The MacNeil/Lehrer NewsHour

Intro

JIM LEHRER: Good evening. Leading the news this Thursday, Robert McFarlane denied he solicited the Saudi king for contra funds. Lebanon hostage Alann Steen showed up live on a videotape and the U.S. trade deficit went down last month. We'll have the details in our news summary in a moment. Robin?

ROBERT MacNEIL: After the news summary, we continue our extended coverage of the Iran-contra hearings with excerpts from the end of Robert McFarlane's testimony and that of new witnesses, Gaston Sigur and Robert Owen. That's followed by comments by the Select Committee Chairman and Vice Chairman, an analysis from journalist Ronald Dugger and former White House spokesman Larry Speakes. Then Jack Ryan of the FAA responds to new concerns about air safety. News Summary

LEHRER: Former National Security Advisor Robert McFarlane denied today that he had solicited the king of Saudi Arabia for contra funds. It was McFarlane's fourth and last day in the Iran-contra hearings witness chair. The Suadi king issue was raised in a Washington Post story this morning. Congressman Jack Brooks, Democrat of Texas, asked McFarlane about the report.

Rep. JACK BROOKS, (D) Texas: I note in the paper this morning that it is said that you helped twice with the Saudis to get funds for the contras -- once before the Boland Amendment, and then once there's an allegation that -- when the king came over in '85 and visited with the President, you went out and visited at the Ambassador's residence and talked with the king and asked for $ 15 million to help the contras. Did you have that meeting?

ROBERT McFARLANE, former National Security Advisor: Mr. Chairman, I have testified fully and truthfully as to my involvement in the provision of funds by that country. I have seen the reports of this morning's newspaper. It seems to me more than anything else sad that this government is put in that position, and I think it ought not be in that position.

LEHRER: This afternoon the committee heard from former National Securities staffer Gaston Sigur and Robert Owen. Robin?

MacNEIL: In Beirut, Moslem kidnappers today released a videotape of an American hostage, Alann Steen, one of four kidnapped in January. Steen appeared in good health, despite the claims by his kidnappers last month that he was dying. On the tape, which was of poor quality, Steen's English sounded stilted -- suggesting that his message praising his captors and blaming the U.S. had been written by his kidnappers.

ALANN STEEN, kidnapped American: Once again, I show up as a witness whois still alive -- a witness who was thrown by American officials with his people into this trouble. I know that they wish us a longer absence than even death, while the traitors of the foreign policy and some other exploiters wish to our continuous presence in order to use us as a probable favor in their fake democratic game, so that they reach their goals and high positions while we all suffer.

MacNEIL: A State Department spokesperson in Washington denied that the hostages had been abandoned. "We still care deeply about their fate," she said. With Steen, the Islamic Jihad also holds three others -- American academics, Jesse Turner and Robert Pollhill, and an Indian. They are among 24 foreigners -- 8 of them Americans -- still missing and believed held in Lebanon.

LEHRER: The U.S. trade deficit has gone down for a change. The Commerce Department reported today the monthly deficit figure for March was $ 13.6 billion. That's a $ 1.5 billion drop from the $ 15.1 billion deficit recorded in February. The report said the decrease was caused by the biggest monthly increase in U.S. exports in 6 years.

MacNEIL: The mayor of Atlanta, Andrew Young, had a date today with a Grand Jury. Mark Picard of Atlanta's WSB-TV has a report.

MARK PICARD, WSB-TV: Mayor Andy Young found himself in the unfamiliar role of the pursued this morning, as he has since he received a subpoena to appear before this Federal Grand Jury. After leaving his home he went to former U.S. Attorney General Griffin Bell's office. Bell is representing Young during the federal investigation into allegations of cocaine use by prominent Atlantans and obstruction of justice by Atlanta city government. Young will be questioned primarily about his phone call to Alice Bond after he learned she had gone to police alleging cocaine use by her husband Julian and others, including the mayor. Young denied ever using cocaine, and denied that he obstructed justice by calling Mrs. Bond.

MacNEIL: After his Grand Jury testimony, Young said he was glad to had an opportunity to talk to the panel, and added, "I hope that it's over."

LEHRER: The Reagan administration gave the government of El Salvador some bad news today. It turned down El Salvador' request that hundreds of thousands of illegal aliens from there not be sent back under the new U.S. immigration law. State Department spokeswoman Phyllis Oakley said the request was given serious consideration, but it was finally decided that an exception could not be granted. El Salvador has estimated that between 400,000 and 600,000 of its people could be deported back, an action that would cause hardship for all concerned because of economic conditions in that country. And there will be no more Michael Buerk reports on this program from South Africa. Buerk, a frequent NewsHour contributor, was one of two British TV correspondents ordered out of the country today for violating restrictions on reporting about violence. We have a report from John Simpson of the BBC.

JOHN SIMPSON, BBC: Last month, the Supreme Court in Natal ruled a number of these restrictions unconstitutional. And on legal advice the BBC's Michael Buerk reported this demonstration at Cape Town University.

MICHAEL BUERK, BBC [voice over]: This was the most violent campus unrest since the imposition of the State Emergency last June.

SIMPSON: Peter Sharp of TIN reported the demonstration, too.

PETER SHARP, ITN: And as the police riot squads stormed the university library, the barricades went up. Thestudents took shelter inside.

