The MacNeil/Lehrer NewsHour

MR. MacNeil: Good evening. I'm Robert MacNeil in New York.

MR. LEHRER: And I'm Jim Lehrer in Washington. After our summary of the news this Wednesday, outgoing CIA Director Robert Gates has some parting words, then excerpts from the confirmation hearings of Ron Brown to be Secretary of Commerce, a Judy Woodruff look at the new administration expectations of the Washington special interests, a Spencer Michels report on the battle for California's water, and finally the works of Dizzy Gillespie and Rudolf Nureyev, both of whom died today. NEWS SUMMARY

MR. LEHRER: Iraq has been given 48 hours to remove anti-aircraft missiles from the southern no-fly zone in Iraq or face military retaliation. That ultimatum was delivered this evening by the United Nations. It came at the request of the United States, Britain, and France. The no-fly zone was created by the U.N. to protect dissident Shiites from Iraqi warplanes. A spokesman for President-elect Clinton said he agrees the United States cannot tolerate any Iraqi violation of U.N. resolutions. We'll talk to CIA Director Gates about the situation right after the News Summary. Robin.

MR. MacNeil: Bush and Clinton officials issued a joint statement today urging Haitian leaders to cooperate with the United Nations in efforts to restore democracy there. Sec. of State Lawrence Eagleburger and Secretary-Designate Warren Christopher also agreed that the United States must work with the U.N. and the Organization of American States to find a solution to the Haitian refugee problem. President Bush released his final budget today before leaving office. The federal deficit for the next fiscal year is estimated to be almost $20 billion more than he projected last summer. Bill Clinton today accused the Bush administration of camouflaging the numbers and under estimating the deficit. He is expected to present his own budget plan soon after taking office.

MR. LEHRER: Congress began confirmation hearings today on President-elect Clinton's cabinet. First up was Commerce Secretary- Designate Ron Brown, a Washington lawyer, and chairman of the Democratic Party. He told the Senate Commerce Committee his past lobbying work would not influence his decisions at the Commerce Department. He said he fully embraced Mr. Clinton's new ethics rules. We'll have excerpts from the hearing later in the program. President-elect Clinton met in Little Rock today with executives of the Big Three domestic automakers. United Auto Workers President Owen Bieber was also there. The auto industry has requested the meeting to discuss job creation, the possibility of a gas tax, and curbs on Japanese imports among other things. The Clinton-Gore victory was made official today. Vice President Quayle presided over a joint session of Congress to count the 538 electoral votes passed in last November's election. The winners watched the proceedings from the Governor's mansion in Little Rock. As expected, they received 370 votes, while the Bush/Quayle ticket received 168 votes.

MR. MacNeil: The tanker which ran aground yesterday in the Shetland Islands north of Scotland is still spilling oil. The American-owned tanker is carrying nearly 25 million gallons of light crude. We have more on this report by Kevin Dunn of Independent Television News.

KEVIN DUNN: All day ocean tugs have attempted to reach the Braer, but so far to no avail, the thickness of the oil churning out of her broken tanks foiling any attempt to put salvage experts aboard. It's still not known how much oil remains in her hull, but the ship has settled on the rocks, and there's no sign yet of its starting to break up. But that does nothing to diminish the disaster. The slick stretches for seven miles off Shetland's coast, but experts say the pollution so far is not as bad as they feared. The spraying operation is being carried out by specially equipped Dakotas flying continuous sorties and dumping detergents. But sea conditions have been too rough to deploy booms to contain the slick.

MR. MacNeil: The spill has already taken a toll on the region's wildlife. Environmentalists have found oiled birds and dead fish on the island's beaches.

MR. LEHRER: The Environmental Protection Agency has confirmed that secondhand tobacco smoke causes lung cancer in thousands of non-smokers every year. The agency will release the official report tomorrow in Washington. The American Lung Association called it "a major milestone." Tobacco companies have denounced the EPA finding, saying it relied on statistically flawed studies. A federal jury in Los Angeles today convicted Charles Keating on 72 counts of fraud and conspiracy in connection with the failed Lincoln Savings & Loan. His son was convicted on 63 counts. The Lincoln S&L cost taxpayers 2.6 billion dollars. The elder Keating is already serving a ten-year prison term on state charges.

MR. MacNeil: Two legends of the entertainment world died today. Ballet dancer Rudolf Nureyev was 54-years-old. His doctor in Paris said he died of cardiac complications, following a devastating illness. The doctor said that in accordance with Nureyev's wishes he would not elaborate. There have been media reports for some time that Nureyev was suffering from AIDS. Jazz trumpeter Dizzy Gillespie was 75-years-old. He died at a hospital in Englewood, New Jersey, from pancreatic cancer. He was a creator in the 1940s of the jazz style known as bebop. He was a familiar figure on concert stages, blowing his bent trumpet with trademark bulging cheeks. We'll take a longer look at the work of Dizzy Gillespie and Rudolf Nureyev after the News Summary. Now it's on to the CIA Director, the North Sea oil spill, Ron Brown's confirmation hearings, and Clinton and special interests. SERIES - PARTING WORDS

MR. LEHRER: We begin tonight with another of our "Parting Words" conversations, interviews with top outgoing officeholders of the Bush administration. It is with Robert Gates, who will be parting after 14 months as Director of Central Intelligence, 26 years as a career intelligence officer with the CIA. Mr. Gates, welcome.

