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 the News Summary, we have a Newsmaker interview with President Clinton's new White House counsel Abner Mikva. Betty Ann Bowser reports on the efforts of George Bush, Jr., to unseat Texas Governor Anne Richards, two Hollywood analysts discuss the implications of the Spielberg-Katzenberg-Geffen deal to make a new movie company. And Washington essayist Phyllis Theroux looks at home schooling. NEWS SUMMARY

MR. LEHRER: Haitian military leader Raoul Cedras began a new life in Panama today. He and his army chief, Philippe Biamby, and their families flew there early this morning. Haiti's elected president, Jean-Bertrand Aristide, is scheduled to return to Haiti Saturday and reassume power. In Washington, White House Press Sec. Dee Dee Myers said the United States will unfreeze the U.S. financial assets of Haiti's deposed military leaders once Aristide returns, but she said the two men will never be allowed in this country. Robin.

MR. MAC NEIL: The Iraqi government today agreed to a peace plan presented by Russia's foreign minister, Andrei Kozyrev, in Baghdad. It would call for Iraq to recognize the Kuwait borders that were demarcated after the Gulf War. But in return, Saddam Hussein said the United Nations must agree to lift economic sanctions within six months. Also, there were reports today that three Iraqi brigades had halted their withdrawal near the town of Nazaria. It was not known if they had done so for logistical reasons or under orders from Baghdad. Some of the 20,000 U.S. soldiers in Kuwait engaged in military exercises today. Fifteen Marine helicopters flew over Kuwait City in a show of force. About 500 Marines conducted anti- tank operations and other live fire training in the Kuwait Desert. Defense Sec. William Perry said the number of ground combat troops in Kuwait will reach a peak of 30,000 within a week but could be reduced soon thereafter if Iraq continues its withdrawal.

MR. LEHRER: Northern Ireland's Protestant paramilitary groups announced a cease-fire today. It is effective tonight. The action follows the recent cease-fire by the Irish Republican Army. A coalition of pro-Britain, Protestant leaders made the announcement in Belfast.

AUGUSTUS SPENCE, Loyalist Leader: The permanence of our cease-fire will be completely dependent upon the continued cessation of all nationalist republican violence. The sole responsibility for a return to war lies with them.

MR. LEHRER: Irish Prime Minister Albert Reynolds said the announcement signifies the end of 25 years of violence and the closure of a tragic chapter in our history. Other reaction came from British Prime Minister John Major and from the political leader of the IRA.

GERRY ADAMS, Sinn Fein: Sinn Fein have been calling for some time for loyalists to stop. And I think this morning's announcement is a direct result of the IRA's very courageous initiative on the 31st of August.

JOHN MAJOR, Prime Minister, Great Britain: Another very important part of the jigsaw has fallen into place. What we now need to do is to absorb what has happened, consider it, and then decide how we move forward.

MR. LEHRER: Major said he still wants to be sure the cease-fires are permanent before he convenes talks between Irish, Protestants, and Catholics.

MR. MAC NEIL: In economic news, producer prices fell 1/2 percent last month. The Labor Department said the decline was the largest in more than a year. It was led by a drop in prices for fuel and coffee. President Clinton signed a bill today designed to simplify the government's purchasing system. It's expected to save $12.3 billion over five years. He said it would mean no more $500 hammers. The law is part of Vice President Gore's reinventing government plan.

MR. LEHRER: Japanese writer Kenzaburo Oe won the Nobel Prize for literature today. He was cited for the poetic force behind his fiction of post war Japan in novels, short stories, and essays. He's the second Japanese writer to receive the award. It will be presented to him in Stockholm, Sweden, in December.

MR. MAC NEIL: Swiss police said today they've identified the body of cult leader Luc Jouret. His remains were found among the bodies of 25 of his followers who died in a suspected mass murder-suicide last week. Police were searching for Jouret in connection with the incident. In all, 53 cult members were found dead in Switzerland and Canada. That's our News Summary tonight. Now it's on to the White House counsel, the Texas governors' race, Hollywood's new blockbuster, and a Phyllis Theroux essay. NEWSMAKER

MR. LEHRER: We go first tonight to Abner Mikva, the new White House counsel. Two weeks ago, he replaced Lloyd Cutler, who had replaced Bernard Nussbaum, who left after the counsel's office became embroiled in the Whitewater story. Mr. Mikva came to the White House from being a judge on the U.S. Court of Appeals in Washington. He was a Democratic Congressman before that representing Chicago districts in the House of Representatives for four terms. He's here now for a Newsmaker interview. Judge Mikva, welcome.

JUDGE MIKVA: Thank you, Mr. Lehrer. I'm pleased to be here.

MR. LEHRER: Lloyd Cutler spent much of his time working on Whitewater-related matters. Are you doing the same?

JUDGE MIKVA: Well, no. I'm spending some time on it. I'm hoping that I will have a chance to do more proactive things, rather than reactive things. Mr. Cutler was caught in a situation where he was pressed into service and immediately had to prepare for hearings on the Hill and so on. I'm hoping that my job, in addition to finishing up those things that Mr. Cutler was involved in, like the Whitewater hearing, will also involve trying to generate the kind of sensitivity to these ethical problems to keep them from happening in the first place. That would allow the administration, particularly the President, to focus his attention and have the American people focus their attention on the substantive issues that are going on.

MR. LEHRER: Is there -- are there unfinished matters on the Whitewater thing that you as the White House counsel -- describe what you see your role as White House counsel from this point on Whitewater.

