The MacNeil/Lehrer NewsHour

MR. LEHRER: Good evening. Leading the news this Thursday, a gunman shot 19 people in Louisville, Kentucky, 7 of them died. The Senate voted to ban smoking on all domestic airline flights, and the steady flow of East German refugees to West Germany resumed. We'll have the details in our News Summary in a moment. Charlayne Hunter-Gault is in New York tonight. Charlayne.

MS. HUNTER-GAULT: After the News Summary, we go first to the lingering controversy [Focus - Exxon - Cleanup] over the Exxon oil spill in Alaska. Correspondent Lee Hochberg reports. Next [Focus - New President] on South Africa's new president, F.W. DeKlerk, we have three views. Former U.S. Ambassador to South Africa, Herman Nickel, former South African journalist Dumisani Kumalo, and Patrick O'Meara, Indiana University's Director of African Studies Programs. Then [Focus - HUD Scandal] on the eve of Congressional testimony by former HUD Secretary Sam Pierce, Kwame Holman has a background report, and finally we look at the odds on a state sanctioned pro football lottery in Oregon.NEWS SUMMARY

MR. LEHRER: There was a mass murder in Louisville, Kentucky this morning. A man opened fire with an automatic assault rifle inside a printing company plant. He went from floor to floor, shooting people at random, killing 7, wounding 12 others. He then shot himself to death with a pistol. The man was identified as 47 year old Joseph Westbecker. He was described as a disgruntled employee who was on permanent disability. A former co-worker told reporters he was a paranoid who thought everyone was out to get him. Charlayne.

MS. HUNTER-GAULT: On Capitol Hill, the Senate today overwhelmingly approved an amendment that would ban smoking on all domestic airline flights. The measure extends the current law banning smoking on flights of two hours or less. The chief sponsor of the legislation was Sen. Frank Lautenberg, a Democrat from New Jersey. After the vote, he said the American people favor such a ban.

SEN. FRANK LAUTENBERG, [D] New Jersey: I think that what they're saying is be alert to the fact that your freedoms, if they impose your habits on others, are going to be restricted. That's not uncommon. You're allowed to drink in this country, but you're not allowed to drink and drive if you get caught for a very simple reason, that you're liable to kill somebody beside yourself on the way to your destination. We have other prohibitions on conduct, you know, the traditional example of fire in a theater. I mean, there are things that you are not permitted to do that affect the health of others.

MS. HUNTER-GAULT: The measure is still not law. It still faces a test before a Joint House-Senate Conference Committee. Also on Capitol Hill today, the House, Ways, and Means Committee approved one of Pres. Bush's most sought after pieces of legislation. They passed a cut in the capital gains tax which reduces the maximum tax rate on investment profits. The Democratic leadership called the plan a giveaway to the rich. And House Majority Leader Richard Gephardt promised to fight the measure when it gets to the House floor.

MR. LEHRER: The government of Colombia said today it was ready to extradite two drug traders to the United States. One was identified as Bernardo Pelez Rodan who fled the United States five years ago after being convicted on drug charges in Detroit. The other is Guiermo Bueno Delgado, who is wanted on charges of smuggling cocaine and for money laundering in San Francisco and Tallahassee, Florida. Both were captured in the recent anti-drug crackdown in Colombia. Pelez Rodan was described by a government official as the most important person yet taken into custody.

MS. HUNTER-GAULT: In South Africa, national party leader F.W. DeKlerk was elected today to a five year term as president. He promised that the black majority would be brought into the government as soon as possible. The 53 year old DeKlerk has served as acting president since August. The vote by the all white electoral college took place just one day after the largest legal anti-government rally in the country's history. Meanwhile, in neighboring Namibia, which has been ruled been South Africa for the past 74 years, black opposition leader Sam Najomo returned home to a hero's welcome. Ending 30 years of exile, the 60 year old head of the guerrilla movement known as SWAPO kissed the tarmac at Linn Hooks airport, embraced SWAPO colleagues and his 89 year old mother. Najomo has returned to participate in the country's first free elections in which SWAPO is favored to win. In that event, Najomo would likely become president.

MR. LEHRER: Pres. Bush will meet next Thursday with Soviet Minister Eduard Shevardnadze. White House Spokesman Marlin Fitzwater made that announcement today. He said the White House session is planned to last an hour and is a stop for Shevardnadze on his way to spend the weekend with Secretary of State Baker in Jackson Hole, Wyoming. Fitzwater said Baker and Shevardnadze will discuss the possibility of a Bush/Gorbachev summit and the signing of a ban on chemical weapons.

MS. HUNTER-GAULT: Hundreds of East Germans resumed their trek into Hungary today after a three day lull, and Hungary reaffirmed that it had no immediate plans to close its borders. We have a report narrated by Tom Browne of Worldwide Television News.

TOM BROWNE: The renewed flow of East Germans is apparently spurred on by fears that Hungary may be preparing to close its borders with the West, overnight authorities reporting the steady stream of East German refugees, more than 100 arriving on the Austria-Hungary border every hour. The flow of refugees is straining relations within the Eastern Bloc and Hungary's top officials have been in East Berlin trying to solve the problem. Poland too is trying to find a solution to its refugee dilemma. Authorities there have confirmed that up to 50 East Germans are holed up in the West German Embassy in Warsaw, hoping for permission to emigrate to the West. Inside officials are refusing to comment on the situation, saying only that the problem will be solved within the next few days. In Czechoslovakia, a hundred East Germans are reportedly still inside the West German Embassy compound in Prague. Many crammed into makeshift camps as they wait for passage to the West.

