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is THE Hager I
THE WHITE HOUSE
WASHINGTON
copied
Nash
Spates
C. Willis
July 25, 1997
Gracie Edwards
Post Office Box 432
Bald Knob, Arkansas 72010
Dear Gracie:
Hillary and I were so sorry to hear about
Tommy's death and send our prayers and deepest
sympathy to you. He was such a good man --
I'll always be grateful for his support and
friendship through the years.
Our thoughts are with you, David, Beatrice, and
all your family.
Sincerely,
Rui Cuiter
He was a guat friend
to us - I'll never
Jhon.
fingerite
Gracie Edwards
Post Office Box 432
Bald Knob, Arkansas 72010
07/24/1997 11:13 5013750512
DNC AR OFFICE
PAGE 03
BALD KNOB - Thomas "Tommy" Ed-
wards h., 68, died Sunday. Born August
24, 1928, in Bald Knob, a son of the late
Thomas and Eddra Hamilton Edwards.
He served Bald Knob as alderman for the
past 22 years. He was past president of
the Bald Knob Rotary Club, Chamber of
Commerce, president of the Union
Cemetery Association, member of the
White River Agency on Aging, the Ar-
kansas Motor Vehicle Commission and
served on the Arkansas State Housing
Development Commission, president of
the Kensett American Legion, and a
32nd-Degree Mason. Mr. Edwards was
retired foreman of the DK&S Railroad,
veteran of the Korean Conflict and mem-
ber of Pleasant Grove Baptist Church,
where he served as deacon. Survivors:
wife Gracie Johnson Edwards: son David
Hays. Little Rock; daughter Beatrice
Smith, Flint, Mich.; four grandchildren:
three great-grandchildren. Services Sat-
urday, 1 p.m., Pleasant Grove Baptist
Church. Burla:, Union Cemetery by Pow-
ell Funeral Home. Visitation: 6 to 8 p.m.
Friday.
send letter to wife:
Mraci Edwards
Bold knot 72010
P.O. Box 432
THE WHITE HOUSE
WASHINGTON
SESSION WITH DAN BALZ AND CECI CONNOLLY
DATE:
July 25, 1997
LOCATION:
The Oval Office
TIME:
4:10 p.m.
FROM:
Mike McCurry
You will meet with Dan Balz and Ceci Connolly from The Washington Post in an informal, off-
the-record session.
As a national correspondent and former National Editor for The Washington Post, Dan Balz is
well known for sharp political coverage as well as for his recent book, Storming the Gates, a
joint effort with Los Angeles Times columnist, Ron Brownstein. Early next month, Balz is
heading to the Post's London bureau, where he will reconcentrate his efforts on politics in the
United Kingdom.
Formerly a political reporter for the St. Petersburg Times, Ceci Connolly joined the staff of The
Washington Post early this summer after dazzling readers and editors alike with her sophisticated
campaign coverage.
Often working together, Balz and Connolly have recently dedicated much of their work to the
unrest among the Republican leadership in Congress, as well as the concern of many that the
work done in Washington seems to have little relevance to those who are reading about it beyond
the beltway and across the country. In a story published early this week, Balz and Connolly
theorized that the problems that seem to plague the House leadership cannot be blamed on
Speaker Gingrich alone, but rather are due to much larger issues of overall leadership as well as a
lack of confidence in the party's agenda and identity.
Tab H
goes to the
Press List:
POTUS/SG
COS
JP
SM
Rahm
McCurry Sosnik
NH
Todd
BC
File
monitoring USEC's performance. The oversight committee will have general responsibility for
ensuring that performance in the HEU Agreement is satisfactory; that ownership and control
restrictions are enforced; that relevant foreign and domestic intelligence information is applied;
that coordination with other regulatory bodies, including SEC and NRC, is appropriate; that the
government's interest in AVLIS (see below) is well-managed; and that the requirements of the
1992 and 1996 statutes are upheld. The precise institutional arrangements of the oversight
committee, the responsibilities of its sub-committees, and the methods for ensuring appropriate
coordination between the oversight committee and regulatory bodies, will be defined in the
directive. A draft terms of reference for the directive is at Attachment B.
Privatization and the AVLIS issue
One issue that is being linked by some in the Congress to the timing of privatization is
the spending cap on developing a new enrichment technology, Advanced Vapor Laser Isotope
Separation (AVLIS). The U.S. government has invested over $1.5 billion in this technology, and
the research and development is being performed by about 600 workers at the Lawrence
Livermore National Laboratory. The Energy Policy Act of 1992 created a cap on how much a
public-sector USEC could spend on AVLIS. That spending cap will be reached this fall.
Already, AVLIS workers are concerned over the prospect of layoff notices. A disruption of
AVLIS, furthermore, could potentially affect USEC's value at privatization. The Administration
is therefore considering several options to sustain AVLIS, but some have indicated that your
approval of the privatization plan may be necessary to secure congressional support for any
temporary fix. However, all agree that some kind of congressional action will be necessary
regardless of the existence or speed of the privatization process: even if the privatization plan
were approved immediately, the spending cap would be breached before the privatization
transaction could be completed.
Recommendation
The Energy Policy Act of 1992 requires Presidential approval of the implementation of
the USEC privatization plan. Your approval at this time will help dispel any doubts in the
market and in Congress about the Administration's commitment to privatization. Following your
approval, USEC will begin immediately to seek market opportunities for privatization, subject to
approval by the Secretary of the Treasury of the final privatization proposal. Treasury will take
the lead in managing the transaction for the Administration.
If approved, we expect privatization to occur in six to eight months. As noted above, a
directive will be prepared to ensure that the national interest is monitored and protected after
privatization. The following agencies agree that USEC should be permitted to pursue
privatization options in the market: NEC, NSC, State, Treasury, Energy, Commerce, and Justice.
CIA believes that privatization poses no threat to national security. CEA opposes this
recommendation.
4
3RD STORY of Level 1 printed in FULL format.
Copyright 1997 McClatchy Newspapers, Inc.
Sacramento Bee
July 20, 1997, METRO FINAL
SECTION: MAIN NEWS; Pg. A12
LENGTH: 1267 words
HEADLINE: GOP'S PLIGHT ISN'T JUST GINGRICH
BYLINE: Dan Balz and Ceci Connolly, Washington Post
DATELINE: CLEVELAND
BODY:
The infighting over the leadership of Speaker Newt Gingrich, R-Ga., that
rocked House Republicans this week reflects far deeper problems than a debate
over who will lead the House.
Republican activists and key strategists interviewed over the past few days
said the absence of leadership nationally and lack of consensus on a new party
agenda invite intensified intraparty conflict that will leave Republicans
weakened against President Clinton and the Democrats.
"We don't have unifying themes and we don't have unifying leadership," said
Steve Merksamer, a Sacramento attorney who was chief of staff to former
California Gov. George Deukmejian. "We have control of both houses (of Congress)
and the country sympathetic to our agenda
and what are we doing with it?
We're squandering it."
Last week's abortive coup attempt against a weakened Gingrich led to the
hasty resignation of Rep. Bill Paxon, R-N.Y., as a key member of the speaker's
team in the House and helped crystallize a growing sense of frustration within
the party. As one top party strategist put it late last week, "The tragedy is
that we're on the verge of passing a balanced budget and cutting taxes and we're
in a circle shooting each other."
In one sense, the frustration grows out of the party's collective failure to
compete against a popular president who they believe has stolen their best
issues. Sharp differences among Republicans over whether they should pursue
cooperation or confrontation with the president have helped undermine confidence
in Republican leaders on Capitol Hill.
But the party's problems also reflect a loss of confidence in its own agenda.
Support for supply-side economics has frayed in the face of the strong economy,
and with Clinton and the GOP nearing agreement on a balanced budget with tax
cuts, there is no consensus on shaping a new agenda.
These problems are responsible not only for the complaints about Gingrich's
leadership but also for an escalation in tensions between economic and social
conservatives and between Northern and Southern Republicans.
Many conservatives complain the party is losing its identity as a result of
Clinton's shift to the center and what they say is their leadership's
Sacramento Bee, July 20, 1997
collective lack of courage in developing a clear conservative alternative to the
president's policies. Moderates complain that conservatives care more about
ideological purity than governing.
"We are like the Democrats of the '60s and '70s," said one Midwestern
Republican. "We've become captive of a wing of our party, just as the Democrats
were captive of their left in the '60s and '70s
Remember when Republicans
used to laugh at Democrats beating themselves up? Now we're doing the same
thing."
Gingrich's problems drew the headlines, but there were other signs of unrest
last week. Massachusetts Republican Gov. William Weld lashed out at Senate
Foreign Relations Committee Chairman Jesse Helms, R-N.C., accusing Helms of
"ideological extortion" in opposing his proposed nomination to be Clinton's
ambassador to Mexico. In Washington, conservative Republicans were engaged in a
brush fire with 1996 GOP vice presidential nominee Jack Kemp, once the darling
of the conservative movement, over the sales of high technology computers to
China, which Kemp supports.
Weld and Helms disagree on social issues, such as abortion and gay rights,
and Helms has accused Weld of being soft on the war against drugs. Weld's
attack on Helms threatens to strain relations between the party's moderate and
conservative wings. The Kemp dust-up with conservatives underscored the lack of
consensus on foreign policy.
Republicans haven't fully recovered from their public relations debacle over
disaster relief, in which the president vetoed a disaster-aid bill and charged
that the Republicans had loaded it with extraneous issues. Eventually the
Republicans caved to Clinton's pressure. Now they fear Clinton is on the brink
of stealing the tax issue from them as they arrange to balance the budget.
These frustrations prompted members of the Republican National Committee on
Friday to urge RNC Chairman Jim Nicholson to convene a party summit to bring the
bickering to an end and produce a new agenda.
Party leaders and activists offered a variety of explanations for the
problems.
"We are clearly suffering from the transition of having been a presidential
party to one that is more diverse, with power that is more diffuse," said Tom
Rath, the national committeeman from New Hampshire. He added that members of the
national committee feel "we've not had strong leadership out of the Congress."
Another Republican was more blunt: "If we had a strong leader in either House
to rally around, we wouldn't have this problem," he said.
With Gingrich crippled first by an ethics investigation and later by sniping
from dissidents, many Republicans assumed that Senate Majority Leader Trent
Lott, R-Miss., would emerge as the party's strong voice on Capitol Hill.
Instead, Lott has disappointed many fellow Republicans who say he hasn't been
able to project a national message for the party.
LANGUAGE: ENGLISH
8TH STORY of Level 1 printed in FULL format.
