The MacNeil/Lehrer NewsHour

MR. LEHRER: Good evening. I'm Jim Lehrer in Washington.

MR. MAC NEIL: And I'm Robert MacNeil in New York. After tonight's News Summary, we focus on the crisis in Bosnia with a report from Sarajevo, a Newsmaker interview with Defense Secretary William Perry, and the opinions of four analysts. Also tonight, Betty Ann Bowser reports on the future of the Department of Housing & Urban Development, renovation or abolition. NEWS SUMMARY

MR. MAC NEIL: Two thousand U.S. Marines and three Navy ships arrived off the coast of Bosnia today. They might be involved in any evacuation of UN peacekeepers there. The Bosnian Serbs continue to hold more than 350 UN soldiers as hostages. They released six French peacekeepers today, but they also detained another seven Ukrainians. Several are still chained to possible NATO targets, despite Serb promises to release them. U.S. officials would not rule out the possibility of a commando raid to rescue the men, but they did rule out a deployment of U.S. ground troops. White House Spokesman Mike McCurry spoke about the U.S. position today.

MIKE McCURRY, White House Spokesman: We will be prepared to be there and to meet our obligations as a member of the alliance. Now we've never said specifically that's going to mean "X" number of troops on the ground, "X" number of planes in the air, "X" number of ships in the Adriatic. What the United States has said and what the President said consistently is that we understand as a member of the alliance, as a member of the North Atlantic Treaty Organization we have obligations to our European allies, especially to those who have got troops committed on the ground in Bosnia. And we'll be prepared to go forward based on the type of recommendations that the President gets from his military and foreign policy advisers.

MR. MAC NEIL: Secretary of State Christopher today met with NATO foreign ministers in the Hague to discuss the war. They agreed to send more weapons and equipment to Bosnia to strengthen the position of U.N. forces. The first twenty-five soldiers of a new British contingent of sixty-two hundred arrived in Split, Croatia, today. They might also be used to help in a U.N. withdrawal. Thirty British peacekeepers are among those held hostage by the Serbs. We'll have a Newsmaker interview with Secretary of Defense Perry on Bosnia later in the program. Jim.

MR. LEHRER: Russia will join NATO's Partnership for Peace program. The Russian foreign minister confirmed that today at a NATO foreign ministers meeting in the Netherlands. Secretary of State Christopher said it meant the beginning of a new era in U.S.- Russian relations. It clears the way for exchange of military information, joint maneuvers, and mixed troop training. The search for the living and the dead continued today in a remote Russian town hit by an earthquake on Sunday. Officials say 2,000 people may have been killed. We have more in this report from Julian Manyon of Independent Television News.

JULIAN MANYON, ITN: On top of a mound of rubble that was once a block of plants, a rescue worker hears some sounds below. He calls to his friends for help, and soon they can hear the voice of a woman trapped beneath them. "Don't worry," they tell her, "we won't abandon you. We'll get you out." But no one knows if the woman will be able to hang on. Time after time it is only the dead they find, crushed beneath tons of concrete. More than 500 bodies have been recovered so far, and there may be as many as 2,000 more. In those low rise houses over there most people survived, but here where I'm standing, whole apartment blocks five stories high collapsed like so many houses of cards.

TAMARA LISITSINA, Survivor: [speaking through interpreter] I was on the fifth floor, and in a second, I find myself at ground level with a great slab of concrete hanging over my head. The only reason it didn't crush me is it was stopped by a wardrobe. I called out to my sister, "Natasha, Natasha, but they were all dead."

JULIAN MANYON: From the air, the pattern becomes clear. There were 17 blocks of flats, each one now reduced to a long pile of debris. They were built by the Communist government 20 years ago from prefabricated parts. They were put up quickly as cheap housing for the oil workers that the Soviet system brought here. When the quake happened, all 17 blocks fell apart. Boris Yeltsin's government is mounting a massive relief effort. Helicopters fly in and out around the clock, but for the people who once lived here, it is all too late.

MR. MAC NEIL: Back in this country, a tornado in western Massachusetts last night killed at least three people. It cut through a five-mile section of Great Barrington, a small town in the Berkshire Mountains. The three were killed when their car was picked up and thrown six hundred feet. At least twenty-four people were injured by the storm, and authorities are looking for at least four who are believed to be missing. The state medical examiner in Oklahoma City said it will be some time before three bodies recovered yesterday from the wreckage of the federal building can be identified. They're believed to be two women who worked at the building's credit union and a man who was a customer there. Their bodies could not be removed before the building was demolished last week. Vice President and Mrs. Gore joined students at an Oklahoma City school today, planting a tree in memory of the 168 victims. The Gores also met with children who lost family and friends in the bombing.

MR. LEHRER: President Clinton issued another veto threat today. He said legislation passed by the House earlier this month would halt years of progress in cleaning the nation's waterways. The Senate has yet to consider the measure. Mr. Clinton spoke at the edge of Rock Creek in Washington, D.C..

PRESIDENT CLINTON: Members of Congress who support this legislation actually have the nerve to call their bill the Clean Water Act. And the House of Representatives actually passed it just before the Memorial Day weekend. But newspapers all over America are calling it the "Dirty Water Act." And it won't get past by desk. We have worked as one people for 25 years, as one people for 25 years across party lines to make our environment safer and cleaner. We cannot turn away from it now. There is still more to be done, not less.

