The NewsHour with Jim Lehrer

JIM LEHRER: Good evening. I'm Jim Lehrer. On the NewsHour tonight, Gwen Ifill explores the case of nuclear scientist Wen Ho Lee, released from custody today; Kwame Holman chronicles the Senate hearings on marketing violence charges against the entertainment industry; and Ray Suarez looks at the fuel crisis in Europe. It all follows our summary of the news this Wednesday.

NEWS SUMMARY

JIM LEHRER: Nuclear scientist Wen Ho Lee was released from jail today. He pleaded guilty to a single felony count of mishandling classified data at the Los Alamos nuclear laboratory in New Mexico. A federal judge in Albuquerque said the federal government's actions in the case had embarrassed the nation. And he sentenced Lee to the nine months he had served awaiting trial. Lee spoke briefly after his release.

WEN HO LEE: I'm very happy to go home with my wife and my children today. And I want to say thank you to all the people who support me. I appreciate it very much. And for the next few days, I'm going fishing.

JIM LEHRER: The Lee case began as part of an investigation into alleged Chinese espionage. We'll have more on this story right after the News Summary. Entertainment executives defended themselves before Congress today over marketing violence to children. Representatives of music and video game companies appeared at a Senate Commerce Committee hearing. They said they had tried to implement a voluntary ratings system. Earlier this week, a government study accused the industry of undercutting that system. The chiefs of major movie studios did not attend today's hearing. We'll have more on this story later in the program tonight. The House today failed to override President Clinton's veto of the marriage penalty repeal. The vote was 270-158, 16 short of the two-thirds majority required. The Republican bill would have cut income taxes for nearly all married couples, at a cost of $ 292 billion over ten years. The President said it helped mainly the wealthy. In the presidential race today, George W. Bush charged the Clinton-Gore administration had neglected nation parks. In Everett, Washington, he unveiled a $ 5 billion plan to repair and upgrade the parks system. It would also fund programs to protect endangered salmon. But Bush said he's against breaching dams in the Pacific Northwest to save the salmon, and he challenged Gore on that issue.

GOV. GEORGE W. BUSH: Support issue not only for Washington, but it is an important issue about how one will lead. My opponent has refused to take a position on the issue of salmon in the dams. He has refused to say whether he would breach the dams or not before the good people of this state vote. I think you deserve an answer. I think you need to know where he stands on this important environmental issue.

JIM LEHRER: Bush said the Pacific Northwest has become a battleground over environmental policy. Vice President Gore campaigned today in the Northeast, visiting a school in Lewiston, Maine. He said there should be a national expectation that parents attend the first day of school with their children. He said it would improve discipline and encourage parental involvement year-round.

VICE PRESIDENT AL GORE: Once the word goes out in the neighborhood, well, you know, you're supposed to come. You're supposed to come. Then, you know, across the backyard fence, are you going? Well, yeah. Then everybody starts to at least focus on whether or not they should be more involved. So I would like to really get that to be a new American practice.

JIM LEHRER: Gore also called again for making up to $ 10,000 in college tuition tax-deductible. Selma, Alabama elected its first black mayor Tuesday. He is James Perkins, who defeated incumbent Joe Smitherman, a reformed segregationist. Smitherman was in his first term in 1964, when police used clubs and tear gas on civil rights marchers on what became known as "Bloody Sunday." In New York's primary, First Lady Hillary Clinton easily won the Democratic nomination for the U.S. Senate. Tonight she has her first debate with her Republican opponent, Congressman Rick Lazio. In Britain today, police escorted more than 100 fuel tankers past blockades. But that was a tiny fraction of the usual traffic, and retailers said it would take weeks to refill thousands of empty service stations. Protesters continued to block roads and refineries to press their demand for lower fuel taxes. We'll have more on this story later in the program tonight. Chase Manhattan announced today it will buy J.P. Morgan and Company for about $ 36 billion in stock. The deal unites two of the country's oldest financial institutions. The new J.P. Morgan Chase and Company will be the third largest bank in the United States. Shareholders and regulators still have to approve the merger. And that's it for the News Summary tonight. Now it's on to the Wen Ho Lee case; selling violence to children; and fuel problems in Europe.

UPDATE - NUCLEAR SECRETS

JIM LEHRER: Gwen Ifill has the Wen Ho Lee story.

GWEN IFILL: After nine months in prison, Wen Ho Lee walked out of a federal courthouse today, a free man.

SPOKESMAN: Dr. Lee is free today. It may have been too long coming, but it's a sweet day indeed, and., again, we'd like to thank those in the community who supported Dr. Lee in the dark days, when he was falsely accused of not being a loyal American. Thank you very much.

GWEN IFILL: The government had accused Lee of stealing the "crown jewels" of the American nuclear weapons program, and compromising national security. But in the end, prosecutors were unable to prove their original and most explosive accusation: That Lee was plotting espionage. As part of a plea agreement worked out with prosecutors today, Lee pled guilty to just one of the 59 charges lodged against him. He admitted improperly downloading nuclear weapons data from the Los Alamos National Laboratory. That charge is a felony. Lee was sentenced to about nine months in prison-- the time he has already served. The other counts, some of which carried life sentences, have been dropped. In return, Lee agreed to cooperate fully with government prosecutors who want to know why he copied files onto a non- secure computer, what he did with the files, and what happened to the seven computer tapes containing the data, which Lee says have been destroyed. Lee was fired from his job as a Los Alamos scientist in March of last year. At the time, the government suggested he was guilty of espionage, providing sensitive missile technology to China. He was indicted in December by an Albuquerque grand jury, and has remained in virtual solitary confinement, his lawyers said, until today. Throughout the investigation, Lee-- who was born in Taiwan but is now an American citizen-- has maintained his innocence.

