The MacNeil/Lehrer NewsHour

MR. LEHRER: Good evening. Leading the news this Monday, Imelda Marcos was found innocent of looting the Philippine Treasury to buy art work in American real estate. Pres. Gorbachev opened the Soviet Party Congress with a call for reforms, and East German factory workers staged protest strikes. We'll have the details in our News Summary in a moment. Judy Woodruff is in New York tonight. Judy.

MS. WOODRUFF: After the News Summary, we go first to Imelda Marcos [FOCUS - ACQUITTED] and ask two reporters about the verdict to acquit, then from Moscow [FOCUS - PARTY APART?] on what Mikhail Gorbachev can expect from this important party congress, a report from East Germany on the bumps in the road to economic change [UPDATE - MARK OF CHANGE] and a look at some of the human hazards involved in keeping your grass green [FOCUS - DANGER IN THE GRASS?].NEWS SUMMARY

MS. WOODRUFF: A federal jury in New York today acquitted Imelda Marcos on racketeering and fraud charges. The former Philippine first lady was accused of conspiring with her late husband, Ferdinand Marcos, to buy real estate, jewelry and art with $222 million allegedly stolen from their country. As she left the courthouse, Mrs. Marcos said, "A great burden is lifted. I'm glad it's over. God bless America." Mrs. Marcos could have faced up to 50 years in prison and $1 million in fines. Saudi business Adan Khashoggi was also cleared of fraud charges in the case. He had been accused of helping Mrs. Marcos hide her U.S. holdings. We'll have more on this story right after the News Summary. Jim.

MR. LEHRER: Soviet Pres. Gorbachev addressed the Communist Party's 28th Congress today in Moscow. He said the Soviet Union is rapidly becoming a second rate power and it will get worse if bureaucrats continueto stand in the way of reform. We have a report from Moscow by Tim Uert of Independent Television News.

MR. UERT: Mikhail Gorbachev entered the vast palace of Congress to muted applause. In the past, party leaders have been given standing ovations. But hardly seems happy now, not radicals like Boris Yeltsin who say the pace of reform is too slow and not hard line Marxists who say it's too fast. His own speech lasted nearly two and a half hours. The message, if reforms were blocked, there would be dark times. To blame perestroika for current problems was simply rubbish. But there were concessions to the conservatives, Mr. Gorbachev promising the free market he wants would not be a move away from socialism. The response was decidedly tepid.

MR. LEHRER: We'll have more about the party congress after the News Summary.

MS. WOODRUFF: Several thousand East German factory workers went on strike for part of the day. They are trying to make sure their jobs are protected as the nation moves to a capitalist system. The strike was organized by West Germany's largest union, which now represents nearly 2 million East German workers. Many East Germans spent the day comparison shopping with their new their currency, the West German mark. The two countries merged their economies yesterday. East German grocery store shelves have never been more fully stocked, but many basic goods went up in price.

MR. LEHRER: There were published reports today Pres. Bush will propose a new nuclear strategy for NATO. He will attend the NATO summit in London later this week. The report said he will call for a reduced reliance on nuclear weapons. Speaking at his vacation home in Kenneybunkport, Maine, today, Mr. Bush said there will be some interesting developments at the summit. He said some will call it dramatic policy changes and others won't. Mr. Bush said he had sent a series of proposals to the other 15 allied nations. The two day summit begins Thursday.

MS. WOODRUFF: In the Philippines, provincial officials said today that they would try to negotiate with Communist rebels for the release of an American Peace Corps volunteer. Timothy Swanson of Cheyenne, Wyoming, was taken from his home on the Philippine Island of Negros by members of the New Peoples Army on June 13th. They have made no ransom demands. U.S. officials ordered the evacuation of all Peace Corps volunteers from the Philippines last week after threats from the rebels.

MR. LEHRER: Thousands of blacks went on strike today to protest black against black violence in the South African Province of Natal. The African National Congress called the 24 hour general strike. Some 24,000 people have died since 1986 in factional fighting between ANC allies and those loyal to the Zulu Tribe and party. Natal is the only province which remains under the government imposed state of emergency. In the Liberia War today, rebel forces in that West African country attacked the capital of Monrovia and cut all major roads into the city. International phone lines were also cut. Pres. Samuel Doe repeated his offer to include the rebels in an interim government, but rebel leader Charles Taylor rejected the proposal.

MS. WOODRUFF: America's foreign debt went way up again last year, and that means foreigners continued to buy U.S. assets faster than the U.S. bought foreign assets. According to figures released by the Commerce Department, that gap increased by 25 percent to more than $663 billion. The U.S. has been the world's largest debtor nation since 1985. Just two years earlier, it was the world's largest creditor nation. That's it for our News Summary. Just ahead on the Newshour, the Marcos acquittal, Gorbachev faces the Communist Party, tough times ahead for East Germany, and the dangers of keeping your grass green. FOCUS - ACQUITTED

MS. WOODRUFF: The Imelda Marcos story is first tonight. The former first lady of the Philippines was acquitted in Federal Court today of racketeering and conspiracy mail fraud and obstruction of justice charges. Prosecutors had charged Marcos and her husband former Philippine President Ferdinand Marcos with illegally transferring 220 million dollars to the United States. For more on today's verdict we turn to Paul Moses. He is a Reporter for New York Newsday. He has covered the trial since it began 3 months ago. And Stanley Karnow the Author of the Pulitzer Prize winning book about the Philippines called in out image. Paul Moses let me begin with you. What exactly was Mrs. Marcos charged with?