Copyright 1997 The Washington Post
The Washington Post
July 13, 1997, Sunday, Final Edition
SECTION: A SECTION; Pg. A04; POLITICS
LENGTH: 220 words
HEADLINE: Democrats' Road Wider in the Middle
BYLINE: Ceci Connolly; Dan Balz
BODY:
President Clinton's efforts to govern from the middle continue to help
refurbish the image of the Democratic Party.
For years, voters trusted Republicans over Democrats on issues such as
fighting crime and cutting taxes. But a new Washington Post-ABC News poll
shows that the Democrats now hold the edge on those and other issues, even if
narrowly.
On some issues, the images of the two parties have not changed much. Those
surveyed, for example, gave Democrats the advantage on improving schools (51 to
30 percent) and Republicans the edge on maintaining a strong defense (50 to 32
percent).
But by 41 to 38 percent, those surveyed said they trusted Democrats more than
Republicans to cut taxes. Democrats held a similar edge on managing the economy
(43 to 39 percent), balancing the budget (39 to 36 percent), handling crime (38
to 34 percent), and reforming campaign financing (34 to 31 percent).
According to the survey taken last week, Democrats held a big advantage on
which party people trust to help the middle class (51 to 30 percent), while
Republicans had a small edge on foreign affairs (40 to 38 percent).
The Republicans hold a small edge in family values, with 37 percent saying
they trust the GOP to encourage high moral standards compared with 33 percent
who trust the Democrats.
LANGUAGE: ENGLISH
LOAD-DATE: July 14, 1997
Republicans Agree to Relocus LHORTS
Summer Meeting's Finger-Pointing Produces Resolution to Redirect Party's Attention
By Ced Connolly
"They should not be engaged with
financial shape than its Democratic
which he hopes Gingrich (Gs). Sen-
each other in Beltway ego fights."
counterpart, officials acknowledged
ate Majority Leader Treat Lott
Washington Post Sus Writer
Expressing the widespread sense
they are falling short of fund-raising
(Miss.) and other GOP leaders will
CLEVELAND, July 18-Oa a day
that Democrats are winning the pub-
projections. The problem for Repub-
explain what they are up to in Wash-
they hoped to turn the spotlight onto
lic relations war on budget and tax
licans is twofold: less-than-spectacu-
Ington.
the Democratic fund-raising contro-
matters, RNC co-chair Pat Harrison
lar giving among small donors and
A GOP task force on campaign
versy, Republican officials were
declared: "That's our issue and we
higher-than-expected expenses for
finance endorsed much of the cur-
forced instead to revive their own
need to take it back."
responding to campaign finance in-
rent system, essentially affirming
dejected troops left stunned by re-
Chastising fellow Republicans for
vestigators.
that the marketplace is the best
ports of chaos in the House.
"I'm one of those Republicans who
"engaging in self-defeating behavior
The effort has been a real drain
regulator of political money. The
and replaying last year's acason."
on the RNC financially and has to
panel recommended legislation that
is a fruntrated now lic
cause Wt seem to be reading more
kngler suggested - lilkle Jevel cliale.
calcul allerupted the day-to-day
would prohibit unions from forcinat
gy summit. "What our party needs is
members to give to campaigns.
stories about palace intrigue than we
are talking about a national agenda,"
a simple national agenda so every
Newly installed party chairman
said Michigan Gov. John Engler.
American knows what we stand for."
"It's time to stop
Jim Nicholson said Democrats were
And just to make clear where he
trying inaccurately to "spin" the Sen-
"It's time to stop blaming and start
acting. The Republican Party must
stands on the turmoil in the House
blaming and start
ate hearings into a debate on cam-
paign finance laws, and be criticized
start acting like the majority party
ranks, Engler added: "And I mean
that we are."
the elected leadership who are serv-
acting."
Clinton for seeming to ignore the
Gathered for what was expected to
probe.
ing today and not the would-be lead-
be three days of routine meetings
-Michigan Gov. John Engler
"This investigation is not in any
era who think it might be time for a
and socializing, members of the Re-
way about reforming campaign. fi-
change.
Let's go to work with the
publican National Committee have
activities of every division," said
nance laws. It has become acthing
team we elected."
spent much of their summer confab
RNC counsel Michael Grebe.
less than about our nation's securi-
RNC members apparently agreed
griping about their leaders in Wash-
Revenue for the year is about $1.3
ty." Nicholson said. "Because of rev-
and passed a resolution urging the
ington and the party's lack of an
million less than budget projections,
elations in this week's hearings, the
agenda. News that one of House
"Republican House leadership, the
and the RNC still faces a debt of
primary focus of these investigations
Speaker Newt Gingrich's top lieuten-
Republican Senate leadership and
about $4 million, down from $9.75
must be whether the People's Repub-
ants had abruptly resigned only in-
the Republican governors, in a small
million after the election.
lic of China attempted to influence
creased the anxiety among the men
group. to meet for a weekend and
Mel Sembler, chief of party fund-
and corrupt our election campaigns
and women charged with keeping
turn off their beepers and focus our
raising. said direct-mail contribu-
here in America."
the party's grass-roots apparatus run-
great party."
tions and gifts from small donors are
But it was Ohio Gov. George.
ning.
Norcross said the unusual vote
below expectations largely because a
Voinovich who issued the barshest
The inside-the-Beltway leaders
was a clear sign of frustration in the
skeptical public is awaiting action in
attack against Clinton. You don't
need to understand we have goals to
ranks: "Criticism of what was going
Congress. "Our stockholders want to
run the White House as 1 place
accomplish and they need to be
on in the House is exactly what we
see results," he sald. To help close
where you run the sheep through
cooperating better." said New Jersey
meant, and it is richly deserved."
the gap, Sembler is staging eight
and shear them as much is you
committeeman David Norcross.
Although the RNC is in far better
fancy dinners around the country at
possibly can."
The Washington Post
SATURDAY, JULY 19, 1997
THE PRESIDENT SEEN
8-4-97
THE WHITE HOUSE
WASHINGTO
July 31, 1997
MEMORANDUM FOR THE PRESIDENT
that
FROM:
Maria Echaveste
K 50 Astein is massup waar
mog memmany 40
Doris Matsui
\
CC:
Sylvia Mathews
tuar 00 waw talu will use
RE:
Proposed Participants for the August 15, 1997 Asian Pacific American Outreach
Meeting
They
James
E
Here for your approval is a list of the 13 proposed participants for the August 15, 1997 Asian
Pacific American outreach meeting, which we have developed in consultation with the approval of other
appropriate outreach offices. Only the 13 in bold would be invited. We would invite alternates in each
THUSE $
category if less than 12 of the original invitees are able to attend. The alternates are not in order of
priority and would be chosen accordingly to ensure that there is representation from a variety of
ethnicities, regions, or sectors.
We believe that the recommended participants represent an excellent mix of people from
different regions, socio-economic backgrounds, and ethnicity. Unlike many constituency groups the
Ooa on big Lien rigie Support
APA community is often divided along historical, generational, and cultural lines. For example, the
experience that a fourth generation Japanese American is vastly different than the experience of a first
generation Vietnamese American. We must remember and respect that the APA community is made up
of Americans who trace their ancestry back to over 40 countries. If the 12 recommended participants
were invited and were able to attend, the breakdown would be as follows:
Women
5 California
6 Japanese Americans
copied
Men
2 Washington
2 Chinese Americans
Echaveste
1 New York
2 Filipino Americans
Matsui
1 Texas
1 South Asian American
1 Illinois
1 Korean American
COS
1 Hawaii
1 Vietnamese American
1 District of Columbia
1 Nebraska
u will notice that the proposed list of invitees reflects your desire to meet with the "real
people the constituency. In keeping with the true nature of this round table meeting, we have
limited our invitations to those representing national organizations--many of whom attend meetings with
the White House frequently. Although these groups often offer insight to the larger community, we
should take this opportunity to hear from those out in the country. It offers us a great opportunity to
assess, first hand, the community's reaction to the current events in the Asian Pacific American
community. The national organizations will be utilized in an alternate capacity should space become
available.
STATE AND LOCAL ELECTED/APPOINTED OFFICIALS (3)
1. Hon. Velma Veloria
Washington. State Representative, Washington
State Assembly. Also active in women's advocacy
issues. Filipino American.
2. Maisie Hirano
Hawaii. Lieutenant Governor. Japanese American.
3. Mike Honda
California. State Representative, California State
Legislature. Japanese American
Alternates:
Robert Gee. Texas. Commissioner, Texas Public Utilities Commission. Chinese American.
Kumar Barve. Maryland. State Delegate, Maryland House of Delegates. Indo-American
Rocky Chin. New York, NYC commission on Human Rights, Chinese American.
BUSINESS, LABOR, EDUCATION, OTHERS (5)
1. Lam Duc Nguyen
California. President/Owner, Winn-Visions. Small
business leader. Vietnamese American
2. Beth Renge
California. President/Owner, Renge Securities.
Japanese American.
3. Tomio Moriguchi
Washington. President/Owner of export/import
business. Japanese American.
4. Kent Wong
California. Executive Director, UCLA Labor Center.
Chinese American.
5. Terry Watanabe
Nebraska.
Alternates:
George Koo. California. President, Asian American Manufacturer's Association. Chinese American.
Sandra Lee. New York. Owner, Executive Director. Harold L. Lee and Sons, Inc. Insurance Specialist.
Chinese American.
Dr. Narinder Kapany. California. Business/Science. Creator of fiber optics. Indo-American.
Scott Oki. Seattle, Washington. President. Oki Foundation. Japanese American.
Luan Le. Texas. Owner, Shrimping Company.
Matt Finucane. Washington, DC. Executive Director, Asian Pacific American Labor Alliance.
Filipino American.
ACTIVISTS, RELIGIOUS COMMUNITY, OTHER (4)
1. Alice Bulos
California. Filipino American Democratic Club.
Longtime grassroots advocate, known as the
"grandmother" of the Filipino American
community.
4. Courtni Pugh
Illinois. Legislative Assistant, Congressman Danny
Davis. Worked in Chinatown community center
and was labor organizer for the Service Employee's
International Union. Young Professional. Korean
American.
3. Margaret Fung.
New York. Executive Director, Asian Pacific
American Legal Defense Fund.
Chinese American.
4. George Willy
Texas. Attorney. Nationally recognized for his
work in civil rights/immigration law. South Asian
American.
Alternates:
Midori Lederer. New York. Japanese American Social Services, Inc. Longtime grassroots advocate.
Japanese American.
John (J.D.) Hokoyama, California, Leadership Education for Asian Pacifics (LEAP). Japanese
American.
