The NewsHour with Jim Lehrer

JIM LEHRER: Good evening. I'm Jim Lehrer. On the NewsHour tonight, a look at the potential impact of the big tobacco verdict in Florida; Susan Dentzer and Margaret Warner explore a new potential for an Alzheimer's vaccine; Elizabeth Farnsworth examines the election returns from Indonesia; and David Gergen talks about giving something back. It all follows our summary of the news this Thursday.

NEWS SUMMARY

JIM LEHRER: Thebig Florida tobacco case prepared today for the penalty phase of the trial. The judge said he'd decide Monday when it would begin. The jury will hear and act on the claims of individual plaintiffs in the class-action suit. Their lawyers have sought awards totaling $200 billion. Tobacco companies were held liable for making a defective product causing deadly diseases. We'll have more on this story right after the News Summary. President Clinton pushed his new markets plan again today in Los Angeles and Anaheim, California, on the fourth day of his poverty tour. He announced a $250 million federal program for training young people from poor areas for high-tech jobs. He visited a high school in Watts, where he was joined by former basketball star Magic Johnson and Governor Gray Davis. Then Mr. Clinton went to Anaheim. He was to highlight the expansion of a not-for-profit program in which business professionals help train high-schoolers, then hire them as interns and summertime workers. Energy Secretary Bill Richardson agreed to create a nuclear weapons agency within his Department. He did so in an interview published today in the "Washington Post." The new unit would oversee U.S. nuclear laboratories. Richardson originally opposed the idea, but said he'd accept it as long as the agency remained inside the Department and under his control. In Yugoslavia today, some 4,000 Serbs demanding the resignation of President Milosevic demonstrated in a town 165 miles from Belgrade. They clashed with pro-Milosevic supporters. There was gunfire and stone-throwing, but no major injuries. In Kosovo, there was a similar confrontation in Pristina where a Defense Secretary visited troops participating in the peace mission. We have this report from Jo Andrews of Independent Television News.

JO ANDREWS: It was George Robertson's first trip to the country that has been occupying most of his waking hours for the past few months, and like many other NATO politicians who have come here, he found the ethnic Albanians had an effusive welcome for him. He was also here to see some of the British soldiers who have been on the streets of Pristina for the past three weeks.

GEORGE ROBERTSON: You're not going to try to kiss me, are you?

SOLDIER: No, sorry.

SPOKESMAN: No, no.

JO ANDREWS: And for the moment, the peacekeepers have plenty on their hands. One of the Serb opposition leaders from Belgrade, Zoran Djindjic, crossed into Kosovo today to meet Serbian community leaders here and ask for their support in opposing Milosevic.

ZORAN DJINDJIC, Opposition Party Leader: We can protect the Serbs in Kosovo. Only government with credibility, with international credibility can protect the Serbs in Kosovo.

JO ANDREWS: But many Serbs in Kosovo are staunchly pro-Milosevic. They pushed the camera crews and barracked Djindjic, who then had to be escorted away by British troops for his own protection. Further south in Haranvacz, ethnic Albanians protested against the imminent arrival of Russian peacekeepers on their streets. They don't trust the Russians and think they will be pro-Serb. So far the peacekeeping forces of all nations have been broadly successful in restoring calm to these streets, but it isn't over yet. And if the unrest in Serbia spills over into Kosovo, then the task will become much more difficult.

JIM LEHRER: Back in this country, today scientists reported progress today on a vaccine for Alzheimer's. It showed promise in mice, but has not been tested in humans. A San Francisco drug company developed it. It reduced or prevented the buildup of a certain protein in the brains of mice. Deposits of the protein are a characteristic of the disease. We'll have more on this story later in the program tonight. The American Red Cross chose a new president today. She is Dr. Bernadine Healy, the former director of the National Institutes of Health and dean of the Ohio State University Medical School. She will replace Elizabeth Dole, who resigned in January to seek the republican nomination for president. And that's it for the News Summary tonight. Now it's on to the big tobacco verdict, an Alzheimer's update, elections in Indonesia, and a David Gergen dialogue.

FOCUS TOBACCO VERDICT

JIM LEHRER: The tobacco industry engaged in extreme and outrageous conduct. That's what a Florida jury decided yesterday in step one of the first tobacco class-action lawsuit ever to come to trial. Here to walk us through the finding and its potential impact are Mary Aronson, head of a tobacco policy and litigation research firm in Washington; Martin Feldman, a tobacco analyst with the Wall Street firm, Salomon Smith Barney; and we hoped to be joined in a few moments by Clark Freshman, a law professor at the University of Miami. Ms. Aronson, what exactly did the jury find?

MARY ARONSON: Well, in this first phase of a three-part trial, the jury was looking exclusively at the issue of general causation, whether or not, in the abstract, tobacco can cause the variety of diseases that are being claimed by members of the class in the named plaintiffs. The jury pretty much found across the board that, indeed, I think 20 out of 20 diseases claimed could be caused by tobacco. The second thing was whether or not the behavior of the tobacco industry was egregious enough that the industry should be forced to pay punitive damages down the road and again, on that point, they also voted with the plaintiff.

JIM LEHRER: And the egregious conduct that they found that the tobacco engaged in was what exactly?

MARY ARONSON: Well, things like withholding information from the public about the dangers of smoking, about the possibility of addiction, on the one hand, and on the other hand, promising the public that they would be forthcoming, the promise was made back, you know, 20, 30 years ago. They did not keep up with that promise, and they were found to be responsible.

JIM LEHRER: Now, in this first phase, what kind of witnesses were put before the jury by both sides?

MARY ARONSON: Well, there was a variety. I think there was 80-some witnesses; when I was observing the case the first week, they started out, for example, with a former surgeon general. There are all sorts of expert witnesses that normally come before the court about whether or not various diseases can, indeed, be caused by smoking. You know, there are a variety of types of witnesses. One thing that they did not put before the jury in this first phase were the individual claimants. Their concerns, their damage claims will come up in the second phase.