MR. GATES: Thank you very much.

MR. LEHRER: First on the, the Iraq missile issue, what kind of missiles are these exactly?

MR. GATES: They're SA-2 and SA-3 surface to air missiles for use against, against generally combat aircraft.

MR. LEHRER: Where do they come from?

MR. GATES: Well, they're primarily Soviet originally, sold to Iraq in an earlier time when the Soviets were selling weapons to the Iraqis.

MR. LEHRER: To whom are they a threat, other than flying aircraft? I mean, is that their only purpose?

MR. GATES: That is their only purpose.

MR. LEHRER: How long have they been there?

MR. GATES: Well, they've been moved in just fairly recently actually, and it's part of a larger pattern on the part of Saddam Hussein over the past several months challenging the U.N. resolutions in a number of areas. It follows -- the movement in of these missiles follows the violations of the no-fly zone by Iraqi high performance combat aircraft. It follows their violation of the resolutions with respect to their actions toward the U.N. relief teams, as well as the U.N. inspection teams. So this is part of a pattern that's been building now for some months.

MR. LEHRER: I want to come back to that in a minute, but how many of these missiles are actually on the ground there?

MR. GATES: Not too many at this point. There are just a handful on the actual sites.

MR. LEHRER: Are the launchers ready to be fired though? Are they mobile launchers?

MR. GATES: Yes.

MR. LEHRER: They are?

MR. GATES: They are.

MR. LEHRER: Taking this and all the things that you just mentioned, what does your agency believe is behind all of this? What's he up to this time?

MR. GATES: We think there are three possible motivations. One is that internal conditions have worsened in Iraq over the last six months or so since he executed a number of businessmen who were violating his rules, but actually getting food and so on to the, to the people. So one possibility is that it's to divert popular attention in Iraq from growing difficulties there. Another is that he's under pressure from people in his own Takriti clan and others in the leadership to show some independence and stand up against the U.N. and the United States. The third is that the may see that he has -- he may feel that he has an opportunity to try and push back these U.N. resolutions and gain a little more running room during the transition in the United States.

MR. LEHRER: Is -- what does your intelligence say just about how firm he is in charge? Is he still running things? Is it still Saddam Hussein is the enemy and Saddam Hussein who's running that country?

MR. GATES: I think that's still the case, yes. He is very unpopular. Conditions inside Iraq are very bad, but he has a pervasive security service. He has extraordinary security measures in terms of his own person, and the likelihood of some kind of a popular uprising being able to put him out I think is rather small at this point.

MR. LEHRER: Is there any way to speculate authoritatively on what he may do with this ultimatum?

MR. GATES: It's -- it is -- it's a good question. I'm not sure. He has shown in the past a remarkable ability to miscalculate the determination of the coalition in terms of his actions and their actions. I think that he -- he has under-estimated the determination of the U.N. before to enforce its will. We will see whether he does so again.

MR. LEHRER: As a practical military matter, would it be hard to take out those missiles?

MR. GATES: I don't think so particularly.

MR. LEHRER: I mean, it wouldn't be a major military operation?

MR. GATES: I don't know what the U.S. might have in mind, what the coalition may have in mind in terms of their options, but in terms of that particular kind of target, it would not be a major, a major operation.

MR. LEHRER: So a few fighter bombers could go in there and take him out pretty quickly?

MR. GATES: Well, I don't know what the nature of the response might be, and I think it's probably well just to leave that uncertain.

MR. LEHRER: Sure, but just in general terms, we're not facing a major military action if, in fact, he says, he stares us down, and he doesn't blink, we're not facing a major military action just to take out those missiles, is that --

MR. GATES: I think it's fair to say not facing anything along the lines of some sort of ground action.

MR. LEHRER: Yeah. Okay. Well, let's go on to some other, other trouble spots in the world. Right next door, for instance, Iran, there have been, you've spoken out about that recently, in fact, about chemical warfare capability and whatever. What is the status of that now? What has Iran been up to?

MR. GATES: Well, they're in the process of rearming in a major way. They have a five-year re-armament program. They've bought three diesel class submarines from the Russians. One of them has been delivered already. They are, they have bought high performance aircraft, MiG 29's, Sukoy 24's. They're buying missiles from North Korea, nuclear technology from China, tanks from other countries. It's a, it's a major build-up on the part of Iran.

MR. LEHRER: For what purpose?

MR. GATES: Primarily, I think, to reassert themselves as the leading force in the Gulf. I think they would like to be recognized as the dominant, as the dominant country in the Gulf. I think subordinate reasons are to re-establish their military power vis- a-vis Iraq, and perhaps also put themselves in a position to challenge outside powers in the Gulf.

