The MacNeil/Lehrer NewsHour

Intro JIM LEHRER: Good evening. Leading the news today, former National Security Adviser Robert McFarlane was interviewed by the Tower commission. The United States lifted economic sanctions against Poland. And a breakthrough against Alzheimer's Disease was announced. We'll have the details in the news summary in a moment. Judy Woodruff is in Washington tonight. Judy? JUDY WOODRUFF: After the news summary, we have three main focuses and an essay on tonight's News Hour. First, we hear about that Alzheimer's breakthrough with one of the scientists responsible for it. Next, a newsmaker interview with Israeli Prime Minister Shamir. Then a documentary report on the man who may or may not be leaving his job as White House Chief of Staff, Donald Regan. And finally, an essay about politics in the city of Chicago.News Summary LEHRER: Members of the Tower commission interviewed former National Security Adviser Robert McFarlane today. The interview took place at Bethesda Naval Hospital, where McFarlane is recuperating from a Valium overdose police said was a suicide attempt. The key issue was reportedly whether President Reagan gave advance approval of a 1985 arms sale from Israel to Iran. McFarlane has testified publicly that Mr. Reagan did. White House Chief of Staff Donald Regan has said he did not. A number of major newspapers reported today that Mr. Reagan changed his own story about what happened. The story said Mr. Reagan gave the McFarlane version when first interviewed by the Tower commission but said in a subsequent interview that he had been mistaken; his approval had come in January, 1986, after the deal was made. White House spokesman Marlin Fitzwater refused comment on the stories. So did a spokesman for the Tower commission. Judy? WOODRUFF: Nicaraguan contra leader Arturo Cruz announced today that he won't resign from his post after all. At a news conference in Washington, Cruz said he was staying, because he had become persuaded that the contra movement, known as the United Nicaraguan Opposition, will undertake some democratic reforms.

ARTURO CRUZ, United Nicaraguan Opposition: I do so because I see the possibility of reforms. I also see the possibility of unity of UNO with other political groups or the Nicaraguan Resistance Force to have total unity. And I also do it because I see the prospects for peace. WOODRUFF: The Reagan administration had strongly urged Cruz to stay on, but he insisted today that he had made the decision entirely on his own. He and fellow contra leader Alfonso Robello have been in a running feud with Adolfo Calero, who resigned his contra leadership position earlier this week. LEHRER: U. S. economic sanctions against Poland were lifted today. President Reagan made the decision, saying the light of freedom continues to shine in Poland. U. S. credits and guarantees and most favored nation status on trade were revoked in 1981 and '82 because of the Polish government's actions against the Solidarity Trade Union movement. President Reagan explained today's move to a group of Polish American leaders and members of Congress at a White House meeting. One who attended was Senator Barbara Mikulski of Maryland.

Sen. BARBARA MIKULSKI (D) Maryland: When Jaruselski imposed martial law and slammed the door in Poland, I supported Ronald Reagan when he slammed the door and put on sanctions. Today, I stand also here in a bipartisan effort congratulating the President for lifting the sanctions against Poland. I think we all agree that the lifting of martial law, the freeing of political prisoners, the fact that there have been no arrests since September, indicate that the Polish government really now does not want to impose further restrictions. LEHRER: The State Department released its annual report card on human rights abuses today. It said the police crackdown in South Africa was the most severe new development. The report also had particularly critical words for both North and South Korea, Nicaragua, Afghanistan, Mozambique and Chile. It had complementary words for the Soviet Union's recent release of political dissidents. And in Moscow, there was news about two of them. Psychiatrist Anatoly Koryagin returned home after spending five years in a labor camp. And Soviet officials said Jewish activist Iosif Begun would be free within 24 hours. Begun's imprisonment triggered violent street protests in Moscow last week. WOODRUFF: An international team of scientists announced today that they have discovered what causes one form of Alzheimer's Disease. The researchers say they have pinpointed a defective gene in the same chromosome that causes Down's Syndrome, a birth defect that results in mental retardation. That discovery should help in the future in diagnosing and predicting the ailment.

JAMES GUSELLA, neuro geneticist: We've identified its position. And we now, therefore, have a basis for isolating the gene. We're no longer working the dark; we're working towards a precise spot on the chromosome. The promise it holds for all Alzheimer's patients is that there is the possibility when the gene is isolated that the knowledge we gain about the primary defect will lead to some sort of treatment. There's no predicting, however, in advance that that will be true. It's clear that we will gain much more knowledge about the disease based on this result. We will find out what proportion of cases are genetic. And ultimately, we'll find out a cause of the disease that may lead to other causes. There's no guarantee it will lead to a treatment. However, it's clear that a knowledge of the cause is much more likely to give you a treatment than simply shooting in the dark. LEHRER: The government issued guidelines today to prevent federal workers from cheating on urine drug tests. They include the use of television monitors and blue dye in toilets and strict rules for handling and transporting the resulting samples. Attorney General Meese was joined by Health and Human Services Secretary Bowen in explaining the need for foolproof testing.