JIM LEHRER: And that's the one that -- it could begin on Monday, right?

MARY ARONSON: Yes. Well, I think the judge is supposed to make some sort of a decision on that.

JIM LEHRER: Right. He's going to decide on Monday as to when.

MARY ARONSON: I mean, the same jury is sitting and waiting. They've been in court with this case since October when it began, and as I understand were not aware until, you know, the end of the first phase that they were going to have to sit for the second phase. I'm sure they're anxious to have it move ahead.

JIM LEHRER: Now, just staying with the first phase for a moment, Mr. Feldman, was what the jury found a stunning thing from the industry's point of view?

MARTIN FELDMAN: Well, it was the very first time that you've had a tobacco class action reach a jury verdict. And of course, it was a very, very tough verdict for the tobacco industry. I think it's important to recognize, however, that a very large number of both state and federal courts have said tobacco classes don't work and have largely decertified them. So while this decision was very tough for the industry and I think came about largely as a result of the expert use of internal industry documents made public through the various settlements over the last 18 months, there's a very real chance that this case might be decertified and disappear within the course of the next six to nine months.

JIM LEHRER: We'll get to that in a moment. Just the finding of the jury, what the jury found that the tobacco industry did and what tobacco causes as a matter of health risk, was that something new? Had any jury and any court ever found that before?

MARTIN FELDMAN: That was entirely new. You had never had a jury actually say cigarette smoking is addictive. It causes a very large number of diseases, and the industry indulged in a large degree of misconduct over a 30-year period.

JIM LEHRER: Okay. Now, let's go to the second phase. The second phase will now determine what damages will be paid. Now, there are nine defendants, I mean, nine plaintiffs in this case, right?

MARTIN FELDMAN: Nine lead plaintiffs, correct.

JIM LEHRER: Lead plaintiffs. And the jury will now be called back to listen to what?

MARTIN FELDMAN: In the first phase, we heard the common elements of the claim. Now we're going to hear the individual aspects surrounding each smoker, each individual plaintiff. The tobacco industry will try and prove that each of these smokers knew the risks of smoking before, in fact, they ever started. They weren't allowed to introduce any evidence like that in phase one. And I think they'll be hoping, they'll obviously be hoping that the jury decides as many juries have done to date, that because the smokers knew of the risks, they're not liable to pay damages.

JIM LEHRER: And, on the other hand, Ms. Aronson, the plaintiff's lawyers will be trying to present what?

MARY ARONSON: Well, they're probably going to say that you can't have a fully informed smoker who can assume the risk unless all of the information is out there, unless the industry or whoever the maker is of whatever product is at issue in a case has been forthcoming with information and because of the concealment and because of the misrepresentation, that was found in these various document, smokers weren't informed. And therefore, they didn't assume the risk.

JIM LEHRER: So as a practical matter, phase two will resolve this for these nine plaintiff, right?

MARY ARONSON: Yes. Marty was very correct in what he said earlier. You know, class-actions are supposed to be efficient means of resolving a lot of similar claims with you know -- many of the same defendants. There are a lot of common issues such as in the big picture, does smoking cause these diseases? In the big picture, was the industry's behavior so horrible that punitive damages should be awarded? But in the second phase, what they'll be looking at is each of the smoker's specific ailments and whether that ailment which is first phase said in the general sense can be caused by smoking, whether for a particular named plaintiff, his cancer or heart disease was caused by smoking.

JIM LEHRER: That has to be proved to the jury that

MARY ARONSON: Right.

JIM LEHRER: -- this particular person started smoking on a certain date and caught a certain disease, et cetera.

MARY ARONSON: Right. You see, the problem with tobacco and asbestos and some of these diseases that are caused by products and result in long latency periods is that over the course of that latency period, over the 20 or 30 years, an individual is exposed to a number of other potential environmental toxins that might have also caused his or her disease. So the industry is probably going to look very closely at these claimants to see whether or not if someone had lung cancer, for example, whether or not it was indeed, due to smoking or perhaps radon in his basement or exposure to Agent Orange or whatever.

JIM LEHRER: And, Mr. Feldman, as you said also, the key to it, though, will be that the companies will say hey, look, it's right there on the pack that it could make you sick, so if you read that on the pack and you did it anyhow, it's your problem, not the industry's problem. Is that in a nutshell what they're going to argue?

MARTIN FELDMAN: Well, I think they'll go back to the beginning of the century and they'll show "Reader's Digest" and Life Magazine's and songs about tobacco and say that it was part of society's knowledge that everyone has known the dangers of cigarettes and it's difficult information to rebut. So I think that will be the main argument they'll bring. But the other point on the decertification-- Mary commented that the use of a class action is to try to efficiently use the judicial system. In phase three of this trial, Stanley Rosenblatt, the plaintiff lawyer is suggesting there might be upwards of 50,000 plaintiffs -- Each one entitled to have his or her day in court. In other words, the industry has to be given the right to defend itself against the claims of each individual consumer. I don't know how-- if you were to give each one an hour, it would still take forever. From my point of view, it's not manageable. Last week, in New York, you saw a case known as the Clay case be decertified, another tobacco class, and there the judge said the case is simply not manageable. So that's a very big problem for the future of this case.

JIM LEHRER: And that's phase three. Phase three is whether or not the class action part of this remains viable, right?

MARTIN FELDMAN: Well, that's exactly right except that it will be those arguments that will be presented by the industry very likely on appeal, during or after phase two. As soon as some money is awarded against the tobacco industry in phase two, it will appeal the very class certification that has allowed the case to come forward. And I think it will describe the very difficult, the impossibility of managing phase three.