MR. LEHRER: Is this something we should be worried about, "we" meaning the United States and the West?

MR. GATES: I think that any time you have that kind of an arms build-up in the Persian Gulf, given our dependence on oil there and the importance of countries like Saudi Arabia and other neighbors in the Gulf, it is a concern to the United States. I don't think it's an immediate concern. I think it's a concern that is still several years away. But as we watch companies trying to sell dual use technologies and we watch other countries selling them weapons, this is the kind of problem that needs to be addressed soon if it's to be prevented from becoming a really serious problem in several years.

MR. LEHRER: I assume that you said all of that to the President and to your successor at the CIA and anybody else who will listen?

MR. GATES: We are saying it to everyone who will listen.

MR. LEHRER: Okay. Let's move on to Russia and the other republics of the old Soviet Union. The big question that most Americans keep asking -- I realize it's a very simplistic question -- but it always has to do with Boris Yeltsin. What is your projection now as to how, how this man is doing and whether he's going to survive as President of his country, Russia?

MR. GATES: The focus on Yeltsin is an appropriate focus. I think my view and that of most analysts of the Soviet Union -- Russia - - is that Yeltsin comes as close to being indispensable to the reform process in Russia as anyone in the political process can be. His political skills, his popularity at home, all are absolutely critical. There's no question but what he was weakened somewhat by this constitutional crisis late last year, and being forced to accept a prime minister not of his own choosing, the replacement of Gaidar, the reform economist. But his personal position would seem quite secure to us at this point.

MR. LEHRER: But going into the long-term, the other major question and the only one that really matters in the final analysis is: Do you believed, based on the Yeltsin thing and all other factors, that Russia is, in fact, going to end up a viable democracy?

MR. GATES: I think that in the long-term the move toward democratic government and economic reform or economic change in Russia will survive, but I think it's very important for people in the West to have some perspective. There's too much of a tendency here to take the kind of approach we do to our own politics on a daily basis, to pull the whole thing up by the roots and see if it's growing, or to take its temperature, who's in, who's out, who's up, who's down. This is a very long process that's going to take place in Russia. It'll take decades for this country to go through this transformation, and what we need to be able to do, both as an intelligence service and others trying to help people understand, is back way and get some perspective, is this overall process of reform inching forward, or has it stopped? Our view is that it is continuing to inch forward, but we have to realize there are going to be detours, there are going to be developments we don't like. We have to find some middle ground between euphoria and depression, depending on the day's headlines out of Moscow.

MR. LEHRER: You spent a good part of your 26 or so years at the CIA in analyzing the Soviet, what used to be the Soviet Union, et cetera, and as you know, the conventional wisdom is that that was the CIA's biggest failure and that it did not see the failure of communism in Eastern Europe and in the Soviet Union and did not see this collapse coming. Is that, as you go out of office and you leave the CIA, is that -- do you consider that a justified wrap?

MR. GATES: No. It also is not consistent with the facts. CIA, from the late 1950s on, documented the growing weakness of the Soviet economy and the social consequences of that. It also documented the political paralysis as it developed in the country. As we moved into the 1970s, the intelligence community documented the growing crisis inside the Soviet Union. I think the record on predicting what happened in Eastern Europe and in Yugoslavia is an excellent record, and the documents show it. The agency --

MR. LEHRER: The public perception is not that, Mr. Gates.

MR. GATES: No, I, I agree. But the perception of a great deal about American intelligence is inaccurate, and one of the reasons for the initiatives that I've taken toward greater openness about what the U.S. intelligence does and how we do it is to try and help not only correct the record but to have people, let people have a better understanding of why the policy makers in this government continue to value intelligence. If we were wrong all the time, I think you would find more opposition in Congress and in, in the executive branch to continued levels of funding and support for us, and you don't find that. We're going through the same kind of downsizing as everyone else in the government. But this river of information that we continue to provide, whether it's on the former Soviet Union or Russia today, whatever, the information we provide on Somalia, on Bosnia, on India and Pakistan, on North Korean nuclear programs and so on, it is this river of information that pays the rent for U.S. intelligence. And I would say that one of the reasons why I believe we ought to de-classify some of our historical documents is precisely to correct the public record in terms of performance on some of these critical issues.

MR. LEHRER: Finally on a personal thing, you, you served in the agency for 26 years. You had a tough time twice, in fact, on the confirmation hearings situation, and you finally became the top guy, and then after 14 months you have to go. You must have a feeling of great frustration.

MR. GATES: No, not at all. As a matter of fact, I feel very satisfied and very content with what we have been able to accomplish. In the last 14 months, we have re-oriented the intelligence community toward a post Cold War world in terms of our targets and our ability to provide actionable intelligence. We've restructured the intelligence community and made major organizational changes, and we've made a lot of progress in changing the culture, in de-classifying documents, in opening the place up to people. We have furthermore created a number of task forces and activities that I think are going to present my successor with some opportunities for and options for re- organizing CIA and integrating the intelligence community in a way that then continues this process of change. So it's been a very satisfactory year. There have been a lot of -- there has been a great deal of cooperation in the intelligence community I think to a degree that I haven't seen any time in my career.

