The MacNeil/Lehrer NewsHour

Intro

ROBERT MacNEIL: Good evening. These are the top headlines today. A flight attendant who survived the Japan Air Lines crash has described the last moments. The remains of 26 Americans missing in Vietnam were handed to a U.S. delegation in Hanoi. A car bomb killed 12 people in Beirut. The Gulf Coast braced for tropical storm Danny, which could become a hurricane. Jim?

JIM LEHRER: On the NewsHour tonight, after the news of the day, a critic and a defender debate the future of the dying synthetic fuels effort. Judy Woodruff reports on how Donald Regan is settling in as White House chief of staff, and we have a newsmaker interview with a federal judge who just returned from South Africa.News Summary

MacNEIL: More pieces of wreckage from the Japan Air Lines disaster were pulled from the sea today, but no more survivors were found. One survivor, an off-duty flight attendant, has been telling her story to airline directors. bbefore the crash, she said, there was a big bang and the aircraft began yawing -- swerving violently from side to side. She saw damage to the ceiling above a rear lavatory but didn't know whether a door had been blown out. Searchers today found the cabin door the pilot had reported broken, still attached to the fusilage. That appeared to kill speculation that the door had blown off and damaged the tail section. The flight attendant said the passengers were warned to put on their life jackets and brace for an emergency landing. The airliner began to descend at an acute angle, as if it were falling headlong. She felt three severe jolts; she was trapped in her seat, pinned under other wreckage for 15 hours until rescuers came. She suffered pelvic and arm injuries. For more on her story and other events today, here's a report by Rod Stephens of Visnews.

ROD STEPHENS, Visnews [voice-over]: At the crash site in the mountains near Tokyo, teams were being airlifted in by helicopter. The officers joined hundreds of searchers who have been digging bodies one by one from the mud. Several hundred are yet to be found. Only helicopters can reach the site, and so far their efforts have retrieved only 121 bodies. At the base of the mountain range the dead are placed in coffins and taken to a local gymnasium. Waiting are the weeping relatives who will have to identify the bodies. At 160 kilometers away, at sea, in the area where the jumbo was flying, three large chunks of the tail section. The first sight of them suggests the plane was torn violently apart. Stewardess Yumi Ochiai, who was in seat number 56c, three rows from the back of the plane, said there was a bang above her head and then the ceiling above the toilet fell down. Moments later, she said, the cabin turned foggy white, in line with sudden decompression.

MacNEIL: Searchers also found the 747's two flight recorders today in a valley below the crash site. The recorded cockpit conversations and flight data may help determine the cause of the crash that took altogether 520 lives. One rescuer on the mountain said today, "It would be a miracle if we can find anyone still alive here." Jim?

LEHRER: The South Africa story today was again a story of riots and violence. Hundreds of black students mobbed a teacher accused of being an government informant and tried to burn him to death. Elsewhere an off-duty black policeman was stoned to death by a group of black protestors. Another policeman shot into another mob attempting to firebomb his home. A man was killed. There was a bomb explosion in a white university building in Johannesburg. Also in South Africa, there was much speculation about what changes will be proposed in a presidential speech tomorrow. Our report is from James Robbins of the BBC.

JAMES ROBBINS, BBC [voice-over]: The cabinet met today with conflicting signals still coming from the government about the scale of reform to be outlined in President Botha's speech tomorrow. The pass laws are an obvious target for reform. Blacks must produce their passes on demand, stating which region of South Africa they are allowed to live in and where they may seek work. The introduction of common citizenship with similar identity documents for all races would remove a section of apartXeid espchange within the existing framework maintaining whites as the dominant force for years to come will do little to stem opposition or unrest. That's certainly the view of Nelson Mandela in Pollsmoor Prison, where his wife Winnie visited him today. Arriving back in Johannesburg, Mrs. Mandela said he had heard nothing to substantiate speculation he would be freed after 22 years in jail.

[interviewing] Does he feel able, if he was released, to lead the opposition to this government?

Mrs. WINNIE MANDELA: Certainly. He is aware of the fact that tomorrow's announcement, for instance, by the state president may entail further glorified apartheid, the further carving up of the country as another one of those unpractical solutions to the country's problems. If it is so, it will be very unfortunate if the state President still further reduces this country into political enclaves which are nothing more than sources of cheap labor for white South Africa.

LEHRER: Bishop Desmond Tutu, the Nobel Prize-winning Anglican Bishop of Johannesburg, said in a speech today he did not believe the reforms to be announced by the government tomorrow will make much difference either. He said the basic structure of the apartheid racial segregation system will not change. We will have a newsmaker interview later with an Ohio federal judge who just returned from a most unusual trip to South Africa.

MacNEIL: In Hanoi, a visiting American delegation received what the Vietnamese said were the remains of 26 missing Americans. They were handed over in a brief, solemn ceremony and then flown to the U.S. Joint Casualty Resolution Center in Honolulu for analysis. The delegation was also given material evidence of six other Americans, including identification tags. The Vietnamese also indicated that they accepted a U.S. proposal that a high-level delegation visit Hanoi later this month to resolve the issue of Americans still listed as missing in action.

In Lebanon, 12 people were killed and 120 wounded when a car bomb exploded in East Beirut. The explosion occurred in the middle of the morning. It ripped the facades off two seven-story apartment buildings and badly damaged four others. Military technicians estimated that the car contained the equivalent of 220 pounds of dynamite. It was also packed with pieces of metal to create shrapnel and fitted with extra gasoline tanks to create the effect of a firebomb. So far, no one has claimed responsibility for setting off the explosion.

Israeli radio reported today that the head of the country's infantry and paratroops will face a disciplinary trial over the deaths of two Palestinians in custody. Brigadier General Yitzhak Mordecai is alleged to have pistol-whipped two Palestinians captured after hijacking a bus. They died on their way to the hospital.