MS. HUNTER-GAULT: Back in this country, the Bush administration, apparently yielding to congressional pressure, said it would provide $50 million in food aid to Poland. This would be in addition to the $119 million in economic and technical assistance already proposed.

MR. LEHRER: Bombs were planted at bookstores in four British towns last night. One of them at York exploded, but there were no injuries. The other three were located and defused before they exploded. All four of the stores were owned by Viking Penguin, the publisher of Salman Rushdie's novel, The Satanic Verses. BBC Radio said the bombs were most likely planted by Moslem extremists still upset about Rushdie's book.

MS. HUNTER-GAULT: In Calcutta, Mother Teresa suffered a setback today after rallying from a heart attack last week. Doctors said the 79 year old Roman Catholic nun was in serious condition, suffering from chest pains and a high fever. That ends our summary and ahead on the Newshour, the Alaska oil spill cleanup, South Africa's new president, former HUD Secretary Samuel Pierce, and a state run new football lottery. FOCUS - EXXON CLEANUP

MR. LEHRER: The Alaska oil spill cleanup is first up tonight. It was six months ago that the Exxon Valdez super tanker ran aground near Valdez, Alaska. Eleven million gallons of heavy crude oil spilled into Prince William Sound. Exxon promised then to all Alaskans that the beaches would be clean by tomorrow, September 15th. Correspondent Lee Hochberg of public station KCTS in Seattle reports from Alaska.

MR. HOCHBERG: It is the end of a grueling summer in Alaska.

WORKER: Long days, 18 hour days, a lot of confusion, a lot of people giving orders, and you know, back and forth, back and forth. We didn't know half the time. And finally the weather just shut us down.

MR. HOCHBERG: Some 11,000 people, mostly Alaskans, are returning from the beaches of Prince William Sound before stormy autumn weather closes in. For most, it's been a lucrative, if emotional, summer, trying to scrub away the gooey remains from America's worst ever oil spill.

MR. HOCHBERG: Did you make a few bucks out there?

WORKER: Yeah, I made a few thousand.

MR. HOCHBERG: A few thousand. How long?

WORKER: I was out there for 18 weeks.

MR. HOCHBERG: What's a few thousand?

WORKER: Well, you got to multiply that times probably 2,000 a week.

MR. HOCHBERG: $36,000?

WORKER: Right.

MR. HOCHBERG: $2,000 a week is big money for these Alaskans, and it turned out to be big money for Exxon as well. The company says it spent more than a billion dollars trying to clean up the beaches. But Exxon's cleanup effort may have been more expensive than it was effective. Most of the workers coming off these boats acknowledged they left much oil behind.

WORKER: There was still lots of oil on the beaches when we left.

MR. HOCHBERG: A lot of oil?

WORKER: Yeah, there was still quite a bit of oil.

WORKER: It's no thorough. There's a lot of work to be done. I don't know how they're going to size this up but it's not done.

MR. HOCHBERG: It's not done?

WORKER: No. They threw a lot of dollars at it, but it's just not thorough.

MR. HOCHBERG: Point Helen on Night Island in Prince William Sound. Oil on this island has saturated more than two feet down into the rocks. Exxon, itself, calls the beach depressing, but will end its beach cleanup here and throughout Alaska by September 15th. Exxon Spokesman Otto Harrison blames looming winter weather.

OTTO HARRISON, Exxon Spokesman: It's absolutely asafety decision. The safety of our people is a paramount factor in our business whatever we're doing. It is just not workable, not safe for people during the wintertime.

DENNIS KELSO, State of Alaska: We're not expecting them to be out here with a flotilla of vessels, the way they were doing this summer. In fact, we don't think that is necessarily the best way to proceed anyway, but what we've been saying is that areas that are protected, in areas where the local people themselves are active throughout the winter then maintain the capacity to do the work and then let's get out there together and make sure that we get as much done over the winter as is appropriate.

MR. HOCHBERG: Exxon initially had made noises about cleaning every drop of oil out of the Sound. Now there's no talk of that. Workers are racing to just stabilize or treat each beach, euphemisms for removing the slippery oil on the surface and leaving beaches safe for wildlife. Alaska state leaders say Exxon could maintain at least a modified work schedule into the fall.

SPOKESMAN: There's work to be done now. We're prepared to keep our sleeves rolled up and working on it. Exxon should be here with us.

MR. HOCHBERG: Nonetheless, Exxon's remaining beach workers are doing their final work before heading ashore. Here at Point Helen, they're using high pressure water hoses, trying to drive surface goo back into the water to be sucked up by skimmer boats.

EXXON SPOKESMAN: On September the 15th what you'll see is the shiny oil that's on top of it, the relatively liquid form of the oil that's on top of it will be pretty well taken off. There will still be a very thin layer of oil on the rock, and there will still be as you dig down, oil saturation in that two feet or so that's below here with thin oil on top of that, but we will have knocked off the gross oil, the heavy oil, off the bulk of this area.

MR. KELSO: This beach has been treated and some of the rocks look as if they're fairly clean, but if you start rolling them over and dig around a little bit, even 1/2 inch down you have oil. The oil goes down inches.

MR. HOCHBERG: The State of Alaska's chief environmental officer, Dennis Kelso, fumes that Exxon is abandoning the so-called "treated beaches". At Sleepy Bay on LaTouche Island in the Sound, Kelso explored a visibly oil beach that he said Exxon had already treated twice.