JUDGE MIKVA: Well, on Whitewater, there are some hearings that will be resumed in the Senate and perhaps in the House when the special prosecutor completes his investigation about the, the matters that took place here in Washington. That will be the biggest part of my task in connection with Whitewater. And in addition, I will be monitoring whatever the private litigation is that goes back to whatever happened in Arkansas before the President became President. That's the Whitewater situation. Now, how much time it takes, in part, will turn on what the special prosecutor comes up with and says and does and what the two committees, the appropriate committees in the Congress say and do. But, again, I'm hoping that I will have more time to spend on, on doing the kinds of things that will, will allow the President and the administration to do the things that they want to do and also let the American people concentrate on those things.

MR. LEHRER: Sure. But you said -- you told some reporters yesterday that you were uncomfortable with some aspects of the legal defense fund that is being raised for President Clinton. What are your concerns?

JUDGE MIKVA: That's a dilemma that no one has come up with an appropriate or good solution to, and that is when a President is sued in a high profile situation, as this President has been doing, for conduct unrelated to the presidency, going back to when -- before he was President, how does he pay for the legal services that are involved? Now, I suppose we could impose a constitutional requirement that you must be worth $50 million before you can run for President. I think that would be very unfortunate. Maybe the lawyer, you could find lawyers that would volunteer their services, but I think there would be a serious ethical problem and a perception of an ethical problem about a lawyer who donated a million dollars' worth of his time to the President. And so you end up with the necessity for finding some kind of a vehicle like the defense fund to provide the resources necessary to pay. It's been done by other political leaders. It's been done by members of Congress, by governors, and there's another solution. When I was asked am I completely comfortable with it, I had to say no. I wish we had some other way of solving it, because I don't like to see, as I'm sure the President feels, I don't like to see him feeling that anyone is thinking that something improper is going on.

MR. LEHRER: A lot of people just think that's basically improper, for -- to raise money for a political figure or a governmental figure who needs money to pay a lawyer, that there's no way for that person not to be indebted to those folks.

JUDGE MIKVA: Well, that's why we have imposed some rather strict limits on how much can be put in by any single contributor.

MR. LEHRER: $1,000, right?

JUDGE MIKVA: $1,000, to make sure that no one really thinks that they're buying anything when they make their contribution. We're looking for other ways to insulate the President from the fund and the operations of the fund. It's being operated outside the White House. I only am monitoring it to make sure that there is nothing that implicates the presidency. Again --

MR. LEHRER: Are you watching to make sure that no thousand dollars are accepted from people who might be somehow suspect or might have some kind of thing that wouldn't look good on a piece of paper or on the printed word of the newspaper?

JUDGE MIKVA: I have a real simple answer. At this point, the fund has been so passive, and there's been such little activity, that I don't, I don't think they've raised very much money. And as far as I know, they're not engaging in any kind of fund-raising activities in the current. What I'm trying to do -- I should say what the lawyers of the fund are trying to do -- is to develop some kind of a means which will totally insulate the President from the fund so that he won't know who's contributing or what is happening in that. It's a very difficult problem, Jim, that I don't know anybody has come up with the answer to, as you say.

MR. LEHRER: Are you looking for a different way of doing it?

JUDGE MIKVA: I'm looking for a way that will insulate the President, but there is no way to solve the problem, as I say, short of saying we're only going to elect people who are rich.

MR. LEHRER: So -- but the decision that you just outlined -- the decision's already been made that the ethical questions from taking $1,000 from a group of people is better than taking the free services from a group of lawyers?

JUDGE MIKVA: You're talking about $1 million worth of services. That's --

MR. LEHRER: Yeah. But that decision's been made already?

JUDGE MIKVA: Yes.

MR. LEHRER: Yeah. On other issues related to ethics, you just issued a report on Agriculture Sec. Espy. Is it true -- there have been stories that you were the one who pushed to get Leon Panetta, the White House chief of staff, to get Sec. Espy to resign -- is that true?

JUDGE MIKVA: No, that's not true. What I think Mr. Panetta tried to do and I tried to do, and more important, the President and the Secretary tried to do was to come to closure on this so that it wouldn't just keep dragging on to the Secretary's embarrassment and more important, to the Department's inability to perform its functions. And the Secretary, when all the facts were presented to him, decided that the thing for him to do was to resign. He did. We've completed a report which reviewed all of the conduct. They went through the corrective action that he had taken or had been taking to make sure that he would not sit on any matters involving poultry or --

MR. LEHRER: Because the allegation was -- not an allegation -- he did, in fact, take some favors from a poultry company, the Tyson poultry operation.

JUDGE MIKVA: He took some favors. He took some free tickets to a sporting event. And so we thought that that corrective action has resolved the problem. And he resigned.

MR. LEHRER: What do you say to those who say, hey, wait a minute, I mean, just because he said he did it and he, and he paid the money back, everything's fine? I mean, nobody else gets that kind of treatment.

JUDGE MIKVA: You know, the money we're talking about were tickets to a sporting event, the use of a limousine. These are not thousands of dollars. Even the scholarship that this friend of his took from a --

MR. LEHRER: $1500 scholarship.

JUDGE MIKVA: A $1500 scholarship, which was also repaid.

MR. LEHRER: Right.

JUDGE MIKVA: And so, again, this is not a case of some kind of quid pro quo coming down for some favors. There were never any allegations that he had performed any particular favors or --

MR. LEHRER: Did you look into that specifically, whether or not he, in fact, did anything for these folks who had given tickets and all of that?

JUDGE MIKVA: The only limit on what we looked into is, as you know, there's a special prosecutor that's investigating whether there were any violations of criminal statutes.

MR. LEHRER: Sure.