MR. MOSES: Like she was charged with transporting stolen money from the Philippines in to our country and that was really the basis of it and the Government also showed how that money was spent. The real problem with the case is that they never showed that she knew the money was stolen.

MS. WOODRUFF: Again on the charge. The U.S. law that she broke, the theft itself was a Philippine crime, but transferring violated our laws by bringing stolen money and goods into this country.

MR. MOSES: That is right bringing in dirty money into the country would be the crime but you have to know it is dirty.

MS. WOODRUFF: Well what happened the prosecution didn't make the case?

MR. MOSES: There really was no direct evidence that she knew that this money was stolen. There was a lot of testimony that Ferdinand Marcos would have known. Testimony from people that there were kick backs but the testimony about Imelda Marcos really said that she spent it not that she knew where it came from.

MS. WOODRUFF: How close did they place her to the crime they were trying to charge her with?

MR. MOSES: Well the jury didn't think close at all. What I heard when they got into the jury room the first day they took a quick vote and it was 10 to 2 in favor of acquittal. So far as the jury was concerned it was not even a close call at all.

MS. WOODRUFF: Well you were in the Court room was that your impression as well that the prosecution didn't do its job?

MR. MOSES: I thought that it could have gone either way in my own impression but I am not a juror. And you could clearly see by the end of the case that there was this problem with the case this lack of knowledge. The Marcos Lawyer Jerry Spence even made a slogan out of it. Get a LOK on the case, LOK, lack of knowledge. So that must have stuck with the jury when they went to the jury room.

MS. WOODRUFF: Well was it that the Government was counting on circumstantial evidence hoping if they said A and B then C, what?

MR. MOSES: The biggest thing that the government had gone for them that so much money was spent and how could you spend so much money with such a small official income and believe that it was legally earned. That was their basic argument. They had a lot of circumstantial evidence. They relied a lot on representatives of the Marcos's. People who supposedly did their bidding, people who were more involved and try to show their relationship but they never quite made the leap showing that she was personally involved and had personal knowledge of the stolen money.

MS. WOODRUFF: Stanley Karnow why do you think this case fell apart for the Government?

MR. KARNOW: Well I think there were three things. First there was the death of Marcos and that permitted the defense counsel to argue that he may have been a crook but she is just a world class shopper and there is no crime against that. So they couldn't make the link between Marcos's theft and her spending the money. The second thing that I think worked against the prosecution there was a point of not long ago maybe a couple of weeks ago when the judge said that I don't understand what this case is doing in an American Court. This is a case of Philippine corruption. Now the jury was not in the room at the time. The jury was not sequestered during the trial so they could have read it in a newspaper. It was in fact in the New York Times. The third thing and probably the most important thing that defeated the prosecution was that two key witnesses. Filipino witnesses who were you might say the missing links who were going to tell the story about how Mrs. Marcos knew about the money got cold feet at the last moment just before the trial began. Went back to Manilla and decided not to testify. I can only guess why they did that. They look at the Government in the Philippines which is very unstable and they say to themselves how do we know that Mrs. Acquino the President of the Philippians is not going to be on the thrown and some opposition group will come to power which will include pro Marcos elements and then we might be in trouble for having testified against Mrs. Marcos. So they decided to clam up and the prosecution I am told lost two important witnesses that just disappeared.

MS. WOODRUFF: Those two that you just talked about?

MR. KARNOW: That is right.

MS. WOODRUFF: On your first point on Marcos's death last September. Do you think that the Government would have been better dropping the case?

MR. KARNOW: Well I think the case was becoming difficult. They still thought that they had enough evidence against Mrs. Marcos without her husband. But with him gone it makes it much more difficult to show that there was a link between the two of them.

MS. WOODRUFF: Do either one of you know if they considered not going with the case?

MR. KARNOW: I know they considered going with it because they had been working on this case for three years. The Government had been investigating and probing the whole affair for many years. This case has been a big case.

MS. WOODRUFF: Paul do you think there was a case to be made and they just didn't make it?

MR. MOSES: I thought the prosecutors were confident but I thought that the problem with the case was that it was like President Marcos was on trial but he wasn't in the court room. The case seemed to go on and witness after witness would have testimony against him but whole days would go by were there was very little evidence on her at all.

MS. WOODRUFF: They were assuming that the jury would assume that she was aware of everything. Mrs. Marcos was aware of everything her husband did.

MR. MOSES: They tried to do everything that could be done. They had all sorts of bank record but there was never the tell tale signature that they needed.

MS. WOODRUFF: Stanley Karnow do you think there was a case to be made but they just didn't make it?

MR. KARNOW: Well I think as Paul says I think when you look at the indictment there were pages and pages of telephone and telex communications between Marcos and the United States which is a violation of Federal Law to be involved in racketeering and using the United States as a means of communications but that was all against Marcos it wasn't against her and he is quite right it was the ghost of Marcos that was in the court room sort of speak.