SIMPSON: It was these reports which seemed to have brought orders that both correspondents should leave.

BUERK: Our requirement is to report accurately and fairly and in a balanced way within the law. This we've continued to do. But the government, I think, having felt that it's legislated those pictures off the screens, has now been extremely annoyed to see those pictures once again going back on the screens.

LEHRER: Under today's order, Buerk must leave South Africa by May 24.

MacNEIL: That's our news summary. Ahead on the NewsHour, extended coverage and analysis over the Iran-contra hearings, and air safety. Iran-contra Hearings

LEHRER: Today was Day 8 for the Congress's Iran-contra hearings, and Day 4 and last for former Reagan National Security Advisor Robert McFarlane. Judy Woodruff presents our coverage. Judy?

JUDY WOODRUFF: As we reported a moment ago, McFarlane responded today to a Washington Post story, saying he solicited donations for the Nicaraguan contras from the King of Saudi Arabia. McFarlane said he could not remember such a meeting, and did not believe it had taken place. But he stopped short of making a complete denial. On the other hand, McFarlane did accept blame for the policy of aiding the Nicaraguan contras, despite the ban on such aid that had been imposed by Congress. Questions about the wisdom and legality of the Reagan administration's policy came from Republican Congressman Michael DeWine.

Rep. MICHAEL DeWINE, (R) Ohio: One of the recommendations of the Tower Commission was that they upgrade the National Security Advisor -- the legal staff and the legal advisor. Would you agree with that recommendation?

Mr. McFARLANE: I do, Mr. DeWine. I think you point out one of a dozen places where I went wrong. I guess I do feel, though, that there's even a better testimony to my error in the fact that -- as I guess I said in the opening statement, I felt that this was a very important issue -- that is, showing the Russians that we can deal with this phenomenon. But we didn't choose the right instrument to do it. Succinctly put, where I went wrong was not having the guts to stand up and tell the President that. To tell you the truth, probably the reason I didn't is because if I'd done that, Bill Casey, Jean Kirkpatrick, and Cap Weinberger would have said I was some kind of a Commie, you know. I mean, my own solution would have been that we'd better make clear that we're prepared to keep Soviet support for totalitarian regime in this hemisphere out.

Rep. DeWINE: Isn't part of the competency problem the fact that the United States has not been consistent, and that was part of the problem you were dealing with?

Mr. McFARLANE: Yes, sir. And I welcome the softball, but (chuckles) -- no, truly, I -- it's generous of you, but --

Rep. DeWINE: They always told me, Mr. McFarlane, that softballs were sometimes harder to hit out of the park. So I don't know if it was intended as a softball or not, but I think it's a question that a lot of people are asking --

Mr. McFARLANE: Well, it is a good question, and I ought to simply say that as ambiguous as Congressional signals were, they were engendered, I think, by a lack of communications from the Executive Branch. There was a time when I thought that there was a lot of politics -- more politics on the Hill on this issue -- that after the first year of President Reagan being on a roll and winning everything, that maybe Democrats picked out that here in Nicaragua was a place he was politically vulnerable and just decided through political motives to go after him. I don't believe that.

Rep. DeWINE: Mr. McFarlane, one of the more often quoted and telling statements that was made in the Tower Commission appears on Page IV, No. 11. Let me just read it to you. "Give the importance of the issue, and the sharp policy divergences involved, however, Secretary Shultz and Secretary Weinberger in particular, distanced themselves from the march of events in regard to this whole series of events." Do you agree with that? Is that a fair statement based upon what you know -- or is that not fair?

Mr. McFARLANE: It's very fair.

Rep. DeWINE: Do you want to elaborate, or is that --

Mr. McFARLANE: No, I --

Rep. DeWINE: You don't have to.

Mr. McFARLANE: I don't understand it. I -- I think that the President is paid to make tough decisions, and his Cabinet Officers legitimately have disagreements, but I think that the President ought to be able to rely on his Cabinet Officers to remain engaged and objective and critical where they feel it -- but engaged and loyal to the President.

Sen. PAUL TRIBLE, JR., (R) Virginia: Now, in regards to the shaping of the decision itself -- arms to Iran -- my understanding is that the President did receive inputs from the Secretary of State, Secretary of Defense and others, who argued against that policy.

Mr. McFARLANE: Yes, sir.

Sen. TRIBLE: So, I see through your testimony a portrayal of a President who is not disengaged as suggested by the Tower Report, but a President who had the information before him, who understood the risk, but who pursued a policy because he wanted to bring the hostages home -- is that a fair statement?

Mr. McFARLANE: Yes, sir. Senator Trible, if I could add a footnote to that, and I -- it is perhaps gratuitous, but it's been made in some comments from your colleagues here the point that if things work they're praised and if they don't, they're criticized. There's frequent reference to the Grenada operation in recent years, and it worked -- generally. There was very close -- well, I should say, complete -- consultation with the leadership of the Congress before that, and with his cabinet, and there was general disagreement and objection to it being conducted. But he did it. That's what he's paid for. And it worked. And he's done this, and it didn't. But I take your point. He is a decisive man who does what he believes is right.

WOODRUFF: But Democratic Congressman Ed Jenkins of Georgia pointed out one instance in which the President's covert policy undermined what Congress was trying to do.