Dr. OTIS BOWEN, Secretary, Health and Human Services: Our goal is to deter illegal drug use and to help employees who have a drug problem find counseling and rehabilitation. EDWIN MEESE, Attorney General: Our purpose here is not to fire employees. The guidelines that are being offered today represent an extraordinary effort to create a drug testing system that is first of all, as Dr. Bowen said, reliable; secondly, that protects employees' rights; and thirdly, that ensures the integrity of the process from beginning to end. We feel that the federal government, as the nation's largest single employer, will be a model for dealing effectively and constructively with illegal drug use in the work place. LEHRER: Only those federal workers doing sensitive work are subject to drug testing. A spokesman for the National Treasury Employees Union called today's new rules further onslaughts on employee rights and a comic exercise in tidy bowl justice. WOODRUFF: There was a mixed set of economic reports out today. On the one hand, the Commerce Department reported that economic growth in the last three months of 1986 slumped to an annual rate of just 1. 3%, the poorest performance since the last recession. On the other hand, inflation slowed during that same period to only . 7%, its best showing in almost two decades. In Los Angeles, embezzlement charges were filed today against a former official of Mitsubishi Bank of California. Forty four year old Hirotsugo Mizuno was charged with crimes involving the embezzlement of almost $45 million -- money he allegedly used to pay gambling debts and play the stock market. The bank had previously sent Mizuno home to Japan and had urged officials not to prosecute him. The Los Angeles District Attorney said that he is seeking Mizuno's extradition. LEHRER: The bodies of two more skiers were found late today under the snow near Breckenridge, Colorado. The skiers, still unidentified, were caught in an avalanche that thundered down the side of a steep mountain late Wednesday afternoon. One other body was found shortly after the slide. Some 300 rescue workers have been involved in the search for more bodies buried in the slide that cut a half mile path down a slope. Rescue officials said at least one other person is still missing. WOODRUFF: That wraps up our summary of the day's news. Ahead on the News Hour, more on the search for the cause of Alzheimer's Disease, a newsmaker interview with the Israeli prime minister, a documentary report on Donald Regan, and an essay on Chicago politics. Alzheimer's: New Clue LEHRER: We go first to today's good news about that form of senility known as Alzheimer's Disease. Researchers at Massachusetts General Hospital announced a major breakthrough in the search for its cause. They found what they call a marker to geta gene that causes Alzheimer's, especially in families with a strong history of the disease. Correspondent June Massell has some background on the discovery.

HAZEL STEGNER: Here I am. Here I am. I don't know why, and I don't know how, and I never dreamed that I would be in a condition like this. Never, never. JUNE MASSELL [voice over]: Until a few years ago, it was called senility. But scientists have discovered that half of all cases of senility are actually Alzheimer's Disease, a brain disorder affecting nearly 2 million elderly Americans. It's the fourth leading killer in the United States. DOCTOR: What do you call this? ALZHEIMER PATIENT: I don't know. MASSELL [voice over]: Victims of Alzheimer's first suffer from a loss of memory. The mind eventually degenerates to the point where a victim can no longer cope with the ordinary functions of life. The disease attacks the body as well. And although a person with Alzheimer's may live for years, the disease will eventually lead to death. Alzheimer's is especially difficult for the families who attempt to care for their loved ones at home. Mrs. B.F. ALLEN: You know, he gets real confused and everything, and then I get a little upset, because he won't do what I want him to do to protect him. And some nights when I go to bed or after the little freak that we have, I'll just sit down, and I'll say, ''Ooh, have I got Alzheimer's too?'' Because it really gets to you. MASSELL [voice over]: For some time, researchers have suspected that Alzheimer's Disease could be genetic -- inherited from an afflicted parent. Here at Mass General Hospital, researchers have just confirmed that. They zeroed in on the gene that, when defective, appears to cause Alzheimer's Disease. Researchers studied four families in which the disease showed up generation after generation. By analyzing blood samples of surviving family members, scientists were able to identify the defective genetic material. Here's how it works. In a normal person, every cell contains thousands of pairs of genes carried on chromosomes. But in a person with Alzheimer's Disease, at least one gene located on what's called Chromosome 21 is defective. In reproduction, the cells split to form either egg cells in a woman or sperm cells in a man. Half the cells carry the defective gene. Therefore, there's a 50% chance that each offspring could inherit Alzheimer's Disease. LEHRER: Dr. James Gusella is the leader of the Massachusetts General Hospital team that found the Alzheimer marker. Their results were published today in the journal Science. In November, 1983, he also found a marker for the gene that causes Huntington's Disease, another deadly brain disorder. He joins us tonight from public station WGBH in Boston. Doctor, welcome and congratulations, sir. Mr. GUSELLA: Thank you very much. LEHRER: Is breakthrough the proper word to describe this finding? Dr. GUSELLA: I think it is. I think that one of the major problems in studying Alzheimer's Disease is that it hasn't been clear in any case what the cause of the disease is. And we now have a clear picture that the cause in at least a portion of the cases is genetic -- a chromosome defect on Chromosome 21. LEHRER: And when you say some of the cases, what do you mean by some of the cases? Dr. GUSELLA: There is good evidence that approximately 10% of cases are clearly genetic. Some researchers believe that a greater proportion have a genetic contribution as well, but that is not at all clear, because it's not easy to follow the family history of this disease, given that individuals die from it relatively quickly, and they have such a late age of onset that you can't build up big family histories. Now, with the markers that we've discovered on Chromosome 21, we should be able to sort out what proportion of cases really result from a genetic defect and what proportion may be sporadic. LEHRER: Do you believe, just based on what you know now, that it's going to be a very large proportion -- that it's going to turn out to be a strongly genetic