MS. WOODRUFF: Well there was no question that the money left the Philippine Treasury. Is that right?

MR. KARNOW: I have no doubt of the pillage and the plunder of the Marcos's it is just that the prosecution was not able to prove that Imelda Marcos was involved in it. Now as I say there were these key witnesses. There have been others that have never appeared in the court room. Imelda Marcos's brother who was the bag man when they were in power. They don't know where he is. Nobody knows where he is.

MS. WOODRUFF: Paul what about the atmosphere in the Court. She came to court everyday dressed in black. She was the widow in mourning. Do you think that had an effect on the jury?

MR. MOSES: Clearly the defense won the battle for the juries sympathy and I am sure that helped but the jury I am sure also focused on the hard evidence.

MS. WOODRUFF: What about the Saudi businessman Khashogi he was also acaudate. Did the case against him hinge on Mrs. Marcos?

MR. MOSES: Not really. The jury could have convicted him without convicting her if they wanted to. But he was acaudate also. It was a complicated case against him and it involved whether he knew about a certain court injunction. There was never any direct proof that he knew about that injunction.

MS. WOODRUFF: Stanley Karnow you know a great deal about the Philippines. What is the impact in this verdict? What is it going to be back there?

MR. KARNOW: Well I think that it is another blow for Mrs. Acquino. She has been having a lot of problems since December. There was an attempted coup against her by military dissidents. She has run in to trouble for example she had some clashes with the United States. She snubbed a visit with Secretary of Defense Cheney back in February. She arrested one of her leading opponents Senator Enrealai who was then released by the courts. The acquittal of Mrs. Marcos which Mrs. Marcos said is our vindication is certainly going to be a boost for the opposition which includes a lot of pro Marcos people from the old days plus a lot of people who were curiously against Marcos but who are now looking for allies. For example the Vice President of the Philippians is a man who used to be against Marcos, turned against Marcos joined Mrs. Acquino then broke with Mrs. Acquino. His wife came to New York to pay her respects to Mrs. Marcos during the trial and in fact gave a speech in Los Angeles not long ago expressing her sympathy for Mrs. Marcos. And thing is if you believe and there is some evidence of this that Mrs. Marcos has been funding some of these opposition groups now that she is free to go back to Honolulu it is possible that these funds will go back to the Philippians.

MS. WOODRUFF: As I read a statement from a government spokeswoman today they made a point of saying that Mrs. Marcos is not permitted in going back to the Philippians.

MR. KARNOW: I am not saying she is going back. I am sure that she won't go back. Money has wings and she can sit back in Honolulu and send back as much money as she wants back from Honolulu to the Philippians.

MS. WOODRUFF: What about the effort by the Philippians themselves to prosecute some sort of case against the Marcos's. That has not began yet?

MR. KARNOW: They have had a so called Committee on Good Government looking in to the so called illegal gotten gains. It has been going on for years. They have discovered that members of the Good Government Committee have been corrupt themselves. So nothing has gotten very far in cashing down the Marcos money and the Marcos's themselves have been out of reach since they have been in the United States.

MS. WOODRUFF: Paul what about the notion, I noticed a couple of jurors said that they didn't know it was proper for the United States to be prosecuting a case that really had to do with another country. How much of that played a role?

PAUL MOSES, New York Newsday: I think that is also a factor and under the law Judge Kanan ruled that the Government had the right to bring the case but even he had some reservations whether it was a good idea. And I am sure that it had to effect a jurors. A conservative person might say the Marcos's were our allies how can we turn on them. Liberals might say the Government knew all along whey are we doing this to the Marcos's. I am sure that the defense brought that out in the closing arguments. I am sure that was an underlying factor.

MS. WOODRUFF: And it might have a bearing on future U.S. efforts to prosecute other foreign leaders like the leader of Panama. IS that right Stanley Karnow?

STANLEY KARNOW, Author: That will be the next test and it will be an interesting one.

MS. WOODRUFF: Gentlemen thank you both for being with us. Stanley Karnow, Paul Moses thank you both.

MS. WOODRUFF: Jim. FOCUS - PARTY APART?

MR. LEHRER: This was opening day of the 28th Communist Party Congress in Moscow, and the lead speaker was the lead player, Soviet President and Communist Party Chief Mikhail Gorbachev. We'll get some analysis of what happened today from an American and a Soviet journalist right after this backgrounder by David Smith of Independent Television News.

MR. SMITH: Just a few weeks ago, this congress was being billed as the day of reckoning for Mikhail Gorbachev and the Communist Party, but the time he opened proceedings to brief applause, it was clear his priority now is to keep the party together and himself in control. One of the first delegates to speak from Leningrad touched a raw nerve of this congress by demanding that the party accept responsibility for the failures of the past 73 years. That was rejected, a vote that told everyone who's control on the floor, the conservatives. But Mr. Gorbachev's speech showed that his ability to deliver change is now in doubt. Five years into perestroika and he was still having to plead his case to a solemn and disenchanted audience.