Rep. ED JENKINS, (D) Georgia: In October of 1985, when the State Department was scheduling an appointment for Col. North to meet with one of these countries that later contributed $ 2 million, I was involved in a tough legislative battle in this House. On October 12, I believe, of 1985, this House passed a textile bill -- very controversial. At that very time, Col. North apparently was soliciting from a nation that was impacted by this bill funds secretly. And that country later delivered $ 2 million, according to the testimony. The President vetoed that bill in December 1985. And between December 1985 and August 1986, when Congress decided to sustain the President by an 8 vote margin, there were entreaties apparently made to many other nations who were impacted by this legislation. So this is the type of thing that is extremely dangerous from a perception standpoint, is it not?

Mr. McFARLANE: I agree with that.

WOODRUFF: As McFarlane prepared to end his testimony, House Committee Chairman Lee Hamilton thanked him for his cooperation, but said he had trouble with much of what McFarlane had had to say.

Rep. LEE HAMILTON, (D) Indiana: Now what concerns me is the disparity between your opening remarks and the remainder of your testimony. The approach to the making of foreign policy set forth in your opening statement is in my view quite at odds with the foreign policy process you have described in your subsequent testimony. And to my mind, at least, they are hard if not impossible to reconcile. I'll not go into a lot of detail here, but let me quote some of your words. When questioned about various aspects of your involvement in providing assistance to the contras, you've told us that you "used some tortured language." That you did not provide "a full account." That you were "too categorical." And that you gave the Congress in response to Congressional inquiries, "incomplete statements." In testimony under oath before the Foreign Affairs Committee last year, when you were asked about the contributions you responded, "I have no idea of the extent of that or anything else." And you said, "I have seen the reports and heard that Country 2 contributed. The concrete character of that is beyond my ken."

Now, I've been impressed as I've sat here for these hours again and again with the clear discrepancies between what you and others in the administration told the Congress -- what the administration was or was not doing and what in fact was done. And so I ask myself, "How can the Congress find out what is happening?" The Congress only knows one way to get information. And that's through the process that we're engaged in here. Senator Sarbanes has asked you who or what you were trying to shield or trying to protect. And you said, in short, that you were trying to protect yourself. Repeatedly during these hearings, you have volunteered to take the blame -- the whole blame -- on yourself. I appreciate your willingness to shoulder great responsibility, I admire you for it. But I cannot accept that answer. As National Security Advisor, you are the spokesman for the President of the United States. And when we write to you, we do not write to Mr. McFarlane, we write to you as the representative of the President. And when you spoke to the Congress and when you wrote to the Congress, we accepted your words and your assurances as those of the President. You spoke for the President. And the responsibility must rest with him, as well as with you. You cannot -- it seems to me -- accept responsibility for mistakes, as admirable as that may be. And thereby absolve the President of responsibility. So all of us, Mr. McFarlane, will remember your testimony with gratitude to you, with appreciation, and I hope all of us will work a little harder in carrying out our efforts to achieve an honest and a complete dialogue between the Congress and the Executive. Otherwise, as you have told this committee, we invite disaster.

WOODRUFF: After McFarlane finished his testimony, the committee heard from two witnesses who played roles either in aiding the contras or in soliciting funds for them. Gaston Sigur is presently the Assistant Secretary of State for Asian and Pacific Affairs -- a highly respected academic in his early sixties, Sigur has recently been credited with several positive developments in U.S. foreign policy -- most notably, pressuring the South Korean government for democratic reform and shoring up support for the Aquino government in the Philippines. The committee's interest in Sigur stems from his prior position as an Asian specialist on the staff of the National Security Council. According to a North computer memo obtained by committee investigators, North asks Sigur to use his Asian contacts to help find countries willing to donate to the contras after Congress prohibited U.S. military aid. Testimony given by Sigur concerning his role in soliciting funds contradicted the earlier testimony of McFarlane. Sigur was questioned by members of the committee, and by assistant Senate Counsel Mark Belnick.

MARK BELNICK, Exec. Asst. to Chief Counsel: Now, Dr. Sigur, did there come a time that Oliver North approached you and asked you to contact the U.S. resident representative of an Asian country, which we shall refer to at this hearing as Country No. 3, to ask that representative whether his country would contribute to the contras?

GASTON SIGUR, Former NSC Aide: Yes, that occurred, to the best of my recollection, in the summer of 1985. I was asked, I was told that -- by Col. North that he and Mr. McFarlane understood that this Country No. 3 might have an interest in giving some assistance -- financial assistance -- in the humanitarian area to the country.

Mr. BELNICK: Did Col. North tell you whether he was speaking for Mr. McFarlane, or did he assert that he was?

Dr. SIGUR: Yes. There was no question about that in my mind.

Mr. BELNICK: In that conversation, did Col. North tell you anything about the condition of the contras, what kinds of assistance he thought they required?

Dr. SIGUR: Oh, yes, he talked to me about the said condition that they were in -- how bad off they were. They had no funds and that they were very short of medical supplies and food and clothing and all this sort of -- kind of need. And that to my mind was the heart of the matter.

Mr. BELNICK: So he presented it as an emergency situation?

Dr. SIGUR: Yes, yes.

Mr. BELNICK: And he asked you to find out whether Country No. 3 would be willing to help?

Dr. SIGUR: That's right.

Mr. BELNICK: And what did you do?