Rev. Norman Fong. California. President, Council of Presbyterian Ministers. Chinese American.
Kanak Dutta. New Jersey. Longtime grassroots advocate. Indo-American.
Catherine Lew. California. Community relations consultant. Chinese American.
EXECUTIVE DIRECTORS/PRESIDENTS, NATIONAL ORGANIZATIONS (1)
1. Karen Narasaki
District of Columbia. Executive Director, National
Asian Pacific American Legal Consortium.
Japanese American.
Alternates:
Mark Kim. Washington, DC. Korean American Coalition. Korean American.
Helen Kawagoe. California. National President, Japanese American Citizen's League. Japanese
American.
Michael Lin. Washington, DC. National President, Organization of Chinese Americans.
John Yang. Washington, DC. National President, National Asian Pacific American Bar Association.
Chinese American.
RECOMMENDATION:
We recommend that you approve these participants for the August 15, 1997 session:
Approve
Disapprove
Discuss Further
'97 JUL 24 AM8:56
THE WHITE HOUSE
WASHINGTON
THE PRESIDENT SFFN
7-25-97
July 23, 1997
copied
MEMORANDUM FOR THE PRESIDENT
me Curry
: MIKE McCURRY MMC
CO3
FROM
SUBJECT
: STAFF CHANGES
I wanted to bring to your attention some staff changes that are occurring in the Press
Cri
Office. You will be seeing a few of them this Friday for departure photos.
in
if
333
Stuart Schear, our tv booker, is leaving to join his partner in New York. When we
1
approached Stuart 18 months ago about the job, he was reluctant to leave New York, but was a
huge supporter of yours and felt that duty called. He has done a tremendous job and has loved
every minute of his tenure with us.
accepted to University's leaving August to move to
April Columbia Mellody's new husband Business (she got School. married She on will June be 14), Chris in Gillespie, has been you weeks was fort
New York with Chris. April has worked in the press office for four years and is a favorite of
ours and the press corps.
In addition to Stuart and April, Mary Ellen Glynn will also be coming in for a departure
photo. As you know, Mary Ellen went back home to the State Department to work for Secretary
Albright. While she is certainly missed, Joe Lockhart has done a wonderful job replacing her and
is receiving high marks from both the press corps and the staff. He has fit right into our team.
On a final note, Lorrie McHugh will also be leaving in August after three and a half years
with the press office. Lorrie is leaving for family reasons. Her son starts kindergarten in the fall
and she wants to be able to be home in time to pick him up from school. While Lorrie is
virtually irreplaceable, we are going to split Lorrie's job up and hire a deputy press secretary for
operations and a media affairs director. Lorrie will probably come by sometime in August for a
photo - although, she actually has her heart set on having you sign the photo that Diana Walker
gave her of you on the train trip!
While it is certainly sad to see some members of our Press Office leave, they are doing SO
for a very good reason - to be with their families. They all feel that it has been a great experience
and honor to serve you and they appreciate your taking the time to see them.
Councilman Noach Dear
VP
4424 16th Avenue
Birger
Brooklyn, New York 11204
CUS
Telephone (718)633-9400
Facsimile (718)633-9403
copied
THE PRESIDENT HAS SEEN
7-25-97
July 17, 1997
PERSONAL AND GONFIDENTIAL
President William Le ferson Clinton
The White House
1600 Pennsylvania Avenue, NW
Washington, DC 20500
Dear Mr. President:
This is a follow up to my previous note in which I alerted you to the
negative media coverage the Administration is receiving in the Jewish
newspapers. I am enclosing a two page advertisement that is appearing in this
week's Jewish Press.
Three-quarters of a million Jewish households nationwide receive this
newspaper and will see these ads. It is necessary to put a stop to this
misinformation. I saw this same tactic used with Peres and predicted his
downfall. I am concerned that this pattern will be repeated and adversely
affect the Administration.
I recently spoke at a public forum in the Jewish community. The
audience expressed great hostility toward the Administration. I want to put a
stop to it. I need your help.
I must meet with you immediately.
I hope to hear
from
warrent you reful
nool Very truly yours,
Noach Dear
Encl.
Mul
DETERMINED TO BE AN ADMINISTRATIVE
MARKING INITIALS: DB DATE: 07/30/19
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JIM DORSKIND:
Please coordinate
the reply.
THE WHITE HOUSE
copies sent to
WASHINGTON
Tarullo
July 25, 1997
his with Are mumu will "a and INt Brincs y Bo Jawin live thes
Berger COS
MEMORANDUM FOR THE PRESIDENT
7/25/97
with
is
FROM;
PHIL CAPLAN Thul
SUBJECT:
Privatization of the U.S. Enrichment Corporation (USEC)
The Energy Policy Act of 1992 calls for the privatization of the USEC, subject to approval by the
President and the Secretary of the Treasury. The attached memo from Sandy Berger and Dan
Tarullo recommends you approve implementation of the privatization plan that has been
developed by the USEC and an NSC/NEC-led interagency group. NEC, NSC, State, Treasury,
Energy, Commerce and Justice have all agreed on the plan. John Podesta and OSTP concur.
CIA believes that privatization poses no threat to national security. CEA is the only dissenting
voice. Your FY '98 budget assumes sale proceeds from privatizing USEC of $1.6 billion.
Background on USEC. The impetus behind the 1992 Act was that the government did a poor
job managing HEU activities. The USEC is now a wholly-owned government corporation that
assumed operation of DOE's uranium enrichment facilities and produces commercial nuclear
reactor fuel. Operations have improved significantly since 1992. The USEC is also the U.S.
Government's executive agent in the U.S.-Russia Highly Enriched Uranium (HEU) Purchase
Agreement, which provides for the purchase from Russia of 500 metric tons of HEU from
dismantled nuclear warheads for eventual use as commercial nuclear reactor fuel in the U.S.
Privatization. Offered for you approval is a dual-path plan (Attachment A) whereby the USEC
will simultaneously pursue (i) a negotiated sale to private investors and (ii) an initial public
offering to the general investing public. The interagency team has recommended this dual-
approach to test both markets before making a final decision -- top-flight investment banks are
advising the whole process. The Secretary of the Treasury must approve the final sale. Because
of the sensitive nature of USEC's facilities and the importance of the HEU Agreement with
Russia, potential buyers will be carefully screened. Total foreign participation in the USEC will
be limited to 10%; foreign-sourced financing will also be limited to 10%. The interagency team
also recommends you issue a directive setting up a high-level interagency USEC oversight
committee to monitor performance.
Views. All agencies agree the plan should move forward. CEA opposes privatization and
believes that the USEC's profit-making motive may give it incentive to not live up to its
responsibility in the HEU Agreement. Other agencies discount this theory -- USEC just
concluded a five-year contract with Russia, and the U.S. Government can remove USEC as the
executive agent of the HEU Agreement with as little as 30 days notice. Plus, USEC has a
strategic market interest in sustaining its position as sole executive agent of the HEU Agreement.
If you approve the plan, privatization will likely occur in 6-8 months.
Approve implementation of plan
Disapprove
Discuss
THE WHITE HOUSE
WASHINGTON
July 17, 1997
ACTION
MEMORANDUM TO THE PRESIDENT
FROM:
DANIEL K. TARULLO AND SAMUEL R. BERGER
SUBJECT:
Privatization of U.S. Enrichment Corporation
Current law calls for the privatization of the United States Enrichment Corporation
(USEC), subject to approval by the President and the Secretary of the Treasury. USEC is a
government-owned corporation formed in 1992 that produces enriched uranium for use as
commercial nuclear reactor fuel. It is also the U.S. government's executive agent in the U.S.-
Russia HEU Purchase Agreement, which provides for the purchase from Russia of 500 metric
tons of highly enriched uranium (HEU) from dismantled Russian nuclear warheads over twenty
years. Under the Agreement, weapons-grade HEU is blended into low-enriched uranium (LEU)
suitable for use as nuclear reactor fuel, imported into the United States, and sold to nuclear
utilities.
An interagency group, led by NEC and NSC, has been examining the economic and
national security issues associated with privatizing USEC. With the exception of CEA, all
agencies agree that privatization should proceed. This memorandum therefore recommends that
you approve the implementation of USEC's privatization plan. Such approval will permit USEC
to evaluate privatization opportunities in the market and facilitate a privatization transaction,
subject only to the approval of the Secretary of the Treasury. Your FY 1998 budget assumes sale
proceeds from privatizing USEC of $1.6 billion.
Background on USEC privatization
The 1992 Energy Policy Act created USEC as a wholly-owned government corporation
to assume operation of the Department of Energy's uranium enrichment facilities, and to market
enrichment services to electric utilities that operate commercial nuclear power plants in the
United States and abroad. The Act resulted from a consensus that these activities had been
poorly managed by the government. For example, the government's operation showed little
ingenuity in pricing and contracting policies, expended billions of dollars by investing in an
enrichment technology that never became commercially viable, and kept excess capacity in
1
operation for many years.
Since USEC's creation as a government corporation, operations have improved
significantly. Some further improvement is expected following privatization (particularly
relative to what would obtain if USEC were to remain within the public sector with no prospects
for being privatized). For example, OMB projects that a privatized USEC could enjoy up to 10
percent lower non-energy costs than a public-sector USEC.
These potential efficiency benefits were the primary impetus behind Congress's direction
to the Administration to privatize USEC subject to several conditions, including the ongoing
protection of the national security. Another condition for privatization, which Treasury has
concluded is likely to be met, is that the net present value of the sale be at least equal to the value
to the government of retaining the company.
A subsequent law, the 1996 USEC Privatization Act, established a more detailed process
to follow in privatization, specified additional liabilities and responsibilities that would be left
with the U.S. government, and established a requirement that the President monitor the actions of
the U.S. executive agent (presently USEC) for the U.S.-Russia HEU Purchase Agreement
(hereafter the "HEU Agreement").
Need for Presidential decision
The 1992 statute requires that before privatization can occur, you must approve the
implementation of a privatization plan. The plan presents a two-track process for exploring
privatization options (an initial public offering or a merger and acquisition). The law also
requires that the Secretary of the Treasury concur in any final sale, an important assurance that
the details of the final privatization transaction will be scrutinized to protect the national interest.
A summary of the factors that must be evaluated as part of any final privatization deal and the
privatization process that USEC will follow, with your approval, is at Attachment A.
Privatization and the HEU Agreement
All agencies concur that the HEU Agreement is a key national security interest. CEA's
opposition to privatization is predicated on its concerns about the economics of the HEU
Agreement for a private-sector entity. In particular, CEA notes that USEC is a near-monopoly
which enjoys advantageous contracts for its most important input, the electricity it uses in the
enrichment process. USEC's marginal cost of producing reactor fuel domestically is therefore
significantly lower than the price USEC is paying the Russians under the HEU Agreement.