JUDGE MIKVA: And that, of course, we stayed away from. That's up to the special prosecutor.

MR. LEHRER: You served in Congress.

JUDGE MIKVA: Yes.

MR. LEHRER: As I just said in the introduction. It was suggested that -- and so did Mike Espy -- he was a member of Congress from Mississippi before he went into the President's cabinet -- it was suggested when he got in there and had his problems, was it maybe he was operating under an ethical system that was okay in Congress and he got confronted with a new set of rules in the Executive Branch. Is that valid?

JUDGE MIKVA: Well, it is, it is a legitimate comment of the facts of life. This President has imposed a very high standard of ethical conduct. I have never seen as high a standard of conduct imposed in any unit of government that I've ever seen, whether it's Congress or the Judiciary, or even previous Executive branches that I was familiar with. And it's a high set of standards. And I found when I came in, for example, that I had to make more disclosure and remove myself from activities way beyond what I had to do as a judge.

MR. LEHRER: There's another member of the cabinet who's under scrutiny now. That's Housing Sec. Cisneros. Are you looking into his case?

JUDGE MIKVA: The conduct that has been -- that Mr. Cisneros has been accused of all had to do with his activities before he became a member of the government. The only question that is involved is whether or not there was some untruth told to the FBI. Again, that would be a criminal matter that's being looked at by the Department of Justice. We're staying out of it, waiting to see what they do.

MR. LEHRER: You're not doing anything about this, right?

JUDGE MIKVA: Monitoring what they do.

MR. LEHRER: As a general -- the facts here are very well known.

JUDGE MIKVA: Yes.

MR. LEHRER: I mean, he has admitted the fact --

JUDGE MIKVA: He made full disclosure.

MR. LEHRER: -- that he was making payments to a former mistress of his. Is that a disqualifying factor in the new ethical standards of the Clinton administration?

JUDGE MIKVA: Well, I hope not. Again, all of this was known to the public, to his constituency in San Antonio, and to the administration when he was appointed, so I would hope it's not a disqualification. And however unfortunate that conduct may have been, it certainly was not -- in and of itself did not involve any illegality and certainly should not be a basis for deciding who should or should not hold public office.

MR. LEHRER: Before you took this job at the White House, did you talk to President Clinton about what he -- what kind of standards he wants you to uphold on others in his administration on the ethical standards?

JUDGE MIKVA: I did. I had a long, over an hour conversation with him when he offered me the job, and he told me that some of the reasons he wanted me in this spot was because I'd been a federal judge, I'd been a member of Congress, and he thought that those experiences would give me the useful knowledge of how to deal with the problems that the administration was confronting, and he made it very clear that he wanted me to come in there and exercise the best judgment I had and not come in to, to cover up, apologize, or disguise any problems that I saw. He's been very supportive so far, and all of the actions that have been recommended are taken.

MR. LEHRER: Well, Mr. Nussbaum got into some of his difficulties, your predecessor to Mr. Cutler, who was your predecessor, because he apparently the allegation was that he couldn't make a -- he couldn't distinguish between his duties as the White House counsel and those of his sense of loyalty to the President, to President Clinton as an individual. Have you sorted through that?

JUDGE MIKVA: Well, I think I understand it, but I am the White House counselor and the counselor to the President, but the President is, in addition to being a person, an institution. The presidency is very important. It's spelled out in the Constitution as to what the President is supposed to do, and I think my responsibilities obviously are institutional. The institution isn't empty. There's a person there, a person with all of the personal attributes that anybody else has. And so it sometimes is difficult to say which is the President and which is the presidency. But I think that clearly that duty is, is to the presidency. Now, my own feeling is that one of the reasons the President wanted me is that I have spent as much time in Washington as I have. I've seen these other two branches of government. I have earned these gray hairs that I have. And hopefully, I can bring some judgment to these matters.

MR. LEHRER: What do you say to those who just ask you the simple question, Judge Mikva, you had a lifetime job on the federal bench, why would you give that up to take what at least up till now has been a perilous job as White House counselor?

JUDGE MIKVA: Well, in the first place, I have a great admiration and respect for my client. I'm a one-client lawyer, or two-client lawyer, if you include Mrs. Clinton, but basically, I represent the President and the presidency. And you can't have a better client than that. I have the utmost respect for what he is doing, what he's trying to do. He believes in government. I believe in government. And I really couldn't think of any basis on why I would want to turn it down. I have to say so far that it's been exciting, it's been challenging. It isn't quite as orderly as my life on the court, but if I can do what I said at the beginning of the program, and that is remove some of these crises management as the role of the White House counsel and turn to some of the proactive things that can keep the crisis from occurring in the first place, then this President can go on about the job of reinventing government and doing other things that he wants to do.

MR. LEHRER: It goes without saying that in recent years a lot of folks have gone into government with a very high reputation and have gone out with a diminished one. Are you concerned about that, that you might get caught up into something that doesn't even, is without, beyond your power?

JUDGE MIKVA: I've been in public life now since -- for almost 40 years. And I'm sure that that's always a risk you take every time you run for public office, every time you hold public office, every time you decide a case, every time you put your name on a memoranda, you're vulnerable, especially in a high visibility town like Washington. But I had a great friend in the Congress, Moe Udal, who retired some years ago. And he told us when we were all freshmen that you come to Congress, you come to public life with a certain number of chits. And, of course, if you use them all up by swimming up stream and throwing down gauntlets to people all at once, you're not very successful because you're chased out of office very quickly. He said but the worst sin of all is to go home and not having used up your chits. I have a great opportunity to do something for this country that has been very good to me, and if I can help, I'm going to do it.