MR. LEHRER: The key sponsor of that legislation said the President was reading from a script written by environmental extremists. Congressman Bud Shuster, Republican of Pennsylvania, said his bill was supported by virtually every public sector group in the United States. And that's it for the News Summary tonight. Now it's on to Bosnia and a place called HUD. FOCUS - QUAGMIRE

MR. MAC NEIL: Our lead tonight is the Bosnia story. More than 300 United Nations peacekeepers remain hostages of the Bosnian Serbs. And diplomats from Europe and the United States continue discussions on the future of the UN mission in Bosnia. We'll have a Newsmaker interview with the Secretary of Defense and analysis, but first two reports on today's events in Sarajevo and on the diplomatic activity in Europe.

TERRY LLOYD, ITN: It has, by comparison, been a quiet 24 hours for the people of Sarajevo, a total of 47 explosions. Instead, it's as the soldiers of the United Nations will remain the targets of Bosnian Serb actions. In a leaky airport hangar, the French said good-bye to two of their colleagues killed in a gun fight with Serbs in Central Sarajevo, but it may be some time before the bodies arrive back home for burial; the surrounding Serbs are refusing to allow safe passage for an aircraft to land or take off. To add to the insults, the Serbs are now driving around in armored personnel carriers and light tanks stole from the UN. Despite all the precautions now being adopted by the UN, seven more hostages were taken this morning, this time Ukrainian soldiers. That was followed by a statement from the Bosnian Serbs declaring void all agreements with the UN and NATO.

ALEXANDER IVANKO, UN Spokesman: International law is being disregarded on a scale unseen in Europe for many years and condemned by almost every capital, almost every government.

TERRY LLOYD: Unprecedented security has since been imposed by the UN to protect its personnel and its property.

NIK GOWING, ITN: Today the Dutch holiday resort of Nordvic hosted what is now effectively a rolling diplomatic crisis meeting on Bosnia in permanent session. The foreign ministers arrived red-eyed at this long-scheduled NATO meeting after Brussels all day yesterday and a five-nation contact group meeting in the Hague last night. That ended in the early hours with a commitment not to withdraw from Bosnia but to strengthen UNPROFOR and give UN forces a rapid reaction capability. The concerns are military and deepening by the hour. The first new commitment is to diplomacy. U.S. Secretary of State Warren Christopher will send U.S. Envoy Robert Fraser back to Belgrade to try to persuade Serb President Slobodan Milosevic to recognize an independent Bosnia Herzegovina, with assurances from here that UN sanctions against Serbia will only be reimposed in exceptional circumstances. But the pressing realities remain military. They have enraged all nations here, especially the UN troop contributors, led by Britain and France, with Canada, Spain, Denmark, and the Netherlands.

HANS VAN MIERLO, Foreign Minister, The Netherlands: We all share the outrage of the behavior of the Bosnian Serbs. The threats against the lives of UN peacekeepers and observers and the shelling of civil population centers such as Tuzla are totally unacceptable.

NIK GOWING: The commitment was to reinforce, to prepare for tougher action, not to withdraw.

WILLY CLAES, NATO Secretary General: The alliance is ready to support efforts towards the reinforcement of UN peace forces in former Yugoslavia, with the aim of reducing their vulnerability and strengthening their ability to perform their essential mission.

NIK GOWING: It is a time of deep anxiety. Britain has led an international realization that the UN commander in Bosnia, Gen. Rupert Smith, needs new resources to allow the UN to make a rapid, more robust response.

DOUGLAS HURD, Foreign Secretary, Britain: Rupert Smith is forming his own reserve, his own rapid reaction force, his own force with which he can react to unforeseen situations. And the difficulties about UNPROFOR has been the lack of a reserve.

NIK GOWING: And the new French government of the deeply concerned new president, Jacques Chirac, is pressing for dramatic new thinking.

HERVE DE CHARETTE, Foreign Minister, France: The real chance, not only just adjustments, but a real chance of the disposal of the troops --

NIK GOWING: And when you agree for extra ability to act and react and reinforce, what does that mean for France?

HERVE DE CHARETTE: We are discussing actually now with our partners, I mean, with Great Britain, especially.

NIK GOWING: So after almost four years of war, there has been a rare, perhaps unique sense here of real determination to act tough, fired by anger at the Bosnian Serbs' taking of hostages. NEWSMAKER

MR. LEHRER: Now to the U.S. Secretary of Defense, William Perry. He's with us now for a Newsmaker interview. Mr. Secretary, welcome.

WILLIAM PERRY, Secretary of Defense: Thanks, Jim.

MR. LEHRER: How would you describe the situation in Bosnia right now?

SEC. PERRY: The situation stems first of all from the problems with the UNPROFOR, the UN operation in Bosnia. I think it's important to start off by observing what they're doing there, what their mission is over there, because that's what got them into the problem they're in right now. Their mission is to facilitate the delivery of humanitarian aid to civilians there and to prevent the shelling of civilians. It's a very limited mission, and in the early years, '92 for example, it was quite ineffective. There were perhaps a hundred thousand civilian casualties in Bosnia in '92, just to put it in perspective. That was made much more effective. Last year, for example, the casualties were about 3,000. Nobody is happy about 3,000 casualties, but it was an enormous improvement, and the reason for that improvement was the UNPROFOR operation. They did it by two actions, the -- first of all was by protecting the convoys that were bringing food in and keeping the airport open and secondly, by preventing the shelling of cities, and they got NATO's support for preventing the shelling of cities. Those two actions led to this dramatic reduction in casualties. What's happened in the last three or four weeks is that the Serbs for reasons not entirely clear have decided to start confronting UNPROFOR. They have harassed UNPROFOR. They've closed the airport at Sarajevo.

MR. LEHRER: They're essentially confronting the rest of the world, are they not?

SEC. PERRY: They're confronting the rest of the world.

