jewish leaders. So did Giuliani. Dinkins met with former Jerusalem Mayor Teddy Kollock. So did Giuliani. Did the symbols work? Seniors at the Ocean Parkway Jewish Center in Brooklyn were not likely to be persuaded by symbols alone, just as they were not fooled by tricky questions in a hard fought game of Trivial Pursuit. Netti Zolotor could answer one Trivial Pursuit question after another but she still had questions about David Dinkins. Like many Jews, her biggest questions were about Dinkins' friendship and support for Jesse Jackson.

NETTI ZOLOTOR: I feel very strongly that he's too friendly with him, that's all, and being of Jewish background, I am terribly against him.

BILL FORMAN: I'm a registered Democrat from way back and yet this election I was going to vote for Republican. But this past week and a half, what I saw in the papers, the news reports and all, turned me around again and made me feel the way I should feel. I feel Dinkins is the man to go for.

MS. BRACKETT: The thought that these longtime Democrats would even consider crossing party lines because of Jackson, because of race, or both, had brought the speaker of the state assembly back to his district to call his Democratic Jewish constituents back to their roots.

MEL MILLER, Brooklyn Assemblyman: Vote for that person who you believe is going to make the best mayor of the City of New York, forgetting their ethnicity, forgetting their race. Because that becomes important. Because if we can't do that, if we can't lay aside the fears sometimes unfounded, the hatred sometimes which is hard to take out of our hearts sometimes because of experience, if we can't do this, then this country has failed.

MS. BRACKETT: But it was a tough sell. Even though Dinkins has repeatedly told voters he is his own man and told them Jackson would have no role in his administration, Dinkins has also refused to back away from his friendship with Jackson.

MR. DINKINS: I think people recognize that if one is to say that a person who has been supportive of Jesse Jackson is somehow ineligible to seek significant office, then they must understand that that means that none of us is able to because almost all black elected officials, every African-American that I can think of, with minor exception, across the country supported Jesse Jackson. So where are we if someone determines that those of us who are friendly with Jesse are ineligible?

MS. BRACKETT: Giuliani does not mention the Jackson issue on the stump, but he has pressed hard on the issues of character and integrity, citing among other things Dinkins' failure to pay four years of income taxes 20 years ago.

MR. GIULIANI: And you know if I didn't pay my taxes for four years, there's no reason that I'd be standing here running for mayor of the City of New York.

VOTER: I always voted Democratic, but this time I voted for him because he doesn't cheat. Dinkins keeps on cheating. He will cheat more.

MS. BRACKETT: Polls show that the tax and integrity issue has had little impact among black voters. But among white voters, especially Jewish voters, it has had an impact. Mitchell Moss, director of the Urban Research Center, at New York University, says some voters are using the issue as a cover for other reasons to oppose Dinkins.

MITCHELL MOSS, Political Scientist: I think the question about race is overriding but very rarely acknowledged, which is that Dinkins is being held to a standard of ideological purity and financial integrity even though, in fact, many of those issues were resolved over two decades ago. But as a black, the issue of race has been superseded by issue of personal management and financial integrity.

MS. BRACKETT: Which is actually --

MR. MOSS: Race.

MS. BRACKETT: Whatever the motives, the anti-Dinkins feeling was high among this group of white voters at a candidate's night in a Jewish temple in Queens. Giuliani revved up the crowd with his attacks on Dinkins' finances. Dinkins did not show but his surrogate, Brooklyn Congressman Charles Schumer, was nearly booed off the stage by the largely Jewish crowd.

REP. CHARLES SCHUMER, [D] Brooklyn: When we've asked elected officials to stand by us, Dinkins was always there. But it seems there are some people in this audience who don't believe that. They believe you ought to be judged by the people you associate with. So why then, why then -- let me finish, ma'am. You had your chance ma'am. Let me finish. As a Jew and someone who is sensitive to a double standard, for some people in this room, there's a double standard operating and it isn't becoming.

MS. BRACKETT: Dinkins has fought back. He has tried to bridge the gap with disenchanted white voters by surrounding himself with prominent Democratic politicians in this very Democratic town. Dinkins' efforts at coalition building have gotten a big boost from the resources provided by unions. This phone bank is run by the United Federation of Teachers. Almost 40 percent of the union membership is Jewish. But the Giuliani camp says it has a way for Jewish voters who usually vote Democratic to vote for Giuliani. It's the Liberal Party, the party run by this man, Ray Harding. Giuliani's name will appear on the ballot under the Liberal Party label as well as the Republican Party label, and that says Harding is what will get their man elected.