JIM LEHRER: Professor Freshman has joined us in Miami just in time to explain the significance of a class-action suit -- why-- this is the first time a class-action suit has gone to a jury involving tobacco -- why it has not happened before and why this is so important.

CLARK FRESHMAN: Well, the basic deal with a class action is it's about efficiency. Rather than having to try the same facts over and over again and waste the court system's time, you present the common facts all at once and then in a second phase, you consider specifically what happened to individual plaintiffs. So, in the tobacco case, it's very expensive to put on all of the expert witnesses, what are possible causes of cancer, what does tobacco do? What evidence was there, what tobacco companies knew, and when -- here you have one jury here all at once. And then in the second phase, consider the relatively simple question: How much were individual plaintiffs hurt? Now, why didn't it happen before? Well, that's basically a peculiarity of Florida law. Florida makes it very easy for people to lump their cases together in a class action. As far as I can tell, it's the easiest state in the entire United States for that to happen and certainly much easier than the federal courts. That's why this case wouldn't have gotten this far as a class action in other states and why, despite the possibility of appeal, if there were another case in another state, it may very well succeed in the Florida appellate system.

JIM LEHRER: But then if it succeeds in the Florida system, it could then go through the federal system on appeal?

CLARK FRESHMAN: No. Not at all. Once it goes through the Florida system, the only way it could get to the United States Supreme Court would be number one, if there was a federal constitutional issue. Class certification is not a constitutional issue. If, however, there were a constitutional issue, such as the amount of punitive damages, then the tobacco industry could try to get the U.S. Supreme Court to take it. But you'd be better off buying a lottery ticket. The odds of getting to the U.S. Supreme Court are very, very low. They only take 40-60 cases per year. The odds that there would be a class certification issue somehow converted to a constitutional question are really completely impossible.

JIM LEHRER: All right. Explain to us, then, this was a case that was tried by six people, only six people made this decision yesterday in a Miami courtroom. And it has been reported all over the world as a landmark -- why is it landmark, because six people in Florida made this decision?

CLARK FRESHMAN: Well, it is going to cost potentially, billions and billions of dollars. In most cases, you would have one or two plaintiffs, perhaps a group of plaintiffs bringing the case and then if there was a loss, it was what their particular medical damages were, their loss of income. What this has done is to say if this is upheld on appeal or if this settles, which I think is quite likely, that everyone in the state of Florida up until now who has been damaged will not have to hire their own expert witnesses, will not have to go mano-a-mano against the tobacco companies and prove that smoking causes cancer. All they'll have to do is show what their particular medical expenses and out- of-pocket losses are for wages. So it really opens the floodgates here in Miami. Number two, the significance is, does this mean something about trials in other states? Potentially, it does. There are two bad facts that have come up in this case; one, documents that were made available due to settlements. Those will also be available in other cases. Number two, the fact that the tobacco industry has been willing to settle, now as a technical matter, the judge will tell the jury in cases, disregard what you've heard about settlement. The fact the tobacco company settled doesn't mean that they're necessarily guilty. But that's like telling people to ignore the fact there's a big pink elephant in the room. People will know the tobacco companies have been willing to settle, and it makes it very hard to believe when representatives come into court that it's so widely unfair to hold them responsible.

JIM LEHRER: Speaking of unfair, we have to go here. I'm going to be unfair to Ms. Aronson and Mr. Feldman and just ask you very briefly to say what you think the impact of this is going to be, Ms. Aronson.

MARY ARONSON: Well, I think ultimately, what's going to happen is, you know, because defendants are starting to lose cases, I think they're going to have to look for some way of bringing closure. I think we may well have to-- they may well have to come back to Washington and to Congress to find some sort of resolution such as possibly a compensation scheme.

JIM LEHRER: Mr. Feldman?

MARTIN FELDMAN: I don't believe that this class will be settled under any circumstances. I think there's quite a good chance that on appeal it is decertified. And, for me

JIM LEHRER: Decertified, meaning the class-action part of this will not wash?

MARTIN FELDMAN: Will disappear, exactly. The other quick point I would make is that if there is any worry for the tobacco industry, I think you will see a trend where it will begin to lose individual trials like you saw in California and in Oregon for multimillion-dollar claims given the new documents that are in evidence, and I think that investors and the industry is going to have to become accustomed to those losses but not to mega losses that would come out of these types of claims.

JIM LEHRER: All right. Well, thank you, all three. Mr. Freshman, I'm sorry you had traffic problems down there in Miami. But we're delighted you finally made it. Thank you all three.

FOCUS ALZHEIMER'S RESEARCH

JIM LEHRER: Now, new Alzheimer's research. First, some background from Susan Dentzer of our health unit, a partnership with the Henry J. Kaiser Family Foundation.

SUSAN DENTZER: Roughly four million Americans suffer from the debilitating effects of Alzheimer's Disease and almost nineteen million say a family member is affected. Among the afflicted are former President Ronald Reagan and as many as half of the residents of the nation's nursing homes. The longer people live, in fact, the more likely they are to have Alzheimer's. While one in ten persons over 65 have the disease, by age 85, nearly half do. Recently a handful of new treatments have shown some ability to stem the severe memory loss and other mental deterioration that patients undergo. And in this week's issue of the journal "Nature," researchers from a California biotechnology company reported on a vaccine that kindled new hopes. The team from Elan Pharmaceuticals said it had developed a vaccine for use in mice that appeared to prevent or reduce one of Alzheimer's key features. These are the sticky protein deposits in the brains of Alzheimer's patients that are known as amyloid plaques. The plaques are believed to cause the death of other brain cells.

DR. IVAN LIEBERBURG, Elan Pharmaceuticals: This drug completely stopped all further progression of the disease and, in some cases, actually lessened it.