WEN HO LEE: I never gave any classified information to any unauthorized person, period. I'm innocent.

GWEN IFILL: Scientists from several national professional academies have defended Lee, complaining to Attorney General Janet Reno that Lee had been subject to "cruel and degrading treatment." U.S. District Judge James Parker had harsh words for federal authorities at today's hearing. He apologized to Lee, saying that the Departments of Justice and Energy have "embarrassed our entire nation and each of us who is a citizen of it. I sincerely apologize to you, Dr. Lee, for the unfair manner in which you were held."

GWEN IFILL: For more on what happened to the government's okay against Wen Ho Lee, we turn to Robert Vrooman, who was chief of counterintelligence at Los Alamos from 1987 to 1998; Robert Clark who worked as a mechanical engineer at Los Alamos with Wen Ho Lee from 1974 to 1995; and Bob Drogin, national security correspondent for the Los Angeles Times. He has covered this case from the beginning. But first we turn to U.S. Attorney Norman Bay, one of the prosecutors on the case. Mr.Bay, what happened to the case against Wen Ho Lee? Did it collapse?

NORMAN BAY, Chief U.S. Prosecutor, New Mexico: No, it did not. The whole point to this case, the government's overriding interest in this case was protecting national security. This plea arrangement gave us the best opportunity to answer any number of critical questions.

GWEN IFILL: Do you think this plea agreement today was good news?

NORMAN BAY: I think it was good news. I think it was -- it resulted in a fair result. I think it resulted in the right result. And most important, Gwen, I think it helped protect national security. You know, we're gaining access to Lee. That's something that we've always wanted. It is something that he wasn't willing to give us, that is complete cooperation, complete access. It is something that we wanted for the past 18 months, even in the pre-indictment period. There were extensive negotiations, pre-indictment, with Mr. Lee. But he would not come forward to talk to us. But now he's going to do that. He's going to be put under oath. And we finally have the opportunity to answer the critical questions, why did he make the tapes, what did he do with them, does anybody else have them?

GWEN IFILL: But what you're saying today, Mr. Bay, is a far cry from what the government implicated at least at the beginning of this whole saga, which is that Mr. Lee was somehow involved in trading American secrets and violating national security with foreign governments.

NORMAN BAY: Actually, Gwen, that's not correct. If you'll notice, the indictment never charged Mr. Lee with any substantive act of espionage. Even when the indictment was first announced, the former U.S. Attorney John Kelly held a press conference in which he emphasized that Mr. Lee was not being charged with espionage; that instead, he was being charged with other violations of the Atomic Energy Act and some other violations in Title 18. But the government has made it clear that it does not have evidence that Mr. Lee actually handed nuclear secrets to anyone. We've never charged him with espionage. We never alleged that he committed espionage.

GWEN IFILL: And in reaching this plea agreement today, did the government also concede that it didn't have evidence to prove the 58 other charges?

NORMAN BAY: The government does not concede that at all. In fact, it was interesting because at the sentencing hearing today, Judge Parker emphasized that Mr. Lee had committed crimes and that Mr. Lee deserved to do some time in jail. The government's evidence after an extensive computer forensics investigation at Los Alamos was able to trace forensically the steps that Mr. Lee took in taking classified information from the secure side, the secure partition of the Los Alamos computer system, moving it to the unsecure side, and then downloading it on to portable magnetic tapes, which is what he ultimately pled guilty to. That evidence was compelling. Subsequently, the FBI executed search warrants at his home and found a notebook referencing these files and a notebook was found in his office as well that referenced the files that he collected in making his own little personal library of nuclear secrets. You know, Gwen, the amount of material was huge. It was more than 800 megabytes, which would be more than 400,000 pages of paper.

GWEN IFILL: You mentioned Judge Parker's statement in court today. Among other things, he also said that the federal prosecutors embarrassed our entire nation. That's pretty tough language.

NORMAN BAY: You know, Gwen, that certainly is tough language. And I respect Judge Parker very much, I have appeared in front of him for five years now. But I very respectfully disagree with that assessment. This case from its inception has been about national security, it hasn't been about putting Mr. Lee in jail for the longest period of time. We wanted to corporate with him, and now we have gained that. We're hoping to be able to answer the questions we've always wanted to try to answer.

GWEN IFILL: In your opinion, the government -- did the government at any point in your opinion overreach in this case?

NORMAN BAY: No, Gwen, I don't think the government did. When you are talking about nuclear secrets, when you are talking about nuclear weapons, you have to - you know, that really makes anybody pause. And sometimes, you know, these are tough calls that prosecutors have to make. Here we made the tough call. And maybe now, we will get the answers we have been looking for.

GWEN IFILL: Do you anticipate -- I know part of the plea agreement included future cooperation from Mr. Lee with the government. Do you anticipate any future legal action arising from this case?

NORMAN BAY: Gwen, I can't imagine how there could be any. The plea has been entered; it was accepted by the court. He waived his right to appeal. The only way there could be any future legal action is if he somehow lies during the course of his debriefing sessions with the government, because if he lies, as you know, he could be subjected to a perjury prosecution, and if the government makes the appropriate motion with the court, and if the court grants the motion, then all of the counts in the indictment are reinstated against him. So it is a very powerful incentive to get the truth from Mr. Lee.