MR. LEHRER: Judge Mikva, thank you very much. Good luck to you, sir.

JUDGE MIKVA: Thank you.

MR. MAC NEIL: Still ahead, the Texas governors' race, Hollywood's new film company, and a Phyllis Theroux essay. FOCUS - LONE STAR SHOOTOUT

MR. MAC NEIL: Now, campaign 1994 Texas style. One of this year's closest contests is the governors' race in the lone star state. Betty Ann Bowser has this report.

MS. BOWSER: In a year when Democratic incumbents are running for cover, Ann Richards is out in the open, taking aim on a second term as governor of Texas. She's been the envy of most every politician in America, with some of the highest approval ratings anywhere. In the first three years of the Richards administration, major crime is down, more jobs have been created than in any other state, personal income is up 30 percent, and student test scores in public schools have improved.

GOV. ANN RICHARDS, [D] Texas: So when you're in class and in school and they're asking you to learn all of these brand new things and things you're not even sure matters right now to you, it's all a matter of training your brain, so that if you do a lot of things over and over again, the next thing you know, you can do anything with it.

MS. BOWSER: She's been lionized by the women's movement for the message she brings to young women. With her national political star image, Richards can count on Hollywood when she needs to raise money, and the audience can usually count on the governor's wit.

GOV. RICHARDS: I told him tonight I bought this brand new suit, and I've got everything pulled in that I can pull in because I was so afraid he'd think I was Miss Doubtfire.

MS. BOWSER: She's eaten up more ink than some movie stars, her snow white air and well-lined face gracing the covers of Vogue and the New York Times Sunday Magazine. Things had been going well for the 61-year-old grandmother and former schoolteacher, i.e., until the man she calls "that Bush boy" entered the picture.

GOV. RICHARDS: You just work like a dog, you do well, the test scores are up, the kids are looking better, the drop-out rate is down, and all of a sudden, you've got some jerk who's running for public office come and tell you it's all a sham, it isn't real, and doesn't give you any credit for a thing you've done. And that's exactly the way I feel.

MS. BOWSER: The object of her anger is her Republican opponent, George W. Bush, eldest son of President George Bush. In spite of the governor's record, in this year of anti-incumbency fever, Bush has Richards locked in a race that right now is a dead heat, statistically too close to call, and she doesn't like it.

GOV. RICHARDS: First, incumbency is not a benefit in politics anymore. Secondly, the man who is running against me has the name of, let's face it, a very well thought of person in Texas who was the President of the United States. It's very, very difficult to run against a name that has that kind of profile. And I think that the other ingredient to it, as well, is that everyone is hoping that something different will be better than what is now.

MS. BOWSER: That's what Bushis hoping voters will think. The 48- year-old Yale-educated businessman and part owner of the Texas Rangers has never been elected to public office. He's defined himself as a newcomer, as the candidate who can unify a badly divided Texas Republican Party.

GEORGE W. BUSH, Republican Gubernatorial Candidate: I'm a unity candidate. I don't believe in picking on people. I don't believe in castigating people. I don't believe in isolating people and demonizing them. I want to focus on things that the governor of Texas can make a difference on: educating children, changing a welfare system that has created incredible dependency in our state and in our society, and changing juvenile justice laws to hold people accountable for their behavior.

MS. BOWSER: The Bush campaign is making that middle-of-the-road pitch in campaign commercials that talk about welfare and crime.

AD SPOKESMAN: [Bush Campaign Ad] Take a stand for Texas values. Bush for governor.

MS. BOWSER: And political scientists Bob Stein says the most recent polling shows it's working.

BOB STEIN, Political Analyst: In George W. Bush, you have a strong and credible candidate, and Republican women, Republican moderates, who are conservative on economic matters but socially liberal on some questions, feel comfortable with George W. Bush. He has not taken strident positions on abortion. He has not quickly embraced -- he's kept his distance from a state convention that was taken over by many religious right activists. I think he has kept himself in a center position and, most importantly, he has not gone mean and ugly in the campaign, as Ann has.

BUSH CAMPAIGN COMMERCIAL SPOKESMAN: Texas is considered the third most dangerous state in the nation.

MS. BOWSER: Crime is a major Bush campaign theme. As governor, he says he would get tough on juvenile criminals and on parents who don't pay child support. People would lose their licenses, from hunting to doctor's licenses.

GEORGE W. BUSH: [in campaign ad] I will end early release of criminals and end parole altogether for rapists and child molesters. Violent juveniles and gang members will be tried and punished as adults.

MS. BOWSER: But the Republican contender does not own the issue exclusively because Richards is leading Texas through the most aggressive prison construction program in the state's history, and she's playing that up in her commercials.

GOV. RICHARDS: [in campaign ad] People say to me, well, Ann, what does that say about Texas, that we've got the largest prison system in the world when we get through building, and I say, it says if you commit a crime in Texas, we've got a place to lock you up is what it says.

MS. BOWSER: Early in the campaign, Bush tried to link massive increases in welfare costs in the state to Richards.

BUSH AD SPOKESMAN: Under Ann Richards, welfare spending is up 142 percent, welfare rolls have grown by over 200,000.

GEORGE W. BUSH: [in campaign ad] I want to be the governor that says to the able-bodied, you're on welfare for two years, we'll help you, but after two years, you're off. And during that period of time, if you choose to have additional children, that's your right to have additional children, but no more taxpayer money to do so. And at some point in time, we must draw the line.

MS. BOWSER: Richards was furious. She called the ad a lie. She called reporters together to say that 98 percent of all welfare costs in Texas are borne by the federal government and that it was President George Bush who signed an expansion of the welfare system into law in 1990.