Thus, the more USEC imports from Russia, the higher its costs. CEA concludes that
privatization, and its accompanying profit-maximizing objective, creates a potential divergence
in incentives between the U.S. government and USEC in the HEU Agreement. Because of the
paramount importance of that Agreement, CEA therefore argues that USEC should remain in the
public sector SO that the government can retain maximum control over its behavior. CEA also
2
argues that carrying out any sanctions -- such as replacing USEC as the executive agent -- will be
difficult as a practical matter. In sum, CEA believes that the internal efficiency benefits from
privatization are not worth the potential risks of undermining the HEU Agreement -- even if
those risks are only modestly higher with a privatized agent. A June 11 New York Times
editorial raised similar concerns, which are shared by some outside experts.
Other agencies are not convinced by CEA's argument. They note that USEC has already
concluded a five-year contract with Russia, with specified prices and quantities, for 132 metric
tons out of the total 500 metric tons covered under the 20-year HEU Agreement. Negotiations to
extend the five-year contract will begin well in advance of the end of the contract period.
Furthermore, the U.S. Government will retain the right, after privatization, to change or add
executive agents with as little as 30 days notice if USEC fails satisfactorily to perform its
executive agent responsibilities. Contingency plans have been prepared should such action ever
be required. Since USEC has a strategic market interest in sustaining its position as sole
executive agent (to prevent market control from slipping to others), this authority should be a
powerful tool for ensuring continued attention by USEC to U.S. national security objectives. All
other agencies, however, support privatization and oppose the imposition of additional measures
to improve USEC's incentives to implement the HEU Agreement beyond those described below,
believing that they are unnecessary or undesirable at this time.
Preventing foreign ownership, influence, and control
Because of the sensitive nature of some of USEC's facilities and the importance of the
HEU Agreement, potential buyers of USEC will be carefully scrutinized in the process prior to
selling USEC. The NSC led a review of existing statutory, regulatory and administrative
regimes to control foreign ownership and influence of USEC and determined that they are
sufficient to protect U.S. national security. Consistent with those authorities and the national
interest, the NSC approved stringent limits on foreign ownership and influence: foreign
competitors, or any entity with a relationship with a substantial commercial competitor of USEC,
are excluded from bidding for USEC. In addition, total foreign participation in the acquisition of
USEC is limited to a maximum of 10 percent; foreign-sourced financing will be limited to a
maximum of 10 percent; and voting rights of foreign persons in the corporation are limited over
10 percent. Not only will bidders be screened, but the criteria are designed to limit future
opportunities to amass sufficient corporate shares to achieve control of the privatized corporation
or obtain sensitive commercial information.
Policies to ensure performance in the national interest
To ensure that satisfactory performance of the HEU Agreement, limitations on foreign
influence in USEC, and other governmental responsibilities are upheld in the years after
privatization, we are preparing a directive for your signature. This directive, which will be
completed during the privatization process, will formalize a high-level USEC oversight
committee and will detail the precise responsibilities of the relevant government agencies for
3
Decision
Approve
Disapprove
Discuss
5
Attachment A. Privatization process and summary of factors that must be
considered in evaluating privatization
USEC PRIVATIZATION
DUAL PATH PROCESS
Merger & Acquisition
Public Offering
Process
Process
(M&A)
(IPO)
Solicit
Structure
Bidders
Public
Offering
Qualified
Bidders
Perform
"Due
Diligence"
Prepare
SEC
Registration
Qualified
Statement
Bidders
(S-1)
Submit
Offers
Dual Path Decision
Negotiate
Purchase
Estimate
USEC Board of Directors
Agreement
IPO
with Qualified
and
Valuation
Bidder(s)
Secretary of Treasury
File S-1
Execute
Purchase
Agreement
OR
Market
and
Price
M&A
IPO
Final Sale Approval
USEC Board of Directors
and
Secretary of Treasury
PROCESS FOR THE PRIVATIZATION OF THE
UNITED STATES ENRICHMENT CORPORATION
I.
Introduction
The United States Enrichment Corporation is following a dual path approach to
privatization --- simultaneously pursuing a negotiated sale of the Corporation to private
investors ("M&A transaction") and an initial public offering of the Corporation's common
stock to institutions and the general investing public ("IPO"). A dual path approach has
been recommended because, while either an M&A transaction or an IPO could be
structured to satisfy the statutory requirements for privatization, it is difficult for the United
States Government to know which approach will best achieve these objectives without
testing both markets before making a final decision.
Set forth below is a brief description of the process that USEC will follow.
Additionally a schematic outline of this process is included at the end of this
memorandum. The Secretary of the Treasury and other Administration officials will be
consulted with at each step in the M&A and IPO process. At the dual path decision point,
the USEC Board of Directors (Presidential appointees confirmed by the Senate), with the
approval of the Secretary of the Treasury, will select the transaction alternative that best
satisfies the statutory requirements for privatization set forth in the Energy Policy Act of
1992 and the recently enacted USEC Privatization Act (the "Statutory Requirements"; see
section III). Following the dual path decision, the Corporation, with the approval of the
Secretary of the Treasury, will execute and close the selected privatization transaction.
The Corporation, working with the Department of the Treasury, has engaged
Morgan Stanley & Co. as the Transaction Manager to direct both the M&A and IPO
process. Merrill Lynch & Co. has been engaged as the co-lead manager and six other
investment banks have been engaged as co-managers in the event that the USEC Board
of Directors and the Secretary of the Treasury determine to privatize USEC pursuant to an
IPO. In addition, the Corporation is supported by its financial advisor, J.P. Morgan
Securities, and its legal and accounting advisors. While the Secretary of the Treasury is
directed to make certain statutorily-required approvals in connection with USEC's
privatization, it is anticipated that throughout the entire dual path process USEC will be
working closely with Treasury and other Administration officials.
II.
The Dual Path Approach
The dual path approach to privatization commences with the simultaneous initiation
of the merger and acquisition process and preparation for the public offering process.
Appreximately 21 weeks later, the USEC Board of Directors and the Secretary of the
JS in a position to decide which path to follow to the closing of a privatis
transaction.
The Merger & Acquisition Process
The M&A process will proceed in two distinct phases designed to (a) provide
prospective buyers with information about the Corporation and result in firm bids for the
Corporation and (b) provide information to the Corporation about prospective buyers and
their ability to meet the Statutory Requirements. It is anticipated that prospective M&A
buyers would be large industrial companies having both a strategic and financial fit with the
Corporation. Alternatively, it is also anticipated that a group or consortium of companies
may be interested. During the course of the M&A process, the Corporation, DOE, NRC
and other agencies will collect and evaluate information regarding the ownership, financial
structure and other matters related to prospective bidders to permit a complete
assessment by the Government of the ability of bidders and bids to satisfy the Statutory
Requirements.
Phase I: Offering Memorandum and Preliminary Bids
Phase I of the M&A process is designed to provide prospective bidders with
sufficient information about the Corporation to submit a preliminary bid to purchase the
Corporation. Phase I will also enable the Corporation to make an initial assessment as to
the level of interest of prospective bidders and the ability of an M&A transaction to satisfy
the Statutory Requirements.
Prospective bidders will be provided an offering memorandum which will contain a
description of the uranium enrichment industry and certain confidential information
regarding the Corporation's business. After reviewing the offering memorandum,
interested parties will be required to make a preliminary, non-binding bid. Phase II of the
M&A process will only be open to those bidders that are judged best able to satisfy the
Statutory Requirements. It is anticipated that the pool of prospective bidders will be
significantly reduced before the start of Phase II.
Phase II: Due Diligence and Final Bids
During Phase II, bidders will be provided a copy of the form of purchase agreement
to be used in acquiring USEC and given an opportunity to conduct an in-depth due
diligence review of the Corporation. This will include access to data rooms, management
presentations, meetings with other appropriate government officials and facility tours.
At the conclusion of this due diligence period, bidders interested in acquiring USEC
will be directed to submit their best and final offers by a specified date together with a
signed purchase agreement. Prior to the dual path decision, the Corporation will negotiate
a final purchase agreement with the bidder(s) submitting the bid which has the ability to
in a transaction best satisfying the Statutory Requirements.
The best bid(s), if any, from the M&A process will be compared to the valuation
determined in the IPO process, and both will be measured against the Statutory
Requirements.
2
The Public Offering Process
The public offering process will be undertaken concurrently with the M&A process
and will consist of three principal components: (i) the structuring of the public offering, (ii)
the preparation of a registration statement and prospectus, and (iii) the determination of
the estimated IPO valuation. In addition, the Corporation will consider the option of an
investment by a strategic investor to purchase a minority interest in the Corporation in
conjunction with a public offering.
During the structuring stage, which may overlap with the preparation of the
registration statement, key issues such as the Corporation's financial structure, dividend
policy, the number of shares to be issued, and the jurisdictions in which the offering should
be sold, will be finalized.
The Corporation will work with the underwriters and the Corporation's financial
advisor, legal advisors and accountants to prepare the registration statement. A
registration statement is both a disclosure and a sales document filed Willi the Securities
and Exchange Commission ("SEC"). Following completion of the draft registration
statement, the Corporation intends to make a confidential submission of its draft registra-
tion statement to the SEC. The Corporation would only make a public filing of the
registration statement in the event that a public offering is selected as the privatization
transaction when the dual path decision is made.
During the period that the registration statement is being reviewed by the SEC, the
underwriters will complete the estimated IPO valuation of USEC. This valuation will
indicate an estimated range of the gross proceeds that could be realized from a potential
public offering. The estimated valuation range will be based on the conclusions of the
underwriters and will represent their best estimate at that time of the likely proceeds from
a public offering of the Corporation's stock. The estimated valuation range will also reflect
the financial structure and dividend policy of the privatized corporation. Accordingly, this
estimated valuation range, based on updated market and financial information, and the
policies and financial structure for the privatized corporation, may differ from previous
valuations of the Corporation done by others.
As part of the public offering, the Corporation will consider the option of an
investment by a strategic investor to purchase a minority interest in the Corporation. Under
this scenario, a strategic investor would purchase a certain percentage of the Corporation's
stock at a price no less than the IPO share price. The Corporation anticipates that the
process to solicit a strategic investor would begin at some point after the start of the M&A
process and likely end before the public filing of the registration statement.
3
III.