Dr. SIGUR: I made an appointment to meet with the -- one of the representatives of the country. I talked this matter over with him.

Mr. BELNICK: This was in August 1985?

Dr. SIGUR: I think it was -- no, I would say it was in July, probably. Late June or July of 1985. I talked the matter over with him, and he said that he was not a policy man, of course. He did not decide anything. He said he would have to go back to his home government on it. He gave his view, and some indication that perhaps there had been perhaps some conversation of some kind about this sometime in the past -- that his government would only be able to do this by providing funds directly to the United States government.

Mr. BELNICK: What did you do next after that breakfast meeting?

Dr. SIGUR: I went to see Mr. McFarlane. I think it was probably that same day. I can't be absolutely certain of that, but I think so. And I told him that I had as a result of my talks with Col. North and Col. North saying to me that he and Mr. McFarlane were interested in finding out what the situation was, and I talked with this particular individual of Country 3 and that he had said that any funds would have to be channeled -- he thought -- channeled through the United States government. Mr. McFarlane's response to that was, "This is not possible. That cannot be done." So I saw that as the end of that, and I told Col. North about it.

Mr. BELNICK: And what did Col. North say?

Dr. SIGUR: He didn't say much of anything at the time. But then a week or ten days, or two weeks later, he came back to me and asked if I would arrange for him to meet with that particular individual from Country No. 3.

Mr. BELNICK: And did you arrange a meeting for Col. North?

Dr. SIGUR: Yes, I did. I arranged a meeting.

Mr. BELNICK: With the same official of Country 3?

Dr. SIGUR: With the same official. And I --

Mr. BELNICK: That was at the Hay Adams Hotel?

Dr. SIGUR: That's right.

Mr. BELNICK: In August of 1985?

Dr. SIGUR: In August of 1985.

Mr. BELNICK: What was the next you heard about this matter and from whom?

Dr. SIGUR: The next I heard, I believe, and this took a while -- I don't know how long it was -- was from that particular official, who said that the Country No. 3 had decided to provide some humanitarian assistance financially to the contras in the form of -- in the amount of a million dollars.

Mr. BELNICK: Did you subsequently learn from that official whether Country No. 3 did send another million dollars?

Dr. SIGUR: He said he had, and so did Col. North say that they had.

Sen. WARREN RUDMAN, (R) New Hampshire: Let the record show the several million dollars from Country No. 3 was transferred into the Swiss bank account of that great, world humanitarian organization, Lake Resources, who has not been known for buying much rice or wheat.

WOODRUFF: The Country No. 3 referred to there was reportedly Taiwan. The last person to take the stand today was Robert Owen, the first witness to be granted limited immunity -- meaning anything he said could not be used against him in a criminal prosecution. [voice over] Robert Owen is a conservative activist in his mid-thirties who worked as a Republican Congressional aide until he was drawn into the private aide network for the Nicaraguan contras. Owen has been described as Col. North's cutout -- or informal liaison to the contras and their U.S. supporters. Although not on the government payroll, Owen worked out of North's White House office as a consultant. In the fall of 1985, the State Department's Nicaraguan Humanitarian Assistance Office gave Owen a $ 50,000 contract to help administer humanitarian aid to the rebels. But in his note found among North's papers, Owen's name is scribbled above the word, "weapon." Owen also created the Institute for Democracy, Education and Assistance, known as IDEA, which is identified on this flow chart found in North's safe. It is believed to have managed funds used to aid the contras during the 2-year Congressional prohibition on direct military assistance to them.

Owen was questioned by House Deputy Counsel Neil Eggleston about his travels to Central America to deliver maps and money to the contras on behalf of Col. North.

NEIL EGGLESTON, Deputy Chief Counsel: Did you return back to Central American in mid-November of 1984?

ROBERT OWEN, Former North Associate: Yes, I did.

Mr. EGGLESTON: Did you have occasion before you went down to meet with Col. North?

Mr. OWEN: Yes, I believe he called me into his office and I went over to talk with him.

Mr. EGGLESTON: At this time his office was in the old Executive Office Building, is that correct?

Mr. OWEN: Yes, not the basement of the White House, as many assume.

Mr. EGGLESTON: And you met with him in his office?

Mr. OWEN: Yes.

Mr. EGGLESTON: And without giving us any specifics about what the operation was about, did he give you anything at that time to take with you down to Central America?

Mr. OWEN: Yes. He provided some photographs and some maps.

Mr. EGGLESTON: And the maps and photographs were in connection with what was going to be a specific military operation?

Mr. OWEN: It hadn't been decided, but there was the potential that an operation would be mounted and this information and intelligence would be most important for it to succeed.

Mr. EGGLESTON: And just generally, the idea was to destroy some military equipment which belonged to the Sandinistas?

Mr. OWEN: Yes.

Mr. EGGLESTON: And these maps and photographs were to help out in that specific military operation that the contras then were going to undertake?

Mr. OWEN: Yes. Without them, it probably wouldn't have been successful. Even with them, it was doubtful it would be successful.

Mr. EGGLESTON: Do you know if the mission was ever undertaken?

Mr. OWEN: No, it was not.

Mr. EGGLESTON: And do you know why the mission was not undertaken?

Mr. OWEN: It was felt it was probably too risky.