SUSAN DENTZER: The scientists at Elan first genetically altered a group of mice so that they developed the exact type of plaques found in humans with Alzheimer's. Then, in what yielded the key breakthrough, they harnessed the animals' own immune systems to fight the plaques by injecting the mice with a specially developed vaccine. The vaccine appeared to shrink or eliminate existing brain plaques and to block formation of new ones. The slide on the right is from the brain of a mouse that had been given the vaccine. It had virtually no plaque deposits compared to the slide on the left of an untreated mouse. Elan now plans to ask the federal Food and Drug Administration for authority to begin testing it on people later this year.

JIM LEHRER: And to Margaret Warner.

MARGARET WARNER: Joining me now is Dr. Steven DeKosky, head of the Alzheimer's Disease Research Center at the University of Pittsburgh. He's also chairman of the Scientific and Medical Advisory Board of the Alzheimer's Association, a national advocacy group.

Welcome, Dr. DeKosky. How significant do you, in your view, is this finding reported today?

DR. STEVEN DE KOSKY, Alzheimer's Association: We think, both the researchers in the Alzheimer's community and the association, that this is a striking finding. It was a bit surprising, I think, even to the scientists who did the study themselves. I don't think they thought it would be as effective as it turned out to be.

MARGARET WARNER: And what -- without being maybe too technical or medical with us -- what is significant about it? What's the big breakthrough that you see?

DR. STEVEN DE KOSKY: They did two experiments that they reported in this paper. They first gave their vaccine to animals who we know will develop the sticky plaques in their brains, the little deposits of protein in their brains, as they get older. Then they started giving these animals the vaccine before they developed thee plaques, and, in fact, when they looked at them a year later, when their brains should have been full of plaques, they had none, and they did not have any of the other inflammation or negative effects that accompanied the formation of this material in the brain. They had basically prevented them from developing the changes. The second experiment they did was on animals in whom they waited until they were old enough to already have plaques and gave them the vaccine then and continued to give it for several months, and those animals not only stopped developing more plaques, but it was pretty clear that they also began to resorb the material that was in the brain, that is, they were improving.

MARGARET WARNER: Okay. Now, in humans, first of all, do all Alzheimer's patients have these plaques?

DR. STEVEN DE KOSKY: Yes, all Alzheimer's patients do. In fact, that's one of the criteria, one of the ways we make the diagnosis of Alzheimer's Disease. If there aren't plaques in the brain, it's probably some other neurological disease.

MARGARET WARNER: And what is known about whether these plaques are a symptom, just a symptom of the disease, or cause the disease?

DR. STEVEN DE KOSKY: We know that the plaques are made up of a material called amyloid. In some families, who have familial Alzheimer's Disease, they have a mistake, a mutation in the protein, itself. And those people all get Alzheimer's Disease. So we know that if you have a problem with this protein, you will get the disease. That's a very small number of people. It's only probably 10 families that we've identified, but it proves that this protein is clearly involved in the cause of the disease in those patients and in the disease process in everybody else who gets the disease.

MARGARET WARNER: But there are also -- without going into great detail -- but there are other abnormalities in the brain characteristic of Alzheimer's patients, correct?

DR. STEVEN DE KOSKY: Absolutely.

MARGARET WARNER: That aren't addressed by this vaccine.

DR. STEVEN DE KOSKY: That's correct. I think you can -- we have two major types of changes in the brain that occur in Alzheimer's Disease. One is these deposits of the protein called amyloid, and the other is deposits of a different kind of protein that occur inside the nerve cell. This vaccine and this strategy only attacks the amyloid plaque portion of the pathology. Now, if you say, well, what does that mean as far as patients are concerned, that's the whole question. We want to know, we need to know if we find an effective way to slow down these deposits in the brain will that slow down or stop the whole process, or will the process continue and let us just see no change in the course of the disease in patients. I think most people who study the disease believe that if we are able to slow this half of the problem down, that what we would see in patients is a slowing of the progression of their disease.

MARGARET WARNER: All right. Now, often, I gather, experiments in mice don't translate to humans. Is there anything here that gives you special hope or reason to think that this might?

DR. STEVEN DE KOSKY: Right. It's appropriate always to be cautious, and, in fact, I think we need to re- emphasize that this is not a cure for the disease; this is what we hope will be a good treatment and possibly a prevention. But the studies in Alzheimer's Disease which have been done on mice up till now have all been done not on models of Alzheimer's Disease, per se, but just on mice that are very old because they develop some memory problems, and you can treat them with various medicines that improve their memory. That's not the same kind of change you see in the brains of Alzheimer's patients; they lose many more of the connections in their brains than mice do that get old. These mice have the human protein put into them; they're carrying the human protein. And it was the human protein that was used to vaccinate them with. So it was a human protein that they are responding to, and it's human protein that they're clearing out of their brains. That's the reason why we think these have much more applicability to humans than did some of the earlier studies that were just looking at aging changes in mice brains.

MARGARET WARNER: Okay. Now, if the FDA approves the beginning of clinical trials in this, how long are we looking at? First of all, how long will the trials take, and if people want to be in the trials, how do they get in them?

DR. STEVEN DE KOSKY: Okay. I suspect that the first trial -- what the Food & Drug Administration calls Phase 1 trials -- to make sure that the vaccination is safe -- probably would begin within a year, because I believe the company has data that suggest that they have some safety data. Certainly, the mice were reported to have done well and not had any ill effects of the vaccine. They need to show that in another species of animal and then they can try it in humans for safety. Then it will take a study probably of several hundred people being given the vaccine and tested in their thinking function and memory function over the course of a year or so before we'll know whether or not it is effective in slowing the progression of the disease. And in order to do that, we first need to make sure that when humans get the vaccine, they have a good response of making antibodies to it, just as we want people to make antibodies to vaccines we give them for the flu.