The Dual Path Decision and the Statutory Requirements
Following the submission of final bids and the negotiation of a final purchase
agreement(s) by prospective buyers in the M&A process and completion of the estimated
IPO valuation of the Corporation, there will be a formal evaluation of the options available
under the M&A process and the IPO process. The transaction selected will be the one that
the USEC Board of Directors, with the approval of the Secretary of the Treasury,
determines will best satisfy the eight Statutory Requirements, as described below.
1.
Net Present Value: privatization will result in a return to the United States
at least equal to the net present value of the Corporation.
2.
No Foreign Control: privatization will not result in the Corporation being
owned, controlled, or dominated by an alien, a foreign corporation, or a
foreign government.
3.
Public Health & National Security: privatization will not be inimical to the
health and safety of the public or the common defense and security.
4.
Adequate Enrichment Capacity: privatization will provide reasonable
assurance that adequate enrichment capacity will remain available to meet
the demands of the domestic electric utility industry.
5.
Long-Term Viability: privatization will provide for the long-term viability of
the Corporation.
6.
Gaseous Diffusion Plants: privatization will provide for the continuation by
the Corporation of the operation of the Department of Energy's gaseous
diffusion plants.
7.
Reliable and Economical Domestic Industry: privatization will provide for
the protection of the public interest in maintaining a reliable and economical
domestic source of uranium mining, enrichment and conversion services.
8.
Maximize Proceeds: to the extent not inconsistent with such purposes,
privatization will secure the maximum proceeds to the United States.
The Statutory Requirements can be found in section 1502(a) of the Atomic Energy Act of
1954 (42 U.S.C. 2297d-1(a)) and sections 3103 and 3104 of the USEC Privatization Act
(42 U.S.C. 2297h-1 and 2297h-2).
4
IV.
Closing the Privatization Transaction
Following the dual path decision by the USEC Board of Directors and the approval
of the Secretary of the Treasury, the Corporation will pursue the selected transaction to
closing.
If a public offering is selected, the Corporation anticipates that it would make a
public filing of the registration statement shortly after the dual path decision. At that time,
the preliminary prospectus would be circulated and the "road show" (i.e. the marketing of
the common stock of the Corporation to the public) would commence. At the conclusion
of the road show, the public offering would be priced. Because the pricing of the public
offering would occur at least 6 to 8 weeks after the estimated valuation range had been
established by the underwriters, changes in market conditions during that period could
affect the final pricing. Following the pricing of the offering, the registration statement
would be declared effective by the SEC and the offering would be consummated.
If an M&A transaction is selected, the Corporation intends lu liust this transaction
expeditiously following satisfaction of all relevant conditions. This would include obtaining
all necessary regulatory approvals.
At the time of the pricing of a public offering or the execution of a definitive purchase
agreement relating to an M&A transaction, the USEC Board of Directors must again
determine that it is not aware of any facts or circumstances that would materially change
the Board's decision that the privatization transaction will satisfy the Statutory
Requirements. In addition; pursuant to section 3104(c) of the USEC Privatization Act, the
Secretary of the Treasury must make a final determination that the privatization transaction
will provide the maximum proceeds to the U.S. Treasury consistent with the other Statutory
Requirements.
The USEC Privatization Act provides for the allocation of liabilities between the U.S.
Government and USEC at privatization and calls for a memorandum of agreement
between OMB and USEC, which would also provide for final settlement of USEC's
accounts receivable and accounts payable with the Government.
5
THE PRESIDENT HAS SEEN
7-25-97
Foreign Affairs
THOMAS L. FRIEDMAN
The Globalutionaries
JAKARTA, Indonesia
Indonesia's national car factory -
There is a fascinating revolution
controlled by the President's son -
be
going on in Indonesia. It's not always
is being protected by all sorts of
visible, but if it succeeds it could
tariffs out of line with W.T.O. norms.
save this country from the dead hand
Many, of course, have made a sim-
of the Suharto regime, which after 30
ilar argument about China - that
years in power is a spent force, with-
the more it is integrated into the
out energy or ideas.
global economy, the more open and
Berger
Wimar Witoelar, a popular Jakarta
pluralistic it will inevitably become.
talk-show host, described the Indo-
But what is interesting about Indo-
COS
nesian revolutionaries to me as those
nesia is that it isn't outsiders making
copied
20- and 30-year-olds, most of them
educated and working in the private
sector, "who want to get rich without
having to be corrupt and who want to
Indonesia's
have democracy but don't want to go
out in the streets and get killed for it."
young guerrillas.
What's interesting is their strat-
egy. The Suharto regime allows no
space for a democratic opposition to
emerge. So what the pro-democracy,
this argument to justify their busi-
pro-clean-government forces are re-
ness dealings here. It is Indonesian
lying on is not a revolution from
reformers making the argument as a
below, not a revolution from above,
self-conscious political strategy.
but a revolution from beyond
So globalization has many dark
Their strategy is to do everything
sides, from environmental degrada-
they can to integrate Indonesia into
tion to widening the gap between rich
the global economy on the conviction
and poor, but what you see in Indo-
that the more Indonesia is tied into
nesia is its most important upside -
the global system, the more its gov-
the ability to generate pressure on
ernment will be exposed to the rules,
autocratic regimes when no domes-
standards laws pressures scrutiny
tic space is available.
and regulations of global institutions,
While everyone is focusing on the
and the less arbitrary. corrupt and
question of whom President Suharto
autocratic it will be able to be. Their
will appoint as his next vice presi-
strategy, in short, is to Gulliverize
The New Times
THURSDAY, JULY 24, 1997
dent and likely successor, I would
the Suharto regime by globalizing
argue that it almost doesn't matter.
Indonesian society. As a military an-
The really interesting succession in
alyst, Juwono Sudarsono, put it:
Indonesia is already happening and
"The global market will force upon
n IS the one being mounted in the
us business practices and disciplines
private sector by the globalutionar-
that we cannot generate internally."
ies. mey are plugging Indonesia into
Or as another reformer here re-
the world in ways that will, over
marked to me: "My son and I get our
time, redefine both politics here and
revenge on Suharto every day by
the limits of what's possible - no
eating at McDonald's."
matter who succeeds Mr. Suharto.
Indonesia's "globalutionaries" in-
In the meantime, if the U.S. wants
clude business school grads who
to promote this process of opening up
want Indonesia in the World Trade
and democratizing politics in South-
Organization (W.T.O.) and APEC
east Asia it needs a multifaceted
and Asean; young entrepreneurs
strategy. It has to work with military
who welcome foreign investment
officers who want to professionalize
here so that any move the Suharto
their ranks, give protection to the
regime makes with the domestic
nongovernmental human rights or-
economy, and any shenanigans it
ganizations when they come under
might try, will have international
attack for reasonable activities and
implications; and human rights ac-
find every way possible to encourage
tivists who use the Internet to get
countries like Indonesia to integrate
their stories out and whose hackers
with the global economy and institu-
occasionally break into and alter
tions, rather than cutting them off,
- government web sites. The Indo-
which is idiotic.
nesian press can't directly rebuke
It would be nice if every democra-
the Suharto regime for its rampant
cy movement could be led by a hero
nepotism. So instead it reports with
like Andrei Sakharov. But you have
great relish on how the U.S. and
to work with what you've got, and
Japan are taking Indonesia before a
around here the biggest agents of
W.T.O. court to protest the fact that
change are the globalutionaries.
Bleed
THE PRESIDENT HAS SEEN
COS
7-25-97
copied
Quietly, a trend away from out-of-wedlock births emerges
By Ben Wattenberg
teen-agers, 70% for blacks.
take Into account the
What will It mean? Plenty.
If there's such stunning
sharp decline In mar-
Teen births
Consider "income inequality."
Out-of-wedlock births have
headway, why no headlines?
ried fertility."
soared and are America's No.
After all, illegitimacy, particu-
So why Is this good
decline
It's said the poor are getting
poorer while the rich get rich-
I social problem. In 1960, 5%
larly by teen-agers, correlates
news? Because teen-
Since-1991 teen birth rates
er. Yes, but. In part that's com-
of children were born illegiti-
with major social problems:
agers become adults.
have fallen, mostly among
ing from the increase In single-
mately. Now the ratio is a third
poverty, crime, welfare, drop-
(Flash!)
blacks (births per 1,000 black
parent households, caused par-
(32%). Scary, straight-line pro-
outs, cyclical illegitimacy.
If unmarried teen-
women aged 15-19).
tially by out-of-wedlock teen-
jections have shown It could go
The problem is that illegiti-
agers refrain from
120
age births. Median Income for
to 50%.
macy Is usually talked about as
childbirth, they likely
female-headed households was
Yet, unheadlined, major
a simple ratio, out-of-wedlock
will have children later
100
$21,348 in 1995, compared to
changes are going on. The most
births as a percentage of all
on, after they are
80
$47,129 for married couples.
critical components of high II-
births. It's important. It's under-
married (perhaps at
Fewer female-headed house-
legitimacy rates birthrates
standable. We concentrate on
increased rates). This
60
holds in the future will mean
among teen-agers and blacks
it.And It's changed little in re-
means that the illegit-
40
less Income inequality.
- have fallen dramatically.
cent years.
Imacy ratio will go
Who should get the credit?
Why no headlines? Due to
How can the out-of-wedlock
down solidly - but
20
Most welfare walvers have
a temporary statistical anoma-
ratios decline so minutely
slowly. Each year only
0
been granted during the Clin-
ly, the trend is seen only faintly
while the rates decline so
1/29th of the fertility
'91
'92
'93
'94
'95'
'96'
ton presidency. But mostly
in the most publicized Index of
sharply among the very groups
spectrum moves from
mkl-year to
GOP governors did the asking.
illegitimacy. But the turn-
- teen-agers and blacks -
teen-ager to 20-
Clinton says he "ended welfare
around will be showing up
that contribute so heavily to It?
something. Martin
correlate with other Indicators.
as we know It." The Republi-
soon.
Teen-agers comprise a
O'Connell, chief of
Contraceptive use among teen-
cans say their tough bill passed.
The National Center for
small proportion of the popula-
fertility and family statistics for
agers is up. Abortion is down
Conservatives point to a cam-
Health Statistics' (NCHS) most
tion. Women are considered
the Census Bureau, says, "Once
partly because of fewer con-
paign for teen-age abstinence.
recent statistics, through mid-
statistically fertile for the 29
out-of-wedlock birth is delayed,
ceptions. Welfare recipiency
Liberals look at sex education.
year 1996, reveal the startling
years from 15-44. During the
It may never happen. Personal
and high school dropout rates
Let everyone take credit.
changes.
four years teen-agers are statis-
responsibility and contracep-
are down."
