The MacNeil/Lehrer NewsHour

Intro

ROBERT MacNEIL: Good evening. These are the top news headlines. Congress aggressively entered the Challenger disaster investigation. The Philippines currency fell sharply because of political uncertainty. The heaviest rains in three decades forced thousands to evacuate their homes in northern California. Details of these stories in our news summary coming up. Jim?

JIM LEHRER: After the news summary Elizabeth Brackett has a full report on the Senate Challenger hearings. There's the first post-election interview with a communist leader in the Philippines, plus reaction to it from two American experts, an analysis of the post-Tylenol future of the capsule, and finally a report on a horse sale by essayist Jim Fisher. News Summary

MacNEIL: Congress took its first official notice of the space shuttle Challenger tragedy today, and the result was some heat. At a Senate hearing investigating the accident senators made it clear they were looking to fix responsibility.

Sen. ALBERT GORE, (D) Tennessee: Something has gone wrong with the absolute commitment to quality control and discipline that we've always come to associate with NASA. Now, is that unfair to reach that conclusion?

WILLIAM GRAHAM, Acting Administrator, NASA: Well, Senator Gore, there is no question that a tragic accident took place with the Challenger and there is no question whatsoever that that accident should not have taken place. If history is any guide as we understand what caused that accident, and history of far less complex systems than the space shuttle system, we will in fact eventually find that there were a large number of events which occurred in sequence, virtually any one of which, had it been done differently, would have prevented the accident.

LEHRER: Also, correspondent Elizabeth Brackett has a followup report on the weekend shakeup at NASA which involved a change for NASA's general manager, Philip Culbertson. Elizabeth?

ELIZABETH BRACKETT: Jim, the former number-two man at NASA told me in a telephone interview today that his new duties are to look at NASA's mail system. Philip Culbertson said acting administrator William Graham reassigned him after Culbertson went to him with the information that The New York Times is about to publish a Sunday story detailing NASA's prior knowledge of the problems of the O-ring seals on the solid rocket booster. Culbertson said he assumed Graham was aware of the information since it was common knowledge within the agency. Culbertson said he wanted to make sure that Graham informed the presidential commission investigating the accident of the upcoming New York Times stories. Graham's reaction, said Culbertson, was to reprimand him in a memo last Wednesday for not coming to him earlier with the information on the O-rings. Graham asked for Culberton's resignation. Culbertson refused, and he was reassigned. Culbertson said he was concerned, because the agency is experiencing its deepest problems since the Apollo fire, and instead of pulling together there is high tension and strife within the agency. Much of that strife, says Culbertson, is being caused by executive administrator Graham's decision to isolate the decision-making process in his own office. Jim?

LEHRER: A deep-diving nuclear submarine is being added to the task of recovering Challenger's right rocket booster. There are indications parts of the booster are lying 1,200 feet down on the bottom of the Atlantic. The nuclear sub has a crew of seven; it is equipped with cameras, floodlights and a grappling arm, among other necessary things. It is now being towed from Connecticut to Florida for the search. Robin?

MacNEIL: President Reagan today began a campaign to resume military aid to the contras, the rebels fighting the Sandinista government of Nicaragua. Last year Congress refused to send military aid and approved only $27 million in humanitarian aid, which expires at the end of March. The President's new appeal was in a statement to Republican congressmen at the White House.

Pres. RONALD REAGAN: The program approved last year for $27 million in humanitarian assistance has helped to maintain the pressure or the resistance on the Sandinistas. The resistance has continued to grow and is operating deep inside Nicaragua, but we have to do more to help them. As I've said before, you can't fight attack helicopters piloted by Cubans with bandaids and mosquito nets.

MacNEIL: Republican leaders who heard the President were in favor of his plan, but on Capitol Hill Democrats were not. Here is a sample of congressional reaction.

Sen. RICHARD LUGAR, (R) Indiana: I think the sentiment is growing because it now appears that the Soviets are putting substantially more military equipment into Nicaragua, that the two ports are being developed, the three airfields. In short, we have to make a decision whether we are going to have a Soviet base on this continent or not, and essentially we're going to have one if the contras are not successful in reordering the government of Nicaragua.

Rep. MICHAEL BARNES, (D) Maryland: I think that the decision, if it's made, to go farther down this road of military confrontation with Nicaragua will lead inevitably to two choices. You can either send in American troops or you can abandon a failed policy and retreat, as we were forced to do just recently in Lebanon, in the Middle East.

MacNEIL: Also on Capitol Hill the Reagan administration gave the clearest public indication yet that it intends to give covert military aid to the rebels fighting Angola's Marxist government. In testimony to the Senate Foreign Relations Committee, Assistant Secretary of State Chester Crocker said, "Certain decisions have been made to provide both moral and material support." He refused to say more. The leader of the Angolan rebels, Jonas Savimbi, recently visited Washington and personally asked the President for aid.