LEHRER: There was a public burying of the hatchet today by the two top officials of the government's synthetic fuels corporation. Chairman Edward Noble and Vice Chairman Tom Corcoran said they had resolved their differences. Last week Corcoran accused Noble of duplicity and betrayal in proposing funding for various corporation projects. The organization is considered by many to be almost a dead organization now. Whether that's a good or bad thing is what we will look at in our lead focus segment tonight.

MacNEIL: A new treatment for liver cancer, a generally fatal disease, was described today by a Johns Hopkins University scientist. Dr. Stanley Order said that injections of radioactive isotopes have significantly shrunk inoperable tumors in 50 out of 104 patients and produced a handful of apparent cures. Dr. Order said that much remains unexplained, but he had no qualms about stating, "We have the first effective treatment of liver cancer."

LEHRER: And finally in the news of this day, a tropical storm named Danny is headed north across the Gulf of Mexico and there are fears it will turn into a hurricane before it hits land on Thursday. The storm has winds of 55 miles per hour now. It is currently following a northwesterly course. Official hurricane and gale watches were posted from Corpus Christi, Texas, to the mouth of the Mississippi River on the east. Galveston, Texas, is now considered to be the most likely spot for the storm to strike, but officials remind all that that can change. Scuttling Synfuels?

MacNEIL: The government predicted this week that gasoline and home heating oil prices will be going down even further. That's good news for just about everybody, except those in the synfuels industry. That's the effort started during the oil crisis to create alternative fuels to oil. The federal Synthetic Fuels Corporation has been taking a beating recently. Inside, major policy battles have divided top officials. Today they said they'd resolved them and were ready to face the challenges on the outside. Two weeks ago the House voted overwhelmingly to slash the corporation's funding, and Energy Department officials recently decided to withdraw financial aid to a leading synfuels plant located near Beulah, North Dakota. Our story starts there tonight, in North Dakota, with a report from Elizabeth Brackett.

ELIZABETH BRACKETT: Robin, North Dakota is nervously awaiting the decision of the Department of Energy on whether or not to shut down the coal gasification plant. The plant provides natural gas to millions of consumers in the Midwest and is considered the centerpiece of the government's synfuels program. But the bottom has dropped out of energy prices, and the government says the plant's synthetic gas may have become too expensive to produce, though if the plant goes down an important sector of North Dakota's economy goes down, too.

[voice-over] It is a land of wheatfields, stocky beef cattle and open skies. The hundreds of miles of shiny pipe and the enormous cooling tanks come as a surprise on these vast North Dakota plains. But it is here where the nation has been determined to find a solution to the energy crisis, an energy crisis which was considered to be the nation's top priority just six years ago.

Pres. JIMMY CARTER [July, 1979]: To give us energy security I am asking for the most massive peacetime commitment of funds and resources in our nation's history.

BRACKETT [voice-over]: That plea spurred five major energy companies to borrow $1.5 billion from the government and go ahead with the Great Plains coal gasification Plant, the only plant in the country that today turns coal into natural gas. Inside the one-mile-square plant, assistant manager Virgil Sabin keeps a close eye on the computer screens that monitor the operations. The plant has now been producing gas for the last eight months, though it did not officially open until August 1st. Sabin thinks he and his colleagues kept their part of the bargain in the energy war.

VIRGIL SABIN, assistant manager: The plant was brought in under budget; the plant was brought in under time in terms of when it was due to be up, and got to 100 capacities essentially two years ahead of management's schedule.

BRACKETT [voice-over]: The plant has also provided new opportunities for people like Linus Poitra. Poitra earns $38,000 a year as a maintenance man on the plant's costly and complicated machinery. His wife, Amanda, has just been promoted to personnel supervisor at the plant, at $28,000 a year.

AMANDA POITRA, personnel supervisor: Well, we're both from the Turtle Mountain Reservation in Belcourt, North Dakota. We also employ a considerable amount of people from the Fort Berthold Indian Reservation, and these opportunities at an industry like this were not available to us before. They will not be available to us again.

LINUS POITRA: And it was an industry that was different. Everybody's kind of excited about it.

Ms. POITRA: We are the pioneers. We're the synfuels pioneers, and it's something to be proud of. And all those employees out there are very proud of being in on the ground floor of possibly providing the country with another means of energy.

BRACKETT [voice-over]: Since plant construction began, the small town of Beulah has grown to five times its original size. Homes and schools now stand on the once-vacant plains. But while the people here are justifiably proud of their response to the nation's energy crisis, the crisis seems to have slipped away. The plant performs flawlessly, but the synthetic gas that is produced here is twice as expensive as natural gas on the open market. So, two weeks ago, the government backed out of the deal. The Department of Energy refused to restructure the loans taken out by the five energy companies involved. And the department said no to subsidies for the plant's high-priced natural gas. [on camera] And there were still more shocks. When the DOE turned down the loan restructuring deal, the five companies walked out. Suddenly the Department of Energy had a coal gasification plant on its hands with no clear idea of what to do with it.

SPEAKER: You can actually see the mine -- the drag line operating along the other side.

BRACKETT [voice-over]: Department of Energy officials trooped out to North Dakota to look at their new operation last week. They promised to take a range of options back to the secretary of the Department of Energy, including the one that has everyone here angry, perplexed and scared.

[interviewing] Is one of those options to shut the plant down?

SPEAKER: Certainly.

SPEAKER: Sure.

BRACKETT [voice-over]: Plant director Mike Mujadin has been with the project for 13 years. He is now trying to convince the government officials that the plant should not be shut down and would not be a drain on taxpayers' dollars.

MIKE MUJADIN, plant director: The fact remains that we're currently selling our gas under contract to four pipeline companies, and the current price and our current production is meeting all of our costs and leaving over an additional five to six million dollars a month that could be spent for this research. So the taxpayers wouldn't be paying a thing out of their pocket.