RAYMOND HARDING, Liberal Party Chairman: The expression in New York City of fusion means a joinder of the Republican with the Liberal Party and it's the Liberal Party which serves as the reach out vehicle to that segment of the electorate which has a reluctance to vote for a candidate no matter how high his quality on the Republican line.

MS. BRACKETT: Another block of voters who have a reluctance to vote Republican and whom both candidates need to form a winning coalition are Hispanics. Hispanics make up 10 to 12 percent of the city's population. Most polls show them going overwhelmingly for Dinkins, but Giuliani says he will do much better than is expected with Hispanics.

MR. GIULIANI: I really do expect that I am going to get a very heavy proportion of the Latino vote and I think people are going to be very surprised. I've campaigned a great deal in the Latino community from the very beginning.

MS. BRACKETT: In the closing weeks of the campaign it appeared to many that Dinkins and Giuliani were trying to bring swing white voters and Hispanics into their camps by slinging as much mud as possible. Both ran TV ads bluntly attacking the other. [CAMPAIGN COMMERCIALS]

MS. BRACKETT: After that commercial, Dinkins pounced on Giuliani's media adviser.

MR. DINKINS: My opponent has taken up the tactics of that maestro of mud, Roger Ailes. Ailes seeks to gain votes by turning group against group.

ROGER AILES, Giuliani Adviser: What's negative is something that isn't true or isn't fair. Everything we've said about David Dinkins came right out of the newspapers and right out of your television reports and is fair and true.

MS. BRACKETT: Giuliani continued the attack into last minute weekend debates.

MR. GIULIANI: When is it in American politics that you have someone running for mayor of a city that failed to file his taxes for four years?

MR. DINKINS: I think the people of our town don't want a prosecutor; they want a mayor.

MR. GIULIANI: Wait a second. That's no answer to either one of the two questions. And I think the people of this town want a mayor who has nothing to fear from a prosecutor.

MS. BRACKETT: Many voters appeared disgusted by the negative campaign. Late polls showed support softening for both candidates. But those same polls show Dinkins ahead with the key groups he needs to build a winning coalition.

MR. LEHRER: That Dinkins lead according to the weekend polls is now 10 to 12 points. NEWS MAKER

MR. MacNeil: Next we have a News Maker interview with the woman who is challenging Daniel Ortega for the presidency of Nicaragua. Her name is Violeta Chamorro, and Charlayne Hunter-Gault talked with her in New York earlier today.

MS. HUNTER-GAULT: Violeta Chamorro never thought of going into politics. That role was thrust upon her in 1978, when her husband, newspaper publisher Pedro Quakin Chamorro was assassinated. It was his death that rallied the opponents of the Samosa dictatorship to the cause of the Sandinistas. And when they formed a new government in 1979, Violeta Chamorro became part of the ruling five member Junta along with Daniel Ortega. But nine months later, he resigned from the Junta because of ideological differences accusing the Sandinistas of treason. Mrs. Chamorro and her family newspaper, La Prensa, became the symbols of opposition to the Sandinista regime. The paper was often censored, even closed down at times. Her family still runs the newspaper, and like many families in Nicaragua is divided. Two of her children actively support the Sandinistas. And her eldest son and a daughter support her candidacy. Mrs. Chamorro, welcome. Let me begin by asking you, why do you think Mr. Ortega suspended the cease-fire agreement?

VIOLETA BARRIOS DE CHAMORRO, Opposition Candidate, Nicaragua: [Speaking through interpreter] Ortega suspended the cease-fire because he is afraid of freedom and freedom is what we want in our country. We want democracy, we want freedom, and he is encouraging a war and this is not the right time.

MS. HUNTER-GAULT: The United Nations is going to hear this dispute at the suggestion of Daniel Ortega this week on Thursday with the contras and with the Sandinista government. Do you think this is a good idea and what do you hope will be achieved by this meeting?

MRS. CHAMORRO: This news I heard here in the states. I would answer to Daniel Ortega why doesn't he do all these meetings in Nicaragua and not here in the states, when this solution should be reached in Nicaragua, in our country, and not here at the UN or somewhere else. This is a pretext. That's what he's doing in order that the process of election wouldn't start, which has already won.

MS. HUNTER-GAULT: Daniel Ortega has said that the reason he suspended the cease-fire was because of an upswing in violence on the part of the contras and he has also said the contras have involved themselves in the campaign on your side. Is any of that true? Are you and what is your relationship with the contras?

MRS. CHAMORRO: No, no, these are pretexts of Daniel Ortega. We have no relationship. It's just a pretext in order to make things longer. And that cannot be done because the electoral process started. And it's going to be finished on February 25th. That's what's going to be a democratic process.