LEHRER: There was some good Gramm-Rudman-Hollings news today from the Congressional Budget Office. CBO director Rudolph Penner told the Senate Budget Committee the cuts to meet deficit reduction targets may not have to be as severe as earlier believed. He said the gap next year between federal revenue and expenses could come in a billion dollars less than planned, at $37 billion. He said just the fact of passing Gramm-Rudman-Hollings has already promoted a stronger economy and lower interest rates. Gramm-Rudman-Hollings is still not out of the legal woods, though, and today both sides asked the U.S. Supreme Court to consider it April 23rd. A special federal court ruled a key section of the law unconstitutional two weeks ago, and that decision was appealed immediately to the Supreme Court.

MacNEIL: Economic aftershocks from the disputed presidential election in the Philippines continued today. The peso had its sharpest drop in 15 years, falling by more than 10 . Several prominent business leaders resigned from a presidential productivity council to protest the victory President Marcos has claimed. Some 5,000 demonstrators denounced election fraud and what they saw as U.S. support for Marcos. [voice-over] The demonstrators gathered in the square in front of the Manila post office after a march past the U.S. Embassy. Most of them were young men, workers and farmers. They heard speeches accusing President Reagan of propping up Marcos and meddling in Philippine affairs. One spokesman for the group threatened that American hostages would be taken if its protests against the Marcos government were not successful.

[on camera] A car bomb exploded at the gates of the U.S. Embassy in Lisbon this evening. A guard said a man drove the car through the gates and then ran away. No one was injured in the blast, and the embassy itself, 100 yards away, was not damaged.

LEHRER: Floods and landslides brought more death and destruction in the West today. At least seven people are dead and six are missing in the tragedy that has left thousands homeless in parts of California, Nevada, Colorado and Utah. Some regions of California recorded more than eight inches of rain in the last 24 hours, and forecasters say another storm surge should hit by early Wednesday.

MacNEIL: In Lebanon a Moslem fundamentalist group called Islamic Resistance claimed it is holding two Israeli soldiers who were captured yesterday and threatened to kill one of them if Israel does not withdraw its troops from southern Lebanon within 24 hours. Nevertheless, a strong force of Israeli troops continued to sweep an area 10 to 15 miles north of the security zone along the Israeli frontier. Israel said the search would continue until the two soldiers were found, but the Moslems said the soldiers had been moved to a safe location beyond Israel's reach. The Moslems said both soldiers were being treated for gunshot wounds.

In South Africa, 19 people have died in violence in a black township near Johannesburg, 16 of them killed by security forces. Anti-apartheid activists said the death toll is 80 or more. The violence began on Saturday and it threatened to become worse today, when thousands of Africans started to march onthe police station. Anglican Bishop Desmond Tutu defused the situation by persuading the huge crowd to go back.

LEHRER: And that wraps up our summary of the news of this Tuesday. Now, a longer look at the Senate Challenger hearings; an interview with a Philippine communist leader, with reaction from two Americans; the future of capsules in the over-the-counter medicine market; and an essay on a horse sale by Jim Fisher. Philippines: A Communist View

LEHRER: First, an unusual newsmaker interview. Most major parties to the post-election crisis of the Philippines have been heard from. President Marcos has said his peace, so has Mrs. Aquino and so have President Reagan and many, many members of the U.S. Congress. A principal voice not yet heard is that of the communist insurgency in the Philippines, a military force of some 22,000 guerrillas called the New People's Army, that has been fighting to overthrow the Marcos government. It is particularly strong in the provinces of Negros and Mindanao. The rebels have a political organization called The Nationalist Democratic Front with a following that numbers in the thousands. One of the group's leaders is 53-year-old Antonio Zumel, a former Manila newspaper columnist who has been in hiding from the government since 1972. Our interview is with him. It was conducted by special producer Bruce McDonnell. Zumel insisted that it be done in silhouette because he did not want the authorities to know what he looks like now.

ANTONIO ZUMEL, communist guerrilla: I suppose the election that we have just witnessed provides our people with a very important political lesson, that under a dictatorship no election is -- no free election is possible, and that they should stop relying on fake elections like this one as a means of bringing about change in our society.

BRUCE McDONNELL: But then is the only means for change violent revolution?

Mr. ZUMEL: Principally by violence, because we are confronted with violence, you know. You must remember, Bruce, we are not by nature a violent people. I mean, we people in the movement are not by nature violent. But the violence, that is, the violence that is institutionalized, the official violence, the legal violence that the dictatorship uses against -- uses upon the people compels them to take up arms themselves and fight this violence. We have to fight counterrevolutionary violence with revolutionary violence. As simple as that.

Mr. McDONELL: If Mrs. Aquino had come to power, she had said that she would ask you people to give up violence and to use legitimate means to restore democracy in the Philippines. Could you have gone along with that?

Mr. ZUMEL: Well, to begin with, we believe that taking up arms is a legitimate resort of the people. It is even in your Constitution. The United States Constitution recognizes the sovereign right of free people to take up arms and change the social system that is not responsive to their needs, that is not responsive to their interests. There has to be a very good reason for laying down your arms. Now, as I have had occasion to say in the past, if Mrs. Aquino -- if the government stops these onslaughts upon our forces, both in the urban areas and in the countrysides, if she implements the democratic reforms that she's been talking about, in short, given the correct political situation we could discuss -- we could discuss a ceasefire.