GOV. RICHARDS: We have somebody running for governor now that deliberately misled the public and is going to continue to do, I would say, by suggesting that somehow increases of 149 percent were as a result of my being governor of the state of Texas. We've got someone suggesting that we have welfare rolls running to $17 billion, when it is federal money, federal programs, and programs that were signed by a member of his family. Now, I want to ask you how much more duplicitous you can be than that?

MS. BOWSER: Bush has refused to let Richards get under his skin. Over and over again in campaign appearances, he's repeating this statement.

GEORGE W. BUSH: I refuse to and will not demean or diminish Ann Richards in any way whatsoever. [applause]

MS. BOWSER: George Christian has been following Texas politics since returning to the state in the 1960's, after serving as Lyndon Johnson's press secretary, and he says the Bush strategy is effective.

GEORGE CHRISTIAN, Political Analyst: Bush is trying to be as kind and gentle as possible in dealing with her, and it's probably frustrating to the Richards campaign. I think the Richards people would like to mix it up a little more. But Bush's strategy, to me, is, is not to make a mistake.

MS. BOWSER: But early in the campaign, George W. Bush made a whopper of a mistake. On the opening day of dove hunting season, he took a borrowed 12-gauge shotgun and a bunch of reporters out into a field in South Texas. Seven shots later, in a case of mistaken identity, Bush shot a Texas songbird called a Killdeer that is so endangered it's a crime in the state to kill one. Bush had to turn himself in to the game warden and pay a $130 fine. Richards wasted no time. An experienced hunter like herself, she said, would never have made such a mistake. And it gave Richards ammunition she'd been hunting for to question Bush's experience on another front, as a businessman.

CAMPAIGN AD SPOKESMAN: [Richards ad] When you offer your business experience to the voters, shouldn't they know your record? He says he's a successful businessman. But official records show that every other Bush business venture has lost money, big money, net losses of $371 million.

MS. BOWSER: Have you lost $371 million, as she claims?

GEORGE W. BUSH: That's preposterous. That's the kind of mudball politics that I am not going to engage in.

MS. BOWSER: Are you a successful businessman?

GEORGE W. BUSH: You're darned right I am. When I first released my income taxes, they declared I was too rich to be the governor. But, see, I'm not going to let this campaign get off track. I'm just not. I'm going to focus on where I want to lead the state.

GOV. RICHARDS: I'm glad to be back from Texarkana. I'm glad to be in East Texas.

MS. BOWSER: Both Richards and Bush have spent a lot of time in East Texas. this largely rural area, stretching hundreds of miles from Texarkana in the North to suburban Houston in the South has been a Democratic stronghold since the days before the Civil War. Now in the midst of its 100th birthday celebration, the town of Diboll has been so Democratic that it's never voted for a Republican governor. It's the kind of place where there's still a sense of community, where parades still take place, where a Democratic congressman named Charlie Wilson is proud to ride down Main Street on a donkey. Two years ago, voters sent Wilson back to Washington even though he bounced $143,000 in checks at the House of Representatives Bank. Still, people in Angelina County are worried about crime, welfare cheats, and an educational system they think is failing their children. So increasingly, voters here find themselves in a tug of war between the Republican Party's conservative principles and what they believe is the Democratic Party's liberal agenda. With his crime, welfare, and education themes, Bush is hoping to give Diboll a reason to vote Republican for the first time. Ann Richards is campaigning hard to hang onto her traditional white, middle class base in this part of the state. And the tug of war is producing some interesting ticket-splitting.

BOBBY BAKER: I'm a frustrated Democrat that votes a split ticket.

MS. BOWSER: And you're going to do what?

BOBBY BAKER: Split ticket again in terms of I would say that as of this point I'm looking more toward Bush in terms of what the beliefs are. I thought I'd never say that, but I am.

MS. BOWSER: Marie, what about you, do you think Ann Richards has done a good job? Is she going to get your vote again?

MARIE COCHRAN: Well, I still worry about the education. There were so many things in our system that needed to be changed, and I feel like I've been let down in that respect. And I think I speak for a lot of teachers. I don't think it's just the two of us. I think that is a general opinion, but with the choice of the two, I would still go for Ann Richards.

MS. BOWSER: Anybody else?

PATRICIA JONES: Well, of course, I'm going to vote for her, and I voted for George Bush's daddy, but I'm going to vote for Ann Richards this time in large part because I think that, that her governorship is a work unfinished, and I think she got off to a slow start because of a lot of internal turmoil, and that she lost about the first 18 months. And I think she deserves the opportunity to show us everything that she can do. That's why I'm going to split it and vote for her and for Kay Bailey.

MS. BOWSER: Mike, what are you going to do?

MIKE GASTON: I'm going to vote for Bush. I'm a Democrat, and I'm going to vote for Bush.

MS. BOWSER: You're a Democrat but you're going to vote for Bush?

MIKE GASTON: I -- really, I just don't think Ann Richards can handle the job she's got.

MS. BOWSER: Earl Black is an expert on southern politics who says the votes in Diboll represent a pattern of voting that is spreading across the region.

EARL BLACK, Political Analyst: 1994 is the best opportunity the southern Republicans have ever had to really establish a majority position below the level of presidential elections. They've already achieved a dominant position in the South in presidential elections. The stakes for them in 1994 are the opportunity for them to capture a majority of southern Senate seats, a majority of southern House seats, and a majority of southern governorships.