GWEN IFILL: Well, you mentioned Mr. Lee's truthfulness. You can clear up a point for us whether Mr. Lee at some point or his lawyers offered pre-indictment to submit to a polygraph test and answer some of the questions you still don't have answers to?

NORMAN BAY: On the day the indictment was returned, Mark Holster, Mr. Lee's attorney, said his client was willing to take a polygraph exam. But what you have to understand is that when defense counsel did that, he tried to limit the questions to one or two questions, and to not allow either a pre-polygraph examination interview, or a post polygraph examination interview. And those are essential parts of any adequate polygraph examination. Now, the government responded to Mr. Holster's letter listing a bunch of other questions that we thought should be part of any examination, as well as the fact that we felt there had to be a pre-polygraph exam or a post-polygraph exam. As far as I know, defense counsel never responded to the government's offer.

GWEN IFILL: Mr. Bay, thank you very much for joining us. We know you've had a busy day.

NORMAN BAY: Thank you, Gwen.

GWEN IFILL: We turn to Bob Drogin from the Los Angeles Times. You have covered this case since it began. And I wonder if could you walk us through the key turning points were that brought us from the crowned jewels of the first and original statements about Wen Ho Lee's arrest to today in which you basically walked out unscathed.

BOB DROGIN, Los Angeles Times: Gwen, this has been the incredible shrinking prosecution from the start. As you said, he was originally cited, although not charged as a spy, he was branded the spy of the century. By the time they finally got an indictment nine months later, they had something very different. They accused him of downloading, copying a great deal of classified information. It turned out very soon after that information was classified at the time, or even now was classified at such a level that essentially could be sent through the U.S. mails. So that was a big problem. Secondly, of course, the defense was able to find a number of experts who were able to challenge and in some cases ridicule the government claims that this data was as crucial and indeed the crowned jewels. And then the government had a tremendous problem when their chief witness, the chief F.B.I. investigator in this case, recanted crucial testimony. So they had a tremendous credibility problem with the witness. And then you had a judge who was openly skeptical of government claims. There were a couple of other issues, but essentially the case began crumbling all around them.

GWEN IFILL: Let's talk about the judge. Judge Parker, as you alluded to earlier, had some pretty tough things to say today in court. What was the scene like in the courtroom?

BOB DROGIN: It was stunning. It was a very emotional kind of hearing. And afterwards, it was marked by a great deal of laughter and tears. It was quite a statement that he made. It went on for about 30 minutes and he just repeatedly apologized to Dr. Lee. He repeatedly said how sorry he was that he had been put in jail under what he called demeaning and inhumane conditions. He said he had been misled by the government. He said he had been led astray by the government, and particularly singled out what he called the top leadership at the Justice Department, Attorney General Reno and the Energy Department. And then he also singled out a former U.S. Attorney here who brought the original prosecution. So it was a very powerful denunciation of government prosecutorial tactics.

GWEN IFILL: After all this time, nine months later after the indictment, do we have any better idea today than we had then of what was actually on these tapes what danger these tapes represented?

BOB DROGIN: That's a matter of some dispute. I think perhaps the better way to ask this is where we are now. And the answer is that nine months after this case began, the labs themselves are in utter disarray. And morale has plummeted, recruitment is way down, people are leaving in droves. You've had careers ruined and lives destroyed, and frankly, the government is no closer today than when it began to determining how China obtained nuclear weapons secrets. The only thing we do know is that Wen Ho Lee wasn't the source of that.

GWEN IFILL: Robert Vrooman, you worked for the government until you retired. So give us some sort of sense of what the government did right if your opinion and what the government did wrong, which I assume you believe is quite a bit?

BOB DROGIN: Well, the original case against Dr. Lee was flawed from the beginning. And yet there was an insistence that the case pushed forward even though every F.B.I. agent that I work with said it was flawed, including Mr. Mesmer, who used the term to me that it was intellectually flawed.

GWEN IFILL: Mr. Mesmer, being the F.B.I. agent who recanted the earlier statement?

BOB DROGIN: Yes. So I think the insistence that pushing this, even though they knew that it was a very weak case, befuddles me. And I don't agree, respectfully don't agree with Mr. Bay when he said that this improves national security. The collateral damage from the Lee case, which Mr. Drogin has pointed out, the national labs are severely impacted, some lives are hurt, and one thing that many people forget is that the nuclear emergency search team has to cooperate to do their job with the F.B.I., and right now, the relationship is almost irreparable. So this is not in the national interest in spite of what Mr. Bay says.

GWEN IFILL: Mr. Vrooman, Dr. Lee has been -- a lot of people gathered around him and supported him, including the Asian American community which has raised questions along the way that he was pursued in part because he was Chinese-born even though he's a naturalized citizen. What do you make of that?

ROBERT VROOMAN, Former Chief, Counterintelligence, Los Alamos Laboratory: Well, I understand there is sensitivity to that issue. Not being a minority, I don't think I really understand the depth they feel about that. My feeling always was that the root cause of this problem in the case was not, what do you want to call it, ethnic profiling or racism. There was really just the lack of intellectual rigor in the original investigation. And part of that is, I think, that once they found Lee, and he was ethnic Chinese, they didn't go on and look at the entire population. Now, former Senator Warren Rudman agrees with me. Senator Thompson and Lieberman agree with that assessment. And so I think I'm in pretty good company in that...