MR. KELSO: What they promised to do was to leave a clean shoreline. This is not a clean shoreline. They may have treated it, which means removing the gross contamination at least the first time, but the job hasn't been finished. The decision to leave now I think represents the worst in corporate irresponsibility.

TERRY KOONCE, Senior Vice President, Exxon: I think it's difficult for me to conceive that mechanical washing, for example, will make any sense next spring. We've gotten all the good out of that we can. What remains is oil that's likely to be in a very very weathered heavy potentially mobile state and maybe so immobile that it may be almost asphaltic and harmless. It may be like the pavement we drive on.

DENNIS KELSO, State of Alaska: Exxon wants to put a cap on its costs. It's told its shareholders it's going to spend only a certain amount of money. It wants to have that message go out to the financial community and to its shareholders and it's trying to do everything it can to get that accomplished.

MR. HOCHBERG: Exxon is hoping this substance will keep working on the oil all winter after the human beach washers have gone home. This is oleofilic fertilizer. In the first large scale American trial of a process called bio-remediation, the fertilizer is being applied to dozens of beaches. It promotes the growth of naturally occurring bacteria that actually eat oil. The EPA's Bio-Remediation Project Director says the results have been promising on moderately oiled green island.

CHUCK COSTA, EPA: I don't think anybody expected to see as quick a result as we had with the oleofilic fertilizer, the surface action that we saw. I mean, it's interesting, the country just hasn't done that much with oil spills. We've been working hard at using biodegradation or looking into bio-remediation of hazardous waste sites, for example, but with oil, there hasn't been much work. And maybe this is going to be the kickoff to really spur it on for future oil spills.

MR. HOCHBERG: Faced with oily beaches and a public relations nightmare, Exxon has been hustling television reporters to Green Island, a beach that's been treated with the fertilizer for a month now and looks somewhat better. But even on this beach, which Exxon considers a success story, you rub your finger across some of these rocks and it comes up oily.

OTTO HARRISON, Exxon Spokesman: When you're talking about clean and dirty, what status do you call this? If you want to have a beach that's not harmful to the wildlife, that is restoring, that's this beach. If you want to say do you want to have a picnic on here yet, that's not this beach yet.

MR. HOCHBERG: The federal government's top scientific advisor of the spill says Exxon's hot water scrubbing of the beaches may actually delay the day that those beaches are again ready for a picnic.

DAVID KENNEDY: The damage as a result of that cleaning process is, in fact, much worse than the oil being left there would be.

MR. HOCHBERG: David Kennedy of the National Oceanic and Atmospheric Administration says the scalding water and high water pressure killed beach organisms that had managed to survive the oil. He predicts the beaches that will rejuvenate fastest are the ones nature scours clean with storms and tides.

DAVID KENNEDY, NOAA Scientist: I would hope that within the next three to five years the majority of any damage that was caused by this would be almost negligible and feel fairly confident that will be the case.

MR. HOCHBERG: When then did Exxon spend a billion dollars buffing the beaches? Across Alaska, the common wisdom is that Exxon spent the money to placate angry Alaskans and to provide jobs for out of work fishermen.

LANCE PARK, Cleanup Worker: My personal opinion is they didn't really get a lot done. It's kind of like they're trying to buy our happiness or something.

MIKE WYBORNEY, Cleanup Worker: They're just spending the money to buy off the people, you know, that are working. And just to keep everybody shut up or satisfied, you know, Alaska's been poor for several years now so this is keeping them shut up and I think they bought 'em off. That's all there is to it.

TERRY KOONCE, Senior Vice President, Exxon: We've not been trying to buy out anybody. We've been trying to get the job done. We said early on that, you know, it was our spill, it was our oil, it was our people. We take full responsibility for it. We're sorry that it happened, and we are sorry that it happened, but we're going to do everything we can to mitigate its impact and to put it right.

MR. HOCHBERG: With Exxon pulling out of the state tomorrow, Alaskans are bracing for a long, unsure winter. In fishing villages like Cordova and Homer and Kodiak, mental health referrals and reports of domestic violence shot up dramatically when fishing seasons were cancelled and again in recent weeks.

PAUL RUFF, Kodiak City Mental Health Department: They see the pullout at this point as another destabilizing factor, so as people had sort of achieved some equilibrium now there's another major change in people's lives and in the community and in the economics of the community and in sort of the job structure of the community is all going to be destabilized in a number of ways again.

SANDRA JOHNSON, Kodiak Island Native: Next year is the fishing season going to be open, or is it going to be just nothing? Is it no Vico, no Exxon, nothing, no fish, so what are the people going to do?

MR. HOCHBERG: Native villagers on Kodiak Island feared they might not have enough fish to even get through this winter. Twenty-five hundred natives live a subsistence lifestyle, catching fish in the summer to support them in the winter, but the state had cancelled the commercial fishing season this year because of oily water. Unemployed natives went to work for Exxon. Now with Exxon's cleanup ending, the state offered the natives a special two day season to catch a winter's worth of salmon in the Carluck River. Allen Panamaroff headed up the operation.

ALLEN PANAMAROFF: Up to now we've got about since yesterday and today, we've got approximately 14,000.

MR. HOCHBERG: Are you going to be able to catch enough?

ALLEN PANAMAROFF, Fisherman: I think right now we have enough for our talking basically about the elderly are on the island, people in the villages, as long as we can supply those, I'm fairly satisfied, the elderly people who cannot go out and fish.

MR. HOCHBERG: And Exxon's pullout triggered a highly visible protest in the Valdez arm outside the Alieska pipeline terminal. Two dozen vessels representing Alaska ports assembled in a flotilla to appeal for better oil spill prevention in Alaskan waters.