MR. LEHRER: Those are -- they represent the United Nations.

SEC. PERRY: And most dramatically, they have started shelling Sarajevo. This was before the bombing -- they started shelling Sarajevo. The UN tried to jawbone them, get them to stop it. That did not succeed. They really were -- at that stage had two alternatives. The first was admit that they could not enforce the mandates and leave Bosnia -- and leave the Bosnians to their fate. We'd be back to these tens of thousands, there'd be hundreds of thousands of casualties again, or to try to enforce the mandates. They did not have the military strength, themselves. They called on NATO to do it. They did that with a full understanding of the risks involved. In fact, the very reason they have not called for more air strikes in the past, because they understood fully the risks involved. But when they balanced the risk of what the Serbs might do, for example, the hostage taking versus the thousands of casualties that were going to occur in civilians if they allowed the shelling to go unimpeded, that was the reason for their action.

MR. LEHRER: The air strikes considered a mistake now?

SEC. PERRY: No, I do not believe the air strikes were a mistake, because you have to compare that with the alternative. The alternative was giving up and pulling out. Now what we've seen here cannot be measured by one set of actions. It was a statement of a firmness and solidarity, and I believe that we're going to see it played out in the next few weeks. You saw it in the report of the contact group meeting. This is the first really indication of the - - in national communities willing to demonstrate solidarity and to be firm on this.

MR. LEHRER: Mr. Secretary, you said that NATO or the people on the ground were prepared for the repercussions from the air strikes. In other words, they expected these hostages to be taken.

SEC. PERRY: They understood that was one of the risks.

MR. LEHRER: And whywere they not protected? Why were not the troops protected before the air strikes?

SEC. PERRY: Well, I wouldn't want to second guess the ground commander, but I understand he has -- his mission calls for him to have troops deployed all over Bosnia, and so his problem, I'm sure, was how do you continue to conduct your mission and, and, and at the same time protect these troops? They had thirty or forty military observers who were unarmed in Serbian territory, so they were at risk, without question.

MR. LEHRER: Now, the U.S. has been encouraged -- the U.S. policy has been to encourage the use of air strikes, is that correct?

SEC. PERRY: Our policy has been right along to encourage UN to carry out its mandate, and its mandate is to protect the civilian population there and to protect the convoys so that humanitarian aid could be delivered. We would hope that it would not be necessary to use air strikes for them to do that, and the UN, of course, obviously is very reluctant to do that, but it is important that that mandate be carried. And if air strikes are required to be carried out, then we do support that.

MR. LEHRER: Well, what do you say to the folks who say, wait a minute? In fact, the LA Times compared U.S., the United States' official position to that of, of Halloween pranksters, push the button and then run when somebody comes to the door, meaning we've encouraged the air strikes but when the going got rough, the hostage taking, there we are, we're not that involved.

SEC. PERRY: We are involved in many important ways, Jim. We have perhaps 15,000 or so military forces that one way or another are supporting the UN and the NATO operations in that area, not just through the air strikes, which is a very obvious way, but through continuing airlift and airdrops, which have been going on for years, and through -- we have --

MR. LEHRER: You've said that on this program before, and a lot of people forget that. There's food and supplies being dropped in these -- to these various -- in these various areas in Bosnia, is that correct, and that's still going on?

SEC. PERRY: That goes on episodically. It depends on the circumstances. One of the reasons it's difficult to -- well, for one thing, as long as the ground convoys are getting in, the airdrops and airlift are not necessary, i.e., when the ground convoys get stopped, if you go back to the first few months of the administration, which I remember very well, this is in -- this was a time when -- early '93 -- when people were predicting there were going to be tens of thousands of people starved in Sarajevo during the winter because we couldn't get food through to them, and that's when we really increased the airlift large time. But ground convoys have been getting in up until a month or so ago.

MR. LEHRER: All right. Let's talk about what happens now. There are 2,000 U.S. Marines in the Adriatic. What is their mission? What are they prepared to do, and more importantly, what are they prepared not to do?

SEC. PERRY: Our policy remains the same as it has been, which is we are not going to get involved in a war in Bosnia, i.e., we're not going to commit to be a combatant in a war in Bosnia. And so that's not the purpose of those Marines there. The Marines there are there for two reasons: First of all, a Marine and our carrier battle group patrol regularly in the Mediterranean and, and -- and irregularly in the Adriatic. The Theodore Roosevelt -- the carrier there -- is part of a regular deployment. The --

MR. LEHRER: It's already in the area.

SEC. PERRY: It was already in the area, in the --

MR. LEHRER: Moved closer?

SEC. PERRY: And the Marine Amphibious Ready Group was already in the Mediterranean. It was scheduled to go in the Adriatic in a few weeks, and we just moved up the schedule, moved it in earlier as a precautionary measure. Now, their regular mission is training and, and presence, and a particular mission they train for is a search and rescue mission which is if a downed -- one of the aircraft over there get downed, they have the force to go in and rescue that. Two thousand Marines is not enough, even as good as the Marines are, is not enough to have a major influence on a, on a war that's going on over there, and they're not there as combat forces. Now, they would be a part of, of an extraction operation if UN called for assistance in extracting some part of the UN from a dangerous situation, and they came to NATO and asked for that assistance.

MR. LEHRER: Then the Marines could be involved --

SEC. PERRY: And NATO agreed to do that, then the Marines could be a part of that operation.

MR. LEHRER: But that would be a combat mission. I mean, for instance, let's say the term that's being bandied around today is commando raid, to go in and, and get some of those hostages out of there, which is -- you call it extraction -- others would call it a commando raid.