GWEN IFILL: Robert Clark, you worked at Los Alamos until a few years ago. Do you have any sense about the big unanswered question, I guess here, is how lax is security at the lab?

ROBERT CLARK, Former Los Alamos Scientist: How lax is security?

GWEN IFILL: Yes.

ROBERT CLARK: It certainly tightened up recently, but I would have to say that the simple fact that Wen Ho Lee could do what he did as easily as he did, it makes you wonder.

GWEN IFILL: How easy is it to do what he did?

ROBERT CLARK: At the time he did it, it only took a set of instructions, which were available almost anywhere. It could have been done by anyone up until a couple of years ago, probably a year ago.

GWEN IFILL: And what did he...

ROBERT CLARK: It was quite simple.

GWEN IFILL: And I'm curious if you have a sense about what he did, how damaging is the information that he actually downloaded and copied on to unclassified computers?

ROBERT CLARK: Well, although I don't know the exact details of every file that he put on those tapes, in general, the computer codes that we're talking about, although they are used for simulating nuclear weapons, what happens to nuclear weapon when you ignite it, the stuff that's in the codes is used for thousands of other things, and the methods that are in there are readily available in open literature, and worked on by people at universities and everywhere. The only thing that's really classified about them is when you compile them into a single code and you tell a foreign power that this is the way we do it, they would be interested in knowing that's the way you do it and then they'd look at it and study it. But they certainly -- I certainly do not believe, let's call a spade a spade, they are talking about China, I certainly do not believe the Chinese would ever take these codes and try to design a weapon with these codes. So, I think, I heard the testimony both ways and I believe it was exaggerated both ways. The codes are useful and valuable, but the fact is the vast majority of this stuff sun classified by vast, almost all, but several lines.

GWEN IFILL: So, Mr. Vrooman, do you agree with that that this is not information the Chinese would ever have been able to really use against us in any case?

ROBERT VROOMAN: I'll defer to Mr. Clark on that. I'm not a scientist, and I'm an intelligence officer.

GWEN IFILL: Well, do we have any reason to know based on what we've seen in these nine months of investigation about whether Mr. Lee is, indeed, just a naive bungler, or whether he was kind of a scheming spy? I mean, do we -- are we any closer to knowing the answer to that?

ROBERT VROOMAN: That's a nice choice that you give me. If I have to take one of the two, I would say that he's a naive bungler. He's not a spy. I have maintained that for many years. And I'm very comfortable with that and today I feel vindicated about that.

GWEN IFILL: Well, how did it unfold then? Was that just an overeager, I guess I asked this question earlier -- was this an overeager government just trying to, jumping too hard on the very suspicion just to smell, the whiff of Chinese espionage?

ROBERT VROOMAN: I think in the beginning, some people say this as a career-enhancing opportunity. Other people who went along with it just didn't have the backbone to stand up and say this is wrong and every human frailty was involved in this Lee case.

GWEN IFILL: Mr. Clark, you worked with Mr. Lee in the Los Alamos laboratories. Do you have any sense that the man you worked with, in the laboratory you worked in, would have made him a target because of his ethnic heritage?

ROBERT CLARK: I... I hate to say he was made a target, but clearly, as soon as they found a Chinese-American that had done basically exactly the same things that I had done, I went to China with Wen Ho Lee on one of those trips. I worked on the same codes that Wen Ho Lee worked on. We were good friends. I had access to everything that Wen Ho Lee had access to. But someone obviously felt that he was more likely to be a spy than I was.

GWEN IFILL: So you're saying that you went on the same trips, you had access to the same codes, but you were never a suspect?

ROBERT CLARK: To my knowledge, I was never a suspect. I think Bob Vrooman actually could answer that question.

GWEN IFILL: Mr. Vrooman, do you want to take a try?

ROBERT VROOMAN: Sure. He was never a suspect.

GWEN IFILL: There you go. There's the answer. Bob Drogin, so we have this whole story which is now unfolded and the question remains not only do we know anything about what Mr. Lee did, but we do know that he at least admitted today to downloading these files, which is a crime. We don't know why. We don't know what became of them. What happens next?

BOB DROGIN: Well, he goes home to a big party tonight is what I understand. His neighbors have been taking cookies out of the freezer and putting them back and taking them out and whatnot for days now because this has been such a cliff-hanger kind of a case. We've been waiting for several weeks for him to get out. I think the case kind of now moves on. We try to figure out what this means for policy. The labs have -- desperate to get back on their feet. The director of the Los Alamos Lab said on Monday that this has been the most difficult 18-month period in the history of the Los Alamos Lab. You know, I think there probably should be an awful lot of soul searching by members of Congress, members of the media and frankly members of the Justice Department and the Energy Department as to how a case was brought that really seems to have been built on quick sand.

GWEN IFILL: Say members of the media because...

BOB DROGIN: Because there were some very sensational reporting in the early stages of this that I think played a role in creating the pressure to go ahead, and led members of Congress to hold a series of very heated hearings and leaked a great deal of damaging information that in retrospect didn't hold up at all.

GWEN IFILL: Have any fundamental questions been answered about security at the nation's top secret labs? Have any fundamental questions been answered about security?