MR. GORBACHEV: [Speaking through Interpreter] We hear voices today, and sometimes I wonder if there's an opposition, voices saying perestroika is responsible for everything. Excuse my language, but that's rubbish. One of the most serious problems we face now is the bureaucratic machine and all the social forces which are connected with it. I'm not talking about tens or hundreds, but thousands of people who hold stubbornly to the ways of the past and are standing in the way of change.

MR. SMITH: Despite that attack on the old guard, he made no concessions to the radicals. But on the crucial questions of power, the dogmatists had their way. Lenin's principle of democratic centralism, in other words, Moscow's control over everything, remains the credo.

MR. GORBACHEV: [Speaking through Interpreter] What sort of new revived party will this be? It will be a socialist party with a Communist perspective, bringing together workers, peasants, and the intelligentsia. I'm finishing now. Comrades, we face the most complicated tasks, and the solution to them is to go forward with perestroika.

MR. SMITH: Every other party leader has always had a standing ovation. For Mr. Gorbachev, the applause was grudging and short. Some like Boris Yeltsin left the hall keeping their thoughts to themselves. Elsewhere opinion was divided.

OTTO LATSIS, Moscow Communist Party: [Speaking through Interpreter] It was an excellent speech and an important one, because it's consolidating democracy and that's crucial.

MR. SMITH: What did you think of Gorbachev's speech?

NIKOLAI ALEXANDROV, Ukraine Delegate: As far as there was not much news, you know, but you know, we don't expect really to hear something new.

MR. SMITH: A mixed response then, but it's been significant today. The delegates from both right and left here have been stressing the need to give Mr. Gorbachev support because there is for the moment no alternative leader. If the president has his way, it seems, he'll become chairman of the party at the end of this congress and hand over the day to day running to a new general secretary. That won't go to a floor vote, but we found a broad consensus today for Mr. Gorbachev staying at the helm, for putting himself above the fray.

STANISLAV FYODOROV, Central Committee: Without Gorbachev it will be big fight. That's why everybody understands that we have to make him to fight but only on the congress, but not on the state.

MR. SMITH: Do you think that Gorbachev can hold the party together?

MR. FYODOROV: Yes, of course. This is the main goal of Gorbachev whole time.

MR. SMITH: Preventing a split seems a forlorn hope though. Today, for example, a delegate representing the democratic platform, the radical faction, demanded the entire Central Committee be fired. "Sack the lot instantly," he was saying. The way his motion was thrown out was a sign of the confrontation to come.

SERGEI STANKIEVICH, Radical Leader: This congress cannot be united around Gorbachev and the beginning of this congress is the most serious proof of it. You remember that one of the delegates demanded immediate resignation of all Central Committee and all other things connected with this, so it's quite symbolic beginning.

MR. SMITH: So there's going to be a split?

MR. STANKIEVICH: Yes, I think the spit is inevitable.

MR. SMITH: A serious one? Do you expect many people on your side, the radical side, to go?

MR. STANKIEVICH: According to our estimations about 40 percent, not here, not here, of course, not here at this congress, but within the party.

MR. SMITH: 40 percent?

MR. STANKIEVICH: 40 percent of the party,yes.

MR. SMITH: Tonight the politburo member closest to Mr. Gorbachev, Alexander Yakovlev, has made an impassioned plea for the party to face up to its responsibilities and delay no longer.

ALEXANDER YAKOVLEV, Politburo Member: [Speaking through Interpreter] I'm not trying to diminish the responsibility of the party or myself, and what I'm about to say may sound out of place here, but we are late, 50 years too late, and it's giving perestroika a fever.

MR. SMITH: That got a rousing response.

MR. LEHRER: Now for two additional journalistic perspectives. Paul Quinn-Judge is the Moscow correspondent for the Boston Globe; Fyodor Burlatsky is editor-in-chief of Literateuryaya Gazetta, a Soviet journal with a circulation of more than 5 million; he's also a deputy at the party congress. I talked to them earlier today from Moscow. Mr. Quinn-Judge, how would you interpret the message of Gorbachev's speech today?

PAUL QUINN-JUDGE, Boston Globe: Well, it was a very long speech, it was over three hours, so Gorbachev crammed a lot of messages into it. I think there are a bunch of them. One was quite clearly to remind the Communist Party that it was nolonger the leading force, the guiding force in society as it had been for 70 years, that it was going to have to get used to sharing power and to behaving like a parliamentary party and to try to win power. There was an interesting hint that the KGB, the armed forces, may no longer be controlled solely by Communist Party cells working inside their organizations. That's something that I doubt really pleases very many people on the floor of the congress. And finally I think there was Gorbachev's effort to fashion a sort of coalition of moderates and radicals as far as reform is concerned inside the Communist Party, a sort of group on whom he can rely in the future.

MR. LEHRER: What was, how would you describe the general reaction to his remarks, Mr. Quinn-Judge?

MR. QUINN-JUDGE: It's difficult to tell from a distance. Fyodor Burlatsky, who was on the floor, I think would be better suited to answer it. Essentially, people had been expecting a very negative reaction after the Russian Party Conference of last week. It certainly wasn't an enthusiastic one. Gorbachev didn't get much applause, but it was perhaps not as hostile as expected, and Alexander Yakovlev, Gorbachev's closest aide in the leadership, made a tremendous impression with a very defiant, liberal speech at the end of the day that seemed to get even some of the conservatives applauding. So I think on balance, Gorbachev probably feels relatively good about today.