There's work to be done. Illegit-
Teen-age fertility (ages 15-
tically fertile, they bear 13% of
tive techniques learned as teen-
Why now? Tighter state-by-
imate birth is still problem No.
19) dropped by 10% from 1991-
the bables. So, when teen-age
agers are likely to stick."
state welfare provisions, made
1. But something Is going on
96, while the decrease for the
fertility falls, It has only a.lim-
Is this trend definite? Part
possible by federal waivers
that bodes better. That will
total population was only 5%.
Ited effect on the ratio.
of the coming illegitimacy ratio
granted in the first part of the
show up in the illegitimacy ra-
White teen birthrates de-
Moreover, fertility de-
decline is already baked into
1990s, probably discouraged
tios. Then It will be headline
creased by 7% and black
creased not only for teen-agers
the cake - by teen-agers who
young women from bearing
news.
teen birthrates by 20%.
(mostly illegitimate) but also
haven't borne children during
out-of-wedlock children. An
That's important. These
among older women (mostly
the past five years. The illegit-
"announcement effect" of the
days, catastrophically, about
legitimate). If both sides of the
By Jerry Mosemak,
USA TODAY
Imacy ratio will go on falling
federal welfare-reform bill had,
three-quarters of teen-age
proportion shrink, the ratio
if teen-age fertility rates simply
an impact even before the law
Ben Wattenberg, a sertior
births are illegitimate. But
won't move much. Demogra-
don't go up. It will fall faster If
was passed. There have been
fellow at the American Enter-
among women over 20, the 11-
pher Stephanie Ventura of
they continue to decline.
publicity campaigns. A growing
prise Institute and moderator
legitimacy ratio is 25%. There
NCHS says, "The out-of-
Douglas Besharov, welfare
economy lifted many poor peo-
of PBS' Think Tank, is a mem-:
is also a big racial difference
wedlock ratio is a flawed Index
expert at the American Enter-
ple to higher economic status,
ber of USA TODAY's board of
in illegitimacy: 25% for white
because It doesn't properly
prise Institute, says: "The data
where fertility is lower.
contributors.
USA TODAY THURSDAY. JULY 24, 1997
THE PRESIDENT SEEN
BRud
Fegh
Reed
copied
Welfare Incentive to Keep Teenage Parents in School Shows Some Success
By Barbara Vobejda
long-term recipients had their first child as a
there are no easy answers.
Overall, too
But for teenagers who had already dropped
Cuyahoga County, said the state's experience
Washington Post Staff Writer
teenager.
many teenagers returned to school only to
out of school when they were enrolled, em-
has shown that "it is really important to do
The study, conducted by the Manpower
leave again without getting a diploma. And too
ployment rates did not increase, nor did
things to get to teens as soon as possible after
An Ohio program that boosts the welfare
Demonstration Research Corp., a New York
many remained on welfare and not em-
graduation rates or receipt of equivalency
they have a child to help them avoid dropping
checks of teenage parents who stay in school
organization that designs and evaluates wel-
ployed."
certificates.
out of school." That means identifying poor
and cuts benefits if they drop out has had
fare programs, followed more than 4,000
LEAP, begun in 1989, pays teenage parents
Phyllis Brown, who oversees the LEAP
teenage parents, offering them child care
some success in increasing classroom attend-
teenagers in 12 counties for four years after
an extra $62 a month if they attend school
program in Hamilton County, Ohio, said many
assistance and other services and monitoring
ance and reducing welfare dependence, ac-
they entered the program.
regularly. Their checks-$274 a month for a
young mothers do not return to school, even if
their progress, he said.
cording to a study released yesterday. But the
While it found that financial incentives can
teenage mother with one child-are cut by
their welfare benefits are reduced, because
Another recent study by the same group
program failed to induce teenagers to return
change some behavior, italso underscores the
$62 if they drop out or are absent frequently.
their families or boyfriends make up that lost
highlighted the difficulty of changing teen
to school if they had already dropped out.
difficulty of improving the lives of those who
LEAP also provides child care, transportation
money. "A $62 decrease in their check does
agers' behavior. Researchers found that a
The program, known as Learning, Earning
need help the most: high school dropouts.
and counseling for the teenagers.
not make that much difference to them," she
program that spent $9,000 per teenager trying
and Parenting, or LEAP, has been cited as a
Three years after entering the program, for
In tracking the effect of the program, the
said.
to improve self-sufficiency had little effect. The
model by President Clinton and has become
example, two-thirds of the teenage parents
researchers found that it helped the young
Also, many of the teenagers found entry-lev-
mothers who received the money were no
the focus of national attention since passage of
had not completed high school.
parents progress from one grade to the next. It
el jobs without finishing high school. But after
more likely to find a job or leave welfare.
the federal welfare law last year. The federal
And while the proportion of the teenagers
did not, however, end up ráising graduation
several years at these jobs, she said, many
"In general, we don't have examples of
law also sanctions high school dropouts by
on welfare decreased over time, more than 60
rates, although the teenagers who were in
young mothers contacted the LEAP counsel-
success working with teen parents who have
denying welfare payments to teenage parents
percent were still on the rolls four years after
school when they enrolled in LEAP were more
ors seeking help in completing high school
dropped out," Gueron said. "That's troubling,
who are not in school. Changing the behavior
joining LEAP.
likely to go on to receive high school equiva-
diplomas because they eventually decided
because when every state has to deal with that
of teenage parents also is considered critical
The study, said Judith Gueron, president of
lency certificates. The program also raised
they wanted to improve career options.
population, you like to have models of success,
to reducing welfare caseloads because half of
the group that conducted it, "reminds us that
employment rates for the teenagers in school.
Leonard Tetlak, who runs the prògram in
and there aren't any of those out there."
The Washington Post
THURSDAY, JULY 24, 1997
THE PRESIDENT HAS SEEN
7-25-97
A28
Gas Exposure in Gulf War Revised
first, Rather. it was soaked UP by
the wood crates that held the rock-
ets and by the sand at the site and
remained viable for a longer period
CIA Computer Model Indicates 100,000 Troops Were Near Nerve Agent
of time
Defense scientists came up with
the original estimate of 20,000 sol-
By Dana Priest
whether any of the chemical alarms
from several other agencies and
diers by drawing an arbitrary 50
Washington Post Staff Writer
carried by troops sounded.
private companies, measured the
mile radius around Khamisiyah.
The demolition at the pit, which
number of rockets believed to have
TheWashington Post
The department then surveyed
Nearly 100,000 U.S. troops were
occurred on March 10, 1991, and
been denoted, weather conditions,
those troops, but found no signifi-
exposed to trace levels of poison-
that of a nearby bunker, are the
wind patterns, rate at which the
cant increase in reported health
THURSDAY, JULY 24, 1997
ous sarin gas in a plume released
only confirmed releases of chemi-
chemical would have dissipated
problems among the group.
when American soldiers unknow-
cal agents during the conflict in the
and the location of troops.
ingly detonated rockets in Iraq at
vicinity of troops.
The model shows that over a
The department is sending out a
the end of the Persian Gulf War, five
The new data does not by itself
three-day period the plume trav-
new questionnaire to survey the
times the number the Defense De
answer the question so many Per-
eled 300 miles over 99,000 troops,
99,000 troops identified by the
partment had originally estimated,
sian Gulf War veterans have, name-
most of them from elements of the
model and another letter to the
Pentagon officials said yesterday.
ly whether the collection of symp-
18th Airborne Corps and the 7th
previous 20,000 that were previous-
But the concentration of nerve
toms reported by some of them can
Corps. The amount they were ex-
ly identified, letting some of them
agent that reached those troops
be linked to chemical exposure.
posed to is estimated to be between
know they were actually not ex-
was so low that no known health
There is no reliable scientific data
1 milligram per cubic meter, a level
posed to the
effects are believed to be associat-
that shows that a one-time, low-
that would immediately cause run-
For five years the Pentagon had
ed with such a level of exposure,
level exposure to sarin would cre-
ning noses and watery eyes, and
steadfastly insisted that no U.S.
officials said.
ate the sleepiness, memory loss,
0.01296 milligram per cubic meter,
soldiers had been exposed to
The new information, which is to
joint pains and other illnesses af-
a level that would not produce any
chemical weapons in Iraq. In June
be released today, comes from a
flicting some vèterans.
known effects, at the time or later.
1996, it revealed that chemical mu-
CIA computer model of one pit
"The answer is not in the plume,"
An exposure of 100 milligrams is
said one defense official.
nitions had been unknowingly de-
located near an ammunition dump
lethal; 35 milligrams is incapacitat-
at Khamisiyah in southern Iraq.
Still, it is a critical piece of infor-
ing.
stroyed at Khamisiyah. The depart-
U.S. troops entered the area days
mation for the dozens of ongoing,
Defense officials said yesterday
FINAL
dopied
Cos
ment has admitted that its efforts
Berger
after the war ended to destroy a
government funded studies into
that one reason the number of
to find possible chemical expo-
huge cache of weapons before leav-
the possible delayed effects of low-
troops is so much larger than they
sures were extremely. lax and disor-
ing the country. No one reported
leyel chemical exposure.
had originally estimated was be-
ganized, but it has denied it cov-
unusual illnesses at the time, and
The CIA computer model, which
cause the sarin did not dissipate as
ered up the information, as many
there are conflicting reports about
combines data and technology
quickly as had been believed at
veterans advocates allege.
Saway
Fyl-
BC
John Warner and Kay Bailey Hutchison
THE
PRESIDENT
SEEN
The Missing
NATO Debate
7-25-97
Going into the NATO summit in
same administration estimated the
Berger
creased training for the new mem-
Madrid, conventional wisdom had it
bers, enhanced command and control
costs of the current U.S. operation in
COS
that expanding the Alliance would be
capabilities, communications and in-
Bosnia at less than $2 billion. The
copied
easy. We believe this perception is
telligence-gathering improvements,
actual cost will be $6.5 billion through
changing with the realization of what
upgrading of facilities and the pur-
June 1998, with that withdrawal date
expansion will entail.
chase of weapons that will bring the
now in question.
The plan-which would have Po-
new members up to NATO standards.
The administration's February re-
land, the Czech Republic and Hungary
The wide variations in the esti-
port is further troubling because of its
come under the American security
mates for these improvements are of
assumptions about burden-sharing, or
umbrella in just two years-seems to
concern. The independent and re-
how much of the total cost of NATO
contradict the reality of declining de-
spected Rand Corp. in 1995 fixed the
enlargement will be borne by our
fense budgets and general post-Cold
cost of NATO expansion at $1 billion
European allies. According to the ad-
War retrenchment that is taking place
to $5 billion a year over 10 years,
ministration, the United States will
in all of the Western democracies.
pay just 15 percent or so of the direct
French President Jacques Chirac ad-
mitted as much at the recent NATO
enlargement costs. Other members
summit in Madrid, when he flatly
Will an attack on
will pay 50 percent, and the new
declared that "France does not intend
members 35 percent.
to raise its contribution to NATO
one member be seen
The recent statement by President
because of the cost of enlargement."