BOB DROGIN: Well, you know, you asked earlier about whether it was easy for Wen Ho Lee to take that kind of material. You could ask the same question about the Pentagon or the State Department or the White House. You know, people who are cleared who have a high security clearance and work on computers, in most cases there is nothing that stops them in the U.S. Government from downloading that material onto a floppy drive and taking it out the door -- or in the case of a lot of these scientists, just walking tout door with what they know in their heads. And that's ultimately the problem in these cases, I think -- insiders who for whatever reason, decide to pass this on. You know, and let's not forget, I mean, Wen Ho Lee is a free man and it is a great triumph for the defense today. We still don't know why he did it. We still don't know what he did with it. We still don't know why it did it in the middle of the night. There really are some very perplexing aspects to this case that have not been answered.

GWEN IFILL: Mr. Vrooman, a final question to you and then also, Mr. Clark, I'd like for you to respond. Norman Bay said that justice was done in this plea agreement. Do you agree?

ROBERT VROOMAN: Well, justice was done, but it was very late, and as I mentioned earlier, there was a lot of collateral damage that should not have occurred, and I do not think the nation today is security-wise is in as good a shape as it was before the Wen Ho Lee case.

GWEN IFILL: And, Mr. Clark?

ROBERT CLARK: I have to, I have to say in the real world, justice in the sense of he admitted to a crime, and has been punished, may be true, but the actual crime to which he admitted, I do not believe, is that rare that it deserves a felony on one's record, and if everybody in the country that had ever done something like that had a felony conviction, I would be surprised if anybody in the country who has done something similar to that has a felony conviction for it. So I'm not so sure that this was really justice.

GWEN IFILL: Gentlemen, thank you all very much.

JIM LEHRER: Still to come on the NewsHour tonight, selling violence to kids; and the fuel crisis in Europe.

UPDATE - TARGETING CHILDREN

JIM LEHRER: Kwame Holman has our violence report.

KWAME HOLMAN: Following a series of school shootings last year, President Clinton directed Federal Trade Commission Chairman Robert Pitofsky to study the entertainment industry's marketing of violent material with respect to young people. The FTC was not asked to determine any link between violent media and violent acts. Testifying before the Senate Commerce Committee this morning, Pitofsky detailed the main finding of the report released Monday-- that many entertainment companies market adult-rated products to children, in violation of their own voluntary ratings systems.

ROBERT PITOFSKY, Chairman, Federal Trade Commission: As you know from our report, for each of the three industry segments, target marketing to children of entertainment products with violent content is pervasive and aggressive. Of the movies we looked at, 80% were marketed to kids under 17. Of the music recordings we looked at, all of them were marketed to young people under 17. Of the electronic games we looked at, 70% were marketed to kids.

KWAME HOLMAN: Pitofsky recommended Congress act only if the entertainment industry fails to change the marketing practices he says are aimed at children.

ROBERT PITOFSKY: I believe these industries should be given a reasonable period of time to consider whether they are ready to commit to effective self-regulation. If it turns out that self regulation doesn't solve the problem and current law is inadequate, legislation respectful of the First Amendment should be considered. By adopting rating codes...

SPOKESMAN: Very strong words.

ROBERT PITOFSKY: Well, I've thought about it a long time. I hope we don't go to that. I think it would serve everybody's interest if the industry will come to the table and come up with adequate self regulation.

KWAME HOLMAN: As today's hearing got underway, Commerce Committee Chairman John McCain noted sharply that executives from major movie studios invited to attend, declined.

SEN. JOHN McCAIN: There will be much said today but thundering silence will be heard from motion picture executives. They have all been invited to testify. But by some uncanny coincidence, every single studio executive was either out of the country or unavailable. I can only conclude the industry was too ashamed of or unable to defend their marketing practices. Their hubris is stunning.

KWAME HOLMAN: But Jack Valenti, head of the Motion Picture Association of America, did testify and tried to explain why the studio executives did not.

JACK VALENTI: One of them at this moment is in London with a worldwide meeting of his parent corporation, another in Australia for a long-delayed meeting there. Another one is on maternity leave. Another one is in the middle of an important meeting appointed to a commission by the governor of California. And I had one who would be here, Stacy Snyder, but at the last minute, she said she didn't want to appear by herself.

KWAME HOLMAN: Valenti went on to say he agreed with many of the criticisms of the entertainment industry contained in the FTC report.

JACK VALENTI: It appears from the report that some marketing people stepped over the line where reasonable becomes unacceptable. And I'm talking specifically about ten and 12-year-olds in a focus group. That is wrong. It is unassailably wrong and there is no excuse to sustain it. But I wanted you to know that when we draw lines in the creative world, those lines are ill-illuminated and hazily observed. We're not dealing with Euclidean Geometry where the formulas are pristine. We're dealing with the irregular passions of what I call subjective judgment; and I promise you, and you know, subjective judgments vary widely.

KWAME HOLMAN: Valenti promised to travel to California tomorrow and return with a list of recommendations he believed would be acceptable both to Congress and the movie industry.

SEN. JOHN McCAIN: We welcome you before the committee. We thank you for coming today.

KWAME HOLMAN: This afternoon, top executives of the recording and video game industries did appear before the committee and were credited simply for doing so.

SEN. JOHN McCAIN: We appreciate the fact that this is not the most comfortable time for you, but we appreciate the fact the you're willing to come and address this committee and the American people.

KWAME HOLMAN: Each executive denied marketing adult products or material to children. But they all agreed parents-- not the Congress-- are responsible for policing their children's entertainment. Danny Goldberg is president of Artemis Records.

