The MacNeil/Lehrer NewsHour

MR. MacNeil: Good evening. Leading the news this Tuesday, four American military advisers were reported held by rebels in a San Salvador hotel, the Bush administration says it was making plans to protect the American lives, Czechoslovakia's premiere said non-Communists could join the government. We'll have details in our News Summary in a moment. Judy Woodruff is in Washington tonight. Judy.

MS. WOODRUFF: After the News Summary, we make the events in El Salvador our lead focus. We talk with journalist and writer Clifford Krauss, who's been on the scene in San Salvador. Then we're joined by Gen. Fred Woerner, former head of the U.S. Army's Southern Command, James LeMoyne of the New York Times, who's written a book on Central America, William LeoGrande of American University, and Francisco Altschul, spokesman for the rebel group, the FMLN. Next [Focus - Handgun Control] controlling handguns. We hear excerpts from today's first time ever testimony on Capitol Hill by former Reagan Press Sec. James Brady, followed by a debate between Brady's wife, Sarah, speaking for a handgun control group, and Richard Gardiner of the National Rifle Association. Then a report [Focus - Savings & Loss] on today's congressional hearing on the scandal involving California's Lincoln Savings & Loan.NEWS SUMMARY

MR. MacNeil: Salvadoran rebels today seized a luxury hotel in San Salvador, taking a group of foreigners prisoner, then according to one account releasing them all, except four Americans, a Briton and a Chilean they said were military advisers. The hotel, located in a prosperous residential area, was surrounded by government troops who were repeatedly pinned down by rebel gunfire. The government troops suffered some casualties as they managed to seal off the neighborhood, but an army spokesman said his troops were not able to storm the hotel because the rebels had planted mines inside. The rebels also placed snipers on several floors of the hotel. The White House said the administration is making plans as necessary to protect the lives of Americans. The State Department described the rebels as terrorists.

MARGARET TUTWILER, State Department: The FMLN has for years targeted civilians and democratic institutions. It has failed to rouse popular support. This failure and their failure on the battlefield has resulted in this outrageous act of terrorism this morning in which civilians have once again been put at risk. The FMLN has shown its face to the world today. They are terrorists pure and simple. The situation in El Salvador is very fluid and dangerous. We will not speculate on the steps that either the El Salvadorian government or the United States Government may take.

MR. MacNeil: In Washington this afternoon a rebel spokesman said the U.S. advisers had fired on the attacking rebels and had been captured near the hotel. He said they were prisoners of war and would not be harmed. The rebels said they were willing to release them to their governments. The Associated Press quoted one of the Americans held as saying they were not hostages but that they couldn't lead the hotel safely. The American, who wore civilian clothes and carried an M-16 rifle, denied firing on the rebel troops. We will pursue this story further after the News Summary. Judy.

MS. WOODRUFF: In Czechoslovakia there was another huge pro- democracy demonstration. More than 200,000 people took part. It came as the country's prime minister said he would allow non- Communists to join the government for the first time. We have a report narrated by Roderick Pratt of Worldwide Television News.

MR. PRATT: The news was greeted with jubilation by the thousands gathered in Prague. The opposition groups made a major breakthrough in their fight for democracy, ameeting with the Communist Premier. Unaware of the announcement, a fifth consecutive night of demonstrations was going on in Wenislaw Square. The atmosphere was tense. There were widespread rumors that the government was about to launch a major crackdown by imposing martial law. The tanks were out in force but they stayed away from the demonstration. Students hurried through the crowd distributing leaflets, appealing to the people to remain calm and steer clear of confrontations. Many were fearful of a repeat of Friday's violent clashes between riot police and demonstrators. Later in the evening, the protests spread outside of Prague to the country's second largest city. About 10,000 marched in Bretislava on Monday, an indication that the pro-democracy movement is gaining support nationwide.

MS. WOODRUFF: In Moscow, Soviet Leader Mikhail Gorbachev today spoke about the changes in Eastern Europe. He made the remarks after meeting with visiting Canadian Prime Minister Brian Mulroney. Mr. Gorbachev told reporters it's important the reforms lead to a more open society. He said the East European nations as well as the Soviet Union misjudged their situation in the 1970s, thinking they were better off than they really were. He said now we have to make up for lost time and this requires a more rapid change of pace. West Germany's Foreign Minister Hans-Dietrich Genscher was in Washington today to talk to Pres. Bush about the upcoming summit with Soviet Pres. Gorbachev. Genscher reportedly wants assurances that the two super power leaders won't make sweeping new decisions about the future of Europe. Genscher brought Mr. Bush as a gift a piece of the Berlin Wall that's recently been torn away. He said the opening of the wall was symbolic of changes in the German Democratic Republic.

HANS-DIETRICH GENSCHER, Foreign Minister, West Germany: The German Democratic Republic is on the way really to become a democratic republic, but this depends on free elections they will have during this year and we are supporting very strongly these demands of our Germans in GDR.

MS. WOODRUFF: Senior officials at the Pentagon told the Associated Press today that Defense Sec. Dick Cheney is studying suggestions for what were called revolutionary changes in America's military. The changes would include cutting 100,000 army soldiers, getting rid of 100 Navy ships, and closing at least a dozen air force bases. Congress, meanwhile, prepared to close down for this session after a day of last minute meetings behind closed doors. Trimming the budget deficit and repealing some Medicare benefits were two items that remained to be resolved.