MR. LEHRER: Mr. Berlatsky, would you agree that Gorbachev should feel relatively good about this day?

FYODOR BURLATSKY, Journalist: Yes, I'm sure Paul is right. I was there and I had a feeling that I became more optimistic after the speech and after all this day because after the Russian Party Congress, I had a very bad feeling that the right force was growing. But now I have a feeling that the relation between center and left and maybe between center and some left rights, it can be improved and Gorbachev will be supported by majority now I am sure.

MR. LEHRER: Mr. Burlatsky, do you agree with Mr. Quinn-Judge that one of the major messages of Gorbachev today was that the Communist Party must now learn to share power, that they are no longer controlling everything?

MR. BURLATSKY: Yes, but maybe not to be, this, some explanation of the process of the future, and Gorbachev's speech is balanced, more center than left, and therefore, some from the right side can support the speech too. But from the other side, I saw that Gorbachev did very big step to the left. For example, in the three very important points, the multi-party system forced their agreement to the republics, the second, and the market system of the sort. In this direction now, the center or left are more closed.

MR. LEHRER: Mr. Quinn-Judge, do you believe that the reformers that are represented at least in a political way by Boris Yeltsin are with Mr. Gorbachev now as a result of the concessions he made today in his speech?

MR. QUINN-JUDGE: This is a 10 day congress so it's very dangerous to predict. All that one can say with certainty is that Gorbachev's people were feeling very confident before the congress started that they could establish a modus vivendi with Yeltsin even if Gorbachev and Yeltsin are never going to be intimate friends. Right now it looks as if this could actually work, but there are plenty of opportunities I think over the next 10 days for something to go wrong. So far, Gorbachev seems to be doing relatively well.

MR. LEHRER: But he did not, Mr. Quinn-Judge, say anything today at least you would interpret that was anything negative as far as Yeltsin and his forces are concerned?

MR. QUINN-JUDGE: Definitely not, and I think Yeltsin and his people would feel very good indeed about what Alexander Yakovlev said at the end of the day in his speech which talked very much the liberal/radical line, and would be something very close to the heart of many of Yeltsin's supporters.

MR. LEHRER: Mr. Burlatsky, would you agree with that?

MR. BURLATSKY: Yes, I agree with Paul that now it's possible some cooperation between Gorbachev and Yeltsin, despite that fact that during the congress maybe Yeltsin will continue his criticism about some aspects of Gorbachev's policy. But they need each other. Gorbachev needs support from the left because of the dangers from the right and Yeltsin needs Gorbachev's support, and because he has not enough support from the Russian people, deputies congress.

MR. LEHRER: Mr. Burlatsky, there was talk going into this conference that Gorbachev might step aside as general secretary of the Communist Party. That is not now going to happen, is it?

MR. BURLATSKY: Maybe he will run for election to become president of the party but not general secretary, in spite of the fact that many delegates before general secretary, not presidents, but either he will run as the president and maybe he will succeed there. The question is who will be the second one, who can be the secretary or the general secretary, if this post will continue to be included in the party system? I think there are some possibilities for such people like Bakatin or even Yakovlev after his speech, in spite of the fact that right forces hate Yakovlev very much. But he had very good result, became very good result after his speech, therefore, it's possible that he can be elected. But that maybe or some person like Bakatin maybe have more chance.

MR. LEHRER: Anything that you would like to add to that on that question, Mr. Quinn-Judge?

MR. QUINN-JUDGE: No, not really. I think the key thing though is for Gorbachev to remain in control of the party, whatever title he chooses. The party is a declining force. It's nowhere near as important in the reform program as it used to be, but is much too dangerous, much too rich, has much too sophisticated a structure for Gorbachev to give up and to hand over to one of his adversaries. The key thing that we tend to miss when we look at a congress like this is that this is a side show. The major issue is reform and what's going on in the streets. Gorbachev needs to keep control of the Communist Party and then get back onto reform very quickly indeed, so I think he's going to be very relieved when these 10 days are over.

MR. LEHRER: Is it possible for him to reform the Communist Party, itself, or as you say, it's a side show that doesn't really relate to the reforms that are going on in the country, itself, and he just has to tolerate the party at this point?

MR. QUINN-JUDGE: It would certainly be nice to reform the party. The atmosphere at the Russian Party Conference of last week did not give rise to too many hopes that one could do that. The key thing though is I suspect that Gorbachev will not want to spend too much time trying to reform the party. He needs to control it, then he needs to get back to economic reform, to handling the parliament and handling the republics wanting to leave. These are the key issues.

MR. LEHRER: How over these next few days are those on the right who oppose what Mr. Gorbachev is up to likely to voice their opposition?

MR. QUINN-JUDGE: Well, they're getting franker and franker. They've taken five years to come out and openly with their criticism of Gorbachev. They are unhappy about the party giving up its guiding role in society. They are unhappy about individual policies like Eastern Europe and the role back of Soviet forces in Eastern Europe. They think Gorbachev is much too conciliatory in many ways. I suspect they'll be criticizing him for this. The key thing to look for though is whether somebody finally gets up and says it's time for Gorbachev to go and see whether that person gets much support. So far, the conservatives have been vociferous but rather spineless. I'm not totally convinced they're going to develop their spine this week.