DANNY GOLDBERG: I'm speaking not only as a long-time record executive, but also the father of a 10-year-old girl and a six and a half-year-old boy. And I do not believe that either government or any entertainment industry committee has any business in telling me and my wife what entertainment our children should be exposed to.

KWAME HOLMAN: Straus Zelnick is president and CEO of BMG Entertainment.

STRAUSS ZELNICK: We take responsibility for the content of what we do. We don't choose to market explicit material to minors. We don't believe in it. And I think that you'll get a good deal of a sense in our industry, even among people that are not like-mined that it is inappropriate and we largely agree there haut to be specific standards that prevent that. Where I think you loose this lows this constituency is where people venture opinions about specific material and decry it as shameful or not artistic. That in my view is not the purview of the legislature of this country.

KWAME HOLMAN: Chairman McCain however suggested a labeling system for records could be something everyone could agree on.

SEN. JOHN McCAIN: I'm talking about labeling as a way of informing both consumers and families as to what the content is, so that they will be informed in their purchases. That's the whole rationale in my view behind labeling.

DANNY GOLDBERG: We do label curse words because you can have objective criteria. Either those words are on an album or it is not. And I think the companies, our company included does label records with those words. That's what we've been doing for 15 years. Other than curse words:.

SEN. JOHN McCAIN: If I could interrupt, and please interrupt me. The labeling is mature audiences or really suitable for certain:.

DANNY GOLDBERG: In terms of categorizing as simple MV, or X --other than the dirty words -- I don't understand the criteria that could be used that would create those categories.

KWAME HOLMAN: For a time today, the presidential campaign trial made a detour as well. Al Gore's running mate, Joe Lieberman long has been one of the Senate's most outspoken critics of violence in the media.

SEN. JOSEPH LIEBERMAN: The Vice President and I believe that vigorous self regulation is the best solution to this problem and we hope that these entertainment industries step up to the plate to do just that in the next six months. The Walt Disney Company did just that yesterday, issuing a strong statement that it would incorporate the FTC's major recommendations into its marketing policies and I want to thank and commend them for that step. But if the entertainment industry fails to act and if they market adult rated products to kids in violation of their own standards, then I believe they must be held accountable.

KWAME HOLMAN: Lieberman was followed by Lynne Cheney, former head of the National Endowment for the Humanities, and wife of Republican Vice Presidential Candidate Dick Cheney. Her comments were faithful to both roles.

LYNNE CHENEY: What seems to me the proper stance here is for outraged citizens, policy makers included of course, to take it as a duty to speak out about, to hold people who produce these outrageous products, to hold these people responsible for them, to shame them. And there is a model for this. Bill Bennett and Joe Lieberman a few years ago began distributing this silver sewer award to particularly outrageous, particularly culpable people in the industry who have produced particularly harmful product

KWAME HOLMAN: But a few minutes later, Cheney added this.

LYNNE CHENEY: Shouldn't people of stature go to Harvey Weinstein, the co-chairman of Miramax, and ask him to pledge in the future he will not fund work that debates our culture and corrode our children's souls. I notice two people of stature, Vice-President Gore and Senator Lieberman are attending a fundraising extravaganza that Mr. Weinstein is holding on Thursday, and I would ask them, please, to deliver this message.

KWAME HOLMAN: In the end Chairman McCain acknowledged that censorship concerns might prevent some actions by Congress, but he said he's determined to find ways to control further marketing of violent entertainment to children.

FOCUS - TURMOIL

JIM LEHRER: Now the oil uproar. In much of western Europe protests against high oil prices are leading to shortages at the gas pump. We have three reports from Independent Television News on the worst situation, the crisis in Great Britain.

CAROLINE KERR: In Northrop, just before dawn today, farmers moved in to support drivers blockading a major oil distribution center. And that's an allegiance which is being repeated all around the country. With lorries and tractors side by side, these two groups are picketing most major fuel depots and refineries and bringing supplies to a halt across Britain. In Manchester, for example, there was no fuel at some petrol stations today. Others had sold out by mid morning, as hundreds of anxious drivers tried to stock up. The result: a wave of panic-buying creating huge queues at those garages which still had petrol to sell, and even there, supplies were rationed. In Edinburgh, there were more misery as drivers staged at the height of the morning rush-hour. Today the prime minister insisted such tactics would win no concessions from him.

TONY BLAIR: We cannot and we will not alter government policy on petrol through blockades and pickets. That is not the way it is made policy in Britain, and as far as I am concerned, it never will be.

CAROLINE KERR: But the protesters were not impressed by Mr. Blair's strong stance.

PROTESTER: I thought always the duty of a government was to its inhabitants of that country. And I don't think Mr. Blair, you are looking after us. You are most certainly not doing what you were put in power for.

CAROLINE KERR: With the blockade leaders determined to hold firm, they remained trapped all day. And by this afternoon, petrol companies were admitting that a quarter of garages were running out of fuel.