Mr. EGGLESTON: Mr. Owen, let me ask you to direct your attention if I could, to Exhibit RW0-2, which is also in the book -- excuse me, RW0-3 -- Let me direct your attention, if I could, to the very bottom of the page -- the paragraph that begins, "Next week." And it reads, "Next week a sum in excess of $ 20 million will be deposited in the usual account. While this should be husbanded very carefully, it should allow us to bridge the gap between now and when the vote is taken and the funds are turned on again." Were you aware that $ 20 million had been deposited into an account on behalf of the contras?

Mr. OWEN: No, I was not.

Mr. EGGLESTON: Had you had any discussion whatsoever with Col. North about whether or not the contras were about to receive any sum of money?

Mr. OWEN: Not that I can remember. The discussion of funds for the contras was always something that was of concern to him.

Mr. EGGLESTON: But you don't recall any specific discussion with him that the contras were about to receive a large sum of money?

Mr. OWEN: No.

Mr. EGGLESTON: Let me direct your attention to Page 2 of this document. And maybe I could just summarize it. You have previously read this, is that correct?

Mr. OWEN: Yes.

Mr. EGGLESTON: Would it be fair to say that on Page 2 of this Document Col. North refers to establishing a regular supply program for the contras?

Mr. OWEN: Yes.

Mr. EGGLESTON: And does he also recommend to Mr. Calero that $ 10 million of this $ 20 million sum be set aside for nothing but logistics?

Mr. OWEN: Yes, he does.

Mr. EGGLESTON: And further up on the page he makes references to how Mr. Calero should deploy his troops, is that also correct?

Mr. OWEN: Yes, it was a suggestion.

Mr. EGGLESTON: Now, the very bottom paragraph of Page 2 of RWO-3 reads, "This new money will provide great flexibility we have not enjoyed to date. I would urge you to make use of some of it for my British friend and his services for special operations. I can produce him at the end of this month." Do you see that?

Mr. OWEN: Yes, I do.

Mr. EGGLESTON: At a subsequent time, did you have conversations with him about a British friend?

Mr. OWEN: Yes, in passing.

Mr. EGGLESTON: And did he tell you what hisBritish friend and some of his people had been involved in -- I guess what you would call sabotage work in Managua.

Mr. EGGLESTON: And that they were -- is it fair to say that he described them as contractors for him?

Mr. OWEN: I don't think it's fair to say they were contractors for him, but he did say that he knew about what they were doing.

Mr. EGGLESTON: Let me direct you to Page 3, the last paragraph. It reads, "Please do not in any way make anyone aware of the deposit. Too much is becoming known by too many people. We need to make sure that this new financing does not become known. The Congress must believe that there continues to be an urgent need for funding." Did you have discussions with him at all at any time about this issue set forth in the last paragraph?

Mr. OWEN: No.

Mr. EGGLESTON: You don't recall any discussion at all?

Mr. OWEN: No.

WOODRUFF: The Congressional investigation claimed its first casualty at the White House today, apparently the result of Owen's testimony. Owen told the committee at one point that Jonathan Miller, who is now Director of the White House Office of Administration, in March of 1985, cashed travelers checks from Oliver North for distribution to a contra leader. Early this evening, the White House announced that Miller had resigned voluntarily, but said there would be no comment when asked if that was related to Owen's testimony. Robin?

MacNEIL: With Robert McFarlane's testimony completed, it won't be until Col. Oliver North and Admiral John Poindexter appear in late June that the committee will hear again from witnesses who dealt directly with President Reagan. So the end of the McFarlane testimony is a good point to assess the picture the hearings have painted of the President's role. During the committee lunchbreak today, Judy Woodruff talked with the Chairman of the Senate Committee, Democrat Daniel Inouye, and the Vice Chairman, Republic Warren Rudman.

Sen. DANIEL INOUYE, Chairman, Senate Select Committee: I think -- taking into consideration the recent statements of the President and of the White House, would suggest that the President was much more knowledgeable than heretofore claimed by the White House.

WOODRUFF: What do you mean specifically by that? Knowledgeable of what?

Sen. INOUYE: Well, for one thing, about a week ago the White House was rather adamant, stating that the President was not aware of solicitations being made to foreign countries. Now we know otherwise.

WOODRUFF: Any other point?

Sen. INOUYE: I think the testimony of Mr. McFarlane points out rather clearly that the President has been involved in the policy making process of some of the cover activities described.

WOODRUFF: What about in the realm -- Senator Rudman, what about in the question of whether any of this was illegal or not -- are you going to say that's to be left to the Independent Counsel, or --

Sen. WARREN RUDMAN, (R) New Hampshire: Well, there are two sides of that, Judy. As far as illegal conduct on the part of members other than the President, that, of course, is up to the Independent Counsel. If we're talking about the President of the United States, that of course is not up to the Independent Counsel. It's up to -- in the first instance -- the House of Representatives. And I don't think we're anywhere near that. Let me point out to you that one of the curious things about this debate -- and the Chairman and I were discussing it I believe this morning before the hearings started -- is that everybody is talking in legal terms rather than really in political terms. I have been rather astounded to find the difficulty at the White House in talking about foreign governments or private aid. The President of the United States, it seems to may of us, could not be prohibited from doing himself what he wanted to do in terms of foreign policy -- whether it be solicit money or exhort the American people to support the contras from their own pocketbook. That may be questionable policy, that may be questionable political conduct. But is not a legal issue, Judy. Never has been. The legal issue revolves around the diversion of funds. That's a serious matter and there is no new evidence that the President knew more than he said he knew. And I think that distinction has to be made.