BRACKETT [voice-over]: But Mujadin's figures don't include close to $100 million still needed to bring the plant into compliance with North Dakota's antipollution laws. Plus, the plant is battling further changes in government pricing regulations that could drive Great Plains gas completely out of the market. But the government's problems with the plant did not carry much weight with the 700 North Dakota residents who packed the Beulah High School gym to try and save the plant. The meeting brought out the governor, North Dakota's one congressman, and the two United States senators along with an array of local officials. The message did not change with the office.

Rep. BYRON DORGAN, (D) North Dakota: All of us share a common purpose and a common resolve, and that's to do everything possible that can be done to convince those who need to be convinced that this plant was built for a noble purpose for this country, and this plant can, five yeas from now, 15 years from now and 25 years from now, stand on the prairies in North Dakota producing natural gas for an America that's going to need it, without any question.

BRACKETT [voice-over]: U.S. Senator Mark Andrews told the crowd two major gas companies are interested in the plant. But the Department of Energy says as of now no energy company has asked the department for a new contract to operate Great Plains.

[on camera] A plant shutdown would be devastating for this town. Before the plant was built, Beulah had a population of 1,500; now 5,000 people live here. City services have grown right along with the town, and so has the debt to pay for those services.

[voice-over] Harold Benz has been the mayor of Beulah for the past eight years. He figures at least half the population in Beulah will leave if the plant shuts down, and he wonders how those left behind will pay for the $4.5 million debt that the town has taken on to pay for the new services.

HAROLD BENZ, Beulah mayor: We did have to expand our -- double our water treatment system. Our lagoon system had to be doubled. We did have financial help. Our streets of course grew a lot. As a result, our garbage crew in the city grew a lot, the police department grew, our street maintenance crew grew. So everything's gotten bigger.

BRACKETT [voice-over]: The mayor says one of the town's biggest problems would be the drop in property taxes. Most here agree that homes would be almost impossible to sell. Virgil and Cindy Sabin sunk almost $100,000 into their brand-new home. If the plant goes down, Virgil says he would have few choices.

Mr. SABIN: In essence we would, I think, be forced to walk away from it. If the partners can be forced to walk away from the factory, essentially I'm being forced to walk away from my house.

BRACKETT: What's your reaction to that?

CINDY SABIN: Well, I would hate to think that over all these years that we've worked and saved and put money into houses and then resold them and bought better homes, that the money we've invested in this one we're just going to lose and have to walk away from. That upsets me a great deal.

BRACKETT [voice-over]: The local grocer is worried, too. He has hired 40 new employees and put a $1.5 million addition on his store since plant employees swelled the ranks of his customers. He figures his taxes will triple if the plant is mothballed.

RICH BRONSON, grocer: The store will be affected by the taxes. Just the taxes alone, whether they be the unemployment tax, real estate tax, the stores are going to suffer.

BRACKETT: And how about you personally?

Mr. BRONSON: Maybe I'll do the same thing as the employees -- pull my money out of the bank and tell them, hey, it's yours.

BRACKETT: Give them back the store?

Mr. BRONSON: Give 'em back the store.

BRACKETT [voice-over]: The president of the bank that opened after the plant came in is not as upset by these threats as one might think. Most home and business loans at the bank are backed by the government.

BOB BAKKEN, bank president: The bank wouldn't be the loser. It would be the government again.

BRACKETT [voice-over]: The Poitra family says that is exactly what makes so little sense about closing down the plant. The government would be stuck with both a $1.5 billion investment in a mothballed plant, and millions more in federally insured home and business loans.

Mr. POITRA: If they close the plant down they'll lose their debt service, they'll lose everything they've got in there. And if it remains open, we're getting good out there producing gas. So I still feel that the government, if they're thinking about the taxpayers, are going to lose another 100 million bucks a year if they close this.

BRACKETT [voice-over]: Besides, the Poitras and nearly everyone else in town thinks there may come a day when cheap energy prices once again disappear. And the nation will wonder whatever happened to its resolve to become energy independent. The question is, who should foot the bill for the years in between?

LEHRER: That report by Elizabeth Brackett. The Energy Department is to make an interim decision this week on whether to close the North Dakota plant. Someone who thinks shutting it down icongressman Mike Synar, Democrat of Oklahoma, chairman of the House Environment, Energy and Natural Resources Subcommittee. He is the sponsor of legislation that would eliminate all federal funding for the Synthetic Fuels Corporation.

Congressman, why close the plant in Beulah, North Dakota?

Rep. MIKE SYNAR: Well, first of all, Jim, I think it's important to say that Secretary Harrington, the secretary of energy, that made that decision, that there's really two issues involved when we talk about Great Plains. First of all, should we have bought the Synthetic Fuels Corporation's $720-million bailout program which they proposed? This is after the taxpayers have put in $1.5 billion worth of subsidies on the front end, and the Federal Energy Regulatory Commission on the back end guaranteed a market price twice of what the market is presently for gas. And yet they were back in for an additional $720 million bucks. And Secretary Harrington said no, that was enough, and that exactly wanted to save about $2.6 billion down the road. The second question I think really is, what do we do with the plant now? And, as you saw on that report, the people from the Department of Energy and Secretary Harrington are reviewing those options right now. Now, what is a little bit discouraging is the fact that in the letter by Secretary Harrington to Ed Noble, the chairman of the Synthetic Fuels Corporation, he pointed out that under even the most rosy projected price figures that the operating costs of $75 million a year for the next three years and $300 million for the next seven years couldn't be covered by contracted prices which they're getting, and it really looks very bleak for the future of that plant.

LEHRER: What about the two issues raised in the tape piece? First of all, the damage you would do to the people in Beulah, North Dakota. What happens to them or what should happen to them?