Chirac would seem to call this as-
One indication of this intensified
as an attack on all?
sumption into question. His statement
scrutiny is the recent letter from 20
is consistent with the trends of the
senators to the president outlining
soaring as high as $10 billion or more
last several years. Despite cuts in
those areas that will be debated prior
should a strong threat to NATO re-
U.S. defense spending since the end
to NATO expansion. Signatories in-
emerge.
of the Cold War, we still spend nearly
clude senators from every region of
The nonpartisan Congressional
4 percent of our total wealth (gross
the country and from across the polit-
Budget Office has estimated that ex-
domestic product): on defense By
ical spectrum, from Jesse Helms (R-
panding the alliance (to the three plus
comparison, France spends just 2.5
N.C.) to Paul Wellstone (D-Minn.).
Slovakia) would lead to U.S. costs
percent, Germany 1.5 percent and
These members have differing
ranging from $5 billion to $19 billion
Poland 2.4 percent. It seems unlikely
views of NATO expansion, from sup-
over 15 years. The CBO estimates
that these current and future allies
port to skepticism to outright opposi-
the total cost of expansion at as much
will pay proportionately two or three
tion. But they share one concern: The
as $125 billion. The cost to the Unit-
times more than the United States for
decision to enter into a mutual de-
ed States assumes, questionably, that
the costs of NATO expansion when
fense. treaty with three additional
the new members of the alliance
they spend just half of what we do on
countries deserves more debate and
would increase their own defense.
general defense.
inspection than it has thus far re-
spending by 60 percent over the same
NATO expansion may well be a
ceived.
period.
good idea, but the plan to bring it
Under Article 5 of the NATO Char-
In stark contrast to these stagger-
about must be based on hard realities,
ter, the members make a commit-
ing cost assessments are the Clinton
not feel-good perceptions. A heavy
ment to treat an attack on one mem-
administration's rather modest esti-
burden falls upon elected leaders to
ber as an attack on all. Are the
mates for adding three to five un-
make a convincing argument to the
American people willing to make that
named members to the alliance. In a
American people that changes we
same commitment to the three coun-
February 1997 report to Congress,
make to the alliance are in our nation-
tries in Central Europe being identi-
the administration concluded that the
al interest and will strengthen the
fied for NATO membership, and pos-
cost to the United States over 12
organization.
sibly more in the future? And at what
years would be just $150 million to
price?
$200 million a year, at best only
Sen. Warner is a Virginia
The cost of adding at least three
one-fifth of the next highest estimate
Republican and Sen. Hutchison is a
members to NATO will entail in-
from an independent source. The
Texas Republican.
TheWashington Post
THURSDAY, JULY 24, 1997
3-1997
16PM
FROM
PL/LLL
TO
4566703
P.02
LINDA LESOURD LADER
MariaE.
July 22, 1997
we Domyo togice
then
MEMORANDUM FOR THE PRESIDENT
SUBJECT: Religious Outreach at the White House
J.Wuiston BC
FROM:
Flo McAfee and Linda Lader
Both of us have been pleased and very honored to assist you with religious issues and
with people in the faith community over the past four years, and we both remain
committed to being of help to you in the future. Because we know how important these
people and issues-and your personal faith-are to you, we wish to bring to your
attention our concerns about how these matters will be handled in the White House
in the coming months. In brief:
(1)
With Marilyn DiGiacobbe leaving the White House at the end of July, it is not
clear who, if anyone, will be the staff person assigned to this area.
(2)
After four years of concentrated, committed effort on your part and from many
others, we are concerned that significant ground could be lost.
THE PRESIDENT 7-25-97 HAS SEEN
Should there be a dramatic difference in the understanding or attention shown
to these people and to issues of importance in the faith community, we are
especially worried that it would breed cynicism about your motives. ("He
doesn't really care about these things, he was just trying to get reelected.")
Echaveste
COS
(4)
Without anyone in the White House who has an unbiased sensitivity to all the
copied
faith communities, access to you, to White House staff and to events would be
skewed in favor of those who have the best personal contacts, and the voices
of a few could drown out the vast majority.
Many new heads of denominations have been elected who have not yet been
invited to any events and who need to be contacted.
Though we are enthusiastic about the upcoming event on Religious Freedom
in the Workplace, we hope that the staff involved will be as sensitive to the
religious dimensions of this occasion as they are to the legal issues.
We are especially hopeful about your initiatives regarding race, but we have
heard from various religious leaders who are unhappy about not having been
contacted by the White House and who wish to be included in the process and
hope to be invited to related events.
The annual Religious Leaders breakfast should now be in the planning stages
if it is to take place in September. (Suggested date: September 15.) To that
end, attached is a letter from Tony Campolo suggesting what could be the start
of a list for the breakfast meeting.
We will be having lunch in the White House Mess with Marilyn DiGiacobbe this Friday,
July 25. If it were possible for us to drop by and see you for a few minutes, we would
appreciate the opportunity to discuss this candidly with you in person.
As always, we commend you for the great things you are doing for this country!
with grattitude
THE
PRESTOENT
7-25-97
July 18, 1997
VIBRO the
Lewis
The Honorable William J. Clinton
McCurry
President of the United States
Smith
The White House
c/o Ann Stock
moore, Minyon
1600 Pennsylvania Avenue
COS
Suite 200 ~ East Wing
Washington, DC 20500-2000
Copied
Dear Mr. President, MR. PRESIDENT
You, and the country, are on a major roll. I can't wait to see what happens
when your leg heals.
I'm writing to you with a request which I believe is right in the pocket
with what you are trying to accomplish. Vibe, the successful urban
magazine I founded, will take to television with a megalaunch August 4 in
98% of U.S. households. Think Arsenio times two; the best music on
television, fresh guests, meaningful conversation and a lot of spontaneous
IY
fun. David Salzman and I hope that you will appear on the nightly hour
the next time you visit Los Angeles, but for now we'd greatly appreciate a
brief "good luck from the President" on videotape.
We feel it makes sense because the show is about the same ideals and
objectives you stand for ~ inclusion, honesty, hope and unity. We're
bringing full spectrum television to latenight America and fulfilling a need
in the process.
David will be following up with your staff since our debut is quickly
approaching. Thanks in advance.
With lov and respect,
Quincy Jones
7800 Beverly Boulevard
East Building, Suite 258
Los Angeles, California 90036
Phone: (213) 852-4309
Fax: (213) 852-4411
Apply the Lessons of Cambodia to Bosnia Before It's Too Late
n
W
ASHINGTON - Bosnia
By Fred Hiatt
BC-FYI
Even when Mr. Hun Sen used
more accommodation to the
and Cambodia are a world
tanks finally to oust Prince
"reality" he seeks to make per-
apart, but unfortunately with
disarming of
hariddh the weekend of July
manent. It also argues for a hard
it
much in common. The United
factions, but th
the Clinton administration
look at Bosnia, which could still
States and others have spent bil-
hard, and so ti
itated to sever its access to the
go either way.
ace
tator Hun Sen
g, balancing its criticism of
In Bosnia, too, peacekeepers
Copied
all,
retain his priva
7-25-97
1 with admonitions to Prince
have hesitated to do the hard
1 in
Communist pa
tion, but when
Sawly
ariddh and refusing to label
things - to enforce the Dayton
lity
Hun Sen's coup a coup.
peace accords by returning
Berger
blow up the pt
All along, one argument for
refugees to their homes, arrest-
im-
United Nation
ing a blind eye to democ-
ing war criminals, building a
COS
ons
allowed him tc
y's degradation was that
real democracy to challenge the
the
co-prime min
Fift
ability" would allow eco-
mafia power of wartime thugs.
ave
prince. Alread
nic development, which
And no wonder - those tasks
by
10 Cambodian:
ild eventually promote de-
are hard, and risky; with Con-
of
That same
cracy. Cambodia illustrated
gress yapping at his heels, Pres-
are
forces left, decl
bankruptcy of such logic. As
ident Bill Clinton might love to
pta-
tory on their W:
re-
time, the prosp
'Ire
1 Prince Ranariddh and Mr.
pre
declare victory, deal "realistic-
1 Sen became less and less
ally" with the ensconced thugs
nost
sonable. A fre
ountable, the Cambodian
and bring home the troops.
sks,
man rights gr
nomy became more and
Yet the hard tasks were writ-
to claim success no matter what
International a
e corrupt. The leaders sold
ten into the Dayton accords, just
and to deal "realistically" with
land mines and
alf of Cambodia's forests to
as into the much-violated Paris
thugs and dictators. We used to
Yet - and h
i and other companies,
agreement, because everyone
blame those temptations on the
mistake - t]
keting most of the proceeds
understood peace would not
Cold War ("He's a dictator, but
community paic
nselves. In a few more years,
take root otherwise. Having
he's our dictator''); they turn
tention to postelection democ-
who lives in a heavily fortified
Cambodia could be a desert
tried and failed to ignore Bos-
out to stem more from human
racy-building. Few sought to
stockade outside Phnom Penh,
an impoverished desert with a
nia, and then having invested $7
nature than from the struggle
safeguard the UN's huge initial
behaves like an increasingly
wealthy, drug-trafficking elite.
billion there, the United States
against communism. In Cam-
investment by insisting, as a con-
dangerous psychotic. Washing-
All this argues for a strong
should give that investment at
bodia, where Bolshevik-style
dition of aid - which continued
ton's belief that he will provide
international response to Mr.
least a chance to pay off.
purges have followed last
to pay half of Cambodia's
'stability' is foolish."