WOODRUFF: Is there any reason the White House should be nervous at this point about what may yet come out of these hearings?

Sen. RUDMAN: Well, I would say if the President were facing reelection, he would probably be nervous. But of course he's not. I think that nothing that I have seen so far changes my view that this is to a large degree a political matter, a showing of really poor political judgment. But for those who want to try to hand some legal charge around the President, that hasn't happened this week.

WOODRUFF: Senator Inouye, should the White House be nervous about what's to come out yet?

Sen. INOUYE: If I were the White House, I'd be very nervous, not knowing what Mr. North and Mr. Poindexter will be testifying to. I have no idea what the testimony will be like. I am looking forward to this. If I were in the White House, I'd be nervous.

MacNEIL: We pursue these issues now with two who have been following the hearings closely -- Larry Speakes, former White House Spokesman and now Vice President of Communications at Merrill Lynch here in New York, and Ronnie Dugger, publisher of the Texas Observer and author of the biography "Reagan, the Man and His Presidency." Is Senator Inouye right? Should the White House be very nervous now?

LARRY SPEAKES, former White House Spokesman: I don't think so, Robin. I think from top to bottom, from start to finish, the President has laid it on the line. He's tried to get out as much as he can on this matter as much as he knows. And I believe the story as he first told it is the story that stands today and nobody's shaken that.

MacNEIL: What about what the Chairman just also told Judy -- that McFarlane's testimony has shown that the President was involved and knew -- or was a lot more knowledgeable than as claimed by the White House before McFarleane's testimony?

Mr. SPEAKES: Well, it was my impression during the period I was there -- and certainly I wasn't involved in everything -- but it was my impression that every time the President discussed aid to the contras during the period that it was -- legal aid was prohibited by Congress -- during that period, every discussion in the President's mind was on the subject of humanitarian aid. Whether it was private assistance, United States, or assistance from countries abroad.

MacNEIL: How do you feel about it, about how close this has come to Mr. Reagan and his knowledge and his involvement, Ronnie Dugger?

RONNNIE DUGGER, Publisher, The Texas Observer: I think it's come pretty close. The Constitution says the President shall take care to see that the laws are faithfully executed. That isn't just the negative responsibility of not violating the laws, but seeing to it that theyare carried out. I'm impressed by Anthony Lewis's point last Tuesday in the Times. He said that what the committee is uncovering is a conspiracy to subvert the Constitution. I think there's a case for that. I just heard with you Senator Rudman say that there's no serious question of illegality here. But notice how carefully Mr. North and others tried to avoid Taiwan's money coming directly to the government. Why hasn't the question been raised, it occurs to me, whether when Col. North deposited money from foreign governments, characteristically not democratic governments, it didn't become American money. When it went into those Swiss accounts, and a member of the National Security Council was depositing it, it seems to me that became American money. The President, bargaining for that money -- in effect bargaining, whether or not he knew in advance -- asked in advance -- he expressed pleasure receiving it. It seems to me what the President did there was trade credit to the United States, which does not belong to him personally -- it belongs to the public -- to advance the foreign policy that Congress had prohibited. It seems to me that's already pretty close. We know Mr. Reagan knew about the contra's private funding, and we know he knew about foreign nations supporting the policy of the United States. It's pretty close.

MacNEIL: Shaping up to a conspiracy to subvert the Constitution?

Mr. SPEAKES: I disagree. Certainly, that's a rather convoluted point that Ronnie makes here. But it's -- I think that the President was thinking in terms always of trying to seek to change the Congressional policy. You read back on his speeches over a two-year period, and you'll see that the President was concentrating on Congress. He wanted to keep the contras alive through humanitarian assistance through that period, keep them a viable force. But at the same time he was working night and day to change the mind of Congress. There was a lot of misinformation coming out of the Sandinista government. A full-fledged PR campaign mounted by the Sandinista government, where they paid a PR firm to help them. And so what the President was trying to do is keep the contras alive, and then influence Congress to change their policy -- which he was in due course successful in doing.

Mr. DUGGER: I hear in Senator Rudman, there is a sense in which it's a political, not a legal, question. Larry, I think when the President gets involved in this kind of activity, he's showing contempt -- and I think the question is too narrowly aimed to the President, because we don't have all the data yet on all that he knew or how he got what he wanted -- he's showing contempts, though -- or at least his foreign policy apparatus is for the Congress -- specifically for the Constitution, and most seriously, for democracy. I wouldn't ask that he take account of the polls in any constitutional. But I would in a political way. The polls show that the people are opposed to his policy in Nicaragua -- about 70%. And they persist in showing that. So it was not only the Boland Amendment, but the wishes of the people which in some -- the office of the Presidency -- violated. I think that is politically actionable, so to speak.

MacNEIL: Do you want to comment on that, because I have another question to ask if you don't.

Mr. SPEAKES: No, let's take your question.

MacNEIL: Okay. North -- both senators said, particularly Inouye, they're looking forward to North and Poindexter now. What do you -- what importance do you now attach tothe North and Poindexter testimony?