MR. LEHRER: And what are you going to do now?

MR. GATES: Well, as my kids would put it, it's time to get a life.

MR. LEHRER: I see. Okay. Congratulations to you on getting a life and my best to you, and thank you very much.

MR. GATES: Thank you.

MR. MacNeil: Still ahead on the NewsHour, the Ron Brown confirmation, Clinton and special interests, California water wars, and remembering two giants. FOCUS - ADVISE AND CONSENT

MR. MacNeil: Next, the confirmation hearings of Ron Brown. The 51-year-old Washington lawyer, lobbyist and chairman of the Democratic Party is President-elect Clinton's choice to be Secretary of Commerce. Today Brown went before the Senate Commerce Committee to state his case and answer questions.

RON BROWN, Commerce Secretary-Designate: When announcing his intention to nominate me to be Secretary of Commerce, President- elect Clinton indicated that he wanted to make the Department of Commerce a powerhouse, and that he expected it to play a more visible and powerful role in rebuilding the American economy. In the answers I have submitted to this committee's written questions, I have set out my thoughts about the Department and its challenges in more detail. One point I would like to re-emphasize, however, and that is that I will be relentlessly aggressive and pragmatic in advancing the health and growth of the American economy. The question before us is how best to design trade, technology, and development policies, not theoretical arguments about whether we ought to have those policies. Action, not ideology, will be my watchword.

SEN. ERNEST HOLLINGS, Committee Chairman: I have had the opportunity, as you and I well know, to cross-examine you relative to the law firm Pat & Boggs, its representation and affiliation, if any, in connection with BCCI, the representation of Haiti, the DC Bomb Contract, the DC Pension Fund Management Contract, the Kemfix. Any one of those cases could be gone into very thoroughly and over a five minute period. I just want to publicly state that I have gone into those very thoroughly and not taken them casually, and I'm satisfied that you acted properly. In my mind, that's not to be questioned by the committee unless it makes for a bad record in the sense that somebody would say you represented a distasteful client. Let the record show that before I got to the Senate I used to represent murderers. Sen. Breaux.

SEN. JOHN BREAUX, [D] Louisiana: Thank you very much, Mr. Chairman. What about the fact of the law firm -- and apparently you represented a number of Japanese electronic companies? I guess the Post this morning as, I guess, the, not the statement that it would be a conflict, but I guess the concern that some have raised, that that somehow would prevent you as Secretary of Commerce from representing American electronic industries, how do you plan to handle that as Secretary?

RON BROWN: On the question of representing American subsidiaries of Japanese electronics companies, yes, I did represent them. They were some of my earliest clients. There is absolutely no conflict there. I'm going to resign from the law firm effective January 20th, have no financial interest in the law firm after that, have no financial interest in the clients, so there is, there is no question of conflict. I know that issue has been raised, and frankly I don't, I don't really understand it. I believe that the fact that I've had considerable contact with American subsidiaries of Japanese corporations is going to make me a much stronger and more effective Secretary of Commerce.

SEN. JOHN BREAUX: Did you lobby for Jean Claude DeVallier, a dictator of Haiti?

RON BROWN: I did represent the government of Haiti, and I'm also proud of that representation, just as Congressman Rangel indicated. I worked closely with members of Congress. I worked closely with the State Department. I worked closely with United States ambassadors to Haiti. We have to understand that Haiti had good diplomatic relationships with the United States at that time. It was a poor black country in the Caribbean. I wanted to do all I could to improve the lives of the people.

SEN. TRENT LOTT, [R] Mississippi: But you have raised large sums of money from individuals, corporations, PACs, special interests, and, and the combination of these convey perhaps at least the appearance that your nomination is at odds with the standards and concerns raised by President-elect Clinton, both in the campaign and the transition, because of these, you know, the allegations and the involvements that you have had with a number of situations that have been investigated and questions have been raised, so just right here at the beginning, and as far as I'm concerned, how do you respond to the fact that all this background and these things perhaps send the wrong message as we begin with this new administration?

RON BROWN: Well, I would disagree, Senator, that it sends a wrong message. I think it sends the right message. I think it sends a message that I'm someone who's a good advocate, who gets things done. I would think that President-elect Clinton would want somebody in the Department of Commerce who has had successes in law and business, who has been involved in business in our country. And I intend to fully abide by all the ethics requirements of the, the Government Ethics Department, of the Commerce Department, all of those that President-elect Clinton has set out, and frankly all of those that I have led my life by. So I don't think there's going to be a problem of conflict or ethics or anything else of that matter.

SEN. TRENT LOTT: Thank you, Mr. Chairman.