disease? Dr. GUSELLA: I think it probably will be a continuum, with the cases of the type that we've already studied, where there's a very clear cut familial pattern, being totally genetic, and maybe other cases having a predisposition towards the disease, where the gene doesn't actually cause it inevitably, but must interact with some other factor. LEHRER: Like what? What kind of factor? Dr. GUSELLA: Perhaps some environmental factor. Perhaps some of the factors that have already been suggested, such as aluminum or any other environmental factor -- those that have been so hard to identify already as causes. LEHRER: All right, what happens -- what happens next in this search for the cause of Alzheimer's? Dr. GUSELLA: Well, right now, we have a portion of cases where there's a clearly familial pattern. And we know that in those cases, the cause of the disease is in a defective gene on Chromosome 21. But we don't have that defective gene in hand. What we have is a number of neighbors of that gene that allow us to mark Chromosome 21 and trace it through the families. We now have to move from those markers, which are simply segments of DNA on Chromosome 21, to the actual segment that has the defect. That could take several years, or it could be very rapid, as a result of another piece of work that's been carried out by a number of different groups, all of whom have isolated a gene that makes the protein that leads to the amyloid plaques that are present in the brain of Alzheimer's patients. Since this gene has also been located on Chromosome 21, there is a possibility that it is the site of the primary defect. But at the current time, there is no proof of that, and so we will be looking very hard at that gene to determine whether the defect is in it or in some neighboring gene. LEHRER: Okay, so once you find that -- and you say it could take several years, but with a few breaks it could be a shorter time. Is that correct? Dr. GUSELLA: That's right. LEHRER: All right. So once you have the gene, then you're in a position to really talk about what the cause is and start thinking of prevention and even cure. Is that correct? Dr. GUSELLA: Well, once you know what the cause is, you then have a rational basis for trying to interfere with whatever that mechanism is. At the present time, we can't really guess at what the cause is. We simply know that it's a gene. And so we can't guess at potential cures. LEHRER: When you say interfere -- excuse me -- when you say interfere, what you mean is interfere with medicine, interfere with surgery, interfere -- coming in from the outside and making a change. Is that right? Dr. GUSELLA: Coming in and trying to frustrate the activity of that abnormal gene. And there are many potential ways, but you have to know what that gene product is before you can go in either with a drug or with surgery or anything else. You have to know what you're aiming at. LEHRER: What about finding out who has these genes in the first place early enough in the process? Dr. GUSELLA: Well, in the near future, the markers that we've discovered and additional markers that we can build up in that area of the chromosome should be applicable to pre symptomatic or prenatal diagnosis in families of the type that I've just -- LEHRER: Prenatal? You mean -- tell me -- Dr. GUSELLA: Well, what we do to analyze the individual is to look at his DNA. And we can obtain DNA either from a blood sample in a living individual or from an amniocentesis sample for a fetus. And those samples can be tested for the presence of the marker and inheritance of it from the affected parent or the potentially affected parent if it's an at risk individual. LEHRER: So even before a baby is born, you could tell that this person is going to eventually have Alzheimer's Disease? Dr. GUSELLA: But only -- first of all, we can't do it right now. LEHRER: Sure. Dr. GUSELLA: We need more precise definition of our markers. But even then, we will only be able to do it in families where there's this very clear cut familial pattern and where we know that the defect is on Chromosome 21 -- families of the type that we've been using in our study, where there are many, many affected individuals. LEHRER: But once you get this kind of information -- once it moves a little further along -- it will have application, will it not, to those who may have Alzheimer's Disease for reasons other than family history. Is that correct? Dr. GUSELLA: It probably will. By defining a cause of Alzheimer's Disease -- a genetic cause -- we should identify a particular biochemical pathway that's involved in setting off the disorder. And you would presume that other causes of Alzheimer's Disease probably interact with that same pathway. And so we may have better clues as to what those are once we know what biochemical pathway they're interacting with. LEHRER: Are we -- you said -- you used -- you said several years a minute ago. I assume you're doing that -- is that your most optimistic or your most pessimistic view of where this will -- how long this road is? Dr. GUSELLA: It's sort of a medium view. LEHRER: Is that right? Dr. GUSELLA: It's plus or minus. If it turns out to be the amyloid gene, we already have it in hand. If it turns out not to be the amyloid gene, it will definitely be several years, because we have to move gradually along the chromosome until we find it. LEHRER: Let's say it's the right gene. Is finding a prevention or finding a cure fairly simple after that, do you think? Dr. GUSELLA: Not at all. If it is the amyloid gene, we then have the probable overproduction of a normal protein. And you don't want to shut off production of that normal protein, because it has some normal function. You have to reduce its levels. The nice thing is, when you have the gene in hand, you can create an animal model of the disease, where you put the gene into animals and cause them to have the same type of effects in the brain. And you therefore have a place where you can test drugs and other treatments. LEHRER: Assuming everything goes just the way you would like it to go -- you and everyone else who's devoting their lives to this -- what are we talking? Five years, six years? Dr. GUSELLA: There's no way to predict in this kind of endeavor. What's clear, however, is that we now have a new and very clear cut direction to go in, which should give us a fundamental view of the cause of Alzheimer's. LEHRER: Was your team set up specifically to find this marker? Dr. GUSELLA: My team is actually set up to find markers for many genetic diseases, Huntington's Disease being one that we found a marker for four years ago. Alzheimer's Disease was our next target, and we recruited a number of collaborators around the world to identify and collect samples from very large families. LEHRER: And it took you three years. Is