Mr. SPEAKES: I think it's very important. Bud McFarlane was involved with the inception of the policy, with the creation, so to speak -- of Ollie North and the organization of the policy. I think what you're going to question John Poindexter on is the implementation of the policy. How did it happen? Did Ollie North's actions go astray? What happened? So I think you get down to the implementation point where you have had the strategy develop here into the implementation. And I think that's where the key questions are going to come in. I believe that the Congressional Committee will find that when they question Poindexter and North -- -they will find it more of a management breakdown. Certainly the President could have asked more questions. But you've got John Poindexter managing that policy and that team of North and Company, and I don't think he knew what was going on. I found after the story broke, when I set about to deal with the set of facts, that Poindexter did not know a lot of the details of the policy.

MacNEIL: Why would Mr. -- it occurred to me to ask today -- why would Mr. Reagan get dozens of briefings from Mr. McFarlane in the early stages of the policy, and then not expect to continue to be briefed as intimately at later stages of the policy.

Mr. SPEAKES: Well, I'm not sure how intimate these briefings were. In a regular course --

MacNEIL: I just meant in a -- in a sense of regularity.

Mr. SPEAKES: Well, I mean details myself -- and I think what happens is each morning at 9:30 the Foreign Policy Advisor, Bud, or John Poindexter, went in to see the President. They had a lot on their platter. Generally, it was arms control, or was Middle East, or whatever. This was probably a subject that was brought up. How much detail was provided, I wasn't present at those meetings, so it's difficult to say. But I do believe in every case in these meetings -- and every time I heard the President speak on it, it was always in the context of humanitarian aid and an influence on Congress, trying to present our side of the story to the Congress.

MacNEIL: What do you think about the North-Poindexter role -- or testimony to come now?

Mr. DUGGER: Well, obviously it's critical. I think one factor left out of our speculations at the moment -- my memory's not absolutely clear on the disinformation controversy that Mr. Poindexter was involved in. But I do remember there was a will to achieve deniability. And just as a political observer, clearly there might have been a temptation to achieve deniability for the President. I'm actually as interested in whether the committee will call the Vice President, Mr. Bush, or whether Mr. Bush will testify. Because it seems to me not fair to him and not fair to us that we don't know what he's done. And I'm interested in Mr. Meese. Remember his critical role over the weekend? I hope the committee will invite the Vice President and call Mr. Meese.

MacNEIL: Mr. Speakes, what do you say to Representative Hamilton -- we heard the excerpt where he lectured Mr. McFarlane quite sternly at the end of the testimony today. He just cannot accept that McFarlane will take the responsibility and absolve the President. The President cannot be absolved of this.

Mr. SPEAKES: Well, once again, the most disturbing thing to me was Bud's attempted suicide. That has disturbed me more than anything about the whole issue, because I know Bud is a rock solid guy who has the best interest of the country at heart.And I do feel that he has sort of taken this whole matter upon himself personally. And the outburst yesterday when he said, you know, put me away, whatever -- I bear responsibility. I think the responsibility that the President bears is this: he set the policy in motion. And he put a team together to implement the policy. But what you have is it went awry in the implementation. I think it's a management responsibility on the President, and an even tougher management responsibility that should be laid at the foot of Poindexter and North.

MacNEIL: Do you agree with that?

Mr. DUGGER: Well, I certainly think that Poindexter and North are responsible, and I have a lot of sympathy for Mr. McFarlane too. I think what he's gone through, especially under the circumstances, took a lot of courage, and I admire him. But I myself think if Gary Hart's going to be held up to a character issue, maybe the President should be. After all, the President, when the Boland Amendment passed, if he was going to aggressively enforce the policy of the United States should have told his staff aggressively not to get weapons for killing to the contras during that period. He did not. Perhaps there are statements in the record that he said, "Don't break any law." But apparently North and Poindexter really thought they knew what the President wanted and that they were doing it. It seems to me that the slippage is almost inconceivable and that you get into a question which is a political question involving the longterm control of the Presidency. That's what's really involved here. Deniability and the President's judgment in letting this happen, or intentional slippage. It's serious business.

MacNEIL: We have to leave it there, gentlemen. Ronnie Dugger, Larry Speakes, thank you. Air Safety

LEHRER: Finally tonight, we finish a one-two billiard shot on air safety. Last night, National Transportation Safety Board Chairman James Burnett warned of the increasing risks of midair collisions. He said there was an erosion of safety in the Air Traffic Control system and he offered steps to reduce near-misses in the air and errors by Air Traffic Controllers on the ground. Sitting in that same chair tonight is Jack Ryan, Director of Air Traffic Operations of the Federal Aviation Administration. It was to the FAA that Burnett directed his proposals, which include reducing flights at the nation's business airports at peak times during the summer months, forcing airlines to spread out takeoff and landing schedules, and avoiding stacking planes waiting to land. Mr. Ryan, generally, what do you think of those proposals?

JACK RYAN, Federal Aviation Administration: Well, I think the FAA and myself agree with the general thrust of the Chairman and the NTSB's recommendation. Which is not to overburden controllers in enroute sectors this summer. Certainly --

LEHRER: Enroute sectors are the heavily, heavily traveled routes into major airports.

Mr. RYAN: Yes, the Air Traffic Control System of the United States is composed of 20 Air Traffic Control centers, which have 649 sectors. So they control the traffic between the departure point and destination, where the towers and approach controls take over.