SEC. PERRY: I was really referring not to a hostage rescue mission --

MR. LEHRER: Okay.

SEC. PERRY: -- which you referred to, but to the fact that the - - now the UN commander may decide that his position at Srebrenica, which is one of the enclaves, is untenable and may decide that the few hundred or so UN soldiers that they have there need to be moved out. But they -- he can't just march them out because of the danger to them, and so he may ask for assistance in extracting them from one of those enclaves. That would be an example of that.

MR. LEHRER: Is the decision, as you understand it here in Washington, the decision at this point by NATO that those and the United Nations cannot pull out the, the peacekeepers, I mean, to hang in there?

SEC. PERRY: The decision has been very clear and is really clear for the first time that the NATO and United Nations are going to show solidarity, and they're going to stay put. They're not going to cut and run from Bosnia. They're going to stay put there, and therefore, it's quite clear they need to strengthen, not pull out, they need to strengthen those forces, and the contact group, foreign ministers that met just yesterday agreed to do just that.

MR. LEHRER: But they're going to do it without U.S. troops, is that right? If they're going to strengthen it, they're going to strengthen it with British troops and French troops and Canadian troops and Netherlands troops, not American troops?

SEC. PERRY: Strengthening has several dimensions to it. They can add more troops, and they are planning to do that, and those would not be U.S. troops, that is correct. They can also strengthen by more equipment, helicopters, armored personnel carrier, night vision equipment. We have offered to supply that equipment, and I think it's very likely that we'll be taken up on that offer. It may also involve airlifting to take some of the supplies, and we've offered to provide airlifting. And I think we will be taken up on that offer.

MR. LEHRER: But anybody watching this program tonight, who's been following the news in Bosnia in the last two or three days and getting worried about, oh, oh, this could lead to this, could lead to this, could lead to that, 2,000 Marines in the Adriatic, oh, oh, could there be 10,000 more Marines coming, could this eventually lead to the employment of U.S. ground forces in Bosnia, what do you tell them?

SEC. PERRY: I would say, no, except for the one contingency, which I described to you, where we send our forces in as part of a NATO operation in order to extract UN forces that are in danger in the place that they are in danger. That was the commitment that the President has made. Even in that commitment it has to be part of a NATO operation under NATO command and control, and we would go to the Congress for support on that before we did.

MR. LEHRER: Second point; the foreign secretary of Britain, the British foreign secretary, Mr. Hurd, was asked today: "Are there going to be any more air strikes?" And he said, "Not in the immediate future." Would you agree with that?

SEC. PERRY: Yes. We are not ruling out air strikes at this point. It makes no tactical sense to go forward with air strikes in the immediate future, but we're not ruling it out.

MR. LEHRER: So, so the Serbs pretty much pulled it off, didn't they? In other words, the air strikes came, they took the hostages in order to stop the air strikes, and now they stopped the air strikes?

SEC. PERRY: Remember what the air strikes were done for. Air strikes were achieved -- the air strikes were ordered in order to stop the Serbs' efforts to strangle Sarajevo and shell the city, and so the test will be whether that gets stopped. Now, we don't - - it's too early to come to a judgment on that yet, and the one set of bombings is not as sufficient. What is really necessary for that to happen is a show of solidarity and firmness on the part of the international community of which the air strike was simply the first component.

MR. LEHRER: And there are more shows of solidarity to come?

SEC. PERRY: More shows of solidarity to come. The 2,000 Marines are a small part of that. The British have committed up to 6,000 troops going in to Bosnia. The French have -- are moving in more forces. I think what we're seeing now is a showing of real solidarity in reserve of which the bombing was simply the first of many steps.

MR. LEHRER: All right, Mr. Secretary, thank you very much.

SEC. PERRY: Thank you, Jim. FOCUS - QUAGMIRE

MR. MAC NEIL: We get four outside views now. Retired Gen. John Galvin was NATO supreme commander from 1987 to '92. Last year, he served as a special ambassador to the former Yugoslavia. He's now at the Mershon Center at Ohio State University. William Hyland was deputy national security adviser in the Ford administration, is now a professor at Georgetown University's School of Foreign Service. Anthony Lewis is a columnist for the New York Times. Leslie Gelb is president of the Council on Foreign Relations. He has served in the Johnson and Carter administrations. Mr. Gelb, what do you think of the policy Sec. Perry has just outlined?

LESLIE GELB, Council on Foreign Relations: I don't see that it's very much different from what the Bush administration and the Clinton administration have been doing, i.e., basically saying the situation is very sad but that we're not going to get involved beyond what we have, except in emergencies, to extract the troops of our NATO allies. And I don't see that the actions described in any way change the fundamental nature of that situation.

MR. MAC NEIL: Gen. Galvin, what's your view of what we just heard?

GEN. JOHN GALVIN, Former NATO Commander [Ret.]: We have a crisis within a crisis. The main thing right now is that there are a lot of hostages, and we have to try to deal with that. The only way that you can deal with something like that is through communication. It so happens that the bigger crisis too, which is the crisis in the Balkans, has a lack of communication. Sooner or later, we have to take a cool look at this. There's a wide audience out there screaming for things to be done. What we need to do is we need to talk to the Serbs. We need to recognize that they are overstretched, outnumbered, and ready to talk themselves. What is the message that the Serbs are trying to send. We can talk to them through this contact group plan which they didn't entirely reject before, and I think that's something that we ought to look at right now.

MR. MAC NEIL: And Bill Hyland, what do you think of the policy Sec. Perry's outlined?