MARGARET WARNER: So, the lead time between any experiment like this in mice and a drug widely available on the market is how many years, even if it works?

DR. STEVEN DE KOSKY: Well, if it works, depending on what the FDA says about it, this is something that realistically could be -- I would say an aggressive timetable would be four years to five years.

MARGARET WARNER: And is it fair to say that with the aging of the baby boomer generation, if we don't get a handle on this, we're going to have a lot more cases of Alzheimer's in the next -- the next 10 years?

DR. STEVEN DE KOSKY: This is why, I think, most of the researchers and the association feel that we're in a race. We have discussions about whether currently there are three million or four million cases of Alzheimer's now in the U.S.. What everyone knows is, that over the next twenty to thirty years we are probably going to triple the number of cases that we have. This is enough to break Medicare all by itself, so we're in a bit of a race against time to find a way to slow the progression of the disease, or to figure out a way to stop people from developing the disease before it really gets started. And that's why the first study that they did, trying to stop the deposition of protein in the brain was so exciting. It looks like we could treat people and stop them from developing the plaques before they start.

MARGARET WARNER: All right. Well, thanks, Dr. DeKosky, very much.

DR. STEVEN DE KOSKY: Thank you.

JIM LEHRER: Still to come on the NewsHour tonight, the vote in Indonesia, and a David Gergen dialogue.

FOCUS TEST OF DEMOCRACY

JIM LEHRER: The Indonesia story, and to Elizabeth Farnsworth in San Francisco.

ELIZABETH FARNSWORTH: Last month, millions of Indonesians flocked to the polls for that nation's first truly open election since 1955. Election observers from overseas, including former President Jimmy Carter, commended the orderly and apparently fair manner in the vote for members of a new parliament.

JIMMY CARTER: I don't have any indication yet, no evidence yet, I don't even have any allegations coming to me from any of the major party officials that such illegalities have been perpetrated, or that the ultimate outcome of the will of the Indonesian people has been subverted.

ELIZABETH FARNSWORTH: But Carter was among those warning that the credibility of the election process could be damaged if it took too long to count the votes, not just in big cities like the capital, Jakarta, but in the 14,000 islands that make up the Indonesian archipelago. The elections were part of a package of reforms promised last year by Indonesia's new President B.J. Habibie. He came to power after weeks of massive demonstrations that brought an end to 33 years of authoritarian rule by President Suharto. Habibie also inherited an economy shattered by the financial crisis that hit East Asia in 1997. Hundreds of thousands of Indonesians who had risen from poverty to middle class status lost jobs and found themselves falling back into lives of hunger and unemployment. Many had taken out their anger at Suharto, who was accused of enriching his family and friends with so-called crony capitalism. Habibie's reforms for this country of 212 million people included promising a free press, allowing the formation of opposition political parties and holding democratic elections. The press has become vocal and spirited and two major political groups, as well as smaller parties, rose up to challenge the ruling Golkar Party in the elections. And the 500-member parliament was supposed to combine with 200 provincial leaders in a people's consultative assembly that would choose a new president later in the year. On election day Habibie urged all parties to embrace the democratic process and respect the results of the ballot.

PRESIDENT B. J. HABIBIE, Indonesia: [speaking through interpreter] In every game there's a winner and loser, and the party that wins should act with nobility and think of the responsibility it has over the next five years.

ELIZABETH FARNSWORTH: But one month after the parliamentary elections, only 60 percent of the votes have been tallied. Final results were due today, but were once again postponed, this time until July 21st. Based on the official count so far, the principal opposition party, known as the Indonesian Democratic Party of Struggle, is ahead with 36 percent of the vote. Its leader is Megawati Sukarnoputri, the daughter of Indonesia's former President Sukarno, who led the struggle against Dutch colonialism and who was ousted by Suharto in a bloody coup in 1965 in which thousands were killed. Habibie's party, the Golkar Party, is running a distant second with about 20 percent of the vote. Forty-six other parties, including several Muslim groups in this overwhelmingly Muslim nation, share the remaining vote. Officials said the counting was complicated by Indonesia's sprawling geography. But opposition groups raised accusations of corruption and vote-tampering, and that has led to violence. Last Thursday, 1,500 protesters in Jakarta hurled rocks and demanded that the ruling Golkar Party be disqualified. Police moved in, firing shots and using tear gas to control the crowd. About two dozen people were wounded. The next day, heavily armed police suppressed demonstrators who tried to march on the election commission headquarters. And Indonesia is also facing violence in East Timor. Habibie had promised a referendum on autonomy or independence for residents of East Timor, a former Portuguese colony that Indonesia seized in 1975. A vote was scheduled, but then postponed by U.N. election monitors because of violence. Last week, there were several attacks on U.N. election officials by militias, which have also attacked pro-independence leaders. Some say the militias are armed by the Indonesian military, which still has responsibility for overall security in East Timor. At least 12 U.N. workers have been injured, and U.N. officials have said the violence could derail the referendum. And yesterday the head of the U.N. Mission in East Timor demanded that Indonesia rein in those militias. U.N. Secretary General Kofi Annan is expected to announce a final decision on the East Timor ballot date within the next few days.

ELIZABETH FARNSWORTH: And yesterday, the head of the U.N. mission in East

Timor demanded that Indonesia reign in those militias. U.N. Secretary-General Kofi Annan is expected to announce a final decision on the East Timor ballot date within the next few days. For more on all this, we

turn now to Paul Wolfowitz, U.S. Ambassador to Indonesia during the Reagan Administration-- he was in Indonesia last month observing the elections for the Carter Center and the National Democratic Institute; Donald Emmerson, Professor of Political Science and Southeast Asian studies at the University of Wisconsin-Madison-- he too was an election observer last month; and Sidney Jones, executive director of Human Rights Watch Asia-- she was last in Indonesia in February, and has been there frequently over the past 20 years. Ambassador Wolfowitz, what has the election process so far told us about Indonesia now a little more than a year after Suharto was forced out?