SPOKESPERSON: We need better tankers, baal thrusters, double hulls, thicker hull plating, shorter lengths, and most importantly, containerized cargo. Get creative but do something.

MR. HOCHBERG: The protest climaxed with a symbolic charge on the Alieska terminal, an illusion of power after a summer of frustration, but only an illusion. The protest, like all others, had no impact on Exxon's decision to demobilize September 15th. The state of Alaska says it will have to go at it alone. It will announce its own plan tomorrow to pick up where Exxon left off.

MR. LEHRER: Exxon says some 300 workers will be stationed this winter in Anchorage, 100 miles away from Prince William Sound, they will move into action if fish hatcheries are threatened. The Exxon departure has drawn attention in Washington. Yesterday Senate Majority Leader George Mitchell called on Pres. Bush to make certain Exxon completes the cleanup next spring and EPA Administrator William Reilly said the federal government will bill Exxon for whatever cleanup it performs next spring. Still to come on the Newshour tonight, the new president of South Africa, former HUD Secretary Samuel Pierce, and betting on football in Oregon. FOCUS - NEW PRESIDENT

MS. HUNTER-GAULT: Next tonight the new President of South Africa. F.W. De Klerk, Head of the National Party. He Officially began his term of Office today after a campaign that promised reform of the Country's Apartheid system of racial segregation.

PRESIDENT DE KLERK: The National Party intends to create a new South Africa in which every South African can live in safety, prosperity and dignity as an individual and with in a group. A new democratic dispensation is for seen. A dispensation with full political rights for all South Africans.

MS. HUNTER-GAULT: F.W. De Klerk rose to become leader of his party this after President P.W. Botha became ill. De Klerk was Education Minister at the time. He got to the top partly by talking a different game from his competitors. he talked about change. He continued that theme today after the Parliament Officially named him President.

PRESIDENT DE KLERK: State Presidency in South Africa is a position in which a man who is appointed to that becomes the leader of all South Africans. Not only of those who are represented in Parliament.

MS. HUNTER-GAULT: But that message held no promise for Anti Apartheid leaders. They held a huge protect march in Cape Town yesterday the biggest in more than 30 years. The made it clear that they do not believe that De Klerk will end apartheid.

REV. ALLAN BOESAK : Frederick De Klerk will be the last white President of the Republic of South Africa.

MS. HUNTER-GAULT: The fact that this march was allowed to happen at all shows some difference in De Klerk's approach. It was the first march allowed by the Government in three years and De Klerk ordered the police to stay away but blacks want more than the right to march. They want the right to vote and De Klerk has rejected that. He has called one man one vote totally unacceptable. He warned that it would lead to domination by the black majority. Still many whites think that De Klerk will go to far. He recently spoke in a town where there is support for even more segregation. He got a very warm reception until they heard what he had to say.

PRESIDENT DE KLERK: Our Country is on its way towards a new dispensation. Your Party ladies and gentleman has taken the lead in this process and will continue to do so because that is what this country needs.

MS. HUNTER-GAULT: De Klerk supporters had to remove several hecklers. He got a much warmer reception when he visited Mozambique, Zaire and Zambia this summer three of South Africa's staunchist enemies. The trip was seen as an effort to end South Africa's isolation. The key question is how much farther will De Klerk go to end that isolation. Now for three views on the new South African President. They come from Herman Nickel the U.S. Ambassador to South Africa from 1982. He is currently a Senior Fellow at the United States Peace Institute a Washington think tank. Dumisani Kumalo is a former South African Journalist who left South Africa in 1977 and has not been allowed to return. He is now with the American Committee on Africa a New York based African interest group. And Patrick O'Meara also a South African is the Director of the African Studies Program at Indiana University. He joins us from Public Station WTIU in Bloomington, Indiana. And to you first Professor O'Meara what if anything does President De Klerk's allowing the march to go on tell us about him.

PATRICK O'MEARA, Indian University: I think it is an interesting indication of a different era beginning in South Africa. The Imperial Presidency of P.W. Botha has ended and in may ways this was an Imperial Presidency in which even his own Party Members found him inaccessible, aloof and distant. And certainly there is a new style. I also think that it is important to be aware that the context is changing to some extent in South Africa. For nearly 40 years this was what we could call almost the one party State. And this election if not a realigning election has prized open the process, has open the process more. De Klerk indicates that he is willing to talk. The fundamental question becomes how far is he willing to go. Is he now willing to open up the political process as we just saw on the shot on South Africa people are asking for more than permission to march. I must say though that the very fact that this march took place in Cape Town is impressive to me.

MS. HUNTER-GAULT: Let me just ask Mr. Kumalo do you see it the same way?

DUMISANI KUMALO, American African Committee: Well I see it slightly differently. I will go further and say this march happened not out of kindness of Mr. De Klerk. This march happened because two crucial things that happened. One his own police had gone out and killed about 30 people just last week when the elections were held. Two he is under tremendous pressure to try and get loans from the UNited States and overseas because South Africa does need money badly. Three he is trying around the World to create this illusion of change. So it is really not out of his kindness but because of the reality of the situation inside.

MS. HUNTER-GAULT: So you do think that it really tells us anything about him and the direction of policy.

MR. KUMALO: If anything it tells us that he is very shrewd to public relations. He wants to create this illusion that there is change when in fact apartheid is alive and well.

MS. HUNTER-GAULT: Professor O'Meara just briefly back to you. Apparently he over rode the conventional wisdom of the State Security forces in allowing this march to go forward. Was that a risky thing and is he known as a man to take risk?