WILLIAM HYLAND, Georgetown University: It's difficult to know what the policy is. It seems to me that the Secretary waffled his way through most of this. He said that American troops would extract allied troops from Srebrenica. That is a scary proposition. That could mean fighting on the ground, helicopters, gunships, and so forth, but leaving that aside, I don't think the United States, NATO, or the UN, has the slightest notion of what to do next, other than a kind of face saving statement that we'll put in a few more troops, and we'll withdraw from some areas, redeploy, and presumably, we'll go off once again for the nineteenth, twentieth time, to try and talk Milosevic into some kind of compromise with no threat of what will happen if he doesn't agree once again.

MR. MAC NEIL: Anthony Lewis, what do you think of the decision to strengthen the UN forces in Bosnia?

ANTHONY LEWIS, New York Times: I think it's good if it leads to a change of notion of the mission of UNPROFOR. To go on with the hapless, feckless mission that Sec. Perry made sound good but, in fact, has been a moral and political disaster for three years would be completely pointless. I listened to all this, and I agree with Bill Hyland's word, "waffle." Waffle right to the top of the United States government under George Bush and Bill Clinton, and now we're talking about -- I heard the Secretary for whom I have great admiration -- but I hear him talking about firmness and solidarity. Solidarity without the participation in the United States where it counts, on the ground, let's you and him fight, is that solidarity? And what I -- listening to all this, I think to myself, where is the voice that will tell the public of the world what's going on here? A group of evil men have done really terrible things, shelled civilians in Tuzla for no reason at all, taken hostages, committed torture and rape and ethnic cleansing, and where is the voice to condemn it?

MR. MAC NEIL: Well, let's start where Gen. Galvin started. Gentlemen, how do you get the hostages out, the 350 members of the UN force, who are paralyzed at the moment, paralyzing the force? Gen. Galvin, how do you get them out?

GEN. GALVIN: Well, I think that first of all you can't think that this calls for some kind of military raid to, to get hostages that are spread all over the place out of here. This does not call for some kind of action like that right now.

MR. MAC NEIL: So all this -- all this speculation today in the media and the wire services with U.S. officials refusing to rule out the possibility of commando raids, you just think that's not feasible at all, commando raids?

GEN. GALVIN: It's not feasible at all. What we need to do now is retrench. We need to reinforce, if necessary, in there. I think that probably is necessary, with a view that the primary thing we're going to do is basically political. We're going to -- this idea that only the Serbs have done something here is bothersome; it's emotional. The Serbs have been firing artillery, but if you look back at the last few months, the Serbs have not been on the attack. It has been the Bosnian Muslims that have been on the attack in five or six different places. Admittedly, they want to regain what was taken away from them, and admittedly, there's been all kinds of atrocities in this, but let's have the cool head and look at this thing and ask ourselves, is the best way to do this to stand between the two combatants, or is it to become a combatant? I say, let's stay with peacekeeping. There is room for this, but we have neglected to communicate the way we ought to.

MR. MAC NEIL: Do you agree, Leslie Gelb, that the way to get these hostages out is to negotiate more effectively with the Serbs now?

MR. GELB: The hostages now become the centerpiece of a policy which shows that we have no policy. Jack Galvin is a tremendously wise man. He hasn't got a good way of getting those hostages back. And even if we do get them back at the sufferance of the Bosnian Serbs, others will be taken. You can't do this piecemeal. Either the United States government and our allies have to decide to let Bosnia go and explain why --

MR. MAC NEIL: And pull the UN force out.

MR. GELB: -- and pull the UN forces out, just get 'em out of there, or they have to put together a strategy commensurate with the seriousness of that situation. That means serious economic carrots and sticks, a serious negotiating position, not terribly different from where they are now, and a military strategy involving arming the Bosnian Muslims and the Croats, if necessary, and doing some strategic bombing. If you put all those together, I think we have a good chance of getting the Serbs to make an agreement. Absent doing all those pieces, we'll just continue on with this feckless strategy.

MR. MAC NEIL: Bill Hyland, how do you -- starting with how you deal with the immediate problem of the hostages, how do you respond to Les Gelb?

MR. HYLAND: Well, it sounds good, but of course, it's totally impractical. None of the major forces involved are for it. Who is for strategic bombing? Certainly not the British and French, who suddenly when faced with the few hostage -- that their troops were taken hostage, immediately back away, and Douglas Hurd on this program was quoted as saying no more bombing. In other words, how do you get the hostages out? You get them out by giving them what -- giving the Serbs what they ask for, no more bombing. The alternative, which I would not be against necessarily, would be massive escalation. The big mistake, I think, that was made was not starting these two bombing missions, but once the Serbs did not cave in and retaliated, then we should have massively escalated, and we should have been prepared to do that well before we started this. Otherwise, it's just really a criminal, cruel strategy to start bombing, and then quit, and ask for a cool off for four or five days and send Fraser back to Belgrade when he hasn't got a prayer of talking them into anything.

MR. LEWIS: There is a way out of this.

MR. MAC NEIL: Tony Lewis, yes. Tony Lewis, your answer to how you get the -- start with how you get the hostages out as part of a larger scheme.

MR. LEWIS: I agree with what both Les Gelb and Bill Hyland said. Be serious. The trouble with the UNPROFOR mission, despite the good it has done, has been that it hasn't really been in position to do anything. It has to wheedle the Serbs to do anything at all, even to land the plane at Sarajevo. It's no good trying to deal with people like Dr. Karadzic, the self-styled president of the Bosnian Serb republic by appealing to his better nature. He hasn't got a better nature, and we see where we are now with that. It's not going to work.

MR. MAC NEIL: All right. Now, let's go back to the bombing. Gen. Galvin, Sec. Perry said that the bombing, which resulted in the present situation, was not a mistake. Do you think it was a mistake?