MR. MacNeil: Danny Wall, the Federal Savings & Loan regulator, told Congress he had made mistakes but he denied bowing to political influence in the Lincoln Savings & Loan scandal. Wall heads the Office of Thrift Supervision, formerly the Home Loan Bank Board. He testified before the House Banking Committee investigating the failure of the California thrift that will cost taxpayers an estimated $2 1/2 billion. Five Senators who received contributions from Lincoln's chairman, Charles Keating, had intervened on Lincoln's behalf, but at today's hearing, Wall said their intervention had no effect on his decision making.

M. DANNY WALL, Director, Office of Thrift Supervision: My decisions in the Lincoln case were my own. They were devoid of any political influence. I was not under the spell of Charles Keating. We have all learned some tough lessons from this case, we made some mistakes. In retrospect, we would do some things differently. We cannot change what occurred in the past but we can and must guard against allowing the mistakes of the past to be repeated.

MR. MacNeil: Charles Keating appeared before the committee this afternoon. After barring cameras from the room, he refused to testify, invoking his right against self-incrimination. The government today indicted a former official in the ongoing Housing & Urban Development scandal. Marilyn Louise Harrell had admitted she stole $5 1/2 million from HUD, saying she gave it to the poor. If convicted she could face up to 22 years in jail.

MS. WOODRUFF: A federal judge today accepted a guilty plea from Iran-Contra figure Albert Hakim and from one of the companies he operated. Hakim admitted to supplementing the salary of former White House aide Oliver North by paying for a security fence at North's home. His corporation pleaded guilty to taking money from the Iran arms sales and diverting it to the Nicaraguan Contras. The plea subjects Hakim to up to one year in prison. His company faces as much as $1/2 million in fines.

MR. MacNeil: The government reported today that higher food and energy costs helped push consumer prices up last month. The inflation rate increased by 1/2 percent in October, the largest jump since May. In business news, machinists at Boeing Airlines went back to work today. They ended their seven week strike last night by signing a new three year contract, which included wage increases and reductions in mandatory overtime.

MS. WOODRUFF: That's it for our News Summary. Coming up, Americans caught in El Salvador's war, a debate over handguns, and the Lincoln Savings & Loan failure. FOCUS - STATE OF SIEGE

MR. MacNeil: Our major focus tonight, the siege in El Salvador where at least four American military advisers and two other foreign nationals are being held in a luxury hotel in San Salvador by anti-government guerrillas. Our focus begins with an on-the- scene report from a veteran Central American journalist, Clifford Krauss. He's covered the story since 1981 for the Cox Newspapers and the Wall Street Journal and is now writing a book on the region. I talked with him by telephone a short while ago and asked him to describe the situation at the hotel.

CLIFFORD KRAUSS, Journalist: Robin, I was just up by the hotel about 45 minutes ago. I attempted to enter the front lobby with members of the Green Cross, which is like the Red Cross here. We were turned away by the army which was a bit upsetting considering that the Green Cross and others had been allowed in and out only an hour or two before. What we saw was a cordoned off area in which armored personnel carriers and El Salvadoran troops with heavy weaponry and battle dress surrounding the perimeter of the hotel, crouching around, going into what appeared to be attack positions. It's an extremely tense situation. The Green Cross had just taken out some personnel of the hotel who looked gray faced or white faced, but they seemed to have kept their calm. What you have in the hotel is you have a complex of two buildings. I was able to see only the front building. The guerrillas control a back building of the complex with a swimming pool in-between the two. My understanding is the guerrillas are on the bottom floor and on upper floors with approximately a dozen U.S. military trainers, some of whom are probably armed with at least pistols, in-between, trapped, not as hostages, but trapped, and there seems to be an understanding between the two sides up to this now, up to this time now that neither will shoot against the other.

MR. MacNeil: Whose count is that dozen or so, Clifford?

MR. KRAUSS: Excuse me.

MR. MacNeil: Whose count gives a dozen or so, does that come from American sources.

MR. KRAUSS: These are the journalists, relief workers who have come out. The number appears to be 13. But we've also heard numbers of four and we've heard numbers larger than that. The problem is is that those American trainers have told people to stay away; they're in one or two rooms; and you can't really see them and count them. These are not American military personnel who are here permanently. They are temporary trainers who were here on duty for two weeks, and it's my understanding that they were due to leave today. They came in from Ft. Bragg and they come here for regular training exercises with one force or another in the Salvadoran armed forces.

MR. MacNeil: Did you hear a report, and can you confirm what the guerrillas are saying, that they seized some of these American advisers after the American advisers fired on them?

MR. KRAUSS: I had heard that there might have been some firing but I am not at all convinced of that, Robin. At this point we have a situation here which is difficult to decipher. The guerrillas have not made any formal demands, but it does seem that what the guerrillas are attempting to do is provoke the authorities here and crack the government and the army, and perhaps even provoke a direct U.S. military response, and if you take that report that you just spelled out to me and put it in that context, it could very very easily be psychological operations trying to provoke the United States to act here.

MR. MacNeil: How do you interpret what the guerrillas are trying to do?