PAUL DAVIES: Across the country, it turned into a desperate rush to fill up before the pumps run dry. A day of queuing and frustration, in the North where the protests first took hold to the south where London service stations are running out of fuel tonight, and tempers are becoming frayed. Well over half of all petrol stations in the country are now without fuel. Esso saved 50% of their stations have run dry. At Shell, it is 56%. Another 90%, BP, 67%, and Texaco say 67% of service stations have no petrol. There are claims tonight the protest outside fuel depots and refineries are starting to hit essential services. The health secretary says already operations are being canceled. In some parts of the country like Avon, the ambulance services stopped all but emergency work. The prime minister said tonight he hopes the tanker drivers will be able to resume their fuel deliveries within 24 hours. If he's wrong, it is thought all Britain will run out of fuel tomorrow, the capital is already facing that crisis tonight. This is one of the few petrol stations in London still operating. It has run out of unleaded and diesel and only small stocks of four-star left. As Tony Blair faces up to his first domestic crisis this protest is now affecting millions of motorists and threatening the economy -- a fact illustrated by an unusually quiet rush-hour on motor Rays around Londonas many motorists conserve their petrol, and the first signs of food rationing where leading supermarket is restricting sales of bread and milk because of fuel shortages.

LINDSAY TAYLOR: They thought it was all over. One by one, the trucks have marched through the gates under police escort this morning -- the wagons rolling a welcome sight for the government after Tony Blair stated hope last night that things would begin to return to normal within 24 hours. Some trucks said to be delivering supplies to the emergency services were even applauded by protesters. Overnight, it looked like the band wagon might well go the government's way as the first of the lorries heeded the call to get moving, this to Esso distribution center at Hampshire. Elsewhere, there were similar scenes; it appeared government pressure on the oil companies was paying off. But back by mid morning, events started to take a different direction., indeed an about turn. Some gentle pleading from the protesters, and...

SPOKESMAN: Carry on, boys.

LINDSAY TAYLOR: Some drivers changed their minds about moving. If Tony Blair thought the disruption would start to fade, others had other ideas. In London, part of Park Lane was jammed as the protest neared the heart of government. With the message that lively -- hang in the balance because of high fuel costs.

JIM LEHRER: Ray Suarez takes it from there.

RAY SUAREZ: For more on the fuel crisis in Europe, we're joined by Daniel Yergin, chairman of Cambridge Energy Research Associates, an international energy consulting firm, and Vijay Vaitheeswaran, global energy correspondent for the "Economist."

Mr. Vaitheeswaran, throughout the western part of Europe, there are blocked refineries, cabbies gumming up downtown traffic in the capital, as we saw in Britain, closed gas stations. How did this all get started?

VIJAY VAITHEESWARAN, The Economist: It is a mess. It is the worst oil crisis in Europe in a couple of decades. But the first point to make is that this is not like the energy crisis of the past. This is fundamentally a political crisis. There is no shortage of oil in Britain or indeed on the world market. There is no war that is disrupting supply from the Middle East. This is not OPEC action, oil cartel disrupting supply for political reasons, for example. What we actually have here is a good study in how to bring an advanced industrialized economy to its knees. A very relatively small band of users of gasoline, truck drivers farmers, independents mostly, not heavily unionized. They targeted refineries, the choke points in the modern industrial economy and because of a very poor political response from first in France where the government buckled. The government gave in to their demands. And now in Britain and where in Europe, you find this is catching on like wildfire.

RAY SUAREZ: Well, in the reports from Britain, we saw that has taken on the dimensions of a political crisis rather than a consumer one or an economic one. Why?

VIJAY VAITHEESWARAN: Indeed. For this reason, and there, the protesters do have a cause that many people are sympathetic too, that is energy prices are quite high, and the prices for gasoline in Britain in particular, are among the high nest the world. And the reason people understand is because of taxation. The main grouse that people have in Europe and what they are asking for the governments to do is to reduce the government's taxes on retail gasoline. That is, for every gallon of gasoline that people buy in Europe, typically more than half goes to the government. In Britain, it is almost three-quarters. In America, the comparable figures are around a third, let's say in rough figures. So people in Europe are paying much, much more for their gallon of gasoline than people in America are.

RAY SUAREZ: Well, Daniel Yergin, you just heard Vijay Vaitheeswaran say there is plenty of gas around. Why is this crisis spreading from France to other countries?

DANIEL YERGIN, Cambridge Energy Research Associates: I think what's happened with oil prices, it has been a trigger because for instance, in Britain, when the oil price goes up, the proportion of tax actually goes up more, at least that's what's been happening. So these people as Vijay say, are paying, you know, like $ 4.25, $ 4.50 a gallon, most of it tax, and that's tough on people. The backdrop to it, of course is the oil market. But one number to keep in mind at this point, an OPEC country will earn about $ 32 on a barrel of oil that they sell. Prime Minister Blair's government - the British Treasury -- earns about $ 150 on that barrel because of the amount of tax.

RAY SUAREZ: But wasn't this the case last year, earlier this year? Why is this reaching this crisis proportion now?

DANIEL YERGIN: The price o oil, of course, has gone up, and therefore, the tax has gone up. And I think that the world is sensitized to oil now, and it is feeling the pressure. And it is more acute not in Britain than on the continent because the price of a barrel is pegged in dollars. If you use euros, the currency of Europe, that's depreciated and gone down in value, so the increase in the amount that you are paying is even more. So all of that has come together right now. And when energy prices are going up, when tax is high, it is a very sensitive issue and it brings, I mean, it is astonishing, as Vijay said, to see a country almost brought to a halt right now. It's deeply alarming.

RAY SUAREZ: Now, this started in France a couple of weeks ago with striking truck drivers tying up roads and refusing to move farm products from the farms of France to marketplaces. But as you mentioned, the French government capitulated; it lowered taxes. Did that put all of the other governments surrounding France on the spot?