GEN. GALVIN: Let me say this. I think that every time we deal with Bosnia we do just what we're doing now. We take up the immediate thing at hand and don't look at the long distance. I think that we -- let's go back and take a look at the objective. If the objective truly is peace in the Balkans, then let's stop thinking about punishing people. Let's start thinking how we can get peace. The only way you can get peace in the Balkans is if the people in the Balkans -- the Muslims, the Serbs, and the Croats - - want peace -- not if we want it. We can cajole. We can push. We can do things there. We can bring people to the table. But, but we want to look at that first. Of course, we have a crisis right here to deal with, but let's deal with it within a, a better, a stronger, bigger idea of what the objective here is. We're talking about all kinds of uses of military force, raids and so forth. What we ought to do is go back to the objective. I think we can find a way through the problem that we have at this moment if we do that.

MR. MAC NEIL: By going -- you say by going to the Bosnian Serbs and taking them seriously as negotiators?

GEN. GALVIN: That's right. And by not trying to punish one side or the other. That's -- it's not -- we're not in there as a punitive expedition. We're in there to try to get people to come to their senses. Let's stop trying to accuse everybody of everything. I realize that the Serbs have done horrible things here, by the way. They aren't the only bad ones. They just happen to be the worst ones. Let's get peace in the Balkans by talking to all sides and not cutting off communication. When you have a crisis, that's the last time that you want to cut off communication.

MR. MAC NEIL: Tony Lewis, how do you respond to that, that the way to go is to approach the Bosnian Serbs?

MR. LEWIS: Well, I have to admit I'm disappointed. I'm a great admirer of Gen. Galvin, because when he was NATO supreme commander, he said what I believe to be the truth, if we had acted at the very beginning, when the Serbs began shelling Vukovar and Dubrovnik in the fall of 1991, we could have stopped the whole thing then. We had the power to do it, NATO that is. But instead of using the alliance for what it was intended to do, a slight extension of it agreed, but to stop affronts to the peace and security of Europe, to prevent aggression across borders, instead of that, we got UNPROFOR, which is just supposed to get humanitarian aid and not do anything, and it's been simply paralyze. You know, General, the notion that we can go back to the, to the negotiating table with the leaders of the Bosnian Serbs just seems to me to be Never Never Land. I want to say one other thing, if I may, Robin, and that is we haven't touched on what I think may be the worst menace in this, if you put aside the human misery in, in Bosnia, and that is the threat to the western alliance. Assistant Secretary of State Holbrook said yesterday in a speech in Budapest that what's happened in Bosnia is the greatest collective failure of the West since the 1930's. I think that's true, and I think as it goes on, the very nature of the western alliance which has kept the peace in Europe is at stake. It's very serious.

MR. MAC NEIL: And do you agree with that, Leslie Gelb?

MR. GELB: I think this is the central challenge to U.S. foreign policy and to NATO, there's no question in my mind about that. But the striking thing about this conversation, Robin, is here you have four not unintelligent guys, none of us can tell you the first thing on how to get those hostages out, other than capitulate to the Serbs. None of us can tell you anything terribly interesting about what we want to achieve, except peace, and whatever any of us says, the other says it's impractical. I talk about a limited strategy, pulling all the pieces together. Bill Hyland, who is a smart fellow, says that's impractical, but yet, he was in favor of massive escalation, which would have required even more allied solidarity and support than what I'm talking about.

MR. MAC NEIL: Do you think that what you've just outlined and the differences among you all, but what's common among you all is exactly what the administration keeps turning around, itself, in its own circles?

MR. GELB: Yeah. It's because the political leadership and the foreign policy community are deeply divided about several rather fundamental issues. Is Bosnia -- are the Balkans really critical to our security? And we're still arguing about that. Is there a way of dealing with that situation militarily and diplomatically that's workable? And we're fighting about that too. Three years later, we haven't moved this debate along an inch.

MR. MAC NEIL: Do you agree with that, Bill Hyland?

MR. HYLAND: Well, we haven't moved the debate, but the situation has gotten far worse, because the United States at least refuses to accept, I think, the consequences of this failure, which is to withdraw from this whole mess. Now, we don't do that, because we don't have any ground troops, but we constantly give advice to Britain and France and NATO as to what to do, and then we walk away, walk back to the bench, and now we're practically back in the showers. I think the United States is simply going to have to recognize that it cannot lead this crisis, and it's up to the Europeans and has been all along to decide how to end it. And I don't see how to end it, but certainly bombing does no longer seem to be the way to go.

MR. MAC NEIL: Gen. Galvin, do you agree with Bill Hyland that the United States really has to effectively step out of it and let the Europeans do it?

GEN. GALVIN: No. I don't agree with that. But I do think that what we have here has been entirely emotionalized. For example, right now, the Muslims and the Croats together have about 160,000 troops under arms. The Serbs have about 80,000. So they're outnumbered two to one. Most of the aggressive actions have been initiated within that last year by the Muslims and Croats. Now that kind of thing just doesn't get through this tremendous network of our emotions in this. Let's take a cool look at this. We want peace in the Balkans, you get that by bringing the sides together, not by trying to punish them.

MR. MAC NEIL: Okay. Well, Gen. Galvin and gentlemen, thank you all for joining us. FOCUS - RENOVATING HUD

MR. LEHRER: Finally tonight, a look at the Department of Housing & Urban Development known as HUD. It's a federal agency with many challenges, the most important at the moment being that from budget cutters talking about downsizing and even elimination. Betty Ann Bowser reports.