MR. KRAUSS: The guerrillas have been very very disappointed so far with the attitudes of Pres. Cristiani. He's been moderate, he's been a Democrat. They understand very well though that he cannot control the far right within his own party and with the military. What the guerrillas are trying to do is is to provoke those hardline elements to do what they did, what they probably did, allegedly did a few days ago in killing the priests, the six Jesuit priests, thereby undercutting the legitimacy of the elected president here and forcing the United States to once again look at El Salvador as a controversial issue, perhaps forcing the Congress to cut off aid. This is what the guerrillas want to do. You have to remember this war has been going on for 10 years, and when the war began in the late '70s, the Salvadoran guerrillas were a massive, popular organization. That has changed over the years partially because of U.S. policy, partially because the far right has killed so many of their cadres, and now what the guerrillas need to do is rather than slipping and sliding towards slow defeat is somehow change the dimensions of the conflict, taking the initiative once again, and that's what they're trying to do. But at the moment they're acting as a sectarian terrorist force, and what is happening is that the terrorists of the far right are taking advantage of that and Pres. Cristiani who is not an experienced leader is caught in the middle, is looking weak, and he is under increasing pressure from the far right within his party and the military. This government could very easily crack in the weeks ahead.

MR. MacNeil: Clifford Krauss, thank you very much indeed.

MR. KRAUSS: Thank you, Robin.

MR. MacNeil: Now we get four other views on the story. Francisco Altschul is the Washington spokesman for both the FMLN, the Farobundo Martine National Liberation Front, and it's diplomatic arm. Gen. Fred Woerner recently retired as Commander in Chief as the U.S. Army's Southern Command. He was the principal author of a report on the Salvadoran Army in 1981. He joins us from public station KQED in San Francisco. William LeoGrande is a Professor of Government at American University in Washington and author of a 1987 book about El Salvador and Nicaragua titled "Confronting Revolution". James LeMoyne covered El Salvador for the New York Times until last November. He's returned three times since for a book he's writing about Central America, and he joins us from Miami. Mr. Altschul, is Mr. Krauss right, that what your people are up to is to try and provoke the far right into an extreme reaction and to crack the government?

FRANCISCO ALTSCHUL, Opposition Spokesman: Absolutely not. The FMLN has put forth a very serious and viable proposal to achieve a political negotiated settlement to the conflict. The government of El Salvador has refused to give any reaction to that proposal and continues to demand the surrender of the FMLN.

MR. MacNeil: Well, what is the purpose of the attack on the hotel today?

MR. ALTSCHUL: The attack on the hotel is not an isolated case. You must understand that this morning there was military activity in fifteen or sixteen neighborhoods through the capital of San Salvador. So the attack on the hotel was not an isolated one and it did not have the purpose, I repeat, did not have the purpose of having, taking hostages, whether they were civilians or military advisers, as they turned out to be.

MR. MacNeil: What was the purpose?

MR. ALTSCHUL: I am not a military man but I know San Salvador. I know that the hotel is the tallest building in the area. As I said, there is military activity throughout the neighborhood. I imagine that is the reason. But I want to stress that it has nothing to do in terms of taking hostages.

MR. MacNeil: Gen. Woerner, how does seizing this hotel where it sits, in the middle of a very prosperous residential neighborhood, how does it change the situation?

GEN. FRED WOERNER, Former Commander, Southern Command: Well, on one instance it creates a problem for the government of El Salvador because it could be concluded that the government's constraint in resolving this problem at the hotel contrasts to the more violent approach in fighting the guerrillas in the poorer areas of the city, however, I believe that that conclusion is spurious because the two conclusions are quite different. That which we have been witnessing in the past week was traditional urban warfare that demands a certain type of response. And what we have here at the hotel is a blatant act of terrorism that must be approached differently.

MR. MacNeil: Mr. LeMoyne, does this put the Salvadoran government in a different situation than it was in now that this building has been seized in the middle of a neighborhood which contains the homes of many well-to-do Salvadorans?

JAMES LeMOYNE, Journalist: I think the government is really going to be put on the line in how it responds to this. It wouldn't surprise me if given the heavy fighting in that area the guerrillas, in fact, did not intend to seize this hotel and seize hostages. That's possible. It's possible they ran into this hotel as a strategic point, as General Woerner said. But now the government is stuck. It's going to have to get them out and the guerrillas are an extremely effective political military force. And they're likely to negotiate hard using the Americans who are there and the fact that this hotel is in a very affluent residential area, and pointing out that the government will not attack it, whereas, it did attack the poorer neighborhoods.

MR. MacNeil: Mr. LeoGrande, what do you see as the Salvadoran government's options now?

WILLIAM LeoGRANDE, Political Scientist: I think war is a continuation of politics by other means and this element of the rebel offensive has had primarily a political objective. They want to show that the armed forces and the government was willing to bomb poor neighborhoods but will not be willing, they're wagering, to bomb the wealthy neighborhood of Escalon. In that way, I think the guerrillas are trying to put the blame for the damage that was done in the poor neighborhoods in the fighting over the last week squarely on the back of the government and gain a political advantage from that.

MR. MacNeil: Is that the intention, Mr. Altschul?

MR. ALTSCHUL: I would like to stress that the activity that started this morning was not only in the Escalon or in the rich neighborhoods, but also continued in the previous poor neighborhoods.

MR. MacNeil: So you don't buy this explanation that Mr. LeoGrande has given that this hotel was singled out, because the government would not respond by attacking the rich neighborhood the way it had the poorer neighborhoods, you don't buy that explanation?