PAUL WOLFOWITZ: Well, I think the basic news is still extremely good in spite of all the disturbing indications that were included in your introduction. The fact is the fourth largest country in the world on June 7, demonstrated in a powerful and impressive way the deep desire of the Indonesian people for democracy, their determination to make it work, their determination to make it work in a peaceful fashion. These elections were extraordinarily peaceful, much more peaceful than the last rigged elections in the old regime. So, it's a very good start, and I think potentially very important both for solving Indonesia's problems but also if Indonesia ultimately succeeds in becoming the world's third largest democracy, it will have, I think, a big influence on the rest of Asia and the rest of the Muslim world. It will be one of the first democracies in the Muslim world. But the problem is not just the slowness of the vote count.

ELIZABETH FARNSWORTH: And by the way, let me interrupt before you go on. Why, briefly, is it so slow?

PAUL WOLFOWITZ: I think it is more because the country is so vast, because the procedures were so quickly put together and frankly, because in many cases, when there are disputes about the vote count, they laboriously go back and check the differences and work on them. The fact is that while only 60 percent of the vote may be officially counted through very effective sampling procedures, constructed by an organization put together by the rectors of the major universities, everyone has a reasonably good idea of what the final vote count is going to look like. The problem is that it split up among six major parties. And the key is going to be, I believe, for Megawati Sukarnoputri, who will end up with something like 35 percent of the vote, which makes her the very clear leader in this election but that by itself is not enough to establish a government with broad popular support. She and other parties, and I think it has to be the parties that represent this overwhelming desire for change and reform, need to be able to put together a government. The sooner they can get on with that, the sooner some of the problems of unrest that were mentioned in your introduction I think can be dealt with more effectively.

ELIZABETH FARNSWORTH: Donald Emmerson, what's your view on what the elections have shown us about reform and change?

DONALD EMMERSON: I agree with Paul that I think we should be grateful that Election Day was remarkably peaceful. It's important to remember that a lot of people expected major violence to occur. Nevertheless, the real problem is when an election is effective, it has to deliver. And the delays make the delivery, they push it off until sometime perhaps as late as November. We might not know until then who the next president of Indonesia is going to be. And, as Paul implied, the extraordinary complex and cumbersome system that Indonesia is now saddled with means that there are 238 seats in the 700-member constituent assembly the people's consultative assembly -- that are not directly elected at all. And, therefor, if you get all of those 238 seats, you only need as little as quarter of the seats that were directly elected on the 7th of June in order to get an absolutely majority in the assembly and become president. Now, a lot of people worry that in the backrooms of Jakarta, as politicians maneuver to try to make coalitions to put together that winning number of 351 seats, the election which appears to have been won by Megawati is going to be lost to somebody else, conceivably even Habibie.

ELIZABETH FARNSWORTH: And, Sidney Jones, just briefly, what do you think about what this show is about? And then tell us a little about Megawati. I understand she is called by one name, as many Indonesians are.

SIDNEY JONES: That's right. I think it is important to underscore that the longer this goes on, the more dangerous it will be, because it's as though all the rest of Indonesia on hold. Nobody is paying attention to the economy in a systematic way. Nobody is paying attention to the building unrest in the regions. East Timor is going to hell in a hand basket. We've got Aceh on the northern tip of Sumatra erupting. We have got violence breaking out in other places in a way that has nothing to do with the election. So, unless this resolved soon and I think somebody is going to have to declare closure quite quickly I think we could see much of the good that's been done come unraveled. As far as Megawati is concerned, she is someone who came into political prominence in 1993, mostly on the basis of her father's name. She had a reputation as being someone who was clean and uncorrupt, which in itself was a major departure in Indonesia. She is somebody who is-- represents nostalgia for her father who was seen in some case, misguidedly, as being someone who supported the little guy. He was a populist. And she's a populist. Appealing to the lower urban classes, people who have nothing and think that if she comes to power, she will deliver and so on. And, yet, she has said nothing. She has no political program. She's a figurehead in some ways who has maintained her support by being absolutely silent and not saying anything about what she intends to do if, in fact, she does become president. She's got people in her close circle of advisors who are very good but represent radically different streams of thinking, so she's got one person who supports, for example, a fixed exchange rate. She's got somebody else who supports a floating exchange rate. She is somebody who doesn't want East Timor to become independent. And yet she appeals to many intellectuals and people in the Jakarta urban elite who would like to see a free and fair referendum in East Timor. So, nobody has a clue what's going to happen.

ELIZABETH FARNSWORTH: Ambassador Wolfowitz, do you want to add anything to that?

PAUL WOLFOWITZ: I think it's true that Megawati articulated very few policy positions in this campaign. But she did very clearly for two things: Number one, she stood for change. And change means a broad desire of the Indonesian people to have a government that isn't corrupt, that doesn't abuse power. In fact, if you combine her votes with those of Abdurrahman Wahid's party which also stood for change, and Amien Rais's party.

ELIZABETH FARNSWORTH: Those are both Muslim parties.

PAUL WOLFOWITZ: Well, actually Amien Rais's party is not a Muslim party, although he himself was a major Muslim figure. And Abdurrahman Wahid is a major Muslim figure, but all three of these people I think this is important not only stood for change but stood against those people who said politics should be determined by religion, that Indonesians should be divided. Megawati's standard stump speech was, I'm not a Javanese; I'm an Indonesian. And even though she was criticized by some quarters for not being Islamic enough, the millions of people who voted for her, are almost all overwhelmingly Muslims. So, there is a basis there to put something together. I agree absolutely the longer this goes on, the greater the danger is. As I'm told, taxi drivers in Jakarta say the whole process will catch a cold or get pneumonia. The key isn't getting the ballots counted faster because that by itself won't resolve it, and the key is not going into back room deals and consultative assembly. I think the real key is for those three leaders I mentioned who really do have between the three of them, a great mandate for change and perhaps some other people from other parties to put together the makings of a government of national unity, which includes deciding who will have what positions, but also resolving some of these outstanding issues of policy --not all of them but at least a few of the major ones.