BETTY ANN BOWSER: For Henry Cisneros, the day of reckoning is coming. As Secretary of Housing & Urban Development, he's barnstorming the country, trying to save his agency from suspicious Republicans who question its very existence. But he's also having to soothe public housing residents, who are fearful of changes in federal housing policy. And while it may seem odd, one of the ways Cisneros is trying to save HUD is by talking about what's wrong with it.

HENRY CISNEROS, Secretary, Housing & Urban Development: I acknowledge that HUD has not been the exemplary agency that it ought to be over the years, had no feel for local strategies at all, aloof and distant, federal bureaucracy, a bureaucracy that seemed to award [reward] its people for how many times they could say no to people, instead of how often they could get to yes, a bureaucracy that seemed to have as its motto, "Gotcha, you can't do it that way. Caught you again."

MS. BOWSER: Cisneros has a radical plan to rebuild that arrogant bureaucracy from the ground up, and there's a lot to rebuild. In 30 years, HUD has grown into a complex sprawl of 200 different programs dealing with thousands of communities with competing agendas. It also makes the rules that govern literally millions of public housing units. Some of HUD's programs work well. Others have a troubled history. Desire public housing project in New Orleans is a crumbling ghost town that's 70 percent empty. Lafayette Courts in Baltimore is so far gone that HUD recently awarded money just to tear it down. Meanwhile, empty unites lie piled with trash and rubble. The government's General Accounting Office even produced a film using taxpayers' money about problem housing.

GENERAL ACCOUNTING OFFICE VIDEO SPOKESMAN: Physical problems at Edgewood are numerous and longstanding. A 1992 HUD physical inspection report described many occupied and vacant units at Edgewood as "unfit for human habitation" and described Edgewood's physical condition as "deplorable."

MS. BOWSER: The secretary's strategy is to save HUD by reinventing it. Under his plan, the 240 some programs would be consolidated into just three. One would pay for housing vouchers for low income tenants, who could use them to find affordable housing in the private sector. It would, in essence, replace what we know of today as public housing. Another program would fund general community development, and a third would pay for new rehabilitated low and moderate income housing for the elderly, disabled, and the poor. The old logic is cities get money by applying for existing federal programs. But under the new plan, millions of federal dollars would be turned over to cities and states, and they'd be allowed to devise their own programs. It's another example of block grants, a concept growing in popularity on Capitol Hill and among big city mayors and governors.

HENRY CISNEROS: We're taking a giant leap of trust, a giant leap of faith in communities, and we're saying, you know the problems at the community level, you devise the plan, you devise the strategy, you imagine and dream about what it's going to take, and we will stand behind you with some predictable funding to get it done. We're flipping the logic that heretofore has said, oh, you have a problem, you make it fit our program.

MS. BOWSER: The reinvention plan expands on the oldest block grant program in government, which partially funds this day care center in Colorado Springs. It's called the Community Development Block Grant program because cities can use the money for all kinds of community development programs. In Denver, block grants help Savio House fund this program for troubled teenagers.

MAN LEADING DISCUSSION SESSION: Do you guys have developed friendship or relationships with other people?

MALE TEEN: I think a lot of it is it's easier to make friends in here as you live with them and stuff.

MS. BOWSER: Even hard critics say, on balance, those grants have been successful. But the department's own inspector general has found repeated instances of abuse in cities all over the country. Even the Secretary recognizes that.

HENRY CISNEROS: Rarely a month passes that I don't hear of some community that has used its community development block grant funds incorrectly, and it's a problem. For example, I was in one major American city that I know has a good, strong, efficient government, and yet, in this community, there was a controversy that even a newspaper had gotten into and editorialized on which was to use community development block grant funds which were set aside for poor neighborhoods to build a municipal parking garage downtown adjacent to a new hotel that was being built. And we think that's an incorrect use. That is not in the spirit of what community development block grant funds were intended to do.

MS. BOWSER: So what would happen if cities all over the country were given millions of federal dollars and told they could design their own programs with virtually no strings attached? That's what officials here in Baltimore tried to do several years ago when they faced a massive housing shortage, but their plan backfired.

DEMONSTRATORS SHOUTING: We want change! We want change!

MS. BOWSER: For years, tenants in Baltimore public housing held demonstrations and rent strikes to complain about living conditions they were subjected to. Theresa Williams waited an entire year to get a hole in the wall fixed by the city.

THERESA WILLIAMS: This is the hole. The city took this piece out of here, and you'd think they would come fix it?

MS. BOWSER: By 1992, thousands of public housing units stood empty and boarded up, while upwards of 30,000 people were on waiting lists. Mayor Kurt Schmoke called on an old friend and political ally, Dan Henson to become commissioner of housing. Henson is a private developer who, himself, grew up in public housing and had a unique perspective on his mission.

DANIEL HENSON, Commissioner, Baltimore Housing Authority: What I've always done with my life is to try to understand the rules better than the guys who wrote the rules. In this case, I think what you will find when you're at the end of all of this is that I understood the rules real well.

MS. BOWSER: Declaring an emergency, Henson threw away city rules that required competitive bidding on housing projects. Millions were spent to rehabilitate dilapidated public housing units. But according to a four-month investigation by the Baltimore Sun, some of the money went to people with political connections to the Schmoke administration. Tenants complained that much of the renovation work was just plain shoddy. The IG's office found contractors were paid for work that was never completed and that some were overpaid by as much as 46 percent.

UNIDENTIFIED WOMAN: I look at it and say how could they put this together like this? You know, I could have done a better job than that.