MS. HUNTER-GAULT: So you think it's going to go forward?

MRS. CHAMORRO: Yes.

MS. HUNTER-GAULT: The United States has said it feels the contras should remain in place until after the election in February. Ortega and when the agreement was signed with the other five Central American governments, the agreement was that the contras would be disbanded by December 5th. What do you think? I mean, do you think the contras should be allowed to remain intact until after the election?

MRS. CHAMORRO: Look. The contras, as Daniel Ortega calls them, are Nicaraguans, all of them, and since he didn't sign, Daniel Ortega didn't accomplish in Teller what had to be signed a long time ago, we wouldn't be in this problem now about the contras if they stayed in Nicaragua and if they are allowed to stay more time, if they come back to Nicaragua, I think it's a humanitarian thing. They should have to stay there. We're going to win in, all the Nicaraguans are going to come back, will come back to Nicaragua to be peaceful and in freedom.

MS. HUNTER-GAULT: What is the U.S. role in your campaign?

MRS. CHAMORRO: None. None. As I said solidarity as we all have in Central America, and South America, Europe, that is what it is. We want to be friends of everybody. As I said back a few years ago, when I was in the Junta, I want to be friends of everybody, without differences. That's what I told Daniel Ortega when I was part of the Junta, but the government, Daniel Ortega's government, didn't go with what he had told us to and that's what really happened. That's why we're so sad, he didn't do what he promised.

MS. HUNTER-GAULT: But the United States has contributed financial support to your campaign, has it not?

MRS. CHAMORRO: The Government of the United States, we haven't received one penny. This is propaganda of the government, the totalitarian government of Nicaragua. Actually they are the ones that received money from Russia, all these socialistic countries, because if they gave us money, and I hope I'm going to be given money on February 25th, not only the United States but all over the world in order to rebuild Nicaragua, we are going to do everything as decent people sitting with a pencil and paper, but we haven't got one cent. This is forbidden according to the laws of Nicaragua. And if they give us everything will go to the Sandinista government and we would -- they have the money. There is no money in Nicaragua. I'm here. I have come here to talk to you by my own means. I would say my own pocket.

MS. HUNTER-GAULT: If you should win, do you expect the Sandinistas to honor the outcome?

MRS. CHAMORRO: Well, our hope is that they will do what they have to and if they don't, that's why we have the observers. We have everything planned currently. A lot of observers from South America, North America, they are the ones that are going to have the word. They will see. They will see, see computing, counting, counting the votes. We don't want a second Panama.

MS. HUNTER-GAULT: Finally, your candidacy has been controversial for a few reasons, including a fragile, initially fragile coalition, one that doesn't include strong support of some of the business community. They say that you have an insufficient grasp of political details, your health, and a family that's divided in its support between you and the Sandinistas. Why do you think you would be better to win this election than Daniel Ortega, with all of those --

MRS. CHAMORRO: All these reasons of Daniel Ortega, do you know what they call a tape recorder that is not working? I have accepted to government my country February 25th, because I love my country, because I feel that I have the duty and mentally I know that I can govern, not only I'm going to govern, but a group of people is going to govern, very smart, and much better than everybody. We want a Democratic Nicaragua and we don't want a totalitarian country, so this propaganda that I'm not ready, the family, my children divided, the word divided is essential. I have four children, I'm going to be sincere with you. Two of them have a totalitarian ideology. The other two have democratic ideology. The love of a mother, that stays. If they're on one side or the other side, and my side, well, that's fine, but this has nothing to do with it. The main thing is that we have triumph on our side on our side on February 25th not only because of the popular support of the country and of all the people of Nicaragua.

MS. HUNTER-GAULT: Mrs. Chamorro, we will be watching the campaign and the results with interest. Thank you for being with us. FINALLY - VIRTUOSO

MR. LEHRER: Vladimir Horowitz died yesterday at the age of 85. He was one of his times and history's greatest pianists. He brought a style once described as controlled thunder to the piano. We close tonight with an excerpt from a 1978 performance he did at the White House. He played Chopin's Polonaise in A Flat Major. [HOROWITZ PLAYING PIANO] RECAP

MR. LEHRER: Again, the major stories of this Monday, in East Germany, the exodus and the demonstrations continued despite government actions and pleas to stop them. And the U.S. Supreme Court cleared the way for the payment of $2.5 billion to victims of the faulty Dalkon Shield birth control device. Good night, Robin.

MR. MacNeil: Good night, Jim. That's the Newshour tonight and we'll be back tomorrow night. I'm Robert MacNeil. Good night.