MR. ALTSCHUL: Well, I think that what is going on, as Mr. LeoGrande says, there is a war going on in the capital of San Salvador. This is what, the eleventh, twelfth day of constant conflict. This is to stress the need, I would say, to achieve a negotiated solution to the conflict. It is very clear that the FMLN, contrary to what the Salvadorian army and government had been saying and as your report previously or your interview with Mr. Krauss said has been wiped out or defeated, it is clear that that is not the case. The FMLN is a force. It's a sector which has to be taken into account in a serious negotiation between all Salvadorans.

MR. MacNeil: I think what Mr. Krauss was referring to, Mr. Altschul, was that there was not the popular uprising when this new offensive started 10 days ago that the FMLN called for.

MR. ALTSCHUL: I would question that in the following sense. In poor neighborhoods in which the FMLN went initially and is still there, there has been substantial popular support. You must understand that many of the FMLN combatants come precisely from these poor neighborhoods. There are written reports in the U.S. media in which there have been clearly statements of support from the population for the FMLN combatants.

MR. MacNeil: Let's go back to you, Gen. Woerner. Before we move on to what the U.S. can do here, what are the Salvadoran government options dealing with this immediate tactical situation in this hotel?

GEN. WOERNER, Former Commander, Southern Command: The Salvadorian government can use the full range of counter terrorist tactics available to any nation facing a hostage situation. And I believe that this is a hostage situation and that it was the intent all along of the FMLN guerrillas. Their options range from negotiation to assault on the hotel, itself, or any combination thereof.

MR. MacNeil: Are the Salvadoran army capable of that sophisticated approach to a situation like this?

GEN. WOERNER: Yes, they are. They have a counter terrorist force that has been trained both in negotiation tactics and in assault.

MR. MacNeil: How do you see the capabilities of the Salvadorans in this situation, Mr. LeMoyne?

MR. LeMOYNE, Journalist: I think Gen. Woerner is right, if the Salvadoran Army decides to take the hotel, they can take it, but the political fallout from that is something they may not be able to take. And I'm not convinced that they have the capacity to negotiate in the midst of a war in their capital city and avoid inflicting civilian casualties that will really cost them politically. It's going to be very difficult for them.

MR. MacNeil: Do you have an opinion on that, Mr. LeoGrande?

MR. LeoGRANDE, Political Scientist: I think that the political cost is exactly the problem that the government faces, not only around the issue of the hotel and the international attention that's been brought to bear on that, but also in the fact that every few days the fighting does seem to flare up in a new neighborhood, demonstrating that the FMLN does have the capability militarily to carry on this offensive way beyond what any observer thought was possible.

MR. MacNeil: Gen. Woerner, let's now move to the Americans. First of all, under the rules of engagement that U.S. advisers work under, and assuming that these are U.S. military advisers trapped in the hotel, and as some reports have it armed with either side arms or M-16s, what can they do? What are they permitted to do?

GEN. WOERNER: The U.S. military advisers in Salvador have the same rights under the peacetime rules of engagement that all U.S. military have stationed worldwide, the right of self defense.

MR. MacNeil: Now would it be self defense to break out of that place if they were confined and they saw an opportunity to do it, to fight their way out, or would that not be construed?

GEN. WOERNER: I would consider that most definitely a legitimate act.

MR. MacNeil: Now let's move on while we still have you , General. What do you see as the options of the Bush administration right now faced with this new situation?

GEN. WOERNER: The Bush administration can, has a range of options that extends from its current activity of support to the government of El Salvador all the way to direct military intervention. I believe that the administration is very appropriately keeping its full range of options open and we are in no position at this stage of the game to substantiate a change of the current strategy of indirect support to the Salvadorian government.

MR. MacNeil: Mr. Altschul, what does your side hope Washington will do?

MR. ALTSCHUL: I would first like to address some of the comments of Gen. Woerner. I want to stress that the military advisers are not being kept as hostages. Since the beginning, the FMLN made it known very clearly that it was willing to release the military advisers to their respective governments. I want to stress that position.

MR. MacNeil: Why hasn't that happened then?

MR. ALTSCHUL: I understand that there are efforts being done in that sense for that. Obviously the Salvadorian government has to play a role and has been in the case of for example the evacuation of the civilians from the other areas in the city, the Salvadorian government has not been allowing for that evacuation. In terms of the U.S. options, I hope that this will make it very clear of the need to find a rational way out of the conflict in El Salvador. The U.S. has an enormous leverage vis-a-vis the Salvadorian government and the Salvadorian armed forces. I would hope that instead of supporting the tactics that the government has done in terms of indiscriminately bombing civilian population that they would use its leverage and its resources to bring about a negotiated settlement to the war among all Salvadorians.

MR. MacNeil: Mr. LeMoyne, you're an old hand at observing this war. What do you see as where this puts Washington tonight? What can it do?