MS. BOWSER: As the campaign enters its final weeks, polling shows it could be decided by less than 100,000 votes in a state that now outranks New York as the second most populous in the country. FOCUS - MOGUL-MERGER

MR. MAC NEIL: Next tonight, the latest Hollywood blockbuster. It involves three heavyweights of the entertainment world who yesterday announced plans for a major new studio that would produce films, television programming, and recordings. The three are: producer/director Steven Spielberg, the highest grossing filmmaker in history through such films as "E.T.," the "Indiana Jones" series, "Jurassic Park," and last year's Oscar-winning "Schindler's List;" Jeffrey Katzenberg, long-time head of the Disney Studio who oversaw production of such animated films as "Beauty and the Beast," "Aladdin," and "The Lion King." He left Disney just recently in what was widely described as a bitter dispute over expanding his role; and David Geffen, founder of several major record companies and more recently a film producer, including the upcoming "Interview with a Vampire." Three spoke at a news conference in Los Angeles yesterday.

STEVEN SPIELBERG: Hollywood movie studios were at their zenith when they were driven by point of view and personalities. Together with Jeffrey and David, I want to create a place driven by ideas and the people who have them. I regard Jeffrey Katzenberg and David Geffen as pioneers. They've proven that over the last 20 years. And I'd like to be one too and find ways to ensure filmmakers, both established and new, a home they'll feel unthreatened in, free to explore, and share substantially in every success. I'm a movie maker who knows what it's like to be treated fairly and left alone to make my films my way. I know the kind of support as well as the distance filmmakers require to do their best work. And I want to create the playground that they can play in.

JEFFREY KATZENBERG: The idea of three of us joining forces together and trying to start something from scratch is as exciting as anything I could possibly dream of. I look at the three of us, and I figure this has got to be the dream team. For us in our business there are five primary businesses that we would like to build the company around: motion pictures, television production, all forms of television production, an animation company, a major record company, and a major interactive, new media company. Those are the five businesses that we want to go into.

DAVID GEFFEN: This is a great opportunity for me to work with partners and to start something new and get excited about working once again, and it's a once in a lifetime opportunity for, for me, and I hope for all of us, and we're beginning this with more enthusiasm than I've ever felt before. In fact, as I was walking in the room, I said to Steven, I'm sick to my stomach, I haven't had this much anxiety in twenty years.

MR. MAC NEIL: We're joined now by two people who cover the film industry from Los Angeles. Bernard Weinraub does it for the New York Times, and Corie Brown for the Monthly Premiere Magazine. Bernard Weinraub, it's interesting that the merger of three Hollywood figures is as big a front page story across the nation as Haiti, as the Gulf crisis. Why do you think that is?

MR. WEINRAUB: Well, I think it's that way because of the cast of characters here. You have, you know, the world's most prominent director, you have one of the richest men in the country, and you have one of the most powerful executives in Hollywood. And I think the combination of -- there's a lot of sex appeal there between these three guys, and the fact also that this is an entirely new studio, and a studio like this has not been created for at least 50 years. And I think it causes just a lot of interest.

MR. MAC NEIL: Corie Brown, what kind of news is the merger inside Hollywood, if it's this big in the nation?

MS. BROWN: It's the enormous power play of the -- they put themselves in play, and this is a very exciting -- there won't be any part of Hollywood that's left untouched by the ripple effect.

MR. MAC NEIL: Now that you've had 24 hours or so to think about it, Corie Brown, what impact is it likely to have on the movie business and on the movies we all go and see?

MS. BROWN: You've got three great creative people, and you've got two of the greatest creative people in animation that we've ever seen.

MR. MAC NEIL: Those are --

MS. BROWN: Spielberg and Jeffrey Katzenberg. They will be a talent magnet for all the animators, and --

MR. MAC NEIL: You mean, they would lure animators away from other places?

MS. BROWN: Certainly. They're -- as they build their studio, this will be a huge new competitor in the animation business, and that's one of the biggest businesses in town in terms of profits.

MR. MAC NEIL: Bernard Weinraub, what impact do you see on the movie business, directly on the movie business?

MR. WEINRAUB: Well, I think it just shakes everything up in Hollywood. It certainly has shaken up every studio, and the fact that you have a major new studio arriving and competing with these other studios, competing for scripts, competing for talent, for directors, I think it just changes the landscape permanently here. I agree that animation is a key here because animation has made billions for Disney, and I think of all the companies, Disney is probably the most concerned, because of course, Katzenberg came from Disney. Katzenberg has most of his creative relationships there, and the concern, I'm sure, is that Katzenberg will take animators. And I'm sure he will, once the contracts of these animators are up.

MR. MAC NEIL: Why is animation so profitable compared to the -- because it involves an awful lot of work, does it not?

MR. WEINRAUB: Well, it involves a huge amount of work. It's very expensive, but animation is a worldwide entertainment, and as Disney has found through all of its last four or five animated films, you know, especially, you know, "Beauty and the Beast," "Aladdin," and all the others, it grosses billions of dollars, not just in the United States, but elsewhere, and also, it's part of a whole merchandising effort, and so you have "Beauty and the Beast" going into all the Disney stores and there's huge amounts of money to be made on these animated characters.

MR. MAC NEIL: Corie Brown, is the partnership complete without a big studio through which to distribute whatever they make? Isn't that half the name of the game in Hollywood?

MS. BROWN: I believe this is the opening salvo. They are putting themselves in play and over the next several months we will see what it turns out to be. I don't know that it's going to be a stand-alone studio. They will definitely have to bring in strategic partners for financing. There is -- there are a million different configurations that this can take. Will they align with people outside of Hollywood for their financing, a telephone company, a John Malone, or will they align with say MCA to distribute in their early years and sort of act as their incubator? It's completely unknown right now. That's what's going to be fun to watch.