that right? Dr. GUSELLA: It took three years. LEHRER: How many people involved? Dr. GUSELLA: There are 22 authors on the paper, and several more people involved in all of the various centers. There are investigators in Boston, in Indiana, in Michigan and in several other countries in Europe and Canada as well. LEHRER: Well, Dr. Gusella, again, thank you for being with us. And again, congratulations to you and all of your colleagues. Dr. GUSELLA: Thank you. LEHRER: Judy? WOODRUFF: Still ahead on the News Hour, an interview with the prime minister of Israel, a report on President Reagan's embattled Chief of Staff, and an essay on Chicago politics. Yitzhak Shamir WOODRUFF: Our next focus segment tonight is an interview with Israeli Prime Minister Yitzhak Shamir. Charlayne Hunter Gault is in charge. Charlayne? CHARLAYNE HUNTER-GAULT: Judy, Prime Minister Shamir's three day visit to Washington this week is his first since he became prime minister last October. Yesterday, Mr. Shamir met with President Reagan at the White House and also with members of Congress seeking Israel's cooperation in their investigations into the secret U. S. arms sales to Iran. Mr. Prime Minister, welcome. When you visited with President Reagan yesterday, he urged your cooperation with congressional and other committees looking into this affair, and I understand you met with the chairmen of the Senate and House select committees. What exactly is Israel's role going to be in this investigation? YITZHAK SHAMIR, prime minister, Israel: Well, you know, it was already agreed before my coming here about our full cooperation with the various investigative bodies on this matter of Iran. And for us, it's clear we have to cooperate. And the cooperation will be on a basis of government to government. HUNTER-GAULT: Not private individuals. Mr. SHAMIR: Not private, because our people who have been involved in this operation acted on behalf of our government. And we are responsible for them, and they are responsible before our government. And therefore, we have agreed with the various committees that they're entitled to put questions to us -- to the government; written questions. We will give them written answers. And if there will be a need for more clarifications, we will do it. We will give them. But also on this same basis, maybe they will have meetings with some representatives of our government if it will be necessary. HUNTER-GAULT: What do you expect to come out of this kind of cooperation? Mr. SHAMIR: Well, I think that -- I hope that the result of this investigation will be to know, to let know all the American public opinion, the truth -- what happened. And I'm sure that when the investigations will come to an end, everybody will know that Israel acted in this operation with a clear conscience. HUNTER-GAULT: Is that -- is it a problem now? I mean, do you feel that Israel needs to be vindicated? Mr. SHAMIR: No. I don't feel any need for it. I don't feel we have to justify ourselves. But I see that there is some questions in the United States. And if the United States government and United States Congress want us to cooperate with their investigation, we are ready to give them all the information they need. We, on our part, are very sure that we acted accordingly to our obligation as an ally and as a friend of the United States in our region. HUNTER-GAULT: Well, simply put, what was the extent of Israel's participation in this operation? Mr. SHAMIR: Well, you will know it from all the investigations when they will come to an end. I don't think I have now to go into details. It's not for me. We have some people from our government who are busy with that who have all the details, all the necessary information. And they will give it to the American investigating bodies. HUNTER-GAULT: Well, without going into the details -- I appreciate what you're saying -- can you answer this question: I mean, it's been suggested that this whole operation was Israel's idea. Mr. SHAMIR: I wouldn't say so. I wouldn't say so. It is already -- it was stated by the highest officials in the United States that all the decisions were American decisions. Because it's absurd to think that Israel can decide for the United States. HUNTER-GAULT: But the United States might have decided based on information or suggestions from Israel. I think that's been part of the -- Mr. SHAMIR: We are partners of United States in many operations, on many issues. If we have a strategic operation with the United States, we are proud of it. And we are ready always to cooperate with the United States. And we do it willingly. HUNTER-GAULT: But Mr. Prime Minister, you've been quoted as saying that you thought strategic openings to Iran were important. Now, I don't know if you were misquoted or not. But if you weren't, is that a correct -- Mr. SHAMIR: I think that, you know, even today about the present situation in our area, that Iran is one of the most important countries in our area. And unfortunately, it is a country under a terrorist rule, under a very reactionary rule. And I would like to see a radical change in this regime -- the Iranian regime. HUNTER-GAULT: Is it Israel's view and was it Israel's initiative that -- or Israel's idea -- that there were moderates within Iran with whom countries like the United States could possibly -- Mr. SHAMIR: I can only say that there was a cooperation. And you know what is going on. A cooperation, everybody gives his contribution to this joint operation. Somebody gives these assessments, somebody has to check these assessments. Somebody gives some services. It's a cooperation. And it's very, very difficult to make afterwards a stock taking of everything what everybody did, you know. But if the investigators will be interested in it, maybe they will find out. HUNTER-GAULT: All right. But is it your sense that Iran -- somewhere in that country there are elements with whom countries like the United States or Israel could possibly make contact and do some rational business? Mr. SHAMIR: I am sure that there are some elements whom we have to support. And we have to think what will happen in this important country after the disappearance of this old man. HUNTER-GAULT: You mean the Ayatollah Khomeini. Mr. SHAMIR: Yes, of course. And we are sure that this time there will be some very important changes. And it is important for the free world that America will be present at this time there in some way. And it will have some contacts to do something, to be able to do something to influence the events in such an important moment. HUNTER-GAULT: You know, Secretary Shultz -- Secretary of State Shultz -- has been quoted as warning that Israel and the United States' interests in Iran might be quite different. What's your view of that? Mr. SHAMIR: Maybe. You know, maybe. Even when there are very