MR. LeMOYNE: I think it's going to put the administration on the hot seat, which is some place that the Bush administration has been working very hard to avoid in Central America. They're going to have to make hard decisions. At this point, they're supporting a government that is rapidly becoming more dependent on the army, probably an army some of whose elements have murdered six Jesuit priests. That means the hard right is going to be making decisions in El Salvador, probably counseled by members of the High Command. To get through this particular part of the conflict the Salvadoran Army has survived, no military base has been overrun, but the war continues. And when this settles down, and I think the offensive is going to dwindle in the next week or so, the Bush administration is going to have to ask itself if it wants to be in El Salvador in a civil conflict that the United States did not create that's killed 70,000 people and shows no signs of ending. I don't think in those circumstances it's a kind of surrender to consider seriously what Mr. Altschul said, which is to look at some kind of possible negotiation. There has not been a serious negotiation in El Salvador to date and really it seems to me that any rational person looking at this war would look at that option.

MR. MacNeil: Gen. Woerner, what's your response to that?

GEN. WOERNER: I believe that we must pursue all the options available to us and to Salvador that include negotiations and that has been the position of the last two administrations. However, to envision a situation in which the guerrillas can negotiate their objectives at the bargaining table that they have been incapable of achieving otherwise, I don't see the logic of that. The Salvador --

MR. MacNeil: You mean they can't bargain their way into a sort of new position by taking some Americans hostage and then compelling the U.S. government to take a different stand?

GEN. WOERNER: Exactly. Salvador has conducted six democratic elections that have been supervised internationally and overwhelmingly considered to represent the vast majority of the people during this past decade. Rubin Somore is and Ugo Ongo are at liberty in San Salvador representing the FDR and the FMLN permitted to participate in the democratic process. The violence will stop if the guerrillas will resort, abandon violence and resort to the democratic process, an opportunity that is open to them. That's when the violence will stop.

MR. MacNeil: Mr. LeoGrande, we just have a moment. How do you see it?

MR. LeoGRANDE: Over the last five years or so, U.S. policy has been based on the premise that the guerrillas were gradually losing the war and the army would prevail. The events of the last week have demonstrated that that was a mistaken presumption. And so I think we have to go back to the beginning and examine what's in the best interest of the United States. If there is no military solution to this war, how can we move towards a political solution that safeguards the legitimate interest we have --

MR. MacNeil: Well, gentlemen, thank you all, and of course, tonight until they can move on to wider considerations like that, they have to think about what they do about the people inside that hotel. Judy.

MS. WOODRUFF: Still to come on the Newshour, a debate over handgun control and the Lincoln Savings & Loan failure. FOCUS - HANDGUN CONTROL

MS. WOODRUFF: Next tonight we go to handgun control and to the debate over a seven day waiting period before the purchase of a handgun can be completed. A Senate subcommittee heard testimony today on a bill now in Congress named the Brady Bill that calls for just such a mandatory waiting period. It is named after James Brady, former presidential press secretary to Ronald Reagan. Brady was seriously wounded in the March 1981 assassination attempt on the President. Today marked the first time Brady had ever appeared before Congress to testify on behalf of the bill.

JAMES BRADY, Reagan Press Secretary: Of course, I am honored to be here, but it is not the honor that compelled me to appear before you today, it's the anger, anger at a Congress that just a year ago failed to pass a measure which would reduce the handgun violence by plaguing our nation. I had no choice but to be here today because too many members of Congress have been gutless on this issue. I think another member said that they've been afraid to take on the National Rifle Association. They have closed their eyes to the tragedies like mine. They ignored the statistics. Well, this statistic has decided to break his silence. Those members of Congress who oppose a simple seven day waiting period should try being in my wheels just for one day. Do you know what it's like to go through every day? I'm not here to complain. But since you're here, I'll complain a little. I'm not seeking your pity or sympathy. I'm thankful for the chance I've had at life and for the support I've had over the past eight years. But I wanted you to really understand what it's like being shot and what it's done to me and my family. There was a day when I walked the halls of this Senate and worked closely with many of you and your staffs. There was a wonderful day when I was fortunate enough to serve the President of the United States in a capacity I had dreamed of all my life, and for a time, I felt that people looked up at me. Today I can tell you how hard it is to have people speaking down to me. Yes, I experience pain, pain sometimes so intense I cry, but nothing is harder than losing the independence and control we all have so valued in our lives. I need help getting out of bed, taking a shower and help getting dressed. And damn it, I even need help to go to the bathroom. It's not easy to tell you this because I don't want your sympathy or your pity, but I tell you because you can do something not to help me but to prevent this from happening to others. There are some who oppose a simple seven day waiting period for handgun purchases because it would inconvenience gun dealers. Well, I guess I'm paying for their convenience, and I'm one of the lucky ones. I survived being shot through the head. Other shooting victims are not as fortunate. I'm a Southern Illinois boy who grew up hunting and at home with guns. I don't question the right of responsible gun owners. That's not the issue. The issue is whether the John Hinckleys of the world should be able to walk into a gun store and purchase a handgun instantly. Let's get down to the politics of this issue. I've been involved in politics with Dorothy and campaigned since I was old enough to stuff envelopes so I understand that many of you are intimidated by the gun lobby. But you've got to look squarely at the facts. Law enforcement says the Brady Bill will work. The polls tell us that 91 percent of your constituents support it. What other issue enjoys such public support? Well, damn it, don't let the vocal minority dictate your position. Politically it's a winner. Morally it's the right thing to do. I'm pleased to be beside Sarah today. I finally get to see what she does up here. I feel compelled to get involved because there are too many cowardly lions walking the halls of Congress. I fight every day to maintain the courage I need to survive. I pray that Congress can find the courage to quickly pass the Brady Bill.