Rep. SYNAR: Well, obviously we're very concerned about that, andI think the story was told very well by that piece. However, you've got to look at the very simple fact that we could pay everyone who's working in that plant $30,000 a year for the next 10 years and still have a better deal than what we are doing by putting an additional $2.6 billion in that plant to save it.

LEHRER: Two-point-six billion is what it would take to save it?

Rep. SYNAR: Those are Secretary Harrington's numbers.

LEHRER: What about the additional point that, look, there's already been billions of -- well, over a billion dollars already spent on this, that that just goes down the tubes once the plant is closed, that the taxpayers' money is being wasted?

Rep. SYNAR: It was a tough decision by Secretary Harrington, and he visited with a number of congressmen about it. He really had one of two options: either kill the program or pull the plug on Great Plains and lose a billion dollars, or continue and have to throw another $2.6 billion. So he made about a $1.6-billion decision.

LEHRER: And you support that decision? You agree with it?

Rep. SYNAR: I think it was a good decision based upon the facts that he had, and I think the Secretary had a very tough decision.

LEHRER: Why do you feel that the time is over for the federal government to support synthetic fuels development?

Rep. SYNAR: Oh, I don't. I think that the federal government ought to be actively involved in synfuels, and that's why the legislation which we've introduced --

LEHRER: I thought your legislation prohibited the federal government from supporting the Synthetic Fuels Corporation.

Rep. SYNAR: We kill the corporation but we don't kill synfuels research and development, and I think that's the distinction. Commercially viable synthetic fuel plants are not going to happen, whether they be large or small, and what we need to do is move back into the R&D area so that that time when economically viable alternatives in synfuels are available, that we're ready.

LEHRER: I'm not sure I understand what you mean. I mean, what should the federal government be doing? What kind of R&D projects? On what scale?

Rep. SYNAR: Okay. They should be small-scale demonstration projects. These are projects which will give us the expertise and the technology necessary so that when synthetic fuels become economically viable that we will have these technologies available.

LEHRER: Do you think that day will ever come?

Rep. SYNAR: Well, I think that in the long term we've got to look at energy prices going up and that many times, like in Oklahoma, where there's a buck to be made somebody'll be there to make it.

LEHRER: Thank you. Robin?

MacNEIL: An opposing view now from Tom Corcoran, vice chairman of the Synthetic Fuels Corporation. Mr. Chairman, the congressman says it is a good idea to abandon that Great Plains plant. What do you feel?

TOM CORCORAN: Well, I think that it would be a mistake at this point to follow through on that decision. First of all, a lot of money has been spent, Robin, on the investment. Secondly, we have a circumstance where I think the country at some point will need to have the synthetic gas from coal in order to provide our energy needs. And there's no question about the fact, as Mike said, that it was a tough decision. But we were asked in the Synthetic Fuels Corporation to see if we could try to solve what obviously was a bad problem. The decision was made many years ago. The Synthetic Fuels Corporation had no involvement. We have no money in that particular project.

MacNEIL: It was built by the Department of Energy?

Mr. CORCORAN: It was built, Robin, by the Department of Energy, and it was built too big. Its scale is too great. They have 14 gasifiers there when really, for our purposes of demonstrating the commercial scale level, whether or not we can use American coals and American people to gasify coal with this lurking technology, we should go ahead on that vein.

MacNEIL: What about the congressman's argument that even considering the amount of money that would go down the drain if you closed it, that's better to lose that than to continue spending the taxpayers' money to subsidize the output of that plant?

Mr. CORCORAN: Well, when we examine the financial factors involved in the decision from a synthetic fuels standpoint, we thought it made some sense to try to buy that technology. After all, as you well know from the news today, there are serious problems in South Africa, and the only other place in the world where they are using that technology today is South Africa. I think it would be far better for us to swallow this difficulty, recognize that it's far better to go to North Dakota for that experience and for that knowledge about converting the vast resources of coal that we have to usable energy rather than being in a predicament at the turn of the century, perhaps, and have to go to South Africa.

MacNEIL: Now, on the government role in synfuels that Jim was discussing with the congressman, where do you come down? He says that the decision to abolish the Synfuels Corporation is correct and that government help should go back to small R&D projects. What do you think?

Mr. CORCORAN: Well, as you probably know, I served for many years with Mike Synar in the House of Representatives, and Mike and I disgree on synthetic fuels. He has never voted for synthetic fuels. The original bill provided for $3 billion to develop from coal and oil shale the tremendous resources that we have, which are about five to six times the proven reserves in the Middle East. And he voted against that. I voted for that. I did not support President Carter's program because I did not think that we ought to be giving to the government the responsibility to create an entirely new industry with $88 billion. But I think today, in this period of stability as far as the energy marketplace is concerned, that what we ought to be doing is recognizing that at some point in the future, we know not when, we're going to exhaust our supplies of oil and gas, and I know that those in Congress, just as we saw with our good friend Congressman Dorgan who is doing his very best to keep that project alive, Mike Synar is doing his very best to help his constituents, who are in the oil and gas business. And I can understad that. But I think when you look at the problem for the country as a whole, what we have to do is look ahead to that day when we will need energy at reasonable prices.

MacNEIL: Well, thank you. Jim?

LEHRER: Congressman, is that what you're trying to do is help your constituents who are in the oil and gas business in Oklahoma?

Rep. SYNAR: Oh, absolutely not. I think what we're talking about here is helping all American taxpayers save billions of dollars that will be wasted because of a program that just simply will not work.

LEHRER: Never work?

Rep. SYNAR: Well, not right now. In the short term synfuels doesn't offer us any type of solution.

LEHRER: What do you say to that blanket statement?