close relations between two countries and two very friendly countries, there could be some differences of interests. HUNTER-GAULT: Like for example? Mr. SHAMIR: Maybe in this case -- I will not now analyze -- maybe we are arbiters of this area. We know it maybe better -- all the situations and all the fluctuations of the situation -- maybe we know it better. We feel it better than the United States. And we have our special relationship. Maybe we regard, for instance, Iraq differently from the United States. Because Iraq attacked several times our country and was involved in a war against us. Even in 1948, when we have established our country, and then it was a very, very, you know, very bad situation. And on the other hand, we have good memories of our relations with Iran in the past in the times of the Shah. It was a very good relationship. Maybe this is the reason for some differences of approach. But strategically thinking, I don't think that there is a difference of interest. Because we think that there has to be an American presence everywhere in our area. It's very important for the stability of the area, for peace in the area. There is no other power that could replace the United States. HUNTER-GAULT: The Christian Science Monitor said just prior to your meeting with the President that this whole Iran thing had cast a dark shadow over your visit. How would you characterize your meeting? Mr. SHAMIR: Not at all. Not at all. You know, it was very, very slightly mentioned. And not only in my conversation with the President, also with Secretary Shultz and Secretary Weinberger. There is not any bad feeling about it. We know that there is a very friendly and loyal cooperation between us. There could be some ups and downs in various operations. Nobody could be sure that every operation and every joint operation will be successful. HUNTER-GAULT: Well, you know, your meetings have apparently gone smoothly. But at the same time, there have been reports that there have been some frictions. For example, the U. S. is reported to be pressing Israel to relax your opposition to U. S. arms sales to some of the moderate Arab countries. Why is it that you won't do that? Mr. SHAMIR: You know, first of all, I would assure you that there is not any pressing on us -- any pressings on any issue. We are not a people to be pressed, you know. We are partners. And of course, about the sales of arms to Arab countries, these differences of views are a normal phenomenon, because the United States -- of course, it's normal -- would like to have relations with Arab countries, as they have with Israel. HUNTER-GAULT: It's also been suggested that part of the reason they're so anxious to get these sales completed is because of the negative impact that the sales -- arms sales -- to Iran have had. They need some kind of -- Mr. SHAMIR: Yes, there are such assessments. But I would say there is a lot of exaggeration, because these differences of views about American sales of arms to Arab countries, they repeat themselves every year, you know. And it was already, I think, in the history of our relationship you have tens of examples of such differences of views. And it's normal. It's reasonable, because the United States is very interested to have good relations with Arab countries, as they have with us. And we have our reservations about giving arms to countries -- to neighbor countries -- that do not have peaceful relations with us. HUNTER-GAULT: Finally, just very briefly, you've also opposed the idea of an international Middle East peace conference because of the involvement of the Soviet Union. Are there any circumstances under which you would agree to have this conference -- say, for example, Soviets have hinted at more Jewish emigration, diplomatic recognition of Israel. Would any of those things move you closer to agreeing with the United States that this meeting should take place? Mr. SHAMIR: You know, I will tell you something. I met with Gromyko when he was foreign minister. I met him two years ago or three years ago. I don't remember exactly. And we have discussed our relations and the relations between Israel and the Soviets, and also the concept of an international conference for peace in the Middle East. And I've explained to him that it's not normal -- that the Soviets do not have normal relations with us. I can not see any justification for it. And on the other hand, I don't see any use -- any usefulness in having an international conference, because we don't need it. We don't want to have a mini United Nations on that. HUNTER-GAULT: All right. Mr. SHAMIR: You know, we will never accept that foreign countries from outside the region will determine the future of our region or our country. HUNTER-GAULT: Well, Mr. Prime Minister, thank you very much for being with us. Mr. SHAMIR: Thank you. Under Fire WOODRUFF: Our next focus is a look at one of the most controversial members of President Reagan's team, Donald Regan. Yesterday, Mr. Reagan made news when in answering a question he stopped short of insisting that Regan stick around in his job as White House Chief of Staff. It was only the latest chapter in an ongoing political drama of the sort that keeps Washingtonians on the edge of their seats. We use the occasion to take a background look at just what has led to Regan's coming under so much fire. DON REGAN, White House Chief of Staff: We're going to have to do this fast. REPORTER: How could you not know that this was being carried on at the White House? Mr. REGAN: Does the bank president know whether a teller in the bank is fiddling around with the books? No. This is an episode going on, and the National Security Council does not report to me.

WOODRUFF [voice over]: One of the earliest denials from the White House after the Iran contra arms affair surfaced came from Chief of Staff Donald Regan. Whenever he was asked, Regan put as much distance as he could between himself and the decisions to sell arms to Iran and use the proceeds to send money to the Nicaraguan contras. Mr. REGAN: People are being asked what happened on specific dates a year, year and a half ago. Most of us can't remember what we had for lunch two days ago.

WOODRUFF [voice over]: Indeed, the report issued in late January by the Senate Intelligence Committee produced, at best, a murky picture of Regan's role in the whole affair. But there have been calls for Regan to be fired or to resign since the early days of the episode, and the calls have been coming from high places. Sen. RICHARD LUGAR (R) Indiana: Somebody really has to help the President with the advice that he needs right now. He needs to clean house. It is as fundamental and clear and common sense to the American people as anything one can say. He has to have a new Chief of Staff,a new Director of the CIA, before he can progress.