MR. LEHRER: Mr. Burlatsky, what's your view of that?

MR. BURLATSKY: I think that a representative from the right forces will criticize Gorbachev for many things, first of all for destroying the role of party, the ruling and the party and the system, then for the economical problems, then maybe for the international policy, especially what happened in East Europe, but in spite of this fact, maybe some of the conservatives will support Gorbachev personally. I mean the representatives from the republics, from Middle Asia, from gulf coasts, from Kraina and Byelorussia and even from Russia because we can remember that 1,000 representatives on the Russian Party Congress supported Mr. Lobof, who is from the center, maybe the left center. Therefore, I think that majority will support Gorbachev personally.

MR. LEHRER: And you do not expect then that Gorbachev will emerge from this party congress in a weaker position than he went in, if anything, he will emerge stronger?

MR. BURLATSKY: I don't think that he became stronger after this, but it is not so important because he is not a president and party now is important, but not so important as before. Now he needs only one thing, to continue the control of the party and he will succeed in this way.

MR. LEHRER: Do you disagree with that, Mr. Quinn-Judge?

MR. QUINN-JUDGE: No, I agree entirely. He has to keep control of the party, then get back to the real problem, which is in the streets, in the economy, in the Baltics.

MR. LEHRER: And you do not see any signs, at least at this stage, Mr. Quinn-Judge, that he's going to emerge with anything less than continued control of the party?

MR. QUINN-JUDGE: No. He has problems with things like the economy and how to run it. He doesn't have problems, as far as we can see, running things like a Communist Party. He's a brilliant politician, especially in this milieu.

MR. LEHRER: And we're likely to see him at his best over these next few days, Mr. Burlatsky?

MR. BURLATSKY: I'm sorry.

MR. LEHRER: We're likely to see Mr. Gorbachev at his best, and under challenge over these next few days?

MR. BURLATSKY: I believe yes, because he was in very good form during his speech today, therefore, I am sure that he will manage the congress in spite of many difficulties, because some members of politburo, some members of Central Committee, will criticize him, and maybe many people from the right side, but he will control the situation. I believe in it.

MR. LEHRER: All right. Well, gentlemen, thank you very much for being with us this afternoon.

MR. QUINN-JUDGE: Thank you.

MR. BURLATSKY: Thank you.

MS. WOODRUFF: Still ahead on the Newshour, East Germany braces for change and what's good for your grass may not be good for you. UPDATE - MARK OF CHANGE

MS. WOODRUFF: Next tonight we have an update on German unification. This was the first shopping day since the West German mark became the currency of East Germany, but for the East Germans, their initial optimism over the union has been tempered with concern for what the future will bring. Gaby Rado of Independent Television News reports.

MR. GABO: East German shoppers with West marks to spend arrived at the supermarkets this morning to find strange new items for sale. For those people who haven't been to the West before, a certain cautious examination was necessary. The shelves, which had emptied last week, were now fuller than they'd ever been with an unprecedented variety. Only prices of basics like bread and milk have risen dramatically. Other foods have counted as luxuries and cost these Germans just as much or more before monetary union. The same applied to items like clothing and electronic goods. It had been thought that there'd be an immediate rush of spending. But so far, East Germans appear to be cautious, looking but not necessarily buying.

COUNT OTTO VON LAMBSDORFF, West German Finance Minister 1977-84: Germans have always been expert savers and they will save. And there is a widespread expectation here in this country, especially by experts, that the amount of saving will surprise everybody in this country.

MR. GABO: Those savings may well be needed to help fund the reconstruction of East German industry, which is bound to be accompanied by large scale unemployment. The Izenhoutenstat Steelworks employ 10,000 people, one in five of the town's population. It's admitted by those in the know that between three and four thousand of the work force will lose their jobs in coming months. The plant needs modernization, subsidies will have to go, and productivity has to rise to compete with Western steel. In the past six months, three West German steel companies have had talks here about possible investment and cooperation but there have been no positive results.

DR. RINGEL SCHMIDT, Steelworks Deputy Manager: [Speaking through Interpreter] People here are impressive workers and they are good at their job. It would certainly be difficult to tell them to go work somewhere like the Rural Valley in West Germany. They are at home here and I think politicians ought to recognize that.

GABY RADO, ITN: Ever since the first buildings went up here back in 1952, Izenhoutenstat had lived in a cocoon, jobs in the steelworks secure, benefits of the Communist system, such as they were, all guaranteed. Now this old styled socialist model town and others like it across Eastern Europe and eventually in the Soviet Union will have to learn to stand on its own two feet for better or for worse. One of the benefits East Germans have long taken for granted is free nursery school education for all children over a year old. This nursery cares for 150 children, and there are 24 others like it in Izenhoutenstat with its population of just over 50,000. The West Germans can't compete with that, and as their values take over, services in the East are expected to suffer. Nursery school teacher Brigitte Wilberg and her twin sons have benefited from the system. She is now concerned about the future.