Mr. CORCORAN: Well, I have no quarrel with what Mike has just said about the short term. We have changed the program. The Congress of the United States, last year, while I was a member of the House of Representatives, with the cooperation of President Reagan, reviewed the issue, substantially restructured the program, and what we are now doing is looking to the long term. We're no longer looking to the short term. We're not trying to compete with the independent producers in either Oklahoma or west Texas or my home state of Illinois. What we're doing is looking ahead at that day when the geologists begin to tell us that we've exhausted our supplies of oil and gas and we have demonstrated, and it takes 10 to 15 years, Jim, to do this, that these technologies can be environmentally used. They can be used successfully from a management standpoint, from a technical standpoint. And it takes a number of years of lead time to be in that position.

LEHRER: He's right about that, isn't he, Congressman?

Rep. SYNAR: Well, he's right, but the problem is the Synthetic Fuels Corporation wasn't created to do that. The Synthetic Fuels Corporation was created to bring commercially viable products onto the market. That is an impossible task. It cannot be accomplished. What we need to move into is pure R&D, which we are asking for with our legislation, and move in that area for the day when economically viable alternatives can come on the market.

LEHRER: What do you say to his personal point that you never supported synfuels? This isn't a new deal with you.

Rep. SYNAR: Oh, absolutely not. I'm a big supporter of Synthetic fuels. That's why I'm asking for $500 million back into the Department of Energy to keep the effort going. What I'm against is a very wasteful program within the government, billions of dollars.

LEHRER: You know, Mr. Corcoran, the congressman makes a point here. The average taxpayer wonders how in the world does something like Beulah happen? You've got $1.5 billion put up in a plant, 5,000 people move in. We heard the personal stories of these folks. And suddenly there's people out there from the Department of Energy saying we're going to close this whole thing down, sorry. You know, what are we going to do now? I mean, how does something like that happen, gentlemen? You all are both in the government.

Mr. CORCORAN: I think it happens when we make decisions in response to crises. The American people --

LEHRER: In other words, it was a bad decision to go for synthetic fuels during the oil crisis?

Mr. CORCORAN: No, it was a bad decision on that particular project. The projects which we are supporting do not have that scale, they're not up at 23,000 barrels a day; they're not costing $3 billion of --

LEHRER: Twenty-three thousand barrels? You mean the equivalent of 23,000 barrels of oil a day?

Rep. SYNAR: To demonstrate the technology you don't have to have 14 gasifiers. You need one or two with a spare.

LEHRER: What's your analysis of what went wrong?

Rep. SYNAR: Well, first of all, I want to challenge Tom because the Great Plains project has been held out as the flagship project with synthetic fuels. He says it's not really part of their --

Mr. CORCORAN: He uses it that way.

Rep. SYNAR: He said that it's not really part of the Synfuels Corporation.

Mr. CORCORAN: We never put a penny in it.

Rep. SYNAR: The point is that it was created during that transition period between the Energy Security Act and the creation of the Synthetic Fuels Corporation.

Mr. CORCORAN: By DOE.

Rep. SYNAR: Tom recently voted, along with the majority of members on the board, for $720 million in additional bailout. Now, back in Oklahoma if you give me $720 million, you got a piece of the action. So to deny that they're not part of this deal is really not looking at the facts.

Mr. CORCORAN: Well, we offered to help, but it certainly wasn't a bailout. What we now have is a situation where the government has to swallow $1.5 billion of debt, and if Mike had taken the time to examine closely our proposal he would have found that our proposal giving them the $720 million of price assistance over a 10-year period would have required them to pay back their debt. We didn't bail out Great Plains. We didn't take DOE off the hook. We said that they on their own two feet made that decision. And we understand why they made it. If they had to make it today they wouldn't make it the same way. We acknowledge that hindsight is very clear. But the fact is under our proposal they would have had to pay back the government and in the first two years after the contract would have gone into effect, and it did not go into effect, they would have paid back more in interest and principal payments than the $720 million, in the first two years. We didn't bail them out.

LEHRER: What's wrong with that?

Rep. SYNAR: Jim, first of all let me point out that Secretary Harrington, his administration is the one who killed the project, and he didn't read the figures that way. He read them very simply that to continue on would cost the taxpayers $2.6 billion, and he said we've got to quit throwing good money after bad, and that's why he cut his losses.

LEHRER: Do you think that's it, too? I mean, do you think that if you lived in Beulah, North Dakota, you'd start looking around, that the days are over for that plant?

Rep. SYNAR: No, I don't think so. I think Secretary Harrington and his people are going to give it a very close look. They're going to try to look at options. Obviously, they're concerned about the people, the impact of what all this means. So I wouldn't write that off yet.

LEHRER: What do you think?

Mr. CORCORAN: Well, I think there'll probably be a continued operation of the project.

LEHRER: You do not believe -- you think Secretary Harrington will change his mind and -- or not change his mind but --

Mr. CORCORAN: No. He had to look at one aspect of the particular difficulty that confronted him, and he made that decision and I accept his decision. But that doesn't mean that the project is dead. Already there have been four private companies -- Bechtel corporation, A&R Resources, the Kettlinger(?) Companies and the local gas utility company -- that have written to the secretary of energy saying we want to operate that, as we just learned in the report. They're covering their cash costs by $5 million a year. It's a money machine, especially when they don't have any debt. We think they should have paid off their debt.

LEHRER: Speaking of going out of business, the congressman here would also like to put you out of business.

Mr. CORCORAN: Yes, he would.

LEHRER: And do you think he's going to do that?

Mr. CORCORAN: No, I don't think so.

LEHRER: You don't think he is?

Mr. CORCORAN: No, I can understand why he wants to.

LEHRER: It's already passed the House, your bill did.

Rep. SYNAR: Well, I think two things have happened. First of all, 312 to 111 of the congressmen of the United States said that the time is now. Secondly, I think with the flagship going down, with Secretary Harrington pulling the plug on Great Plains, the real onus is now on the United States Senate to justify the continuation of literally billions of dollars going out the door for nothing to show.