Mr. McDONNELL: But I'm wondering what your real feelings are about Mrs. Aquino, and your official feelings as far as the NDF goes.

Mr. ZUMEL: Well, Mrs. Aquino. I have the highest regard for her personally, but looking at her as a political being, as one who aspires for leadership in our country, we have to find out what she has in mind, we have to find out what she intends to do if she gets the presidency. And in that respect, in that regard we can say that in her program are some very good reforms that she says she means to push through once she gets elected. But at the same time we must also point out that there are deficiencies in her program. For instance, this question of the land reform. What does she intend to do about this? This is a very, very, very important democratic question, considering that our country -- that a great majority of our people are peasants, landless peasants. What about the bases? What about trade relations with the United States, the one-sided trade agreement that the two countries have. What about the bases? See, she said at one point -- by the way, we in the NDF don't believe that any country, any power, has any right to establish a military base in our country. We are definitely against any bases, any foreign bases in the country. At one time we had Mrs. Aquino saying that the bases would have to go. I think it was in 1991 that she meant to have the bases out, and then there was a bit of flip-flopping on her part, and finally what she said was that she'd keep her options open. Now, again, I nd that to be a deficiency in her program.

Mr. McDONELL: Is it possible that, given that the National Democratic Front were in power and that the Americans would leave those bases, that they would be replaced by another foreign power, specifically the Soviet Union?

Mr. ZUMEL: Well, it's stated in the National Democratic program, and it is a living principle as far as we're concerned, that we don't want the American bases in our country. We don't want any other foreign base in our country. We will never allow the Russians or any other foreign power to establish bases in our country.

Mr. MacDONELL: You say you are confident that eventually your soldiers will win the struggle. Do you think that the United States will really let this happen without sending in American fighters?

Mr. ZUMEL: Well, we don't know what intentions the U.S. government have. We can only go by how it has behaved in the past. We have the lesson of Vietnam, we have the lesson of Grenada, and although they may not have fighting men in Nicaragua today, the CIA and other agencies of the United States government certainly are helping the contras in Nicaragua. We don't know what they intend to do with respect to the Philippines. If America launches an aggression in our country it would mean the unjust shedding of our people's blood. Unfortunately, if that happens many well-meaning young American boys who carry out such an aggressive policy will necessarily -- also unfortunately our country will be a graveyard for them as well. We are prepared to fight for a protracted period of time. We are prepared to fight the forces of Mr. Marcos or any other foreign force that attempt to impose their tyranny upon our people.

LEHRER: Now some special readings of what Zumel said from Richard Holbrooke, the assistant secretary of state for the Near East in the Carter administration, now an investment banker with Shearson Lehman Brothers, and George Carver, a 26-year-old veteran of the Central Intelligence Agency who held several CIA positions dealing with Philippine affairs. He's now a senior fellow at the Georgetown University Center for Strategic and International Studies. To you first, Mr. Carver. How did you read what he said about laying down arms?

GEORGE CARVER: Well, I take it with a very large grain of salt. I think it's important to realize where Mr. Zumel fits in the scheme of things. The Philippine Communist Party, Marxist-Leninist, is a split-off from the original party in 1966. It has a military arm, the New People's Army, a political arm, the National Democratic Front. It's very closely modeled on the Vietnamese Communist Party, the Lao Dong, with the Viet Minh and the NLF, and should they ever come to power I think the chances of anyone other than communists having any political voice in the Philippines are very slim indeed.

LEHRER: We'll be back to that in a minute. Mr. Holbrooke, how did you read specifically the question about whether or not he would be willing to lay down arms if, through some circumstance, Mrs. Aquino rose to power?

RICHARD HOLBROOKE: [audio interrupted] -- to judge this interview. In regard to the issue you just raised, I think that if Mrs. Aquino were to come to power my guess is that the communists would at first see if they could exploit the change to talk to her politically and gain some degree of legitimacy. If, as I believe to be the case, she will not be able to reach any accommodation with them, because their real objective is to take full power in the Philippines, then she will reject that. If that were to happen, then I think you would find a continuation of the war, the guerrilla war, and I think she would end up having to prosecute the war the way the present government does, but I hope with more vigor and more effectiveness.

LEHRER: Do you agree?

Mr. CARVER: Well, essentially yes. Dick and I don't always agree, but in this particular time we do. I think that the Philippine communists would love to see Mrs. Marcos [sic] be a Kerensky mounting a March revolution that puts Marcos out of power.

LEHRER: You mean Mrs. Aquino.

Mr. CARVER: Mrs. Aquino. But if that succeeds, their own October revolution will come along in due course, and they will try to push her aside, and their equivalents of their Lenins and their Stalins will then come to the fore.

LEHRER: And both of you agree that any possibility of this communist movement sharing power in any way, joining some kind of a coalition government, that is just not in the cards, right?