MS. WOODRUFF: We go now to two people with different views on the waiting period. Sarah Brady, as you saw, is the wife of James Brady and she is the head of Handgun Control, Incorporated, a national gun control policy organization that supports the bill. Richard Gardiner is the Director of State and Local Affairs for the National Rifle Association's Institute for Legislative Action, an opponent of the measure. And let me just say to Sarah Brady, first of all, the issue aside, that was an extraordinary performance by your husband before the committee this afternoon. Let me begin the questions with you, Mrs. Brady. There was a similar bill that was defeated in the House a year ago. What has changed since then? What makes you think that you have a chance now that you didn't have a year ago?

SARAH BRADY, Handgun Control Lobbyist: Well, last year, Congress was able to throw the ball to the Attorney General, to Justice Department, and we all sat back and hoped that the task force, and I'm speaking about the McCollum amendment, which was a substitute to Brady, which mandated that the Attorney General come up with a system, and we've waited for that report. It has now come out and it shows that it is going to be a long time before we come up with a system that is indeed perfect.

MS. WOODRUFF: This was something that was mandated by the Congress last year in lieu of passing the legislation?

MRS. BRADY: That's correct. That's correct. I think many members of Congress felt that what they were doing was mandating that within a year something would come out which would provide a felon check and make it more difficult for the fugitives and felons to be able to buy guns over-the-counter.

MS. WOODRUFF: Let me ask you, let me just back up a moment. How would the bill work as it's presently written? What would, say if I went into a store to purchase a handgun, what would happen? What would I have to do?

MRS. BRADY: You would fill out a federal form which would ask your name, address, have you been, are you a felon, all the things that are prescribed, an illegal alien, have you ever been adjudicated mentally ill. You then wait seven days while the gun dealer sends the form to the local law enforcement community who then has the option of running a background check. If you don't get a hit, if the law enforcement community does not let the gun dealer know that it is indeed someone who should not purchase a gun, they can give the gun to the purchaser at the end of seven days.

MS. WOODRUFF: And what does this waiting period achieve, in your view?

MRS. BRADY: It screens out illegal purchase of handguns. Twenty- three states have it today and they testify that it does work. Every day people attempt to purchase handguns who are convicted felons or fugitives.

MS. WOODRUFF: And you're saying this would help screen some of those out?

MRS. BRADY: Absolutely.

MS. WOODRUFF: Mr. Gardiner, what's the objection to that?

RICHARD GARDINER, National Rifle Association: The problem is that people like that, convicted felons, fugitives, just aren't buying guns from legitimate commercial sources. We know from the state of California, from the state of Illinois, from the state of New Jersey, which have waiting period type legislation, that at absolute most we're talking about 1/3 of 1 percent of people who attempt to buy a particular gun are, appear to be disqualified. Now what we also know though is that after the waiting period went into effect or a permit to purchase system went into effect, the crime rates jumped much higher than they jumped in neighboring states without that. So if your definition of success is that people are turned down, yes, people are turned down. But one of the things we know from the attorney general's report that just came out is that there are an awful lot of turndowns, 50 percent in some cases, which are completely justified, because the record system on which this whole thing is based is inaccurate and incomplete.

MS. WOODRUFF: Let me go back to the point you made earlier, that even in those 23 states where handguns, there is a waiting period, that people still manage to get guns and that the crime rate, the use of handguns illegally, is not reduced. How do they get the guns?

MR. GARDINER: They buy them illegally; they steal them. There are a whole variety of ways you can get them. New Jersey is a good example of where guns are stolen from police officers, from people who own them legally, from gun dealers, there are a whole variety of ways you can get them. Some people even make them.

MS. WOODRUFF: What about that, Mrs. Brady?

MRS. BRADY: It's very interesting. Take New York, for instance, which has very very stringent rules on purchase of handguns. Of all the crime guns that are traced in New York City, only 4 percent of them come from New York. They are brought in from out of state.

MS. WOODRUFF: Because New York --

MRS. BRADY: Because New York has the strong -- but they are able to get them from states like Florida, from Georgia, from neighboring states that don't have background checks available.

MS. WOODRUFF: What about that, Mr. Gardiner?

MR. GARDINER: They're not getting guns legitimately from other states. In fact, it's been a federal felony for over 20 years to go into another state and buy a handgun. So they're not getting them that way. They're getting them in New York, which is a heavily heavily regulated state and particularly New York City from illegitimate sources, because the permit system has established a whole underground source of firearms. And it's interesting that the states which have imposed the waiting periods like California, like New Jersey, like New York, are also the states that have seen crime rise the most.

MS. WOODRUFF: What about that, Mrs. Brady? He's saying crime is not increasing despite the --

MRS. BRADY: Obviously there are a lot of different reasons crime increases. I don't think, I mean, that's like talking apples and oranges. The very fact remains that in states where waiting periods are in effect people are turned down from purchasing guns. And secondly, law enforcement, who I -- I guess have to rely on law enforcement's judgment -- they prefer this system, they want this, they feel it is the very best deterrent from keeping guns out of the wrong hands. There is no way we are going to keep all criminals from getting guns, but if we can take a very simple step which doesn't affect the law abiding and law enforcement, every major law enforcement organization is in favor of it.

MS. WOODRUFF: What about that, Mr. Gardiner, isn't that a pretty powerful statement?