Mr. CORCORAN: Well, first of all, on the Senate, after, as I recall, the House voted, 43 United States senators wrote to the secretary of commerce and they said, we are very concerned about the fact that there is a growing trade deficit for petroleum products; in other words, that we're beginning to import more and more petroleum products. Secondly --

LEHRER: In other words, you have not put your house up for sale yet.

Mr. CORCORAN: No, I didn't put my house up for sale.

LEHRER: And you think he should?

Rep. SYNAR: I think the time has come, and this year is going to be as good as any to get it.

Mr. CORCORAN: And you know, when that happens I think the people of the United States ought to write a letter to Mike Synar and they ought to say, "You know, Mike, you're the guy back in 1985" -- by then he'll probably be a senator because he's representing his producers so well out in Oklahoma, and say "thanks for nothing" because they'll be in long gas lines, they'll have oil imports driving up the price of gas, and they'll be able to reach him.

LEHRER: We will keep the tape and have you both back and we'll play it --

Mr. CORCORAN: Terrific.

LEHRER: -- back to both of you. Thank you both for being here.

Mr. CORCORAN: We'll be back.

LEHRER: Robin?

MacNEIL: Still to come on tonight's Newshour, Judy Woodruff gives us a documentary report on White House chief of staff Donald Regan. Then an American federal judge just back from South Africa describes what he observed. How's He Doing?

LEHRER: Next, a look at how Donald Regan is doing so far in his new job as one of the most powerful men in America. Judy Woodruff has the story. Judy?

JUDY WOODRUFF: The word from Santa Barbara, California, today, where the President is vacationing is that Mr. Reagan plans to push the Congress this fall to make even deeper cuts in federal spending than were agreed to in the budget passed just a couple of weeks ago. The news is based on a White House staff meeting presided over by chief of staff Don Regan. It is one more evidence of the confrontational attitude being assumed by this White House in the second Reagan term, and it is one more sign of the influence of Regan, who in just six months on the job has managed both to consolidate his power and to stir up controversy. Mr. Regan himself refused to be interviewed for our report, but we decided to take a closer look at him anyway.

DONALD REGAN, White House Chief of Staff: The federal government, the world's largest economy, the strenth of the free world, is about to go into its new fiscal year without a budget. How ridiculous can you be?

WOODRUFF [voice-over]: Back before a budget agreement was finally struck between the Senate, the House and the White House, it was not President Reagan but his chief staff man who went public with a blast at the Congress.

Mr. REGAN: Who's not being responsible? Did we not submit a budget? We did. Where is that budget? It has not been passed by the Congress. They're afraid to come to grips with it. And I challenge them to do it.

WOODRUFF [voice-over]: It was some unusually heavy artillery that Donald Regan unleashed in a Chamber of Commerce speech, and the members of Congress he targeted, especially those in his own party, didn't hide their irritation.

Sen. ROBERT DOLE, (R) Kansas, Majority Leader [Meet the Press]: Don Regan should not take on the Congress as he did at the Chamber. That just pours gas on the fire.

WOODRUFF [voice-over]: The private reactions of the Republicans were even harsher, but this wasn't the first time the President's new chief of staff has been on a collision course with power centers outside the White House. In fact, Regan'sfirst six months on the job have coincided with some of the roughest moments yet in the Reagan presidency. From the flap over the President's visit to the West German cemetery at Bitburg to losing battles with Congress over the MX missile and military aid to the rebels in Nicaragua. Again, Republicans have been as critical as Democrats of the performance of the White House staff.

Sen. CHARLES GRASSLEY, (R) Iowa: But it seemed to me like this second term the approach has been more confrontational with the Hill than a cooperative approach that seemed to be the nature of our relationship during the first administration.

WOODRUFF [voice-over]: It was the bitter, drawn-out wrangle over the budget that took the greatest toll on relations between the White House and Capitol Hill.

Sen. PETE DOMENICI, (R) New Mexico: We'll call you back as soon as we have something to talk about. We're in recess.

WOODRUFF [voice-over]: After the President had agreed to go along with a freeze on Social Security benefits, the White House later reneged on the deal, angering Republican senators who had stuck their necks out. Many of them blamed Don Regan for the way the whole affair was handled. Then, when the White House rejected a second budget compromise being put together by Senate Republicans, they and their Democratic allies were stunned.

Sen. DOMENICI: Don Regan came over here to give us the news. He also indicated that he and the White House would like to help us get a budget and to get further cuts, and I was very gracious but told him that we appreciated it but we didn't need his help. We thank him very much; we'll get on with it ourselves.

WOODRUFF [voice-over]: But it was the role Regan played during the President's stay in the hospital last month that raised the most questions.

Mr. REGAN: I did check with the hospital this morning to find out how the President spent the evening, and I nd that he's not only in great spirits this morning, but he's be,en watching the Humphrey Bogart movies that have been playing this week.

WOODRUFF [voice-over]: Regan put out the word that he would be running the show while the President recovered from cancer surgery. He took over an office in Bethesda Naval Hospital, giving himself a role even more prominent than that of Vice President Bush, who did not see the President until the fifth day after his surgery. Even Regan's usual defenders were critical.

Rep. TRENT LOTT, (R) Mississippi: Any time you sort of say, "I'm in charge," as we had one former secretary of state say one time, even though it was with good intentions, people don't like that. They kind of back away, whether it's a congressman or a senator or men or women out there in America.

WOODRUFF [voice-over]: Sources say that even the Fist Lady was annoyed when she thought Regan had overstepped his bounds. Regan's allies have an explanation.

LYN NOFZIGER, former Reagan aide: I think that he's not only new at working with the Congress, he's new at working with Mrs. Reagan, and I think that'll smooth out. Because he's got the same aim as she has, and once again, it's just a matter of adjusting styles.

WOODRUFF [voice-over]: In fact, style is at the basis of much of the criticism of the former Marine turned self-made millionaire through his years heading Merrill Lynch, the giant Wall Street brokerage house. His former associates there say Regan ran the place with an iron hand. The one who agreed to be interviewed put it more politely.