MR. LEHRER: The committee chairman, Sen. Hollings, said he expected a committee vote on Brown right after the presidential inauguration. Confirmation hearings for the other members of the Clinton cabinet will be held tomorrow and all next week. FOCUS - INTERESTED PARTIES

MR. MacNeil: We turn now to another view of the Clinton cabinet and what it is or should be interested in. Judy Woodruff has our report.

MS. WOODRUFF: The most agitated President-elect Clinton has appeared in public recently was a few days before Christmas when he was asked about the complaint of women's groups that he had not appointed enough women to his cabinet.

PRESIDENT-ELECT CLINTON: [December 21, 1992] But I think it's interesting that for purposes, that they're playing quota games and math games, and they have diminished the chairman of the Council of Economic Advisers and the director of the Environmental & Protection Agency, and they would have been counting those positions against our administration, those bean counters who are doing that if I had appointed white men to those positions, and you know that's true. I have nothing else to say about this issue.

MS. WOODRUFF: The National Organization for Women and other women's groups had not counted Carol Browner and Laura Tyson as top appointees because their jobs don't put them in the cabinet.

PATRICIA IRELAND, NOW: [December 21, 1992] In fulfilling the promise that the administration's appointments would look like the rest of the country and be as diverse as the entire country, we wanted to underscore that women are looking for a promise made to be a promise kept.

MS. WOODRUFF: The pressure these groups were exerting and Clinton's reaction to it was the first visible clash since the election between the incoming Democratic President and the interest groups that have long made up the activist core of his party, but that for the past 12 years have felt shut out of White House decision making.

JUDITH LICHTMAN, Women's Legal Defense Fund: I can't think of three administrations that could be less hospitable to the concerns of women and their families than the past three, two Reagan and one Bush administration.

TOM DONAHUE, AFL-CIO: Workers weren't on that screen. They just didn't focus on the problems of working people, in my view.

BARBARA ARNWINE, Lawyer's Committee for Civil Rights: The most obvious shift was the lack of access. Suddenly the doors were closed.

MS. WOODRUFF: All of the main interest groups associated with the Democratic Party say they expect much better under the Clinton administration. After 12 years out in the cold, they are all looking for a big shift in climate. High expectations are what most of these groups have had since they came into being decades ago.

WILL MARSHALL, Progressive Policy Institute: And I think that what happened was in the last generation that the governing wing of the Democratic Party had -- there was a collapse in the certitude, the certainty about what we stood for. This all happened -- it's a familiar story -- in the late '60s -- and what happened was into the vacuum stepped a lot of groups that were newly empowered in many cases. A lot of these groups became much more powerful in the late '60s on, developed mass bases, grassroots bases, often fueled by direct mail fundraising, and during that period they began to become much more strenuous and much less compromising on what they pressed on the party.

MS. WOODRUFF: The more powerful these groups felt they were, the more demands they made on the Democratic Party. Eventually they were viewed as hurting the very party and interests they had been created to help. Many blamed them for the Democrats losing the White House in five out of the last six elections.

JOE KLEIN, Newsweek: These groups have been out of power for so long that their priorities have become anachronistic in some ways. Time has moved on. We're in a new era now of governance, post- modern era when, you know, centralized bureaucracies are becoming anachronistic. And in many areas, the Democratic Party's interest groups have become reactionary. They want to reinvigorate bureaucracies that are part of the past.

JUDITH LICHTMAN: I think that's just nonsense. I don't think anybody, and I certainly don't think it's the women's rights or civil rights community, are coming to these issues with the doctrinaire or rigid solutions. I just don't hear that.

MS. WOODRUFF: Judith Lichtman of the Women's Legal Defense Fund says her group and others are most interested in health care and workplace improvement that will benefit women.

JUDITH LICHTMAN: I don't think that the women's groups are coming to the table asking for huge infusions of capital that don't exist. We are saying to the extent that you're fashioning programs to address the nation's domestic ills, don't you invest that money without recognizing the unique concerns and abilities of women in that economy.

MS. WOODRUFF: But the first demand made of Mr. Clinton was to appoint a high number of women to top positions in his administration. Newsweek's senior editor, Joe Klein, says this strategy could backfire.

JOE KLEIN: Because throughout this campaign Clinton ran as someone who opposed group rights, was very much in favor of individual responsibility, individual opportunity, and these sorts of pressures coming from groups, I think, were things he ran very far away from during the, during the campaign for a real purpose, which is that the, the vast majority of people are opposed to.

MS. WOODRUFF: Another group looking to remedy past discrimination are black Americans. Barbara Arnwine of the Lawyers Committee for Civil Rights under the Law expects that under Clinton there will once again be aggressive enforcement of civil rights laws.

BARBARA ARNWINE: I think that on the question of general following and enforcing the law and not trying to deter the enforcement efforts of the agencies that you're going to find a lot of, a lot of consensus, that people in fact believe that that's been horrendous and it has undermined the stature of the federal government.