MR. GARDINER: First of all, let me say I don't deny that a lot of people are turned down. That, in fact, is part of the problem is that these systems, particularly in a state like New Jersey and new York result in huge numbers of people being turned down, not legitimately turned down though but turned down illegitimately. One of the major problems we see in New Jersey is the terrible abuse of the permit system by the law enforcement agencies that administer it. So exactly what Mrs. Brady quotes is the success of the system is, in fact, what the flaws in it are. With regard to law enforcement, yes, there is certainly leadership of some of the major law enforcement organizations that support this organization, but we believe and we've heard from hundreds and hundreds and hundreds of them, that rank and file law enforcement recognizes what a fraud this concept of waiting period is, that if you're going to use resources, criminal justice resources, and the Attorney General says that we may be talking about the expenditure of hundreds of millions of dollars, the much better use of those resources is to keep those people, those very few people who are apparently buying guns illegally behind bars, so they can't get guns, they can't get rifles, they can't get baseball bats, they can't get anything.

MS. WOODRUFF: Is that a better approach, Mrs. Brady, just to lock these people up when you find them?

MRS. BRADY: Well, certainly nobody is going to take issue with the fact that we do need strong mandatory sentencing. But we need to do things before the crime is committed too, do what we can. I had a point I was going to make.

MS. WOODRUFF: Let me ask you this before you get to that. The attorney general, you mentioned the attorney general had come out with this report over the past year, it was released yesterday. Within this report he says that a truly effective background check would take weeks, if not months, and that it would result in what he called an unreasonable burden on legitimate gun purchasers. How do you respond to that?

MRS. BRADY: Well, I think in the first place that probably when you get down to it, the battle here is, are we really talking about deeply oppressed gun owners? 90 percent of the gun owners in this country favor a waiting period and background check, so I don't know who exactly Richard is talking about, but it's a very small minority of people. Are we going to worry about this very small minority, or are we going to look at public safety?

MS. WOODRUFF: You mean, the people who want to buy handguns.

MRS. BRADY: And seem to be having some type of inconvenience in being able to do so. If 90 percent of the gun owners favor this system, I don't understand where this deep oppression is coming from, when you look at public safety and the number of deaths, handgun deaths we have per year.

MS. WOODRUFF: Isn't that really what it boils down to, Mr. Gardiner, saying that the inconvenience to people who might be turned down, is that really outweighing the public safety factor here?

MR. GARDINER: That really isn't the issue. I mean, certainly there is a huge inconvenience. The question is whether this type of legislation is going to work to reduce crime. And the question you have to ask is are we interested in reducing crime, or are we interested in denying people, law abiding people, the ability to buy handguns? And one of the things we know from the states that I have mentioned is that the consequence of these laws is simply to result in people being turned down. It does not result in crime being reduced. And what we think is that if you're going to spend these resources, these hundreds of millions, maybe even billions of dollars, the attorney general talks about, the much much more efficient way to do it is simply to build more prisons, to hire more prosecutors to keep these people off the streets, so they can't go into gun stores, so they can't get any kind of weapon to attack law abiding people.

MS. WOODRUFF: Mrs. Brady.

MRS. BRADY: In the first place, the numbers that he's referring to, the millions and millions of dollars, are not money that it would cost under the Brady Bill. The Brady Bill does nothing more than ask for a seven day waiting period which allows local enforcement to run a background check. Local law enforcement --

MS. WOODRUFF: The expense he's referring to is a national computerized network.

MRS. BRADY: Would be for the national. So we're not talking about an expensive system. Most law enforcement organizations that have testified have said they'd much rather, they don't need to use officers and they'd rather put their money into checks than mopping up afterwards.

MS. WOODRUFF: Just quickly. This session of Congress is ending. What is your hope? What is your expectation in the future on this legislation?

MRS. BRADY: I think it has an excellent chance this session.

MS. WOODRUFF: This next year.

MRS. BRADY: Yes.

MS. WOODRUFF: Mr. Gardiner.

MR. GARDINER: I think in light of the attorney general's report and the fact, the evidence that has come out that the legislation is going to be very quickly voted down as a joke and a fraud.

MS. WOODRUFF: All right, Richard Gardiner, we thank you for being with us. Sarah Brady, we thank you. Thank you both. FOCUS - SAVINGS & LOAN

MR. MacNeil: As we reported, the central figure in the Lincoln Savings & Loan scandal, Charles Keating, Jr., invoked his fifth amendment right against self-incrimination this afternoon during an appearance before the House Banking Committee. Keating has acknowledged directing large contributions to the election campaigns of members Congress. He conceded it was to win their intercession with federal regulators, challenging Keating's operation of the failed thrift. The 1987 collapse of Lincoln Savings is expected to cost taxpayers about $2 1/2 billion. Jeffrey Kaye of public station KCET-Los Angeles has been covering the story and was in Washington for today's hearing.

MR. KAYE: As Charles Keating arrived for today's hearing, committee members expected that his appearance would be brief, and they were right.

JACK QUINN, Keating's Lawyer: May I address the Chair for a moment. It'll be a very brief statement.

REP. HENRY GONZALEZ, [D] Texas: The gentleman is not here in his capacity as a witness to render testimony to this committee or make any official presentation to the committee even in the capacity of counsel.