Mr. HOLBROOKE: Not at all, Jim. The communist Party in the Philippines, like the communist Party in Vietnam, wants full power. They'll take half a loaf if it gets them to the full loaf, but what they want is full power, and I think that Mrs. Aquino already recognizes that, and if she comes to power, or indeed if Laurel comes to power or any other non-communist leader of the Philippines follows Marcos, and I believe that it's inevitable that's going to happen within the not-too-distant future, that they will have to continue, indeed reinvigorate the effort to deal with the communists. I don't see any alternative for any non-communist leader in the Philippines. Sharing power with a man like the man we just saw on television ultimately means giving him power. That means turning the Philippines into a pro-Moscow nation. The strategic consequence of that for the United States and for the region are obviously unacceptable, and I believe the vast, overwhelming majority of the Philippine people would not want it either.

LEHRER: Mr. Carver, it's been suggested that the reason the Communist Party is growing not so much militarily as it is politically in the Philippines is simply because of the Marcos regime. What do you think would happen if Marcos leaves?

Mr. CARVER: If Marcos were to leave this might arrest the growth of the Communist Party of the Philippines, Marxist-Leninists, as they call themselves. But, as Dick pointed out, they would still strive for power. They would still have an 8,000-10,000 person army indeed, and they would try very hard to deal with their opponents, divide them, but eventually take total control. The notion that they would sit down and share power in any form of coalition with the idea of that being extended over an indefinite period of time is Cloud Cuckooland. The same thing would happen in the Philippines as happened in Vietnam. Once the Lao Dong or the Vietnamese Communist Party took total control of the country, that was the last that was ever heard of the National Liberation Front. So it would be in the Philippines.

LEHRER: Yes, sure.

Mr. HOLBROOKE: Jim, may I just add to that what I think is a critical point you've raised? The present situation in the Philippines, in my view, is ideal for the communists. Marcos is the best recruiting poster that the communists have; however, it's very important that we understand that when Marcos leaves the scene that does not mean the end of the problem. It only means that a new government, if it's well organized, if it isn't internally divided, if it has massive American support, if it's more honest and has a more vigorous and better-led army, can get on with the job of dealing with the communists. If the communists are let loose to continue the efforts they made in the last two or three years, it's my concern that within another year or two their tentacles will be so deep into the rural fabric of the Philippines, particularly Luzon and Negros Islands, that it will be almost impossible to get them out. So it's critically important that the next government get on and do the job more effectively than the Marcos government has been able to do in dealing with the communists. But it won't be easy, and a lot of people in this country seem to think that once Marcos goes the problem is over. It's exactly the opposite. Only when Marcos goes can the next government begin to deal with the problem.

Mr. CARVER: Marcos' departure is the necessary but by no means sufficient condition of coping with the communist threat.

Mr. HOLBROOKE: I even agree with George for once.

LEHRER: Gosh. You guys are okay. All right.

Mr. CARVER: Well, this is unprecedented, Jim.

LEHRER: But one of the points that Senator Lugar has made, he made it on this program again last night, since he came back -- Senator Lugar, of course, being chairman of the Senate Foreign Relations Committee and head of the observer thing -- is that his major complaint with the Marcos government, among other things, beyond the election complaint, is that they did not deal effectively from a military standpoint with the communists. Do you have any comment on that?

Mr. CARVER: Well, they didn't deal effectively for the same reason that many other governments fighting communist insurgencies have not dealt effectively. The Philippine army is very much based on a crony system. Marcos prides or places loyalty to him above military competence. The army is divided and it can't operate effectively. Now, when Marcos leaves it probably won't be tidy, and one of the things -- one of those necessary conditions that Dick and I have been talking about is that the new successor government, Mrs. Aquino's or whoever's, is going to have to have a unified army behind that government fairly quickly, or else the military weaknesses of Marcos are going to be just exacerbated in the new situation, to the communists' great advantage.

LEHRER: What's your view of that, Mr. Holbrooke, that without Marcos running the military, can the military be an effective -- are the ingredients of an effective anti-insurgency campaign there in the Philippines?

Mr. HOLBROOKE: As long as the present situation exists the ingredients are not there. That's why people, including people like George and myself [who] have had many disagreements over events in Indochina, do agree now on the following simple principles, Jim. One, we are ready at the end of the Marcos era. Two, the earlier he goes the better in terms of rebuilding the economy and getting on with dealing with the communist insurgency. Three, it's very important that that transition be peaceful and not disorderly and that Marcos' personal safety be assured. Four, once that happens we will see if we can get on with the task. It is by no means certain that the next government can deal with the communists, but it is certain, as George has said, that the present government can't. Marcos has been in power 20 years. The economy is wrecked. The communists are on the march throughout the rural areas. Those factors are real and must be undone.

Mr. CARVER: Now, on top of that, Jim, there is not one insurgency in the Philippines; there are two, because there is another insurgency, essentially Moslem, going on in the southern islands, which further complicates the effective imposition of central control, and it's going to be another problem that any successor government to Marcos is also going to have to deal with.

LEHRER: Now, both of you gentlemen are aware that President Marcos says just the opposite of what the two of you say and what Senator Lugar and others are saying. He says that if Mrs. Aquino becomes president of the Philippines the communists will take the country over in a matter of very short time.