MS. WOODRUFF: But she predicts on the subject of special rights for aggrieved minorities, there will still be controversy.

BARBARA ARNWINE: Questions of promoting affirmative action, policies, race conscious remedies, that's where you're going to have more difference I think, where people are not going to be as consensus-based.

MS. WOODRUFF: Will Marshall is president of the Progressive Policy Institute, the moderate Democratic think tank, many of whose ideas Gov. Clinton has helped to promote. Marshall sees conflict ahead for civil rights groups that don't update their agendas.

WILL MARSHALL: We still need to be vigilant about enforcement but there isn't much more to accomplish in that arena. I think the main emphasis now has to shift to the economic front. How do we bring more minority Americans into the free enterprise system? How do we make 'em stakeholders? How can we reduce disparities not only of wealth but also capital ownership? It's a tremendous problem in this country. The old agenda, as important as it was for removing barriers, doesn't really address the problems facing say the urban underclass or theproblems of the enormous numbers of minority children growing up in poverty.

MS. WOODRUFF: Barbara Arnwine agrees but says the only way to make sure poor black Americans benefit from any economic growth is with programs targeted to blacks and written into law.

BARBARA ARNWINE: I think the economic package is going to be key, because if it's, in fact, to revitalize this country and if it's, in fact, to deal with the question of urban relief, then there's going to have to be some ideas towards targeting to make sure that the beneficiaries aren't just people who are traditional business owners, that, you, in fact, have an opportunity for people who are the very bottom of our society to have some extra opportunities to advance.

MS. WOODRUFF: Opportunities to advance are also on the agenda of organized labor. Their leaders know they start out at odds with a new President from a right-to-work state, who hasn't always been sympathetic to their cause.

JOE KLEIN: He is pretty much a free trader, and they've been pushing for a form of protectionism, and I think that the future of the industrial union movement is to try and raise wages in the rest of the world to the level, the levels that we have here. Their job in protecting the American worker was accomplished in the '30s and '40s.

TOM DONAHUE: I don't think that the goal of having a job for every person is out of date, and I don't think that the effort to have good jobs in America is out of date.

MS. WOODRUFF: At the same time, Tom Donahue, the No. 2 man at the AFL-CIO, says workers do deserve a measure of protection.

TOM DONAHUE: If we're going to say to people that there's a great national effort we have here, and I believe that very deeply, that we have to compete in the world, then we have to say we're going to do that as a national unit, and we're going to find ways to provide some degree of national security to workers.

MS. WOODRUFF: But given Bill Clinton's unwillingness to denounce the free trade agreement so opposed by organized labor, Donahue says he knows unions have their work cut out for them, including changing the perception that they are stuck in the ways of the past.

TOM DONAHUE: I think that what we've demonstrated over the last - - certainly the last 12 -- probably the last 16 or more years is great flexibility. We have negotiated contracts and concessionary agreements. We've gotten rid of work rules. We have made every effort to work within a changed employment frame work. I think that, that we're lovers, not fighters.

MS. WOODRUFF: Leaders of environmental groups make no such claims of flexibility, despite having dealt with unfriendly administrations over the past decade. In fact, they say it was only by relentless pushing that they were able to achieve many of their goals. But now, says Carl Pope, head of the 600,000-member Sierra Club, they have a full agenda of speeding the country's mood toward what they call environmental sustainability and a President who is ready to listen.

CARL POPE, Sierra Club: He has not been an environmental leader in Arkansas, and I would not expect him personally to be a strong environmental advocate within his administration. I obviously would expect, and we're already seeing, I think, the Vice Presidents play that role. But I think what Bill Clinton demonstrated in Arkansas was that he would take the path of environmental protection where that path was open. We're going to have to open the path for this administration.

MS. WOODRUFF: Pope says in order to do that, his and other environmental groups will have to give up their loud, pushy, defensive style, and adjust to changed circumstances.

CARL POPE: When you're trying to be in a leadership position, you have to be more strategic, you have to sometimes be more patient, and you frequently have to be quiet. This may be our last and best chance to make all this happen, and it's very important that we be extremely disciplined, extremely strategic, and extremely thoughtful.

MS. WOODRUFF: Joe Klein of Newsweek says that is the right strategy for all of these groups to follow.

JOE KLEIN: If Democratic pressure groups continue to emphasize things that distinguish them from other people, I think it's going to be a disastrous effect on the Clinton presidency and on the Democratic Party.

MS. WOODRUFF: Will Marshall of the Progressive Policy Institute argues the interest groups are only hurting themselves if they don't accommodate their agendas.

WILL MARSHALL: To subordinate their demands to some broader agenda for reviving the economy, for reviving many of our social institutions like education and our welfare systems, getting the health care crisis under control, because the Democrats don't do the big things, if we don't get those right, we're not going to be in a position to help anybody accomplish the more narrowly tailored agendas that are important but nonetheless subordinate to these larger tasks.