MR. O'MEARA: Well I have understood that the Dutch Reform Church had approached him and asked him to allow the march to be carried, that in fact, there were assurances that it would be a peaceful march. I think that he is more willing to take risks than the previous President.

MS. HUNTER-GAULT: P.W. Botha.

MR. O'MEARA: P.W. Botha. On the other hand I would agree with Mr. Kumalo that the change is being forced on him. It is not a change that is coming out of altruism. It is a recognition that the situation is at perhaps at one of its most desperate points. The economy is in a bad state, World Criticism continues to be unleashed against South Africa and I think that he has to use his honeymoon to try and win this honeymoon period to try and win maximum benefits for his new regime.

MS. HUNTER-GAULT: Ambassador Nickel you knew him when you were Ambassador to South Africa. In your own dealings with him how would you describe F.W. De Klerk.

AMBASSADOR HERMAN NICKEL, Former U.S. Ambassador to South Africa: Well a vast difference from P.W. Botha. F.W. De Klerk in my dealings with him was unfeelingly courteous, polite, loyal like, very cautious. Where as P.W. Botha could be rude and very impetuous. He certainly had a very authoritarian intimidating style and I think that perhaps I would differ from Professor O'Meara. P.W. Botha had a quality of boldness about him. I think it was Desmond Tutu once said elect the conviction of his courage. He was courageous with in his own political terms on occasion but F.W. De Klerk is very cautious but he is a realist and he looks at the options that are presented and those options have been narrowing. He knows that the tricameral constitution is a failure, that the effort to couple to co habitation with repression is not going anywhere and I think as a result of this analysis and as a result of the internal and external pressures I think that he is convinced that he must in to a stage of negotiations and that I think is the signal that he tried to send by allowing this march to take place. It was in a way an Ad Hoc test for the lifting of the state of emergency. Now, of course, it depends very much on what the other side does too because if one side wants to move into negotiation politics it is not going to be much good unless the other side responds.

MS. HUNTER-GAULT: Do you have a sense that the move that he has made now, how is that going to be responded too? Are they going to read the way the Ambassador did, the black South African majority?

MR. KUMALO: No not at all, I mean, what he has done is suspend repression for two or three hours of the march. People like Bishop Tutu are calling for the end, for the repeal of repression and that us where the big difference lies. We are not asking for a nice oppressor. We are asking for oppression to end.

MS. HUNTER-GAULT: But in watching him and the style, you just heard Professor O' Meara talk a little bit about. Does it give you any confidence that there might be a new day dawning?

MR. KUMALO: No, in fact, it is interesting that I met with one of the South African Diplomats in New York just a few weeks ago and his whole thrust was look we are almost like the Soviet Union. We have a young leader who is very nice, he is photo genic, he is not like old P.W. Botha who was dying and you know give us a chance and you'll see what big changes are coming. But you see that is nice for them to say that. We know that there are people in detention, there is a state of emergency, 30 people were just killed a week ago and that is the reality we live it.

MS. HUNTER-GAULT: Going back to you Professor O'Meara you talked about his style a few minutes ago. I mean how do you expect him to Govern. He is going to make a speech I guess next Wednesday outlining his five year plan that he has referred to bring blacks into participating in some way in Government, I mean, how do you see him dealing with all the disparate elements that he has to contend with as a Leader.

MR. O'MEARA: I think that is an important question Charlayne because the key issue becomes whether these new actors in the political process, you know, if he opens the whole political process and we get more strikes and we get greater involvement of marchers, larger scale marches. How far he will allow this to go becomes the key question because he is caught on the one hand between the right wing and obviously on the other hand between people calling for greater reform. It has always been an interesting point to look at South African politics. Changes have been made internally often without announcing them. You'll find hard line political positions taken internally publically and then certain changes will take place. I don't think that he is going to announce rapid fundamental change. We would be remiss to think that this is the beginning of a fundamental change that will lead to blacks in the South African Parliament. What it might lead to and I think it will lead to is the establishment of National Councils the involment of blacks at the parliamentary level perhaps but not power sharing in that full sense that people are anticipating.

MS. HUNTER-GAULT: Very briefly Ambassador Nickel. Is this man of the lager, I mean, when the going gets tough is he likely to retreat in to the lager or do you see any aspect of a bold visionary man.

AMB. NICKEL: Well I think that as I tried to say earlier a lot of options have been foreclosed. He is by nature very conservative. I think that is quite wedded to the concept of group politics as the only way of making sure that whites are not dominated by the majority the way whites have dominatedthe majority in the past.

MS. HUNTER-GAULT: Alright I see we are going to have to leave it there and see what happens. Thank you very much Mr. Ambassador for being with us. Professor O'Meara in Indiana and Mr. Kumalo. FOCUS - HUD SCANDAL

MR. LEHRER: Next tonight the return of the HUD scandal. Tomorrow is a big day in the investigation of influence and money scandals in the Reagan administration's Department of Housing & Urban Development. Former HUD Secretary Samuel Pierce will make his second appearance before the House subcommittee leading the investigation. We preview that appearance now with a background report by Kwame Holman.

REP. TOM LANTOS, [D] California: [May 25, 1989] Well connected consultants were hired for what to the naked eye and to the average American watching this is an exorbitant amount of consulting fee and very much number of units went to these people. Should you have gotten rid of it, or should you have cleaned it up? I mean, you made the decision or people in your office made the decision that if you can't terminate it, then milk it. There were many other ways to do it.

SAMUEL PIERCE: No. I didn't make that decision.