JOHN FITZGERALD, Merrill Lynch: There wasn't any question about the fact that he was going to make the decisions. He himself characterized his leadership style at one point as autocratic.

WOODRUFF [voice-over]: Critics and friends alike say what worked well on Wall Street and even at the Treasury Department, which Regan led for four years, doesn't necessarily work at the White House.

Sen. SLADE GORTON, (R) Washington: He attempts to treat the government in the same fashion, you know, that there is one central point for all authority and that everyone whom he considers below that level of authority -- and he clearly considers senators to be below that level of authority, other elected officials -- should simply fall in line. You do not have a give and take with him. You get the message and you are expected to act on that message.

WOODRUFF [voice-over]: David Gergen was an assistant to the President during the first Reagan term. He says the White House has changed markedly since Regan took over.

DAVID GERGEN, former Reagan aide: He has the greatest degree of power of anyone in that position since Sherman Adams for the Eisenhower administration, because he has the responsibility not only for the management of the organization but also for the policies. All policies go through Don Regan before they go to the President.

WOODRUFF [voice-over]: Republican members of Congress say they've noticed a change too.

Sen. GRASSLEY: Basically we do not have our views sought out, our points of view sought out in advance by the people at the White House in this administration like we did in the first administration.

WOODRUFF [voice-over]: But many members say simply the White House suffers because of the absence of the former chief of staff, James Baker.

Sen. GORTON: I must say there was a greater feeling that there was someone there who was listening and listening sympathetically and attempting to work out a problem if indeed it could be worked out.

WOODRUFF [voice-over]: Former long-time Reagan aide Lyn Nofziger suggests the comparisons with Jim Baker are unfair.

Mr. NOFZIGER: You have Don Regan, who has not ever run for office, as Jim Baker had, who had not spent a good part of his adult life playing around in politics, as it were. So, I mean, he's really, as far as being a political operative goes, he's pretty much starting from scratch there. And I think he's going to get there.

WOODRUFF [voice-over]: But David Gergen says there's more than campaign-style politics involved.

Mr. GERGEN: In government you're living in a political environment in which it's terribly, terribly important to be able to react to and know in advance and strategize how you're going to deal with the Congress, how you're going to deal with public interest groups, how you're going to deal with the public in general. There are a lot of those kinds of questions that I think have not been successfully handled as they might have been in this second term.

WOODRUFF [voice-over]: Reactions to Regan from some congressional Republicans indicate they agree with Gergen.

Sen GORTON: We are independently elected, and we don't like to be ordered around. We don't even like to be ordered around by the President. We certainly aren't going to be ordered around by someone who was never elected to anything at all.

WOODRUFF [voice-over]: From an historical standpoint Harry McPherson, former top aide to President Lyndon Johnson, says the position of chief of staff is an absolutely critical one.

HARRY McPHERSON, former Lyndon Johnson aide: He is serving as a kind of alternate to the President, an alter ego, making a lot of decisions that the President hasn't got time to make. Even if you're like a Lyndon Johnson with three television sets going in every room and reading 10 newspapers a day, you can't get enough, can't hear enough yourself. So you depend on somebody or -bodies to get that for you and to tell you what's really critical.

WOODRUFF [voice-over]: Critics say they doubt Regan is letting the President hear as many points of view on issues as he should, particularly when they differ from Mr. Reagan's. But in an interview last January just before he took this job, Regan told me there's a point after which the President shouldn't hear other views.

Mr. REGAN [January, 1985]: The chief executive officer should have all shades of opinion around him. He should hear one side and then the other or, if there's a third side, even, to a question. But once he has made his decision, the team has to stick with it. And I nd it an abomination that people in an administration won't stick to the script once the President has given a sign-off on this is the way we're going to go. That's the way you have to do it if you're going to be a team player.

WOODRUFF [voice-over]: Some, however, say Regan is forgetting that he must play ball with Congress, too. Congressman Vic Fazio sat on the budget conference committee.

Rep. VIC FAZIO, (D) California: Unless there is a willingness to engage in give and take, to compromise when it's required and to blend together the kind of differing points of view we just did on a budget compromise, unless the White House is going to be part of that it seems to me that we're in for three very difficult years.

Rep. LOTT: I also would caution you to be a little bit careful about this image of, "Look, I'm the prime minister." Back off a little bit. Remember, after all, you are nothing more than a staff person. Nobody elected you. So perception is important.

WOODRUFF [voice-over]: Not all Republican members of Congress are optimistic about the prospects for change.

Sen. GRASSLEY: I think that there will be some change, but I don't think, based on what I know now, that it's going to be as much of a change or as abrupt of a change that's necessary for the good of the country and for the goals of this administration.

WOODRUFF [voice-over]: But Lyn Nofziger thinks the negative attention Regan is getting is temporary.

Mr. NOFZIGER: I think that if Don will hunker down, so to speak, and let August go by without sticking his head up too high it'll be gone.

WOODRUFF [voice-over]: Even critic David Gergen adds something that he says people shouldn't forget about the 66-year-old Regan.

Mr. GERGEN: I think he's closer to Reagan than any individual has been since Reagan came to Washington, at least that's my sense of it. They're of the same generation; they're both self-made millionaires; they respect each other, they laugh a lot together; they're Irish. And this generational question is very interesting. When Don Regan became chief of staff, the first day he came to the White House, Mike Deaver apparently opened the door to the Oval Office to usher Regan in and he said, "Mr. President, I nally brought you a playmate your own age." And Regan and Reagan have hit it off famously, and I think that whatever criticisms are made of Regan about the way he's carried out the job -- and I know there are many critics -- people should remember that he is doing very much what Reagan wants, what the President wants.