MS. WOODRUFF: Barbara Arnwine of the Lawyer's Committee for Civil Rights adds that for all Mr. Clinton's commitment to the cause she represents, she knows there will be political pressures constantly pushing him in a different direction.

BARBARA ARNWINE: Clearly there will be people like myself and others who will be saying, Mr. President, it's important for you to have throne leadership in this area. Our country has been rocked to the core by racial matters in the last number of years, everything from Bensonhurst to the Los Angeles riots, you're just, you've had it. And it's not going to go away, and it's very important for the President to have an aggressive and affirmative program in this area, and I think that it's going to be -- it's going to be competition for the soul of the President.

MS. WOODRUFF: Bill Clinton has a reputation for being a master at holding different interests together, but even his greatest admirers say it will take extraordinary powers of conciliation to manage the pressures from Democratic groups that have been out of favor as long as they have. FOCUS - TROUBLED WATERS

MR. LEHRER: Next tonight the fight for water in California. As the state faces a seventh year of drought, new federal legislation and New Year's blizzards may offer some relief, but not enough to bring permanent peace to California's political wars over water. Correspondent Spencer Michels reports from public station KQED-San Francisco.

MR. MICHELS: The Northern Snow Pack is the source of much of the water that makes naturally dry California a habitable place. The mountain snow melt feeds the natural streams and manmade channels that carry water hundreds of miles to farms and urban populations. In the 1930s and '40s the political clout of California's farmers won federal public works projects that channeled the runoff into vast irrigation systems. One such project was Shasta Dam on the Sacramento River. Completed in 1945, Shasta was the key facility in the ambitious Central Valley Project. Canals, pumps, other dams and lakes were built to distribute Northern water to arid but fertile lands hundreds of miles away. For decades, agricultural interests controlled water allocation, guaranteeing California farmers enough to make them the most productive in the nation. But big time farming may have been a victim of its own success. Agriculture uses 80 percent of the state's entire water supply, a fact thirsty cities couldn't ignore. As California's urban population grew, its need for water increased. Communities in the arid Los Angeles Basin have been scheming since the early 1900s to buy or steal water from anywhere they could find it to fuel the local economy. Water wars were the stuff of legend. By the 1980s, the need for even more water outstripped the locally developed supply. The Metropolitan Water District of Southern California, known as the MET, provides water to more than 15 million people. Urban areas were politically stymied in attempts to build new canals to bring fresh supplies from Northern California mountains. MET officials decided it was time to try to get water already allocated to its traditional allies, the farmers, and, if necessary, to pay high prices for it. MET General Manager Carl Boronkay.

CARL BORONKAY, Water District Manager: There was no alternative. We're driven to go to agricultural use to supplement the urban water supply. Not a great deal would be necessary, but that's where the water is, that's where we have to go.

MR. MICHELS: Urban water officials and business joined in a new alliance to break agriculture's traditional dominance in water politics. They allied themselves with commercial fishermen and environmentalists who want more water to support fish and wildlife. Together, these strange bedfellows supported federal water reform legislation signed into law last fall by President Bush. It was written by Sen. Bill Bradley of New Jersey and Congressman George Miller of California.

REP. GEORGE MILLER, [D] California: You had to break the hammer lock that the farmers had on the water. They kept going to Washington with their political power and saying, don't tell us what to do; we want to do it our way. Well, their way has turned out to be very, very expensive not just for the environment but for the rest of the economy of this state and clearly for the taxpayers of the state and the nation, and that's why it's come to a screeching halt.

MR. MICHELS: Miller and the environmentalists charge that the huge pumps that send water south and the giant canal systems built by the federal and state governments have caused serious environmental problems.

REP. GEORGE MILLER: As we have taken more and more water and put into concrete-lined canals and shipped it to the Central Valley, we have drained away the life support systems for the wetlands, for the migratory fish, for the indigenous fish and the water fowl. Where we once had hundreds of thousands of fish on an annual basis, we now are down to the tens and the fifties and the hundreds.

MR. MICHELS: Environmentalists blame greedy farmers for many of those problems. Critics claim that crops like alfalfa, cattle feed or rice use more water than is justified in a dry climate, or they point to cotton, another water intensive crop grown in arid regions. They charge the federal government is subsidizing inefficient farmers to the tune of nearly half a billion dollars a year by selling water far below its real cost. The Miller-Bradley Bill raises the price a little, and the new law states for the first time that the purpose of the Central Valley Project includes environmental protection. It sets aside about an eighth of the water to cure environmental damage. Forty-two-year-old farmer Chris Hurd believe the water that will go to the environment will cut into the agricultural allotment he's been guaranteed for years. Hurd farms almonds, onions, and other crops on 2100 hundreds in California's Central Valley. Because of six years of drought, he's getting only 25 percent of the water he's supposed to receive. Now because of the new law he expects to get even less water.

CHRIS HURD, Farmer: In dry years there's a good chance I will receive zero because the other environmental concerns will get first allocation of that water.