BRIGITTE WILBERG: [Speaking through Interpreter] When it comes to buying expensive goods, we might have to be careful because it's possible that I might not be able to work much longer. There may be far fewer nursery schools in the future. Now we have many nursery schools. Every child has the right to a place in one of them, but we shall have to see what the authorities decide.

MR. GABO: Brigitte's husband, Eckhard, is an engineer at the steelworks. He and his wife have a joint income of only225 pounds a week, but then they only pay 7 pounds a week for their small four room flat. They say that's likely to increase more than threefold next year when rent controls are lifted. Though looking forward to the advantages of earning West marks, the Wilbergs realize the problems ahead.

ECKHARD WILBERG: [Speaking through Interpreter] I think there will be unemployed people in Eizenhoutenstat and in the GDR in general. People are quite disturbed by this. That's because of a restructuring which will be caused by monetary union. Under the market economy, we have to think differently, try to be competitive, and I think some plants will no longer be competitive enough.

MR. GABO: Those anxieties about industry are shared by the East German leadership, who are becoming dismayed about the reluctance so far of West German business to invest in the East.

REGINE HILDEBRAND, East German Minister for Works: [Speaking through Interpreter] I had thought that the investment boom would be a lot higher than it actually is. At the beginning of the year, I was led to believe that potential employers were prepared to finance retraining programs for at least 25 percent of the work force. But if they don't come, retraining can't begin. At the time many people came here there were a lot of talks, but little has actually been done.

MR. GABO: Count Otto von Lambsdorff, a former West German finance minister, urges speedy progress towards full unification, conceding that investment has been slow.

COUNT OTTO von LAMBSDORFF, West German Finance Minister 1977-84: It has to do with environmental problems, which are very difficult to overlook, and it has to do with legal problems, the private properties situation, the legal framework. The legal basis in this part of Germany still is not as clear as we would like it to see and it's difficult to clarify it, so my answer is we need German unification as soon as possible.

MR. GABO: The East Germans' cautious response today to the sudden availability of goods showed they were behaving like sophisticated Western shoppers. On the street level among the ordinary people, unification has already taken place. FOCUS - DANGER IN THE GRASS?

MR. LEHRER: Now a story about keeping green grass green. It is a health story reported by Correspondent Tom Bearden.

MR. BEARDEN: The Environmental Protection Agency estimates that about 7 1/2 million households have hired commercial lawn services to take care of their grass. Those companies, together with homeowners, apply some 70 million pounds of pesticides each year. It's a $1 1/2 billion business and it's growing at the rate of 5 to 8 percent a year. Jared Arminger lives in Baltimore. His parents say the chemicals on the neighbors' lawns are making him sick.

MARIAN ARMINGER, Jared's Mother: Psychologically he has major behavioral problems from it and can't function.

MR. BEARDEN: How do you know the pesticides do that?

MS. ARMINGER: Because when he's not exposed, when they're not spraying or we don't pass a truck spraying, he's fine. He's a very calm, loving child.

MR. BEARDEN: Jay Feldman heads the National Coalition Against the Misuse of Pesticides.

JAY FELDMAN, Pesticide Coalition: Increasingly, numbers of people are responding to the fact that these materials are neuro toxic, that is, they can induce a neurological response that has a range of effects in different people from memory loss to behavioral modification, mood swings, as well as basic neurological functioning.

MR. BEARDEN: Victor Kimm is deputy assistant administrator for pesticides and toxic substances at the EPA.

VICTOR KIMM, Environmental Protection Agency: I think that there are clearly, as in many other areas, some small fraction of the population that are super sensitive for whatever reason, and it is hard to say in the face of any specific claim of adverse effect whether that is, turns out to be somebody who is uniquely super sensitive to a set of circumstances.

MR. BEARDEN: How much risk is there for the average person? Critics say no one really knows. All the pesticides used on lawns are registered with the EPA. That means the risks of using them have been evaluated. But some of those studies were done decades ago and Congress has ordered the EPA to retest and reregister all the products.

VICTOR KIMM: Many of the pesticides that are presently on the market, about 400 active ingredients, were registered over the last ten or twenty years against the standards that were current at that point in time. Since the amendments of the law in 1988, we have begun an accelerated process to go back and bring all the data on all the pesticides that were registered before up to current standards.

MR. BEARDEN: But critics say it's been anything but an accelerated process.

PETER GUERRERO, General Accounting Office: EPA has undertaken this process beginning in 1972 as it was required to do under law. It's not completed the process for any of the 20,000 products.

MR. BEARDEN: Peter Geurrero is an associate director of the General Accounting Office, Congress's investigative arm. Last March, the GAO issued a report which said, "There is considerable uncertainty about the potential for these pesticides to cause chronic health effects," because EPA hadn't completed reassessing the chemicals. Dr. Roger Yeary disputes that conclusion. He's a toxicologist working for ChemLawn, the nation's largest lawn care company headquartered in Columbus, Ohio.

DR. ROGER YEARY, ChemLawn Toxicologist: I think though to say that there is not a sufficient amount of knowledge about the pesticide use in lawn care, and in particular, since most of those are used in food production, is a misleading statement to say there is not sufficient knowledge.

MR. BEARDEN: Did the GAO simply not know what they were talking about?