WOODRUFF: There is some evidence lately that Regan understands that he may have a problem, or at least that the White House staff needs to rethink the way it operates. For lunch one day last week Regan called in a handful of men with extensive experience in Washington and in dealing with Capitol Hill to ask their advice on how to get things on the right track. One who attended the meeting said there were some blunt assessments made and that Regan listened carefully. But he also said he didn't know how much the group's advice would really count because it was at least the third such meeting Regan has held this year. Jurist's View

MacNEIL: Finally tonight we take a look at recent events in South Africa from a different perspective, that of a federal judge who went to observe the treason trial of 16 civil rights leaders. Nathaniel Jones is a judge on the Sixth Circuit Court of Appeals. In South Africa he represented the Lawyers Committee for Civil Rights Under Law. As well as attending the trial, he witnessed a violent confrontation between police and mourners at a funeral. Judge Jones was also detained himself by security police. He returned yesterday, and he joins us now from the studios of public station WCET in Cincinnati. Good evening, Judge.

NATHANIEL JONES: Good evening.

MacNEIL: Are the 16 on trial for treason getting a fair trial, in your view?

Judge JONES: Well, the trial on the merits has not begun yet. The proceeding that was initiated during my presence there grew out of a motion which challenged the indictment, and it is considered to be the heart of the case. That proceeding has gone, I think, according to all observers, extremely fairly. The judge is an extremely competent and sensitive judge, who is very much aware of the issues and the law, and he enjoys the respect of all of the participants at this stage of the trial.

MacNEIL: Is it possible that they, that those charged with treason under this regime in this climate could be acquitted?

Judge JONES: I would say there is a likelihood that the indictment may have to be dismissed or drastically amended. It was amply demonstrated that during the presentation of the advocate on behalf of the defense that there are some serious problems in the manner in which that indictment was drawn. There are serious questions of joinder of parties, the over-breadth of the charges, the attempt to link together activities which were totally unrelated to any acts of violence and, in fact, the contention of the defendants seemed to so disorient the state prosecutors that they asked for an adjournment for several days to reconsider their position.

MacNEIL: What is the mood in the courtroom? Are events outside, the sort of violent events swirling around in South Africa, are they affecting the mood in the courtroom?

Judge JONES: I don't think so. I think the mood of the courtroom is very calm and very dignified. The judge is in complete control. I think it's somewhat misleading, though, to conclude that the circumstances of this trial are going to be totally controlled by what happens in the courtroom. I think it's necessary to look to the law, the underlying law which brought those 16 people to the court.

MacNEIL: One of the leading defense lawyers before the trial even got started, Mrs. Victoria Mxenge, was fatally shot. What impact did that have?

Judge JONES: That stunned all concerned. The first morning of the hearing on the motion to quash, Justice Milne took note for the record of the tragic death, the murder of this very fine lawyer, and indicated that it was part of the madness, that insanity, which is running amuck in the country.

MacNEIL: And you went to her funeral --

Judge JONES: I did, yes.

MacNEIL: -- which was a very -- turned into a very violent thing. What was that like?

Judge JONES: The funeral itself was quite moving. It was long, and there were a number of speakers. The violence that you referred to did not occur until after the service was over, and the mourners were carrying the body to the grave. A number of people had gone by that time, including me. I saw the police van which was carrying these three officers, one of whom was killed, coming along the road, and I wondered to myself what in the world a police van was doing in that kind of an atmosphere, some 10,000 people who were quite upset. There is such rage in the black community of South Africa against the police that I felt it was a terrible mistake or blunder for that vehicle to have gotten in there. It may have been inadvertent, I don't know. But I did not -- I knew that the vehicle was stopped by a group and there was some rock-throwing, but I proceeded on to the hotel and did not learn about the culmination of that episode until I arrived at the hotel, and it was most distressing.

MacNEIL: Do you come away from South Africa feeling hopeful that the ultimate confrontation, that civil war and revolution can be avoided, or do you think that that is an inevitable course?

Judge JONES: I think without any question that change is going to come. The timetable, the method of change, I feel is the important question. I don't think the question of change is going to be decided in Washington. I don't think the timetable is in Washington or London or Paris or even Pretoria. I think the timetable for change is in those townships, among the people who are so upset and so disenfranchised and so frustrated. And unless something is done to calm those anxieties by the persons who are now in control of the levers of power in South Africa, the transformation could be a violent one.

MacNEIL: Let me ask you this, finally, we just quoted Bishop Tutu earlier in this program as saying the changes to be announced tomorrow, the reforms, aren't going to amount to anything, really. The basic structure of apartheid will stay in place. If he's right about that, and the minister in charge of that area almost said that himself yesterday, is that going to defuse the atmosphere in the townships, or is it just going to go on?

Judge JONES: I'm afraid Bishop Tutu is perhaps correct. The system of apartheid has to be completely unrooted and removed. It is so fundamentally offensive to the human spirit and to notions of fairness and equity and justice that tinkering with it, as has been indicated is likely to be done, will not placate those who are now on the march. There is a new level of sophistication and determination that I was able to discern from my visits into the townships.

MacNEIL: Well, Judge, I hate to interrupt you, but that is the end of our time.

Judge JONES: Thank you.

MacNEIL: So I'll say thank you for this evening and turn it over to Jim. Jim?

LEHRER: Again, the major stories of this day. One of the survivors of the Japan airliner tragedy said there was a big noise, a drop in cabin pressure and a wild yawing before the plane crashed. Vietnam turned over the remains of 26 Americans who died in the Vietnam war, and there was fresh violence in South Africa as Bishop Tutu predicted tomorrow's announcement of government reforms will not change the basic structure of the apartheid system. And the wind surrounding storm Danny, tropical storm Danny, have now reached hurricane level. The storm is nearing the Gulf Coast. Good night, Robin.

MacNEIL: Good night, Jim. That's our NewsHour tonight; we'll be back tomorrow night. I'm Robert MacNeil. Good night.