MR. MAC NEIL: Bernard Weinraub, how good is the speculation that the Universal Studio will be bought back from the Japanese and that the Spielberg group might join that?

MR. WEINRAUB: Well, that's in some ways the most dynamic and interesting part of this whole episode because if they buy back with, of course, the people who now run Universal, Lou Wasserman and Sid Sheinberg, if they buy back MCA Universal from the Japanese, this would give them immediately a studio and an infrastructure and a staff and it would instantly cause them to be the major studio in town in many ways, given Spielberg, given Katzenberg, and given Geffen's clout and money and experience in the music business.

MR. MAC NEIL: One of your competitors in USA Today said, most attempts to start independent studios fail. Do you agree with that, and why would this be different?

MR. WEINRAUB: I agree. A lot ofattempts have failed, but this is quite different because of the nature of these three men. I mean, certainly three people like this have never begun a studio and most have failed because [a] they haven't had the financial resources after a year or two, making movies is every expensive, they haven't had the financial resources to do it, and also they haven't made many hits. Certainly, these three will produce movies that will be flops but they have the financial resources -- I mean, Katzenberg said yesterday that billions were available -- he was getting phone calls from Wall Street almost immediately. And I think these guys will be able to do it as opposed to many others.

MR. MAC NEIL: Corie Brown, which is the dominant person? I just called it the Spielberg group a moment ago. What's it going to be known as? I mean, is it going to be that or the Geffen group or the Katzenberg group? Who's the Warner in Warner Brothers?

MS. BROWN: We'll probably look to Jeffrey Katzenberg to be running this show mostly because he is the -- he's the guy who came up with the idea. He's the guy who called his two buddies and said, let's do it, come on, you guys, come over, come on, come on. Spielberg said at the news conference that he got everybody excited and everyone thought, well, okay, and it's his energy that's bringing this together. So we will see him managing this. We won't see Steven Spielberg managing this company. Steven Spielberg is a creative genius. He doesn't -- he shouldn't waste his energy managing a big company, managing a company at all.

MR. MAC NEIL: Can creative types run a studio today? I mean, the great -- the famous example was Mary Pickford and Charlie Chaplin and so on way back. But can they do it today? Won't they face the same box office appetite as everyone else across the country?

MS. BROWN: I think these guys can do it, because they have a balance between them of management skills and creative genius. Jeffrey is a manager without peer in terms of the loyalty of the people who have worked for him before and the longevity of the staff that has always been around him. If, if he were doing this alone, I wouldn't think that the creative side was strong enough. If Spielberg was doing this alone, I wouldn't think the management side was strong enough, and then you have Geffen, who has, you know, business acumen. It's an interesting threesome that makes anything kind of feasible.

MR. MAC NEIL: What is your feeling about this, Bernard Weinraub, about the creative types running a studio instead of a corporate structure as is usually the case?

MR. WEINRAUB: Well, that's in some ways what makes it so interesting, because you don't have creative types running studios. In the old days, i.e., in the 30's and 40's, you had the legends, people like Harry Cohn and Louie B. Mayer and Jack Warner. I don't know if people called them creative types but in many ways they were. They were geniuses. They were creative moguls. And right now, you have -- you don't have types, you don't have people running studios, or owning studios -- you have companies, conglomerates. You have Sony and Matsushita and Time Warner and News Corp -- that's Rupert Murdoch's company -- and not people. And what makes this interesting, fascinating, is you have three people who are all very creative, very smart, and also very rich running a studio. And that's what makes this so interesting. These guys are not beholden to anybody.

MR. MAC NEIL: what was your reaction when you heard Steven Spielberg say -- and we just heard him on the tape just now -- say, I want a place for point of view and personalities, I want to create a place driven by ideas. Now will that curl the lips, the cynical lips of Hollywood types when they hear that, or is that something, Bernard Weinraub, that one can take seriously?

MR. WEINRAUB: I think one can take it somewhat seriously. I think Steven Spielberg didn't want to create this studio strictly for those purposes. I mean, I think he wanted to create the studio to own his prints, to own films which are, if you -- if Steven Spielberg had owned "Jurassic Park," he would be far richer than he is today. I mean, as it is --

MR. MAC NEIL: Which is pretty rich.

MR. WEINRAUB: He's very rich, but as a director he will make --

MR. MAC NEIL: Isn't he worth nearly a billion dollars today?

MR. WEINRAUB: Right. But as a director, he earns his fees and percentage points of films. Now that he owns a studio, if he makes "Jurassic Park" at a studio, and he owns it, he will -- that will be a lifetime annuity which will be worth, especially with a film like "Jurassic Park," many billions of dollars.

MR. MAC NEIL: Corie Brown, what's your comment on that, I want to create a place driven by ideas?

MS. BROWN: Well, first, I don't think that Steven Spielberg ever wanted to own his prints. He had the most lucrative deal ever experienced in Hollywood. He made more off of those movies than he probably would have if he owned 'em. But he wants to try something different, and this is an adventure for him with his buddies. These guys have so much money that they can have an adventure and do something that they think will, you know, satisfy their, you know, craving for creative freedom and immortality. This is more of a bid for immortality, a company that they think will have a legacy that lives longer than they do.

MR. MAC NEIL: Well, what character of movies, I mean, with David Geffen, who's been extremely active, for instance, in the AIDS -- anti-AIDS movement and so on -- and Spielberg, obviously very moved by things like "Schindler's List," are we going to see a wave of social responsibility films? What are we going to see?