MR. KEATING: Mr. Chairman.

REP. GONZALEZ: Mr. Keating.

MR. KEATING: I respectfully request pursuant that pursuant to Rule 11-F2, 211, television broadcasts, radio broadcasts, and still photography be precluded during my appearance.

REP. GONZALEZ: The witness has asserted his privilege under the Rule 11, Clause 3-F2 of the rules of the House and Rule 11 of the committee rules. We must insist that all camera lens be covered immediately, immediately.

MR. KAYE: With recording devices excluded, Keating first tried to have the hearing closed to the public, then he changed his mind. Chairman Henry Gonzalez then asked if it was Keating's intention to refuse to answer all questions. Keating said he would decline to testify. Earlier today the committee heard from federal regulators from Washington who have come under attack in five previous hearings. House members have criticized them for failing to act on the recommendations of regulators in San Francisco to move swiftly in seizing Lincoln. Today Danny Wall and associates at the Office of Thrift Supervision defended their actions.

ROSEMARY STEWART, Office of Thrift Supervision: You have been told that the Office of Enforcement failed to investigate Lincoln, failed to issue subpoenas or take depositions over a two year period of time, demonstrating either an unwillingness or an inability to do our job. The fact is that in the entire year of 1986 when the field work was being done for the 1986 exam of Lincoln, there was not a single request for investigation made to my office, not a single request for a deposition or a subpoena was made to my office.

DARREL DOCHOW, Office of Thrift Supervision: It was the opinion as Rosemary Stewart has said of the Office of Enforcement, it was also the opinion of my staff in the office of regulatory activities at that time, that grounds did not exist to place Lincoln into a conservatorship based on that 1986 examination. I quite frankly thought this opinion was understandable.

M. DANNY WALL: Why did the problem occur? Why did the institution come to such an ignominious end? I offer the following reasons: the riskiness of Lincoln's business activities, duplicity of its management in hiding its violations, failure of San Francisco to obtain more accurate and timely information about Lincoln and its holding company, ACC, ineptitude at best of their outside auditors in presenting a true picture of the thrift's financial condition, and finally the inability of San Francisco and the Bank Board's staff to work cooperatively on this case, causing at least some delay and potential increase in cost to the taxpayers. Many people have said that I wasn't tough enough, some people have said that this was a no win job. Maybe both have been some people's views. But I would submit to you that I have said to 553 institutions you're out of business; 553 institutions have been brought down in the time that I've been in the positions of responsibility. Not tough enough? I don't know.

MR. KAYE: While they listened intently, several committee members continued to express concern that regulators did not act more promptly.

REP. HENRY GONZALEZ: I certainly don't want to be uncharitable or unkind, but I want to be as harsh as truth and as uncompromising as justice, but do you really truly believe that these excuses are comforting either myself or any member or to the American people? This is a very disturbing and scary message for the American public, paper work problems, personnel feuds and the niceties of the administrative processes notwithstanding. Even if we adopt all of the premises here and before set in by the San Francisco Bank case, I cannot accept that nothing could be done over two long years.

REP. BILL McCOLLUM, [R] Florida: What it all says to me is that you folks in the Washington office about this time in 1987 viewed the San Francisco examination office as pretty darned incompetent, and I'm concerned about why if that's the case you didn't have some heads roll at that point. What was the reason why they didn't have a shakeup?

MR. WALL: Well, I'm reminded that Mike Patriarcha had not been there at that point for a year yet. It was a matter of his getting in and putting into place his procedures, his methods and his systems. It is not something you can do overnight, it's not something you can do quickly. It takes time. It takes experience. It takes experience for those people who are there doing the work and learning as they do it. So it's an ongoing process.

REP. McCOLLUM: The problem I have with this and I think other members do is the fact that the finger's been pointed back down to San Francisco here today, all these failures, or whatever, but in reality, no matter how you point the finger back there, it still comes back into your shop to roost, because you were responsible for those people. I'm not saying there aren't excuses and you're giving excuses, but those excuses seem to fail to the extent that this all rests with you since you had the charge of all these personnel, and with your predecessor to the degree that he did. That's the problem I have. Let me change the subject very quickly.

MR. WALL: I'm glad you added the predecessor, because I only got there the first of July '87.

REP. McCOLLUM: I know but there's still a big problem here.

MR. WALL: It's the '86 exam we're dealing with.

REP. McCOLLUM: I think there's plenty of blame to go around but there is blame there.

MR. KAYE: As for Charles Keating, his refusal to testify late today came as no surprise. An attorney for Keating's American Continental Corporation said Keating is anxious to tell his side of the story but would rather do that in a court of law rather than the heated environment of a congressional investigation. Keating is likely to have that opportunity as the various lawsuits continue. RECAP

MS. WOODRUFF: Again the major stories of this Tuesday, Salvadoran guerrillas seized a hotel in San Salvador, taking a group of foreigners hostage, then reportedly releasing all, except four Americans, a Briton, and a Chilean, the rebels described as military advisers. The Bush administration called the rebels terrorists and said the use of military force to save American lives was not ruled out. This evening the guerrillas issued a statement saying they had offered the U.S. Government terms for the release of the six military advisers. Good night, Robin.

MR. MacNeil: Good night, Judy. That's the Newshour tonight and we'll be back tomorrow night. I'm Robert MacNeil. Good night.