REP. LANTOS: Well, somebody did, because it was milked.

SAMUEL PIERCE, Former HUD Secretary: But it was too bad and I'm sorry. I'm sorry about that. And as you say, we're looking at it in hindsight, and I'm very sorry about that, but I really believe we should have gone another way.

MR. HOLMAN: Members of this Housing subcommittee peppered former HUD Secretary Samuel Pierce with tough questions and comments when he appeared before them in May. Previous testimony had revealed that during Pierce's tenure, housing developers got HUD money because they were represented by politically connected Republicans acting as paid consultants, Republicans like former Interior Sec. James Watt. Watt told the committee a group of developers paid him more than $300,000, Watt's fee for telephoning HUD officials, including Pierce, in a successful effort to get HUD funding for the developer's project.

REP. BARNEY FRANK, [D] Massachusetts: Does it bother you if, in fact, it turns out that people were getting projects because they had political influence over people who didn't, projects of roughly equal appeal?

MR. PIERCE: Yes, that's bad. I think that's wrong.

REP. FRANK: Do you think that happened in this program, given what we now have seen and looked at?

MR. PIERCE: I don't know. I think you have to go on each one of them and look at it.

REP. FRANK: We've been doing that.

MR. PIERCE: And each case.

REP. FRANK: Do you think that Mr. Watt --

MR. PIERCE: I don't think that Mr. Watt got any special chores because -- any special attention, no.

REP. BRUCE MORRISON, [D] Connecticut: Are you personally familiar with the regulations that govern this program? Maybe the lack of process here did result in bad projects being funded. That's possible, isn't it?

MR. PIERCE: That's possible.

REP. MORRISON: And you really don't have personal knowledge of the quality of the projects that were funded, do you?

MR. PIERCE: No.

MR. HOLMAN: Allegations of political favoritism and lax management became a theme in weeks of hearings that followed, thrusting Pierce into an uncharacteristic high profile role, uncharacteristic because in eight years as Pres. Reagan's Housing Secretary, Pierce's quiet style helped earn him the nickname "Silent Sam". Pierce's low profile image even became the subject of political humor after an incident in 1981. Pres. Reagan mistook his Housing Secretary and only black cabinet member for one of the mayors attending a reception at the White House. Pierce also was to preside over a Housing Department the budget slashing Reagan administration had targeted for deep cuts. Beginning in 1981, HUD's annual budget plummeted from nearly $30 billion to less than 12 billion by 1986. As his Housing Department was being downsized, Pierce was developing a reputation among associates as detached, aloof, even uninterested in all but a few of the federal housing programs that were spared the budget ax.

REP. SHAYS: It turns out that Samuel Pierce was a bad appointment but in the beginning he appeared to be the ideal appointment.

MR. HOLMAN: Connecticut Republican Christopher Shays is a member of the House subcommittee responsible for most of the HUD investigation.

REP. CHRISTOPHER SHAYS, [R] Connecticut: He was a very successful individual, well educated, very competent. There was every reason why he should have done a good job. But having said that, it was clear over time that people began to lose respect for him, and yet, he was still allowed to remain.

MR. HOLMAN: And even Pierce's friends have said his background may have been poor preparation for managing the 16,000 person bureaucracy at HUD. Born on Long Island, New York, 67 years ago, Pierce was a top football player and Phi Beta Kappa at Cornell University. After law school there, he worked for a local district attorney and later became U.S. Attorney for Manhattan. In 1955, Pierce came to Washington to work in the Eisenhower administration's Labor Department. Back in New York, he got involved in Republican politics and twice was appointed by local judgeships by then Governor Nelson Rockefeller. Pierce failed in his own bid for elective office, losing a 1965 judgeship election in heavily Democratic Manhattan. After a stint as general counsel to the Nixon Treasury Department, Pierce went to work for a large New York law firm and as one of handful of nationally known black Republicans got the attention of a new Reagan administration looking for a black cabinet member. As Pres. Reagan's first and only housing secretary, Pierce had the job of defending the President's massive cuts in the housing budget.

MR. PIERCE: [July 14, 1989] We believe that local problems can best be solved by local people. We are not running away from them. We will help with them. We will work with them about money and other things. We want to have a partnership, but we believe that more of the responsibility has to be done locally.

MR. HOLMAN: Reportedly, Pierce became bored with heading the budget slashed Housing Department. In a story last July, former associates told the Washington Post, Pierce arrived at work late and left early, frequently watching television in his office.

SHIRLEY WISEMAN, Former HUD Official: Looking back, I'm sure that the Secretary would have done things differently. I certainly know that there were things that happened that I know he must be very very concerned about.

JANET HALE, Former HUD Official: Sec. Pierce's management style I think was one of delegation in many areas. I personally preferred the "hands on", the ability to work with a cabinet secretary that was very actively involved in the policies and the practices of that department.

MAURICE BARKSDALE, Former HUD Official: Sec. Pierce was not necessarily a "hands on" manager. Consequently, the executive assistant acted on behalf and for the Secretary quite often.

MR. HOLMAN: One such assistant was Deborah Gore Dean, a central figure in the HUD scandals, subpoenaed to testify before the main congressional investigating committee last June.

DEBORAH GORE DEAN, Former Pierce Assistant: [June 13, 1989] I have accepted the advice of my counsel to decline respectfully to answer any questions posed by the subcommittee at this time on the basis of the rights guaranteed to me by the fifth amendment to the Constitution of the United States.

MR. HOLMAN: Although she refused to say so herself, the committee has been told political appointee Dean gave approvals that sent millions in HUD funds to well connected Republicans and to Dean's personal friends. And Congressman Shays says Dean was not alone.