Mr. CARVER: He may well be right, but if someone other than Ferdinand Marcos does not become president of the Philippines, communist victory within a matter of a few years is almost assured.

Mr. HOLBROOKE: I understand -- I think we all understand why Marcos says that. He is a man who is clinging to power, and that's something he has to say. But I can tell you this. There isn't a single senior member of the United States government, including the intelligence community, who shares that assessment. They all would agree with what George said and with what I've been saying, which is that she has a better chance, but by no means a certainty, of being able to deal with this problem.

LEHRER: You agree?

Mr. CARVER: I agree that some successor to Marcos -- she's the one around whom his opponents are utilized [sic]; therefore, better Mrs. Aquino than Marcos at the present time, though don't expect her to walk on water or expect her to solve a very intractable problem very quickly.

Mr. HOLBROOKE: And by the way, Jim, there are alternatives to Mrs. Aquino which we haven't discussed. It isn't axiomatic that when he leaves she will replace him.

LEHRER: Yeah, yeah. There are a lot of things that could happen, right, as far as the transfer of power, etc., etc., etc.

Mr. CARVER: See, the people behind her are unified in that they don't like Marcos. They would not necessarily be unified in letting her have undisputed control to the detriment of their own political ambitions.

LEHRER: All right, George Carver, Richard Holbrooke, thank you both very much. Robin?

MacNEIL: Still to come on the NewsHour tonight, an extended report from today's Senate hearings on the shuttle Challenger explosion, an analysis of what the Tylenol crisis has done to the future of capsules, and an essay on a horse sale by Jim Fisher. Congress Asks Questions

MacNEIL: The Challenger investigation is our next focus tonight. Three weeks ago to the day after the space shuttle blew up, killing seven crew members, Congress began asking some hard questions both of NASA and of the presidential commission set up to find the cause of the disaster. Correspondent Elizabeth Brackett covered today's hearings of the Senate Space Subcommittee, where commission chairman William Rogers explained his group's efforts so far.

WILLIAM ROGERS, Chairman, Presidential Commission: The investigation will cover the NASA decision-making process. Our intention to review to date has indicated that the decison-making process may have been flawed. And I say the process may have been flawed. We have not said the decision was flawed; we said the process may have been flawed, and we base that on testimony that we have taken in executive session.

Sen. JOHN DANFORTH, (R) Missouri: Could you elaborate on that sentence and tell us what the meaning is and whether this is some sort of preliminary finding, or is it just the matter of speculation?

Chairman ROGERS: I would say it is a -- well, I guess the better way to say it is we drafted it carefully to try to say exactly what we meant. We said it because we wanted to be sure that no person who is involved in the investigations in NASA himself might become a subject of investigation.

BRACKETT [voice-over]: Former astronaut Neil Armstrong, a presidential commission member, did say the commission has not come to a conclusion as to the specific mechanical cause of the disaster.

NEIL ARMSTRONG, commission member: We have not concluded that a specific failure was the cause. It's clear to all of us that certainly failure has occurred. But as to the progression of events, we have not yet --

Sen. DANFORTH: I think you sort of anticipated my next question. I take it you have concluded that there was a failure at some point or another and in one of those seals, but not whether that was the first failure or the cause of the -- the approximate cause of the explosion?

Mr. ARMSTRONG: I have not concluded that there was a failure in the seals.

Sen. DANFORTH: I see. Okay.

Chairman ROGERS: Mr. Chairman, we see evidence in the area of the seal, in that general area, but as Mr. Armstrong says you can't really conclude for sure anything about that except the area where it occurred.

Sen. DANFORTH: And I gather that you are seriously investigating the impact, the effect of the extremely cold temperatures in the hours immediately preceding the launch.

Chairman ROGERS: You'd expect it would be easier to find out what the weather conditions were, but it's not as easy as you think. A word like ambient temperature means a lot of different things. I just thought it was what you looked at when you had a thermometer, but it can be -- is it in the shade or in the sun, is it near a building, all of these other things. And then there of course is the temperature of the booster, the outside and inside temperature and how do you determine those things. So we're giving a lot of weight to, a lot of consideration to weather factors.

BRACKETT [voice-over]: It was Senator Fritz Hollings who pushed Chairman Rogers on the commission's ability to ever find the cause of the tragedy.

Sen. ERNEST HOLLINGS, (D) South Carolina: There's no question about the competence of the commission itself, but just investigating cases you need some investigators around, and hell,you've been in 10 days or so and you don't have any right yet. You all been working hard and you have really brought already to the public attention a lot of very interesting facts, so I think you all haven't been negligent in any fashion. But to really get a thorough investigation -- and if I served on that commission I'd say, "Secretary or Mr. Chairman, I want to get me about 15, 16 investigators and send them out ahead of me," and just put them over there at Huntsville, Thiokol and everything around, just listen and talk to all the people involved, and then they might be wanting to take some statements and everything else like that, because there's a lot of valuable information out there. And that's the way you make a thorough investigation, not just that you've got 40 people in a room or a Nobel Prize-winner making the questions.

Chairman ROGERS: Well, Senator, I respect your views and I'd be happy to talk to you about it.