SIDNEY JONES: But the problem again is the longer it goes on, the more there's room for the opposition and manipulation to build so that Paul mentioned that there was a growing movement to deny Megawati the presidency on the ground that she's a woman and a woman shouldn't be a president in a Muslim country. Now, that's been flatly rejected as an argument by some of the key Muslim leaders.

PAUL WOLFOWITZ: And also by the military.

SIDNEY JONES: It's a sentiment that's held. But just now, just today, there was a bill introduced to say that only a president could be in power if they had a college education which Megawati doesn't have. And it seems as though people are looking for ways to almost pull this process which is very fragile but thus far, very positive apart in ways that could be disastrous unless, as I say, it comes to closure quite quickly.

ELIZABETH FARNSWORTH: Donald Emmerson, we don't have a lot of time, but would you fit the situation of East Timor into this overall picture?

DONALD EMMERSON: Frankly, I think the alarm that Sidney strikes is perhaps a especially relevant to East Timor. I'm more optimistic about the political process in Indonesia as whole. But East Timor is an extraordinarily volatile place at the moment. We have clear evidence that elements within the Indonesian military have for some time now been supporting, even supplying arms to militias, as they're called, that have engaged in considerable violence, including killing people, that is people who support independence because they are dead-set against it and would like to keep East Timor inside Indonesia. And let's remember also that there are a fair number of Indonesian military officers that have fought in East Timor. Some of them have married East Timorese wives. They have property in East Timor. I interviewed a general who is a reform-minded person when it comes to democratization for his own country, Indonesia, but who absolutely draws the line -- no independence for East Timor. One of the things that I worry about is that as the East Timor situation continues to unravel, it could reconnect with politics in Jakarta in a rather nasty way. If there were to be a president who came to power in Jakarta who wanted East Timor to become independent, or at least who was willing to tolerate it, the question is, would the army go along? I'm not sure.

SIDNEY JONES: I think there's another key question which is, one of the questions is, why is the army backing the militias at this stage? It's not just because they serve there. It's because some leading people, leading officers see East Timor as the first in a series of dominoes and believe this if this U.N. mission, which is in East Timor to supervise a referendum, is allowed to succeed and if the East Timorese people do vote for independence, that that will start a chain toward the disintegration of Indonesia.

ELIZABETH FARNSWORTH: Which has always been the fear, right?

SIDNEY JONES: Yes. And hook up with rebellions in Aceh and the tip of North Sumatra in Irianjaya, which is the Indonesian part of the island of New Guinea, and so on. Now, I think it's not the case

ELIZABETH FARNSWORTH: I have to interrupt. I'm sorry. I have to interrupt you. We're out of time for this. But thank you all very much.

DIALOGUE

JIM LEHRER: Finally tonight, a Gergen dialogue. David Gergen talks with Bill Shore, founder and director of the nonprofit organization Share our Strength, author of "The Cathedral Within: Transforming Your Life by Giving Something Back."

DAVID GERGEN: Bill, before we talk about the new road you think the country should take, let's talk for a moment about the road you've been on. You came to Washington right out of college, went up to Capitol Hill, and right into politics.

BILL SHORE, Author, "The Cathedral Within:" Right. The day after I graduated from college, I drove down here, and I wanted to go to work for Gary Hart. He believed that ideas have power, which is a notion that still motivates me today. And I stayed on the doorstep until they gave me a job. And I ended up working for him for the next ten years and then for Senator Bob Kerrey after that.

DAVID GERGEN: And during that process, helped to run three presidential campaigns; two for Hart and one for Kerrey.

BILL SHORE: Yes. Didn't help win any, but I helped to run.

DAVID GERGEN: I see. And then after 1992, you left politics altogether to do something that would count, as I think one of your friends, Mike McCurry, would put it.

BILL SHORE: Right. Right.

DAVID GERGEN: Tell us about that.

BILL SHORE: Well, I had -- in 1984, I had started an organization called share our strength, essentially, an anti-hunger and antipoverty organization, and in 1992, I turned my attention to it full- time. And I guess what I really felt, David, was that in a way, politics was too limiting. I didn't leave disillusioned. I loved every minute that I spent in it. But it just felt too narrow and too limiting. And it seemed that there were so many people in this country who literally had a strength to share, who had something to give, some special talent that I thought if we could, in effect, start an organization that would tap into that, we could create longer term social change, social change that would have a more lasting impact.

DAVID GERGEN: And Share our Strength, in that time period, has been attacking hunger, and you've gathered and spent some $60 million.

BILL SHORE: Yes, we have. We've distributed almost $60 million around the United States, and in some cases, around the rest of the world, although about 90 percent of it is here; funding, front-line organizations who are fighting hunger and poverty, and they range from food banks to children's hospitals dealing with malnutrition to school breakfast programs, and have become increasingly convinced that we know how to solve these problems.

DAVID GERGEN: You also had some innovative ways to raise money.

BILL SHORE: Yes, mostly what we tried to do is we wanted to be a grant-maker to these some 200, 300 organizations we fund. We didn't want to be a re-granter, so we decided that we wouldn't go after foundation money or government money or any of those sources, although we welcome them if they come to us. What we really wanted to do was to not just redistribute wealth, but create new wealth, and so we ended up, first of all, asking people to contribute through what they do; asking chefs to cook, asking writers to write stories. We would turn those into dollars for us. But it also gave us a base and a foundation to develop corporate partnerships with American Express and Evian and Williams- Sonoma and Calphalon, companies that really wanted to engage in partnerships that would create new wealth.