REP. SHAYS: We focused a lot of attention on Deborah Gore Dean, his administrative assistant, really his chief of staff, but her predecessor, Lance Wilson, has also basically refused to cooperate with our committee, and we think he's made tens of millions of dollars off of HUD and off of the taxpayers. I mean, there are a lot of questions ethically and morally we need to ask Mr. Pierce, as well as in terms of general competence. Basically, he allowed them, confirming what we've learned in open testimony, that he let individuals do their thing, and the problem was that that amounted to dividing the spoils. And there has to be a question in everyone's mind over time why he wasn't aware of it and so he was either aware of it and chose to ignore it, or he was so incompetent that he was never aware of it. Either answer is not a very pleasant for Mr. Pierce.

MR. HOLMAN: The House investigating committee also called new Housing Sec. Jack Kemp. He was asked for an assessment of the job done by his predecessor, Samuel Pierce.

JACK KEMP, HUD Secretary: I've been critical of the previous secretary, critical of how the programs were managed. I think it was run in slip shod fashion. I think there were mistakes made. I think the previous secretary was a decent and honorable and honest man. At the same time, it was managed very poorly and I'm going to make changes.

MR. HOLMAN: Among the changes Sec. Kemp imposed is a review of all the programs allegedly abused under Samuel Pierce. In his scheduled return before the investigating committee tomorrow, it's expected former Sec. Pierce will be questioned about many HUD decisions and two specific issues. One is his 1985 decision to continue HUD's business relationship with a Washington, D.C.-based mortgage company called DRG. Senior HUD officials gave Pierce detailed reports of DRG mismanagement, but Pierce allowed the company to continue to earn millions in government fees for helping HUD insure mortgages on housing projects like this one in Houston. Ultimately, the Houston project and many others failed, leaving the government to pay off more than $530 million in defaulted mortgages. U.S. Trade Rep. Carla Hills, a former HUD Secretary herself, testified she represented DRG in its successful efforts to continue to get government contracts.

CARLA HILLS, U.S. Trade Representative: [July 17, 1989] We had a very long meeting that was to discuss the merits of whether there was a way to accommodate these clashes of a company that wasn't being told it had to get out of the business but was feeling like it was getting bled, versus the government's interest in having a short tether on a company that had violated the regulations. And that was the meeting.

REP. TOM LANTOS, [D] California: Well, what came out of the meeting is one of the most remarkable developments of Mr. Pierce's eight year tenure. Pierce says you did this and you did this and you did this and you did this, and then you did all these horrible things and if that were not enough, you did more horrible things, but I'm going to lift the restriction.

MR. HOLMAN: Pierce also is expected to be questioned tomorrow about his statement to the committee in May that he never advocated funding of any particular projects, because in sworn testimony last July, Shirley Wiseman, a former Deputy Asst. Housing Secretary, said Pierce did order her to fund the rehabilitation of an apartment complex for low income senior citizens.

SHIRLEY WISEMAN, Former HUD Official: [July 14, 1989] The Secretary said, I want the project funded and --

REP. LANTOS: Those were his exact words as you recall, "I want that project funded," or words to that effect?

MS. WISEMAN: I believe that's the exact words.

REP. LANTOS: That's close enough, close enough.

MS. WISEMAN: But he said, I want the project funded, and I said, I can't fund it, Mr. Secretary, and he said, well, I want it funded. I said, well, I'm sorry, I can't fund it, but I will send it upstairs to you.

MR. HOLMAN: Career officials at HUD opposed this project in Durham, North Carolina, as unwise and even a safety hazard, but the official who replaced Shirley Wiseman said she finally did as Pierce told her, allowing $16 million of subsidy and tax breaks to flow to the project. One of the developers who benefited from the project is a former law partner of Pierce's.

REP. SHAYS: There could have been many reasons why he chose to promote this project. The problem is he said he never promoted any project and that clearly is in conflict with the testimony that we've received from others.

MR. HOLMAN: Perjury perhaps?

REP. SHAYS: He may have perjured himself or he may have an explanation that says, well, when you asked the question, I thought did I ever try promote a project for my own gain, but of course, as a secretary I'd try to promote a project. I don't know what his answer will be. I just hope whatever tells us will be the truth.

MR. LEHRER: There was a big change occurring while we were watching this piece. The Associated Press moved a story saying that Pierce has cancelled his appearance tomorrow. He said he needed more time to consult with counsel and to prepare his testimony. He said he would appear at a later date. Other news permitting, maybe we'll rerun Kwame's piece then. FOCUS - FOOTBALL LOTTERY

MR. LEHRER: Finally tonight legalized gambling on pro football. This week Oregon made its first pay outs on a state run lottery based on the result of each week's pro football games. The state called the lottery a success. An estimated 50,000 played and Oregon earned $75,000 in revenues. Officials say they want to expand their legalized game of chance to other sports. John Tuttle of Oregon Public Broadcasting in Portland reports.

MR. TUTTLE: One week ago Oregon opened its new sports lottery in downtown Portland, cheerleaders, a band, and a speech from the majority leader of the Oregon House of Representatives, David Dix, urging the crowd to bet on professional football.

REP. DAVID DIX: I want to extend and invitation to all of those Oregonians who once in a while put a dollar into their local pool at the office or put a dollar into their local pool at their local tavern and participated in some kind of pool for football on Sunday, come on down and play Sports Action, and know that if you don't win, even if you lose, you win, because the money is going to go to good programs that support our kids on these campuses.