Sen. HOLLINGS: Well, we might have to do it at this committee level, then, if it's not done at the commission level. That's the trouble. That's what we're trying to solve now.

Chairman ROGERS: Well, I'm not sure why we're having the difficulty. I'll be glad to see that we have that type of person available to do work.

BRACKETT [voice-over]: Senator Donald Riegle was more concerned with what the Senate panel would know and when that Senate panel would know it.

Sen. DONALD RIEGLE, (D) Michigan: I'm sure you must have some reason to need to go into executive session, but I don't quite understand why whatever you're learning is not -- ought not to be available to the rest of us who have work duties that are parallel in nature that require us to understand the same things. In other words, I don't know that we would want to rely just in the end on a digest of opinion and probably we would end up finding that we would have to sort of go over the same road, and it seems to me we ought to be able to go over the same road together, more or less at the same time. And so -- I guess I'm somewhat at a loss to know why there is a reluctance there.

Chairman ROGERS: Well, I think it's -- I think you know, Senator, I really don't -- I don't think it's hard to figure it out because the separation of powers, just as the executive branch doesn't normally sit in on Senate hearings, private sessions, and wouldn't want to, wouldn't ask to, this is a presidential advisory commission and we have -- we think we have the right and continue to have the right to hold executive sessions as we see fit.

BRACKETT: The number of panels, bodies and agencies investigating the shuttle disaster continues to grow. The House also has a subcommittee investigating the tragedy. A group of White House agencies is also investigating. But at the moment the presidential commission is the lead group looking at the disaster, and today they fought very hard to keep it that way.

MacNEIL: Next, one of the country's top space journalists discusses what the investigations are doing to NASA both in reality and in its reputation. John Noble Wilford has been covering the space program for two decades for The New York Times. Two years ago he was awarded a Pulitzer Prize. He's providing the overview and news analysis stories in the Times coverage of the Challenger investigation.

What did you think was the most significant thing to come out of this afternoon's hearing today?

JOHN NOBLE WILFORD: Well, there were a couple of things. One, when Secretary Rogers refused to explain exactly what he meant when he discussed the decision-making process of NASA may be flawed. He refused to explain that, but said that his investigation and the questioning would probably lead to further demoralization of NASA, which indicates to me that some -- maybe some heads are going to roll, some people are going to be very embarrassed, the way they've been handling things at NASA. The other thing was in the Senate hearing with Jesse Moore, Mr. Moore indicated that he was not aware of the infrared sensors indicating that temperatures were as low as six to seven degrees on the right booster, which is considerably below, as they say, nominal.

MacNEIL: Mr. Moore being the acting --

Mr. WILFORD: He's the head of the shuttle program for NASA, and he was not made aware of this. And there have been several times in the various presidential commission hearings and then today when you get the indication that a number of top managers of NASA were not being told of some of the problems that were being recognized down below.

MacNEIL: Well, there was perhaps another example today. The acting administrator, William Graham, appeared to be denying that the makers of the solid rocket booster, Morton-Thiokol, had warned against a launch in such cold weather as that day when quite a lot of evidence has come out that at least some people at Morton-Thiokol did warn against such a launch.

Mr. WILFORD: Certainly their testing had not indicated that you should do this. And also apparently the night before the launching, from some unconfirmed reports and also from some of the discussion today, the night before the launching some of the engineers at Morton-Thiokol did express concern, but Mr. Moore says that in the final analysis they signed the paper saying "go for launch."

MacNEIL: Is it from the NASA that you've known and loved and covered for 20 years -- maybe not loved but anyway covered for 20 years -- is it conceivable that such important information as warnings from a manufacturer or the extreme low temperature recorded at the rocket site would not be communicated right up to the top?

Mr. WILFORD: Well, you know, NASA has a reputation for success, in high technology. But NASA is a large organization, and large organizations have communications problems of one sort or another, and I think what is being exposed here now, and may be one of the most important fallouts of this, is that the process of making decisions in NASA -- decisions to launch, decisions to redesign things -- had some communications problems. People were not getting their message up to the higher echelons in all cases. This may have come back to haunt them now.

MacNEIL: Senator Gore said to the NASA witnesses today he wondered whether an organization which had an absent head -- Mr. Beggs being absent because he's under investigation for fraud charges having nothing to do with his NASA activity that an organization without a head has an uncertain leadership at the top, and he was really asking them whether that sort of demoralization because of the uncertainty hadn't in some way affected. Have you sensed that just the lack of a head has affected the way NASA is working at the moment?

Mr. WILFORD: It's probably affected the way they reacted to the accident. The confusion and the reticence and the shock of the first few days after the accident, some of that's natural. But it led to NASA disregarding some of its own rules about issuing information.

MacNEIL: Normally this to journalists is known as an open agency.

Mr. WILFORD: It is probably the most open agency in Washington.

MacNEIL: Open to washing its dirty linen when there's a mistake?

Mr. WILFORD: They do a better job than most people. Obviously they don't like to do that, and sometimes they have to be coaxed or under some pressure, but I think by and large they've done a very good job over the years. In times of crisis, however, they resort to the methods of most organizations. They sort of cover themselves. And I think they did this this time. They did it certainly back in the Apollo fire.