DAVID GERGEN: And it's this notion of creating wealth that comes to the heart of your book. Your argument, essentially, is that organizations that are out fighting poverty, fighting social illnesses are doing it on such a small scale that things have to change. We have to create a new architecture.

BILL SHORE: We really do. I mean, just charitable intentions are not going to be enough. And given my politics, I could probably make a case for redistributing wealth. Redistributing wealth wouldn't be enough. It's going to take creating a new kind of wealth, what I call community wealth, because it goes directly back into the community, if we're going to really solve problems like hunger and illiteracy and teen pregnancy.

DAVID GERGEN: How do you do that? What does this mean? Do you have a couple of examples of things you mean by that?

BILL SHORE: What it means is really non- profits, in ways, getting into business for themselves. In some cases, it's cause- related marketing campaigns like one that we had with American Express, where every time you used your American Express card, a couple cents came to us. We raised $22 million. It was good for our business and good for theirs. There's an entrepreneurial organization in Seattle called Pioneer Human Services.

DAVID GERGEN: Pioneer

BILL SHORE: Pioneer Human Services. And they work with ex- offenders and substance abusers. They were doing housing placement and then job training, and they decided to create a factory so that they'd have a place to employ the individuals they've trained. Today, that factory is the sole supplier to Boeing Aircraft for their sheet metal cargo bay liners, and Pioneer has revenues from that alone of $12 million a year.

DAVID GERGEN: And they're employing mostly ex- convicts and drug abusers.

BILL SHORE: Yes, and people who have come from different types of institutional dependencies. So they've decided to kind of grow their way out of the problem, not just rely on donated money and charitable dollars, but to make their own.

DAVID GERGEN: Start up a company then, in effect, which is out to make a profit and take the profits and plow them back into fighting the problems.

BILL SHORE: That's exactly right. And there are now entrepreneurial organizations across the country that are trying to copy that, because I think they realize that against the scale of the problem that we're dealing with-- for example, Share our Strength distributes maybe $15 million or $16 million a year, in a good year. The federal government spends $35 billion on food assistance programs. So against the scale of the problem, we need to do more than rely on charitable money.

DAVID GERGEN: You said that there was a group in Newark that was doing well with this.

BILL SHORE: Yes, there's an amazing parish priest in Newark named Father Bill Linder. He runs a community development organization called New Community Corporation, and they own a Taco Bell. They own a Dunkin' Donuts franchise. They have a terrific restaurant that I've eaten at, and they use -- these are all for-profit activities, and they pay taxes just like anybody else would. But they use the after-tax profits to fund their objectives.

DAVID GERGEN: You said something a moment ago which was -- I'd like to come back to, because it seems like such an important point, and that is that we have learned how to solve some of the social problems in recent years. And that's not the issue anymore. For many years, it seemed to be the issue. How could you ever get -- cure the problems of child poverty or drug abuse and the rest?

BILL SHORE: Right, and in a way, there's kind of a misdiagnosis, because we know how to solve hunger. We know how to solve illiteracy. We know how to solve infant mortality. There's a clinic that Share our Strength has supported here in Washington called Mary Center, Maternal and Child Health Clinic that has dramatically reversed infant mortality rates. I can give you examples of this in every part of the country. We know what the solutions are. That doesn't mean that we know how to make the solutions affordable or sustainable or to get them to scale or to replicate them. But I think this new breed of social entrepreneurs around the country are shifting their focus from just starting pilot programs and starting a program, let's say, in their church basement or their kitchen to actually thinking, how do we apply business principles to ramp these programs up? How do we get these ideas to market?

DAVID GERGEN: And that means to cover a much broader section of the population. So it goes beyond a neighborhood program.

BILL SHORE: Yes, it really does, and there's way too few resources devoted to that. I always think about when Jonas Salk discovered the cure for polio. The response of our government and of our foundations was not to fund another 1,000 scientists to see if they could also discover their cure on their own. It was to get that idea and that product to everybody who needed it, really to get in to market it. And that requires a shift in the way resources were used, and I think, as I say, the entrepreneurial non-profits are starting to think of that as their next challenge.

DAVID GERGEN: Final question: The cathedral notion -- you wanted to build a new architecture like building a new cathedral, but the cathedral has to be within before you can build it without.

BILL SHORE: Oh, it does. I mean, the whole point of writing "The Cathedral Within," for me, was to think about this idea of what the cathedral builders did, which is they devoted their entire lives on something. The Cathedral of Milan took 513 years to build. So everybody who worked on it only knew one thing for sure, and that is that they would spend their entire life working on it, and they wouldn't see their work finished. And that did not detract from their craftsmanship or dedication. It actually enhanced it. That's not an ethic that's prevalent in our society today, but when you take that ethic inside yourself, and you say many of these social problems we have are not going to go away overnight. We can't eliminate poverty by the year 2000, but if we can dedicate our lives to this, understanding that we may not see our work finished, we'll not only build a real cathedral of social change that lasts and endures and gets to scale, we'll also build a cathedral within that I think is a real sanctuary and kind of a joyful place.

DAVID GERGEN: Bill Shore, thank you.

BILL SHORE: Thanks for having me.

RECAP

JIM LEHRER: Again, the major stories of this Thursday: Lawyers in the big Florida tobacco case were told to prepare for the next phase that will decide how much damages tobacco companies must pay. And Energy Secretary Richardson agreed to create a special agency within his Department to protect the secrecy of nuclear weapons research. We'll see you online and again here tomorrow evening, with Shields and Gigot, among others. I'm Jim Lehrer. Thank you and good night.