VIJAY VAITHEESWARAN: Very much so. The protesters in Britain cited the French as their inspiration. And certainly, if French government has put other European governments in a very, very awkward position. Blair for one had said he will stand firm. But he has yet to follow through on that action by making sure that police escorts or military escorts, if need be, make sure the tanker trucks get to the gasoline stations and replenish stocks. In other words, is he going to really follow through, can he do it? The danger is, and we began to see with some information about the people rationing food in Britain that the panic can spread. And that's a sign of political mishandling. That's not a question of an energy shortage.

RAY SUAREZ: But press accounts coming out of Britain and some of the other countries show that the frustrated people waiting in the gas lines, their sympathies are for the cab drivers and the truck drivers and their resentment is for the government. Why?

VIJAY VAITHEESWARAN: Sure. Again, I would go back to this point. I think the protesters and anyone who drives, has a very good case to be upset about taxes. European levels of taxation are very, very high. Part of the problem here is political. Again, government has not done a very good job of explaining why they have raised taxes so high in the last 15, 20 years, particularly in the last few years. The arguments could have been made, for example, environmental reasons to help fight global warming. That was one explicit reason that the previous conservative government in Britain introduced the regime on gasoline that Tony Blair and labor government have kept up. Another argument that is used is to help ease road congestion. Yet another argument the people put forward, plenty of, sort of environmentally-based arguments. None of these have been very well explained, for a start. And secondly, the levels of taxation, when you pay 75% of the total price on anything as taxes, people are going to be upset, if you don't explain why they are doing so. So I think this is partly a political problem. But I would add, in fact though, that while I'm sympathetic to the protesters, they are really targeting the wrong culprit. You asked why not a year ago, why is this happening now or why not two years ago? Europe had very high taxes two years ago too compared to America. The difference now is the world oil price. And for that, I think OPEC deserves the blame, and frankly, that's who these protesters should be looking at. They have tripled world oil prices largely through the actions of the oil cartel to scale back production. The reason why this reached a flash point is because of things that are happening on the international oil market, not really about domestic taxation.

RAY SUAREZ: Is OPEC at the root?

DANIEL YERGIN: I think what's at the root is we have a very tight oil market. We have tightest oil market in terms of extra production capacity except for the gulf crisis since the early 1970s. So it is a market that's very vulnerable to disruption. We see more supplies come in in the next two weeks or so, we may see more supplies coming into the United States and Europe. But it is going to be a fragile market at least through this winter.

RAY SUAREZ: But if Europe's economies are in generally good health, and the United States continues to roll along with high demand and Asia is bouncing back, even if OPEC pumps more oil, will the price go down, Daniel Yergin?

DANIEL YERGIN: I think that we could well see the crude oil price, if there is no disruption, a good deal lower, $ 5 to $ 6 a barrel by the end of the year than it is now. Clearly strong demand; Asia has recovered and that's driving demand. One out of every two new cars, vehicles sold in the United States is a sports utility vehicle. People are driving more so. Demand has been very strong because we've had a strong economy.

RAY SUAREZ: Tony Blair today at a press conference said, we can't back down because we don't make policy just for today. So we're not cutting the taxes. Will he and Chancellor Schroeder and other politicians have to sit down with their peoples and say, if he don't want us to collect it on gasoline, we're going to have to collect it somewhere is else?

DANIEL YERGIN: I think what's happening, in fact, in Germany, part of the reason for increasing gasoline taxes was to reduce other taxes in the workplace. So there is a tradeoff. There is a different philosophy between the United States and Europe. Europe really does say, or has said up until now, you know, the sky is the limit on taxation. It is about $ 3.50 a gallon tax in the U.K., it is 40 cents in the United States. I remember a Congressman was saying if we try to raise the federal gas tax by 10 cents, we'll have a revolution in this country. But they regard it as a major way to raise revenues and it is a much more important source of revenue than this part of our tax philosophy.

VIJAY VAITHEESWARAN: Sure. And I think you are right that there will need to be some revisiting of. This it is not going to happen under duress. It is a very bad idea, whatever you think about taxation, to change your policy when you are being blackmailed and that's really what Tony Blair is saying and that's what the French gave in on and created, in part this mess. But what we're going to see, European transport ministers are going to meet next week. It is very likely this is going to be on the agenda. Longer term, I think Europe is going to revisit their gasoline taxes. More broadly there is probably a case for a more sensible approach to taxation that looks at, for example, things like road pricing. If you are trying to solve the problem of congestion on the roads, which is one of the things that Europe is trying to do with these very high gasoline taxes, it is a very blunt instrument. It penalizes, for example, people who live in the country and who drive around where there is no congestion. So there are other ways to approach this. Probably a more holistic approach would make sense, and I think there are a lot of people in Europe that argue for that. Right now, under duress, the point of a gun is probably a very bad way to do it.

DANIEL YERGEN: It makes it more complicated, that gasoline is not potatoes, you have to be very careful in terms of moving it around on roads so it makes you vulnerable to violence.

RAY SUAREZ: Daniel Yergin, Vijay Vaitheeswaran, thank you both.

RECAP

JIM LEHRER: Again, the major stories of this Wednesday: Nuclear scientist Wen Ho Lee was released from jail; entertainment executives defended themselves at a Senate hearing on marketing violence to children; and the House failed to override President Clinton's veto of the marriage penalty repeal. We'll see you online, and again here tomorrow evening. I'm Jim Lehrer. Thank you and good night.