MacNEIL: I guess the question in the public mind and in the lay journalist's mind, not specialists, is, are they covering themselves as any organization would and ultimately are going to tell the whole truth, or are they covering up something they already know about?

Mr. WILFORD: I really don't know that, of course. I have a suspicion that they are probably covering themselves and eventually, once they sort of find out what the facts are and how much damage there is, then they would decide how they're going to release the information. I don't think that they would stonewall completely forever. And, as we are beginning to see, they are becoming more public in their announcements about things and discussion of details of the accident. But I think what they wanted to do in the beginning was they wanted to find out, if they did have some dirty linen, where it is and tidy it up as much as possible, and then come out and say, "Okay, yeah, we goofed in this area and this area, but -- "

MacNEIL: And the process isn't allowing them to do that?

Mr. WILFORD: Right.

MacNEIL: It's unraveling in front of them. Okay, Mr. Wilford, thank you very much for joining us.

Mr. WILFORD: Thank you. Scrap the Capsule?

MacNEIL: Next tonight, the continuing poisoned Tylenol story and its impact on the $2-billion-a-year, over-the-counter capsule drug business in this country. Judy Woodruff has our story. Judy?

JUDY WOODRUFF: Aside from the obvious questions about who put the poison in the Tylenol capsules recently and what this episode says about the safety of over-the-counter medications, many business analysts are wondering how this lucrative industry will be affected. With the announcement yesterday by Johnson & Johnson that it will stop selling capsules over the counter because it can no longer guarantee their safety, other drug manufacturers are being forced to take another look at this highly successful form of packaging. But at a news conference in Washington today, a spokesman for the drug iated that up to now, at least, other companies were hesitant to follow Johnson & Johnson's lead.

JOHN WALDEN, drug industry spokesman: The rest of the industry has no plans at this time to walk away from capsules. Capsules are a viable, preferred form of delivering medicine, and there is no consideration by this committee to walk away from capsules or to recommend such a course of action.

WOODRUFF: Joining us now to look at what lies ahead both for producers and consumers of over-the-counter medications is Steven Permut, a professor of marketing at the Yale University School of Management. He has served as a marketing consultant to many large corporations, and was formerly chairman of the national advisory council of the U.S. Consumer Products Safety Commission. Mr. Permut, why aren't the other companies jumping on the bandwagon? I mean, what Johnson & Johnson did seems like the responsible thing for them to do.

STEVEN PERMUT: Well, Judy, I agree. I do think it was the responsible and correct management decision. I also think that it reflects a serious recognition of the public policy concerns. It's possible that they did not jump on the bandwagon simply because in their opinion they did not see the capsule issue as universal and potentially could reflect their own efforts to guarantee the safety of their own products. After all, at this point it is somewhat an isolated set of incidents specifically related to Tylenol. So it's possible that they are simply waiting to see what further developments occur.

WOODRUFF: Well, do you think that Johnson & Johnson was acting prematurely, then?

Mr. PERMUT: Not at all. I think that this is perhaps the best indication of excellence in management where they are concerned about the quality of their product. They are concerned about the public interest, and they bit a very difficult bullet.

WOODRUFF: If that's the case, whey did the Food and Drug Administration, as we understand it, why did they recommend that they not go ahead so quickly and abandon the capsules?

Mr. PERMUT: I think it's possible that they want to wait a little longer to get --

WOODRUFF: This is the Food and Drug Administration we're talking about?

Mr. PERMUT: That's correct. I think they want to avoid jumping into regulation of capsule products per se on an immediate basis. But it is also -- it's really not the FDA's concern as much at this moment as I think it is for Johnson & Johnson. They were being forced, I think, to disassociate themselves from the capsule product so they could get on with the marketing activities that lie ahead.

WOODRUFF: Do you expect the FDA to get more involved?

Mr. PERMUT: I think what will likely happen is that the FDA will be forced to consider both voluntary as well as specific required standards for not only capsule products but a whole variety of other products in terms of both the product itself, the container as well as the packaging. Packaging is going to have to be viewed in a much more serious way across the whole consumer product line, I think, not just marketing design but in terms of its protective qualities.

WOODRUFF: Specifically on the capsule, doesn't this move by Johnson & Johnson put a lot of pressure on these other companies because there's sort of a cloud now over the capsule form of packaging?

Mr. PERMUT: Well, I think they are being forced to react and stand their ground, because it's very likely that they would like to proceed with a marketing advantage now against Johnson & Johnson. After all, there is a tremendous amount of money invested in those capsule products. There's a great deal of brand loyalty and a great deal of marketing energy and momentum that's already been invested in these lines. I think they're being forced to take an awkward position actually, Judy. I think that Johnson & Johnson acted in a very courageous and a very appropriate way, catching the other manufacturers, I believe, off guard.

WOODRUFF: Well, what do you mean? I mean, how do you think this is going to work itself out? Obviously you can't have all the answers right now, but what's your guess now?