MR. TUTTLE: Oregon's lottery game is based on scores from the National Football League. Profits from the Sports Action go to support athletics at Oregon colleges and universities. The athletic programs at both Oregon State University and the University of Oregon have longstanding deficits. In November of 1988, after Oregon voters rejected a beer and cigarette tax that would have balanced the athletic budget, Rep. Dix and others turned to the lottery.

REP. DAVID DIX, Oregon State Representative: And they actually showed us a game that European countries use where they results from soccer events, professional soccer, to fund their Olympic efforts, and so I said why don't we use NFL games and other games that I have put a dollar on illegally, whether it's at the local, in my office at work or at a local tavern.

MR. TUTTLE: This summer the Oregon legislature approved the idea and Sports Action was born. The programming lists the upcoming week's NFL games and the point spreads as calculated by the state of Oregon's own professional odds maker. Players bet 1 to $5 or 10 or $20 on a minimum of four games or up to all fourteen games in a week. [STUDENT TALKING TO PERSON BETTING]

STUDENT: So if you selected say four teams that won, you're going to get about $8 if you'd played on a dollar play. Now if you played a dollar and played fourteen games and you got lucky and all of them won, then what you're going to come away with is about $8,000.

MR. TUTTLE: The odds against picking four games correctly are 16 to 1. The odds against picking all 14 games right more than 16,000 to 1. Another Portlander, Gary Verboot, was the first big winner. He guessed right on all 14 NFL games and won more than $12,000. According to lottery officials, roughly one in four people who played the Oregon game came away a winner.

JIM DAVEY, Oregon Lottery Director: We're very pleased with the turnout. We would like to see continual growth over the 20 weeks of football and we will have games up to and including the Super Bowl.

MR. TUTTLE: The NFL's lawyers have served notice the League wants no part of Sports Action and so all the advertising for the lottery game talks about professional football, but never the National Football League. In its programs, the game even avoids using team names, only the names of the cities where those teams play, which means the Los Angeles Rams are listed as Anaheim, and the New York Giants are in New Jersey.

JIM DAVEY, Oregon Lottery Director: We've looked at the team names and we said this could be considered property of the National Football League, so we've avoided that. We use city names which probably complicates the game a little but not much.

MR. TUTTLE: One more complication for the lottery to deal with is mounting opposition at home. While fans were watching Sunday's games in Portland, Methodist Minister Frank Shields was railing against Sports Action.

DR. FRANK SHIELDS, Methodist Minister: What a pioneering effort this is, to have the state of Oregon fleecing the poor to run its operations, to have the state of Oregon conning hopeless people into taking that desperate long shot instead of paying the rent, and what a way for us to mark ourselves in the nation, and what a way for us to be first, a first in expediency is what I'd call it.

MR. TUTTLE: State Rep. Dix concedes the new lottery is controversial, but he denies it targets the poor.

REP. DIX: And one of the things we looked at was who would buy these tickets, and we found it was a different group of people than buying the lottery presently. They tend to be middle income, upper income folks. We found that in the market research that people that have the money to go to football games, have the money to participate in booster clubs, will play this game because they know the money is going to intercollegiate athletics.

MR. TUTTLE: Still, State Rep. Mike Burton sees the game as a mistake and he predicts a review in Oregon's next legislative session.

REP. MIKE BURTON, Oregon State Representative: And for politicians, it's easier to go out and say let's create a new lottery game than it is to argue that this is valuable enough to put on our tax rolls. I'd like to see government stay out of gambling altogether.

MR. TUTTLE: But while some Oregonians have doubts, at least four other states are waiting and watching. If Sports Action works in Oregon, Massachusetts, Kentucky, Michigan, and Illinois, could all follow suit. And in its first weekend, Oregon betters paid in more than $200,000.

BETTER: I think it's going to be very successful. Everybody that I talked to couldn't wait to go down and get their tickets. It's just fun. You know, you get a lot of fun out of a fair dollar in my opinion.

BETTER: We like pro football and have I guess illegally gambled on it for more than one year in, you know, tavern pools and that kind of thing and so I agree, I think it's great for Oregon.

RESIDENT: It's a chance for the schools to make some money. That's the big part I like about it, because I like things for kids and if the kids can benefit, why fight it, as long as it's not something illegal or immoral, and I see nothing wrong with this because they've got card rooms in the center, they've got lottery all over the states. They've got scratch tickets. Why not? There's room for something else, especially sports, because I love sports. [RADIO SHOW]

MR. TUTTLE: Oregon lottery officials are already looking beyond the football season.

CALLER: I wanted to know why you're so partial to the football game. I myself don't think it's fair to baseball, basketball, and all the other sports that they've got.

JIM DAVEY, Oregon Lottery Director: Well, certainly, you can be assured that we're going to look at the sports and I think the sports are worried about it, but we would like nothing better than to make this a year around game. Our goal is to raise $8 million for intercollegiate athletics, so we're going to be looking at all the ways we can do that.

MR. TUTTLE: Raising that 8 million means Oregon will have to target virtually all sporting events, in football, basketball, and baseball. Next year, Oregon expects to be in the news again when it becomes the first state to sell bets on the All Star game and the World Series. RECAP

MS. HUNTER-GAULT: Once again, Thursday's major stories, a disgruntled worker at a Kentucky printing plant shot and killed 7 people and wounded 12 others before committing suicide and former Secretary of Housing and Urban Development, Samuel Pierce, abruptly cancelled his plans to testify on the HUD scandal before Congress tomorrow. Good night, Jim.

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