DR. YEARY: Well, I don't really think the GAO, quite frankly, is qualified in toxicology, so they may be as auditors able to examine from a cafeteria check list, but I don't think they're in any position to make an appraisal of safety.

MR. BEARDEN: The GAO report also accused the pesticide industry of using the fact that the chemicals are EPA registered to make false claims about the products. The State of New York and ChemLawn sued each other over the issue. On Friday, New York Attorney General Robert Abrams announced that a settlement had been reached.

ROBERT ABRAMS, Attorney General, New York: The claims that they have been making in the past imply that ChemLawn uses pesticides which have been fully tested and which have been fully evaluated by the federal government in its federal registration of pesticides, and as a result, they are, therefore, safe and that the company does not in addition use any known probable human carcinogens in its pesticide applications and all of that is false.

MR. BEARDEN: Abrams said that without admitting any wrongdoing, ChemLawn agreed to stop making any such claims in the future and agreed to pay the Attorney General's Office $100,000 in costs. In an interview before the settlement, ChemLawn president Mike Shannon said the company's ads were accurate.

MIKE SHANNON, ChemLawn President: We don't think there's anything in our publications that we can't stand behind. We don't think there's anything in our publications that's any stronger than what's in the EPA's own publications on the subject of lawn care.

MR. BEARDEN: Today ChemLawn said the company stands by the statement. And, in fact, this EPA booklet does say, "EPA registration is your assurance the product has been reviewed by the EPA and is safe and effective." EPA's Victor Kimm.

MR. KIMM, EPA: Generally speaking, we would try to avoid using words quite in that fashion. I mean, you have to look at the context in which they're used. The word "approved" I mean is a fact. When we register a pesticide, we approve its use in accordance with the label instructions.

PETER GUERRERO, General Accounting Office: Unfortunately, EPA has found when they looked at whether the public read these labels on the products, they found that 50 percent of the public did not, and so the public may be using these very toxic substances without complete information on how to use them safely, and there could be certain acute types of effects that could cause harm.

MR. BEARDEN: Those who are skeptical of the health damage claims say it's the people who work with pesticides every day who should be the most affected. But ChemLawn's extensive testing program hasn't revealed any serious problems. Bob Archibold has worked for ChemLawn for 12 years.

BOB ARCHIBOLD, ChemLawn: We have a blood test and whenever we're applying pesticides, about every three weeks. The very blood test we have at the beginning of the year. It's a base line to control our, or to check our blood levels and so forth. Then it's checked every three weeks. We have our blood drawn to see if there are any changes at all in our chemical make up.

MR. BEARDEN: Have you ever seen any changes in your system?

MR. ARCHIBOLD: No, sir, I have not.

MR. BEARDEN: Anybody you work with?

MR. ARCHIBOLD: No, sir.

DR. ROGER YEARY, ChemLawn Toxicologist: I think last year out of about thirty-five hundred to four thousand people, we had five or six that we took out of the workplace for a very short time period.

ROBERT ABRAMS: It only tests for neuro toxicity. There are other health effects. Secondly, they are testing healthy workers in their prime. They're not looking at other targeted populations, like children and elderly people, and thirdly, when there's any indication that there is a problem, they take people off that assignment and put them on to other things to do.

MR. BEARDEN: Even the National Pesticide Coalition's Feldman concedes there is no conclusive proof of widespread health effects. How many people are we talking about?

JAY FELDMAN, Pesticide Coalition: This is an unknown. We simply have no incident monitoring, and as a result, we're left with conjecture based on reports that come into organizations like ours and others.

MR. BEARDEN: Hard evidence or not, some states are acting to address consumer concerns. Jared Arminger's family is on the Maryland Pesticide Register which requires applicators to notify them before spraying. The state also requires that signs be placed on a customer's lawn after chemicals are applied. Other states are adopting similar regulations. Ultimately, Feldman says the issue comes down to one of esthetics versus risk, no matter how small that risk might be.

MR. FELDMAN: EPA has handed the discretionary authority to weigh the risks and benefits of pesticides and has taken upon itself to attribute benefits in the lawn care area that are basically cosmetic, aesthetic benefits, and then are weighing those benefits against the risks of these chemicals. Should the American public be faced with a choice between a green lawn and cancer and neurological problems down the road?

MIKE SHANNON, ChemLawn President: We don't agree with their point of view. We think a lawn and a healthy landscape are an important part of the ecology. We know that there are a lot of beneficial effects to the environment of healthy grass and healthy trees, so we think what we're doing is supportive of a healthy ecology.

MR. BEARDEN: The lawn care industry and its critics do agree on one thing. Chemical use can be reduced by better watering and mowing practices which make for more insect resistant lawns. Both sides are motivated to encourage those practices. Industry can lower its costs and the worried can breathe more easily. RECAP

MR. LEHRER: Again, the major stories of this Monday, Imelda Marcos was found innocent by a New York City jury of charges involving the looting of $222 million from the Philippine government treasury. And Soviet Pres. Gorbachev told the Communist Party Congress the Soviet Union was rapidly becoming a second rate power. Good night, Judy.

MS. WOODRUFF: Good night, Jim. That's our Newshour for tonight. We'll be back tomorrow night. I'm Judy Woodruff. Thank you and good night.