UNIDENTIFIED MAN: The stove is really supposed to be pressed up against the wall. Instead of it being pressed up against the wall, that allows mouse to jumps up here, to run across here, and just run all over the stove.

UNIDENTIFIED WOMAN: As you'resittin' in the bathtub, you got paint floatin' all in your bath water. You got to get out of the bathtub, you got to do it all over again.

MS. BOWSER: The IG's office looked at 65 examples of Henson's rehab program. It found problems with 64. But equally upsetting to HUD regional officials was Henson's open willingness to allow no- bid contracts.

KAREN MILLER, Housing & Urban Development Department: They did not follow their own rules, and their own rules said that they had to get verbal quotes from three contractors and that they were to select the lowest bid. And they essentially did not do either -- go by either our rules or their own.

DANIEL HENSON: With 30,000 people on a waiting list, over a thousand people in substandard units, $18 million dollars in the bank, and 2400 vacant units, I made a decision we had to do something, and the standard bidding process was not acceptable, it would have taken too long. We would have literally lost people if we had done that. We had people living in buildings that were unheatable.

KAREN MILLER: Contractors were overcharging, say charging twice as much to paint a unit as would be expected under competitive process. Contractors were doing in some cases, in a number of cases, very sloppy work, in some cases were not doing the work that they were supposed to have done and for which they were being paid. It was basically that people weren't watching the shop. There was a lack of internal controls and a lack of external controls.

MS. BOWSER: Even after the blistering audit by the IG's office, Henson remains unrepentant in public appearances.

DANIEL HENSON: Contractors were not overpaid for the work. Most of these units renovated were boarded up shells, requiring total renovation, including new plumbing, heating, and electrical systems. The average renovation cost was less than $25,000. We still are educating HUD about the methodology of how prices were derived.

MS. BOWSER: HUD is also standing firm, saying Henson's authority did break many rules, demanding the city return $700,000 the Department says was misspent. Some people will not only be looking for jobs, so far 12 Housing Authority employees and contractors involved in Henson's rehab program have been indicted on criminal charges of taking and receiving bribes. All have pleaded guilty.

SEN. LAUCH FAIRCLOTH, [R] North Carolina: Mr. Chairman, it is no secret that I want to abolish HUD.

MS. BOWSER: It's just more ammunition for HUD's critics on the Hill.

SEN. LAUCH FAIRCLOTH: Since HUD was created in 1965, I think it has failed to accomplish what it set out to do.

MS. BOWSER: Congress is holding a series of hearings on what to do about HUD. This comes at a time when the General Accounting Office has put the Department on its high risk list for fraud, abuse, and waste, the first and only time the GAO has done that to an entire cabinet department.

HENRY CISNEROS: But the general thrust of elimination clearly would not reform federal programs or policies which all of us agree need restructuring. Those responsibilities would merely be spun off to disparate federal agencies that have little responsibility or familiarity or understanding of housing issues.

MS. BOWSER: The GAO's Judy England-Joseph says HUD has too many programs.

JUDY ENGLAND-JOSEPH, General Accounting Office: You know, HUD doesn't have one mission. It has many missions. And when I say complex, they're supposed to save urban America. You know, they're supposed to revitalize very, very distressed communities that have many, many problems. They're supposed to save homelessness, for Pete's sake. I mean, talk about perhaps even an impossible mission, it's something that I think boggles the minds of a lot of people on the Hill today that are trying to figure out what do we do about this.

SEN. CONNIE MACK, [R] Florida: The real question is the detail of how those funds are then going to be handled, how will decisions be made, what kind of strings will be attached.

MS. BOWSER: So HUD and Congress have a tough and perhaps delicate task. They have to create an agency that can keep cities honest with federal funds but without stifling their best and most creative ideas. That was HUD's problem in the past. How do you give the local communities the power to do that and the flexibility to do that, and at the same time make them accountable somewhere, someplace, somehow for the millions and millions of dollars that are going to be put in their hands?

DANIEL HENSON: Well, that's the trick. It's interesting that we hear Sec. Cisneros and the program staff talk to us about waivers, seeking waivers, and cutting bureaucratic red tape, but the minute you start doing some of this, the HUD office of the inspector general comes and gigs you and you say, but I'm empowered, and they say, oh, no, that's those guys, that's the political appointees talking. I mean, that's literally the language they use -- that's those political appointees, we're the guys that really protect stuff. Well, the problem is they're really not protecting anything. What they're really doing, essentially, is using their perverse sense of power to gig local agencies that are really trying to solve local problems.

MS. BOWSER: He essentially says that the IG's office was playing a game of "Gotcha" when we interviewed him.

HENRY CISNEROS: I don't believe that that is true. I -- I looked at this with a completely open mind, when I first saw the inspector general's report, and what we saw there was not just smoke, but some sparks, hot coals, and eventually real fire.

MS. BOWSER: This is clearly a time of big change in national housing policy. Old solutions like high rise public housing projects are being demolished because they're now seen as part of the problem. Some people want to do a similar job on HUD. The man who runs that agency will have to balance many competing imperatives as he tries to reinvent it.

HENRY CISNEROS: But even if HUD were to go, the Congress will have to face up to its responsibility to people who are housed. It will have to --

MS. BOWSER: Can the Secretary fulfill his vision? Those who watch HUD and the budget cutting Congress aren't sure. RECAP

MR. MAC NEIL: Again, the major story of this Tuesday was the war in Bosnia. Two thousand U.S. Marines arrived off the coast of Bosnia. They might be used to evacuate UN peacekeepers. Serb rebels continued to hold more than 350 peacekeepers hostage, U.S. officials would not rule out the possibility of a commando raid to rescue them. Good night, Jim.

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