MR. MICHELS: What farmers see as a threat, environmentalists see as an opportunity. For example, the legislation may well mean that the once vigorous San Joaquin River will flow again. It has been dry since the 1940s because water is diverted to farms.

BILL LAUDERMILK, Biologist: It's hard to imagine this, but not all that long ago we had runs of nearly 60,000 salmon migrating up- stream to spawn near Fresno. Moving through this --

MR. MICHELS: Bill Laudermilk is a biologist for the California Department of Fish & Game. For 10 years he's inspected with dismay this parched channel and worked behind the scenes to bring back its water. Now encouraged, he thinks the new law will help the state double the number of salmon and steelhead by the year 2000.

BILL LAUDERMILK: Salmon have an ability and a life history strategy to essentially move into unoccupied habitats. So it's very likely that adding water to this river system would result in a restoration of salmon around here.

MR. MICHELS: The new law will also allocate more water for grassy, marshy areas used by millions of birds and thousands of duck hunters. Because of water divergence, wetlands have dried up. Their total acreage has shrunk from four million a century ago to just three hundred thousand today. And the bird population has declined drastically. The new law will ensure more water and more birds. Another provision may be the most controversial. It allows farmers to sell a portion of their water allocation to cities or other users for a profit, a practice previously illegal. For federal water, California farmers pay around $60 per acre foot. An acre foot is the amount it takes to cover one acre of farmland one foot deep. By contrast, some cities are paying five times that much for their water that comes from other sources. Farmers groups and agricultural water districts have fought for years against water transfers. They feared that individual farmers would be attempted to abandon agriculture if they could make more money selling their water. The MET's Carl Boronkay lobbied hard and successfully to change the old law, convinced that farmers would sell to him if given the chance.

CARL BORONKAY: It's tantamount to creating a reservoir overnight from which water can be drawn voluntarily for payment but nevertheless a new source of water. There hasn't been anything like it for a long time, nothing of that size.

MR. MICHELS: Attorney Stuart Somach represents agricultural water users and is furious at what he considers a large water graft.

STUART SOMACH, Lawyer: I just find the notion that we found that new source of water to be about as outrageous as saying that I've heard through this whole process, and you're not talking about a little hit under any circumstance.

MR. MICHELS: Farmers like Chris Hurd say they won't sell water even for double or triple what they're paying for it.

CHRIS HURD: It's funny because in the dry years that there might be a market for it is when I as a farmer would need water even more to keep my permanent crops alive or what row cropping I'm able to do. Soas a, as a water marketer, I'm really not interested. I'm interested in a 20-year commitment I've made here to the banks.

MR. MICHELS: Nevertheless, under a state-run system, some farmers have sold water, finding it more profitable than farming. Congressman Miller believes they can and should produce crops with less water and less waste.

REP. GEORGE MILLER: They can't grow it the way they're growing it now. We see all over the world these same crops are grown with much less water, but it requires an investment in technology, in computerization, in satellite coordination, in understanding the weathers and the soils and changing the way that you deliver the water.

SPOKESMAN: Why did we ever open this ground up? Why did we encumbrance ourselves in debt with the blessing of the federal government if the intention of the project for the long-term was to deliver the water to LA?

MR. MICHELS: Who gets this water will be decided in Congress, the courts, and the federal bureaucracy, as battles continue over the new law. But the Miller-Bradley Act is a political milestone, a sign that agriculture can no longer call the shots in California's water wars. FINALLY - 2 GREAT LEGENDS

MR. MacNeil: We close tonight with a remembrance of two world renowned artists who died today, Ballet Star Rudolf Nureyev and Jazz Great Dizzy Gillespie. Along with Charlie Parker, Dizzy Gillespie trumpeted the bebop jazz style into being in the 1940s. He went on to become one of the most popular jazz performers of all time. We have an excerpt from a 1984 concert. Pianist Chic Harajea and saxophonist Stan Getz joined Dizzy at the White House.

[PERFORMANCE BY GILLESPIE]

MR. MacNeil: Rudolf Nureyev stunned the dance world in 1961, when he defected to the West from the Soviet Union. He became one of the most celebrated dancers in the world. Shortly after he defected, Nureyev re-choreographed Tchaikovsky's "Swan Lake." Tonight we remember him with an excerpt from that ballet recorded in 1966. His partner then and throughout most of his career was the late British dancer Margo Fontaine.

[PERFORMANCE BY NUREYEV] RECAP

MR. LEHRER: Again the other major stories of this Wednesday, the United States, Britain, and France sponsored a United Nations ultimatum to Iraq to move anti-aircraft missiles from Southern Iraq within 48 hours or face military action. On the NewsHour tonight, CIA Director Robert Gates said Iraq has deployed a handful of mobile missiles in the no-fly zone. He said it would not require a major military operation to destroy them. And the tanker ship aground off the shore of Scotland continued to spill oil into the North Sea. Good night, Robin.

MR. MacNeil: Good night, Jim. That's the NewsHour for tonight. We'll see you tomorrow night. I'm Robert MacNeil. Good night.