WOODRUFF [voice over]: The change in CIA directors has already occurred. But there was no evidence until yesterday that the President had anything short of permanent plans for Regan to stay on. Mr. Reagan said the decision was up to his Chief of Staff. Yesterday's apparent shift in Presidential attitude comes after months of an almost unprecedented buildup of criticism against Donald Regan, even from friends and former staffers of Mr. Reagan. ED ROLLINS, political consultant: Regardless of the motivation of the Iranian decision, anybody that has any sense of where the American public is would have basically raised significant red flags on this issue. Apparently, no red flags were raised. You know, you may have damaged this Presidency permanently. PAUL LAXALT, former U. S. senator: The deficiencies I look back on in that process when reviewing it, it didn't have any politicians there. You have to assume that eventually it's going to go public. And when it has to go public, how is it going to be defensible, in face of our own historic positions, in the face of what George Shultz has done in talking with our allies? So just from a political standpoint, it didn't really make any sense. WOODRUFF [voice over]: In fact, Regan has been accused of lacking sufficient political skills since he first came to the White House two years ago in a swap with James Baker, who took Regan's old job as Secretary of the Treasury. Critics said his training as a marine and his years on Wall Street working his way up the ladder at Merrill Lynch did not prepare him for Washington. KEVIN PHILLIPS, political analyst: I think it's innately impossible for somebody who grew up, so to speak, you know, in the business world and who became a CEO of a major company and has a culture related in that particular pattern to be somebody who comes in and becomes the sort of Chief of Staff that a Jim Baker was or even a Sherman Adams or all the people who've held it before, whose roots were really more in politics, or at least in management. It's unique to have a CEO of a corporation come in. I don't think they're good at outreach. That's not the way they do business. WOODRUFF [voice over]: Regan himself gave a forecast of his operating style in an interview with us the day he began his White House job. Mr. REGAN: You've got to remember that I have had quite a bit of experience in administration and in being a leader. I was a chief executive officer of a corporation for ten years, prior to that had three years experience as the chief operating officer of the corporation. I know how to use a staff. I've run Treasury now for four years. We have 125,000 people here. So it's not unusual for me to be able to take the initiative and make decisions.

WOODRUFF [voice over]: And that's exactly what Regan did. What had been a three headed White House team directed by Chief of Staff James Baker, Counselor Ed Meese and Aide Michael Deaver became a shop led by one man. Mr. ROLLINS: In this White House, all the options stop at Don Regan. The staff works for him; it doesn't work for the President. He, in turn, has tried to run it like a business. I think Don Regan's attitude is, ''If Ronald Reagan doesn't want to make all the day to day decisions, I will. '' And from day one, he's talked about Ronald Reagan being chairman of the board and he being the chief executive officer. And I think he's tried to run it that way. LOU CANNON, Washington Post: This has completely changed Ronald Reagan's way of operation, and it has made Donald Regan, in truth, the most powerful man in this government -- more power than the President on many, many issues. WOODRUFF [voice over]: Washington Post reporter Lou Cannon, who has covered Mr. Reagan for more than 20 years, says it is the President's habit of delegating responsibility that gives Regan so much power. Mr. CANNON: Ronald Reagan deals fine with human beings. He is not a reader. Nobody really pretends anymore that he is. And he does okay if he's hearing one cabinet secretary argue that we've got to hang tough on deployment of SDI and another secretary saying, ''No, we can't. We've got to do this with the Russians,'' or whatever the debate is. Ronald Reagan does pretty good in that kind of face to face encounter. And he distills from choices pretty well. But if you take this away from him -- if you just sort of -- this President has always had a tendency, I think going back to his Hollywood days, to be somewhat passive, you know? He's -- lights, camera, action. When he's on stage, he's on stage, and when he isn't, he isn't. Pres. RONALD REAGAN: And if Congress can't cut, I will. WOODRUFF [voice over]: Not content to let his influence be felt behind the scenes as staff people traditionally have, Regan made sure his closeness to the President was visible. Everywhere Mr. Reagan went at his Geneva summit with Soviet leader Gorbachev in 1985, Regan was there. And after last fall's Reykjavik summit fell apart, no one was more vocal than Don Regan. Mr. REGAN: The Soviets refused to trade. Would you please get it straight? The President didn't refuse to trade. The Soviets refused the President's offer to do away with nuclear weapons. They insisted upon getting everything.