LEHRER: All right. So you think he's right about that. Now, are you going to accept that recommendation?

Mr. RYAN: I think he's right that we need to monitor the traffic in enroute sectors so that controllers don't become overburdened. As I recall, the --

LEHRER: He wasn't talking about monitoring,he was talking about restricting the number of flights in these controls -- and in and out of the major airports --

Mr. RYAN: Yes, sir, and monitoring leads to restricting flights. It doesn't necessarily mean that a flight has to be changed or has to be cancelled. As I recall, what the Chairman said, he said that we need to identify those sectors in the 20 centers that may have the potential for peaking. And we've done that within the last --

LEHRER: Peaking meaning --

Mr. RYAN: Peaking, which is exceeding a predetermined threshold where we might become concerned about air traffic controllers becoming overburdened. We've identified 80 such sectors that have that potential. We've also identified the threshold that we wish to stay below. And thirdly, beginning this Sunday, on May 17, from our central flow control facility in Washington, D.C., we'll be monitoring those sectors to ensure that those threshold levels are not exceeded.

LEHRER: Now, what will you do -- do you have a new process that if the monitoring reveals that this particular area -- a threshold -- is being exceeded, what happens?

Mr. RYAN: Well, what we can first do is if the aircraft are airborne, you can reduce their air speed so that they don't arrive in that sector in the time period that you're concerned about. You can reroute the airplanes around the affected sector. And the last thing you can do -- which would be the least desirable from passengers and airlines viewpoint -- is to delay those aircraft on the ground at the departure point so that they're not entering that sector at the time that you're concerned about.

LEHRER: But you're going to do that, right?

Mr. RYAN: Yes, sir.

LEHRER: He also said here last night that he was concerned about the pressure that you all were going to have to decrease delays, and that there might be some scurrying of safety measures in order to do that. Is that a justifiable fear?

Mr. RYAN: Well, certainly we have pressure. We've been under pressure. We'll be under pressure this summer. The important thing is not to succumb to that pressure. We haven't done it yet. The most important thing an air traffic controller does is separate air planes. The most important thing ATC does is provide a safe and secondarily expeditious air traffic control system.

LEHRER: ATC meaning --

Mr. RYAN: Air Traffic Control.

LEHRER: Senator Ford of Kentucky introduced legislation today that would require you all to hire 1,000 more air traffic controllers. Do you support that?

Mr. RYAN: Well, sir, I think what we support is not necessarily hiring 1,000 air traffic controllers. Possibly what we'd like to have is the latitude to hire some more supervisors and to hire traffic management specialists whose job it is in the 20 sectors and the many air traffic control towers and terminals, to monitor air traffic controls so those controllers don't become overburdened.

LEHRER: Mr. Burnett, of course -- the whole promise for what he's said here last night, and for his recommendations, what Senator Ford said today in making his proposal, is the increases in near-misses, and the increases in air controller errors. Now, what's your evaluation of those increases, and what it justifies doing?

Mr. RYAN: Well, certainly we're concerned about the increases and near midair collisions. And we're concerned about the operational errors. But I think to ut the near midair collisions in perspective -- and we had 758 in 1985, 839 in 1986 doesn't necessarily meanthat a near midair collision has occurred. As a matter of fact, the greatest category of the three categories that are near midair collisions -- which are critical, potential and no hazard -- most of that increase was no hazard, which means after investigation the FAA felt that there was no hazard to the airplanes involved. As far as the operational errors are concerned, we're talking about a period from January 1 of 1987 to March 30, where they went up 18%. What sometimes is ignored is the previous 24 months where we had reductions of 25% in 1985, and 18% in 1986. As a matter of fact, for the last 39 days, the number of operational errors is now about 10% more for that time period that it was for the same time period in 1986. The trend is down.

LEHRER: In other words, what you're saying, Mr. Ryan, is that Mr. Burnett, Senator Ford and others are what? Scaring people for no reason? Panicking? Don't have the facts?

Mr. RYAN: I wouldn't say that. I think that --

LEHRER: What's going on, then?

Mr. RYAN: I think the Chairman and the NTSB are trying to do their job. We agree with the thrust, which is to monitor air traffic and ensure that controls are not overburdened. We have a plan to do that, and we're going to carry it out.

LEHRER: But why is it that everybody else seems to be more concerned about it than you all?

Mr. RYAN: We are concerned about it. I'm concerned about near midair collisions, I'm concerned about operational errors in particular, because those are violations of the separations standards that controllers operate --

LEHRER: The difference is that you feel that you all are on top of it -- more so than the others possibly.

Mr. RYAN: We are on top of it, yes, sir.

LEHRER: Mr. Ryan, thank you very much.

Mr. RYAN: Thank you, Mr. Lehrer.

MacNEIL: Again, the major stories of this Thursday. Former National Security Advisor Robert McFarlane denied a published report that he solicited the King of Saudi Arabia for money to fund the contra guerilla operation in Nicaragua. Late today, the Director of Administration for the White House, Jonathan Miller, resigned after a witness at the Iran-contra hearings testified that Miller cashed travelers checks from Oliver North for distribution to a leader of the contras. And the U.S. trade deficit went down in March to $ 13.6 billion from the $ 15.1 billion it had been in February. Good night, Jim.

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