MS. BROWN: Oh, I think that Steven likes to serve as an incubator for young filmmakers, so he will look for new young people. I think that you'll have lots of family entertainment, but they said at their press conference, they love pulp fiction, they love edgy, exciting movies. I think you'll see them draw the line between explicit and exploitative. That's a line that you can draw if you understand film, but it's not a line that means you don't make controversial, provocative films.

MR. MAC NEIL: How would you characterize the films you expect to come out of this group, Bernard Weinraub?

MR. WEINRAUB: Well, I disagree a little bit with my colleague because I don't think it is altruistic on any of their parts. I mean, sure they want to make good films, and they will make good films, but I think there's a lot of -- they still -- David Geffen is not in it for the love of films, he's in it to make more money, and so is Steven Spielberg, and so is Jeffrey Katzenberg. And I think the kinds of films you'll see will be a very mixed bag. I mean, Jeffrey Katzenberg's record at Disney was great in terms of animated films and great as a leader, but his record over the past couple of years in terms of non-animated films, live action films, was -- and he'll admit it -- pretty appalling. And so I think -- I don't think you'll see those kinds of films -- I don't think so - - that Jeffrey Katzenberg had produced or approved over the last couple years, but I think you'll see some interesting films, some very, very commercial films to make some money, some kids' films, and then ultimately some animated films. I think you'll see what they like to call here an eclectic mix. And sure, there will be serious films, but there will be a lot of very middle-of-the-road, family, middle-brow films too.

MR. MAC NEIL: Okay. Well, Bernard Weinraub and Corie Brown, thank you both. ESSAY - HOMEGROWN SOLUTION

MR. LEHRER: Finally tonight, essayist Phyllis Theroux looks at a different kind of Washington idea for improving education.

PHYLLIS THEROUX: It has been almost 160 years since Horace Mann, the founder of American public education, called for the establishment of a curriculum of moral precepts imparted by well- trained teachers. Driving his vision was the conviction that no republic can remain both free and ignorant for very long.

SPOKESPERSON: Let's innovate. Let's organize.

PHYLLIS THEROUX: But the public educational system has turned into a highly politicized, bureaucratic leviathan. The gap between the educational haves and have-nots is wide. And here is an irony: Some of the children who are receiving the kind of education Horace Mann called for are dropping out to get it. An estimated 750,000 to 1.2 million children are getting up in the morning, eating breakfast, brushing their teeth, and reporting to class in their own living rooms. They follow schedules that are specifically geared to their own needs, talents, and community resources. They are free of the pressures, anxieties, and values that may conflict with their families' beliefs.

[PARENT TEACHING CHILDREN]

PHYLLIS THEROUX: The home school movement has been around for a long time, but it really took off about 10 years ago in response to two main factors: the sex education policies in the public schools and new state laws that allow parents to educate their children as long as the children can continue passing state- administered tests of competence.

[CHILD LEARNING RELIGION]

PHYLLIS THEROUX: Competence does not seem to be a problem. Across-the-board, home school children test anywhere from fifteen to thirty points above the national median. And while they're only a small fraction of the school-age population, about one million out of forty-one million, they're growing, about 20 to 25 percent a year. Their lifestyle is one we mostly see on TV reruns. [OZZIE & HARRIET SEGMENT]

PHYLLIS THEROUX: This is the 90's full of single parents or two- income families with carpool schedules so complex that they can't be broken without causing severe career problems. We have sun-up to sundown daycare centers. Neighborhoods that look old-fashioned often don't have anybody in them until after dark. The profile of a typical home school family is very different. There are nearly always two parents, one income. The mom stays home, sometimes with a cottage industry to bring in extra money, and dad brings home the serious bacon, although not a lot of it. Most home school families are not affluent. As a group, it is overwhelmingly white, Christian, and conservative. Their belief in the importance of a moral education is what motivated them to educate their children at home.

[MOTHER WORKING WITH CHILDREN]

PHYLLIS THEROUX: Home school advocates are fond of pointing out that what they're doing is nothing new. Ten American presidents, including Lincoln and both Roosevelts, were home-schooled; Thomas Edison, Emma Willard, and even Horace Mann, who learned Greek and Latin from an itinerant preacher. But in one sense, the home school movement is on the cutting edge. We're becoming a nation of computer cottages. Adults are less and less apt to work outside the home. Perhaps the next step is to extend that same privilege to our children, rather than sending them out like laundry to be educated in schools which for one reason or another don't do the job. The idea of a nation full of children staying home in order to get a good education is an unnatural one. Traditionally, school has always been one of the institutions where children acquired their sense of community. But perhaps we ought to think about keeping our children away long enough for the present system to shut down. It was Sen. Daniel Patrick Moynihan that recently wrote, "There's good money to be made out of bad schools but not if there are no children in them. What if we boycotted the schools the way we once boycotted the buses in Montgomery, Alabama, until they changed?" This is not intended to be a rallying cry, but a question. I am curious to know how people who say they care about our children and our schools might reply. I am Phyllis Theroux. RECAP

MR. LEHRER: Again, the major stories of this Thursday, Haitian military leader Raoul Cedras and his army chief began their exile in Panama. The Iraqi government agreed to recognize Kuwait's border if international sanctions against Iraq are lifted within six months, and Defense Sec. Perry said the U.S. military deployment in the Persian Gulf will be scaled back if Iraq continues to withdraw from the Kuwait border region. Good night, Robin.

MR. MAC NEIL: Good night, Jim. That's the NewsHour for tonight. We'll be back tomorrow night with Shields and Gigot, among other things. I'm Robert MacNeil. Good night.