Mr. PERMUT: Well, it's not clear at all, I think. Partly, I think there are several stories going on. One is the degree to which we incorporate issues of public policy in marketing decisions -- issues of how we protect against unintended consequences in all of our products, whether they be over-the-counter drugs or foods and commodities. There is probably a whole host of issues that will have to be debated and raised across all industries now, with a renewed concern for how does one react to these kinds of circumstances, both on a voluntary as well as on a required basis?

WOODRUFF: But you say these other companies are in an awkward position. I mean, they are coming back and arguing, some of them, that the capsule is a unique form of packaging for certain kinds of medication, the timed-release feature and so forth. I mean, are we going to see a legitimate debate here, or is it going to be governed purely by the perceptions of the consumer?

Mr. PERMUT: The perceptions, I think, will have some impact because market surveys certainly are not irrelevant to the situation. If it can be shown that consumers can be moved from capsule products to caplets or to tablet products, then I think the manufacturers of other products will be more inclined to move along in that direction. I simply think it's a matter of timing. I think the other companies were caught somewhat in a defensive and reactive mode, and Johnson & Johnson necessarily took the steps that I think they had to take.

WOODRUFF: You alluded a moment ago to how this could spread to other forms of packaging, other consumer goods other than medications -- food, perhaps. How far do you think this could go?

Mr. PERMUT: Actually I believe it could go across all products that are consumed by individuals. It could cause a renewed attention to the distribution channels for all foodstuffs and for all products that people consume or ingest. It may mean that the distribution channels for all products now have to, by necessity, take on a higher profile and more certainty in that once it leaves the factory there's as much a concern for who handles it, who touches it, how it's distributed to the middlemen until it gets to the retailer, as is the case in the manufacturing process per se.

WOODRUFF: Well, I know this is one that we're going to be watching. Steven Permut, thank you for being with us.

Mr. PERMUT: It's my pleasure. Animal Shelter

LEHRER: Finally tonight, an essay from our man in Kansas City, Kansas City Times columnist Jim Fisher. His subject tonight is horses, but his place is neither of the Kansas Cities or Kansas or Missouri.

ANNOUNCER: Lot number 11.

JIM FISHER, Kansas City Times: Buying and selling horses has long been part of the American fabric. Horse-trading is an old and respectful phrase. Times past, the seller would absolutely guarantee Old Dobbin's soundness. Sound as a dollar, he'd say, while the buyer warily circled the critter, listening for heaves, eyeballing for fistulous withers, examining hooves for thrush. That's changed. Now you get music, colored spotlights, runways comparable to Hollywood sets, young, frantic men in tuxedoes posing horses. Bidding and buying. Millions of dollars' worth from people in furs and jewels, stetsons and business suits.

This is Scottsdale, Arizona, and its handful of high-priced Arabian horse auctions. For the past several years the first week of February has meant a singular devotion to the extraction of large amounts of money from the wealthy, the new rich, the old rich, the almost rich. This past week, sale week, has been glitzy. Open bars and open barns, Hype with a capital H. Show biz. Last year maybe a couple of hundred people spent 44 million bucks on Arabian horses here. That makes the Super Bowl seem like a pickup football game. With good reason. The Scottsdale spectaculars, light years from average Arabian horse owner who mucks the stalls, struggles to pay for hay and just enjoys his animals is courtesy of the United States tax code with its loopholes, capital gains, deferrals, tax breaks for syndicates, its propensity for tax shelters. This for a breed that doesn't run especially fast, or jump very high or trot very well. And where the owners of the very, very expensive show horses sold here and elsewhere nearly have a nervous breakdown at the mere mention of the phrase tax reform.

But Scottsdale isn't alone. Much of the purebred livestock industry has gotten into fancy sales. A bunch of longhorns sold recently in Texas for big money before a black tie and formal wear crowd. John Wayne would have died. Scottsdale, however, works the tax code like Missouri corn farmers used to work their mules in high summer. Horses here are mostly mares in foal. If you have a spare couple of hundred thousand, they'll assure you, such animals can return their close-to-million-dollar price in a few years. And besides, they're living works of art -- works of art with their eyes made up and their hair sprayed, their noses vaselined and their hooves blacked, combed and brushed. Old Dobbin, naturally, isn't here. Nor can the prices be called horse trading. These are investments. The less charitable have called the sales here akin to a complex pyramid scheme. Promoters call them aggressive marketing. How about wretched excess? Money. A carnival atmosphere. Transitory fame. What's really new is that the excess is open here for all to see and wonder at. Excess subsidized by other taxpayers, you and I, like it or not.

AUCTIONEER: Sold here at $310,000.

MacNEIL: This evening's cartoon from Ranon Lurie deals with the Philippine election and the problems it's causing for President Marcos.

[Lurie cartoon -- World leaders stand around sniffing the air. The room clears, leaving President Reagan standing alone with stinking, skunk, Marcos, on leash wrapped around his legs.]

Once again, the main stories of the day. Congress aggressively entered the Challenger disaster investigation. The Philippines currency fell sharply because of political uncertainty. The heaviest rains in three decades forced thousands to evacuate their homes in northern California. Good night, Jim.

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