WOODRUFF [voice over]: Republican Congressman Richard Cheney, who was President Ford's Chief of Staff, sympathizes with Regan. He says the criticism is all very predictable. Rep. RICHARD CHENEY (R) Wyoming: In terms of the caliber of the response, well, it's fun to sit around and second guess staffs. Probably one of the most enjoyable parlor games in Washington is playing White House Chief of Staff. Half the people in the city would love to have the job. Fascinating job. By the same token, the only really first rate judge of the caliber of the job that individual's doing is the President. He's the only one who knows completely the quality of advice he's receiving. WOODRUFF [voice over]: But even Cheney says Regan brought much of his trouble on himself. Rep. CHENEY: I think Don got himself into a situation partly because of the way he'd operated for the last two years, partly because of the perception that he encouraged that he was in total control. Then when something went wrong, you obviously have to accept a certain amount of the blame. Sen. DAVID BOREN (D) Oklahoma: Well, I think it's ironic. Here's the man who's bragged that he was on top of everything. He knew everything that was going on in the White House. He even presumed to be in a very crucial position at the Reykjavik summit conference, when arms control was being discussed, because he was on top of everything -- on the full range of policy. Now he's saying, ''But I really didn't know what was going on in all of these other policy matters dealing with Iran. '' I think it just raises some question. WOODRUFF [voice over]: Democrat David Boren chairs the Senate Intelligence Committee, which gathered testimony on the Iran affair from Regan and others. Sen. BOREN: When I look back over the way in which this decision was made, it was in such a haphazard way. Critical advisers to the President -- even the Secretary of State, the Chairman of the Joint Chiefs of Staff -- were simply largely cut out of the process. There's certainly the possibility that the Secretary of State was either deliberately or otherwise given the wrong impression about what was going on from time to time by the Chief of Staff himself. And also, while these people were being closed out of the Oval Office, while the President seemed to be screened from some of his key advisers, Mr. Regan was allowing others at much lower levels of government -- some of them not even in the government -- to get in to see the President of the United States. WOODRUFF [voice over]: But Congressman Cheney, who sits on the House Intelligence Committee, points out the final decisions were made by the President, not by Don Regan. Rep. CHENEY: The Secretary of State didn't like the policy and said so. The Secretary of Defense didn't like the policy and said so. The President went ahead and did it anyway. He's the President. Everybody else is a hired gun. WOODRUFF: So what of this argument which we've heard over and over again -- Don Regan should have been there at the table saying, ''Oh, wait. I'm adding my voice to those of others. '' Rep. CHENEY: Not his job, I don't think. It is his job to get the people at the table who will make the case and see that it's a balanced presentation to the President. And as best we understand, that did, in fact, happen. So I think Don Regan fulfilled his role. He can not usurp the authority of the President. WOODRUFF [voice over]: Most Washington observers, however, concluded Regan could have turned the Iran policy around. Since he didn't, friends of the President are holding Regan responsible and feel he should resign. White House Political Director Mitch Daniels was one of the few who had the courage to tell Regan that. As it turned out, Daniels himself is resigning, and he doesn't like to talk about the advice he gave. MITCH DANIELS, White House Political Director: Well, I had conversations with the chief which were both of a reporting nature and an analytical nature. But I'm not going to characterize those conversations now. It isn't because I haven't in between. They were private and advisory. WOODRUFF [voice over]: First Lady Nancy Reagan weighed in heavily in December to try to persuade her husband to get rid of Regan, but he refused. Longtime Reagan friend, former Senator Paul Laxalt, says there are two explanations for that. Mr. LAXALT: The President feels in terms of the Iranian situation -- the original sale -- that he signed off on it, so he can't hold Don Regan accountable for that. The President feels that he hasn't done anything wrong. And simply to satisfy media appetite and some political appetites on the hill, he's not going to take Don Regan's head. He's just not going to do it. WOODRUFF [voice over]: Laxalt also says the President feels very close to Regan. Mr. LAXALT: It's simpatico. Ronald Reagan relates to self made men and women. The kitchen cabinet in California with whom he was dealing are all self made people. Don Regan fits that mold, even though he hadn't known him for a long while. Mr. CANNON: It was a case of having to have somebody who filled a couple of roles: the role of Chief of Staff, to whom you delegate, unfortunately, it would see to me, much of the business of the country; and the role of a sort of first friend. And I think Don Regan fell rather naturally into that role. WOODRUFF [voice over]: Ed Rollins says it's partly because of that relationship that Regan has not offered to quit. Mr. ROLLINS: I think the President's become very dependent on him. And I think equally as important, Don Regan has a very unique tough skin, in a sense. There's nobody else, I think, that ever came under the scrutiny or the criticism that he has that wouldn't have said, ''Mr. President, the best way I can serve you is stepping aside. And I wasn't elected here; you were elected. I'm here to serve you. And if I step away, I'll take a lot of the heat. '' He would have served the President, he would have served the country. He chose not to do that. I think Don Regan loves this job. I think he enjoys the power. His whole history is he's enjoyed power. And I think for that reason it's unfortunate. WOODRUFF [voice over]: For whatever reasons, Regan's job seemed secure until a few weeks ago, when David Broder, the highly respected political columnist for the Washington Post, using words like blundering and dissembling, described how cabinet officials and congressional figures were telling him that Regan had to go if this Presidency were to be salvaged. DAVID BRODER, Washington Post: The level of preparation for moving policy, for putting it together at the level of Presidential decision making, where you have to combine political judgement, rhetorical skills, some understanding of the communications process, and very, very fundamental policy decisions, that that level of decision making had really broken down. One person used the word pitiful to talk about the level of preparation. WOODRUFF [voice over]: Broder's column distilled what other Republicans had been saying for weeks. Mr. ROLLINS: The great concern of the Congress is not the Reagan agenda, the Reagan budget. The great concern of the Congress -- and certainly my party's great concern -- is, does this administration -- does Don Regan -- have the ability to get us out of this crisis and to continue to lead this -- get the President in a position to lead this country effectively for the next two years? Mr. PHILLIPS: I think the Republican Party itself would be better off if Don Regan found a respectable egress in six or eight or ten weeks. Because I think it's extremely important from the Republican standpoint they develop an image of standing for some new ideas, new programs and new approaches to government. And Don Regan reinforces the President's sense that, ''Hey, we did a great job. We've gotten most of what we had to do done already. We don't need a new agenda. We cut taxes, we deregulated. Hey, things are terrific. '' And I don't think that's true. And I think if the Republican Party continues to operate on that assumption, then it's going to have problems. And it would do better if it had a new Chief of Staff who said, ''Hey, there are new things we need to do. '' WOODRUFF [voice over]: Mitch Daniels, however, rejects the notion that Regan's staying calls attention to the mistakes of the Iran policy. Mr. DANIELS: No more so than it calls attention to the fact that the economy is going very well, the nation's at peace, that a number of other favorable developments have occurred during the last two years. And my judgement is that over the course of time -- certainly over an interval as long as two years -- those things are going to be more enduring and more important politically than the Iran contra version. WOODRUFF [voice over]: But Paul Laxalt says Regan himself must determine if his staying helps or hurts the President. Mr. LAXALT: I think probably that there's been a singular chain of events when a respected writer like Dave Broder indicates that he's lost the confidence of the cabinet. I think he's going to have to make an assessment to determine whether or not Dave's sources are accurate. And if it appears that he's lost the support of the cabinet on the inside and the Vice President, he's going to have to take a cold, hard look. WOODRUFF: Sources close to the White House have been saying they didn't expect Mr. Regan to resign until the uproar over his situation died down. In the last few days, however, speculation has grown that Regan may resign after the Tower commission investigating the Iran contra affair releases its report next week. Even if it is highly critical of Mr. Regan, which is expected, sources say he may use the report as an opportunity to step aside. Chicago: Politics as Usual LEHRER: Finally tonight, an essay from Chicago about Chicago's way of politics, particularly the way it elects mayors, which it begins to do again next Tuesday with a primary election. The essayist is political satirist Aaron Freeman.

AARON FREEMAN: The sky has not fallen, nor has it opened up and lifted Chicago's black people to heaven. Thus, the most extreme predictions about the election of Mayor Harold Washington in 1983 have proven incorrect. For better or worse, Chicago is still Chicago. Looking from a distance at the '83 mayoral campaign, you might have thought Pretoria, South Africa, was being taken over by the African National Congress. White people were freaking out. Just because he was in the presence of candidate Harold Washington, Walter Mondale was wildly booed. Any time a crowd can work up a heavy emotion about Walter Mondale, you know something weird's going on. HAROLD WASHINGTON, mayor, Chicago: I will faithfully discharge the duties of the office of mayor of the city of Chicago.

FREEMAN: But for black Chicago, Washington's election was the Emancipation Proclamation, Fourth of July and Christmas rolled into one. After decades of political domination, it was finally our turn. Michael Jordan scoring 100 points could have made us no happier. Martin Luther King and Malcolm X were doing high fives in heaven. COUNCIL MEMBER: This is not Communist China. This is not Russia. This is not Poland. FREEMAN: Since then, if you just watched the TV or just looked at the headlines, you might think the last three years have been merely a continuing series of battles in Chicago's long running council wars, pitting the charismatic but flawed black mayor against the wicked but powerful white city council. COUNCIL MEMBER: Not until you recognize me.

FREEMAN: But if you opened the paper and read a few stories, you'd have seen that the mayor and the council worked together to pass a series of balanced municipal budgets, moved forward on major and lucrative construction projects at O'Hare Airport, and, like most governmental bodies, joined in the spirit of courageous statesmanship to raise taxes. The city that works, as we proudly called ourselves during the reign of Mayor Richard J. Daley, continues to work -- a little more loudly, perhaps, but it's it's chugging right nicely along, thank you. All has not, however, been exactly business as usual. City services are more evenly distributed than ever before. Now nobody gets them. Just kidding. But this is still recognizably Chicago, even is city hall is more open and its face somewhat darker. Garbage is still collected in our alleys and spewed from the mouths of our politicians. In fact, just like in the old days, some of the mayor's closest allies were recently indicted on federal tax and racketeering charges and may soon join some of our white politicians up the river, bringing integration to the nation's most luxurious minimum security correctional camps. It matters less that Chicago elected its first black mayor than that he is this unique individual Harold Washington. Black he is, black support he certainly has, but he is nobody's savior nor need he be anybody's bogeyman. And come election day, he will either win or lose, based on whether 50% plus one of the voters think it in their best interest to keep him around. But no matter who emerges victorious from the Byzantine labyrinth that is Chicago politics, we Chicagoans are better off for having lived through the first Washington term. We've done a lot of growing up over the last few years -- indeed, since Richard Daley died. We have finally learned the lesson that Los Angeles learned with Tom Bradley, that Philadelphia learned with Wilson Goode, and Gary learned long ago with Richard Hatcher. Regardless of who sits in the big chair in city hall, a city's fate is in the hands of the people who walk its streets. I'm reminded of a jazz lyric about Chicago mayoral politics. ''Once they're done shouting 'bout programs and missions, everyone knows that they're just politicians. '' And we are the people. And we must love one another. And all of that jazz, oh yeah. WOODRUFF: Turning now to a final look at today's main stories. The Tower commission interviewed former National Security Adviser Robert McFarlane about the Iran contra affair. Earlier on this program, Israeli Prime Minister Yitzhak Shamir said the investigation of that affair will vindicate his country. The United States today lifted economic sanctions against Poland. And a team of scientists announced a breakthrough in the search for the cause of Alzheimer's Disease. Good night, Jim. LEHRER: Good night, Judy. We'll see you tomorrow night. I'm Jim Lehrer. Thank you and good night.