Hun Sen now, rather than one
The Washington Post.
week's coup d'état, it may be
budget - that the nation hire
too late. Bosnia still has a
independent judges, set up a su-
chance.
preme court, create an impartial
In the Balkans, NATO Must Go After the Masterminds
The UN came to Cambodia
election commission. It was easi-
D
URING my time as high
er. But NATO troops started, on
to challenge Mr. Karadzic.
after it had suffered through two
er just to keep claiming success.
representative in Bosnia, I
Thursday, by going after minor
By design or by default, the
decades of war and genocide at
Gradually, the facade of de-
repeatedly urged key govern-
figures. This served to give both
Dayton peace agreements have
the hands of both native and
mocracy crumbled. Mr. Hun Sen
ments such as the United States
men advance warning, making
entered a new phase. This phase
outside aggressors. In 1993,
re-established control through a
and Britain to be ready to give
their arrests more difficult.
will require a far more coordin-
20,000 UN troops enforced a
classic Communist combination
their forces the orders needed to
I do not know what brought
ated effort from the political
peace and monitored elections.
of political intrigue backed by
arrest those indicted for war
the NATO-led forces to dis-
and military sides to prevent
Ignoring expert opinion that de-
thuggish intimidation and out-
crimes by The Hague tribunal.
count this advice and go for a
repeating the mistakes of
mocracy was inappropriate for
right violence. Journalists were
For these arrests to help the
half-baked operation, which
Thursday's Prijedor operation.
such an impoverished and tra-
gunned down, independent
peace process, and not just cre-
turned into what at best looks
And this effort will not be com-
ditionally authoritarian nation,
politicians were exiled or at-
ate chaos, they had to be care-
like a half-success.
pleted by June 1998, when Pres-
nine out of 10 eligible Cam-
tacked with hand grenades. He
fully planned and orchestrated
There may have been other
ident Bill Clinton has said that
bodians voted - often risking
labeled his enemies "worms"
with political initiatives.
considerations of which I am
U.S. troops should leave.
their lives to do so. The liberal-
and, when France and the United
That meant that the first tar-
unaware. But it appears that
- Carl Bildt, a former
royalist party of Prince Noro-
States let out a peep or two of
gets had to be the most impor-
it was done without any co-
Swedish prime minister and
dom Ranariddh won.
protest, threatened to turn his
tant indicted war criminals, in-
ordination with those in Bos-
the former civilian
The United Nations then
thugs loose on their embassies.
cluding Radovan Karadzic, the
nia. And it will probably dam-
representative in Bosnia,
made its first mistake. The Paris
Even then, the peeps were few
Bosnian-Serb leader, and Dario
age those forces inside the Re-
commenting in The New
peace accords had called for the
and far between. Last fall, on the
Kordic, the Bosnian-Croat lead-
publika Srpska that have started
York Times.
Apply the Lessons of Cambodia to Bosnia Before It's Too Late
n
:,
W
ASHINGTON - Bosnia
By Fred Hiatt
BC-FYI
Even when Mr. Hun Sen used
more accommodation to the
and Cambodia are a world
tanks finally to oust Prince
"reality" he seeks to make per-
apart, but unfortunately with
disarming of all Cambodian
fifth anniversary of the Paris
Ranariddh the weekend of July
manent. It also argues for a hard
it
much in common. The United
factions, but that was seen as too
peace accords, then-UN Secre-
5-6, the Clinton administration
look at Bosnia, which could still
States and others have spent bil-
hard, and SO the longtime dic-
tary-General Boutros Boutros
hesitated to sever its access to the
go either way.
lions of dollars to bring peace
tator Hun Sen was allowed to
Ghali congratulated Mr. Hun
thug, balancing its criticism of
In Bosnia, too, peacekeepers
and democracy to both small,
retain his private army. His neo-
Sen for his "statesmanship."
him with admonitions to Prince
have hesitated to do the hard
e
war-ravaged countries - and in
Communist party lost the elec-
Winston Lord, then U.S. assist-
Ranariddh and refusing to label
things - to enforce the Dayton
both there's a strong possibility
tion, but when he threatened to
ant secretary of state, was still
Mr. Hun Sen's coup a coup.
peace accords by returning
those efforts will fail.
blow up the peace process, the
calling Cambodia "a model UN
All along, one argument for
refugees to their homes, arrest-
The peace-building cam-
United Nations caved in and
success story" in 1995, while
turning a blind eye to democ-
ing war criminals, building a
paigns - by the United Nations
allowed him to retain power as
his deputy reported that the
racy's degradation was that
real democracy to challenge the
in Cambodia, by NATO in the
co-prime minister with the
concept of human rights "has
"stability" would allow eco-
mafia power of wartime thugs.
former Yugoslavia - have
prince. Already, those nine in
permeated" Cambodia's gov-
nomic development, which
And no wonder - those tasks
done much good, not least by
10 Cambodians were betrayed.
ernment. The current U.S. am-
would eventually promote de-
are hard, and risky; with Con-
simply enforcing an absence of
That same year, most UN
bassador to Cambodia, Kenneth
mocracy. Cambodia illustrated
gress yapping at his heels, Pres-
war. But long-term benefits are
forces left, declaring a great vic-
Quinn, consistently rejected
the bankruptcy of such logic. As
ident Bill Clinton might love to
threatened by recurring tempta-
tory on their way out. And for a
congressional calls for a tougher
both Prince Ranariddh and Mr.
declare victory, deal "realistic-
tions in the international re-
time, the prospects seemed rea-
U.S. line on human rights.
Hun Sen became less and less
ally" with the ensconced thugs
sponse - to avoid the most
sonable. A free press and hu-
"This policy was and con-
accountable, the Cambodian
and bring home the troops.
difficult (but necessary) tasks,
man rights groups flourished.
tinues to be absurd," William
economy became more and
Yet the hard tasks were writ-
to claim success no matter what
International aid helped clear
Shawcross, the journalist and
more corrupt. The leaders sold
ten into the Dayton accords, just
and to deal "realistically" with
land mines and train judges.
Cambodia expert, noted in the
off half of Cambodia's forests to
as into the much-violated Paris
thugs and dictators. We used to
Yet - and here was the next
New York Review of Books
Thai and other companies,
agreement, because everyone
blame those temptations on the
mistake - the international
nine months before Mr. Hun
pocketing most of the proceeds
understood peace would not
Cold War ("He's a dictator, but
community paid far too little at-
Sen's final coup. "Hun Sen,
themselves. In a few more years,
take root otherwise. Having.
he's our dictator''); they turn
tention to postelection democ-
who lives in a heavily fortified
Cambodia could be a desert -
tried and failed to ignore Bos-
out to stem more from human
racy-building. Few sought to
stockade outside Phnom Penh,
an impoverished desert with a
nia, and then having invested $7
nature than from the struggle
safeguard the UN's huge initial
behaves like an increasingly
wealthy, drug-trafficking elite.
billion there, the United States
against communism. In Cam-
investment by insisting, as a con-
dangerous psychotic. Washing-
All this argues for a strong
should give that investment at
bodia, where Bolshevik-style
dition of aid - which continued
ton's belief that he will provide
international response to Mr.
least a chance to pay off.
purges have followed last
to pay half of Cambodia's
'stability' is foolish."
Hun Sen now, rather than one
The Washington Post.
week's coup d'état, it may be
budget - that the nation hire
too late. Bosnia still has a
independent judges, set up a su-
chance.
preme court, create an impartial
In the Balkans, NATO Must Go After the Masterminds
The UN came to Cambodia
election commission. It was easi-
after it had suffered through two
D
URING my time as high
er. But NATO troops started, on
to challenge Mr. Karadzic.
er just to keep claiming success.
representative in Bosnia, I
Thursday, by going after minor
By design or by default, the
decades of war and genocide at
Gradually, the facade of de-
repeatedly urged key govern-
figures. This served to give both
Dayton peace agreements have
the hands of both native and
mocracy crumbled. Mr. Hun Sen
ments such as the United States
men advance warning, making
entered a new phase. This phase
outside aggressors. In 1993,
re-established control through a
and Britain to be ready to give
their arrests more difficult.
will require a far more coordin-
20,000 UN troops enforced a
classic Communist combination
their forces the orders needed to
I do not know what brought
ated effort from the political
peace and monitored elections.
of political intrigue backed by
arrest those indicted for war
the NATO-led forces to dis-
and military sides to prevent
Ignoring expert opinion that de-
thuggish intimidation and out-
crimes by The Hague tribunal.
count this advice and go for a
repeating the mistakes of
mocracy was inappropriate for
right violence. Journalists were
For these arrests to help the
half-baked operation, which
Thursday's Prijedor operation.
such an impoverished and tra-
gunned down, independent
peace process, and not just cre-
turned into what at best looks
And this effort will not be com-
ditionally authoritarian nation,
politicians were exiled or at-
ate chaos, they had to be care-
like a half-success.
pleted by June 1998, when Pres-
nine out of 10 eligible Cam-
tacked with hand grenades. He
fully planned and orchestrated
There may have been other
ident Bill Clinton has said that
bodians voted - often risking
labeled his enemies "worms"
with political initiatives.
considerations of which I am
U.S. troops should leave.
their lives to do so. The liberal-
and, when France and the United
That meant that the first tar-
unaware. But it appears that
- Carl Bildt, a former
royalist party of Prince Noro-
States let out a peep or two of
gets had to be the most impor-
it was done without any co-
Swedish prime minister and
dom Ranariddh won.
protest, threatened to turn his
tant indicted war criminals, in-
ordination with those in Bos-
the former civilian
The United Nations then
thugs loose on their embassies.
cluding Radovan Karadzic, the
nia. And it will probably dam-
representative in Bosnia,
made its first mistake. The Paris
Even then, the peeps were few
Bosnian-Serb leader, and Dario
age those forces inside the Re-
commenting in The New
peace accords had called for the
and far between. Last fall, on the
Kordic, the Bosnian-Croat lead-
publika Srpska that have started
York Times.
THE PRESIDERT HAS SEEN
7-25-97
ViBe
July 18, 1997
the
Lewu
The Honorable William J. Clinton
McCurry
President of the United States
Smith
The White House
moore, Minyon
c/o Ann Stock
1600 Pennsylvania Avenue
COS
Suite 200 ~ East Wing
Washington, DC 20500-2000
Copied
Dear Mr. President, MR. PRESIDENT
You, and the country, are on a major roll. I can't wait to see what happens
when your leg heals.
I'm writing to you with a request which I believe is right in the pocket
with what you are trying to accomplish. Vibe, the successful urban
magazine I founded, will take to television with a megalaunch August 4 in
98% of U.S. households. Think Arsenio times two; the best music on
television, fresh guests, meaningful conversation and a lot of spontaneous
N
fun. David Salzman and I hope that you will appear on the nightly hour
the next time you visit Los Angeles, but for now we'd greatly appreciate a
brief "good luck from the President" on videotape.
We feel it makes sense because the show is about the same ideals and
objectives you stand for ~ inclusion, honesty, hope and unity. We're
bringing full spectrum television to latenight America and fulfilling a need
in the process.
David will be following up with your staff since our debut is quickly
approaching. Thanks in advance.
With love and respect,
Quincy Jones
your
video
7800 Beverly Boulevard
East Building, Suite 258
Los Angeles, California 90036
my
Phone: (213) 852-4309
Fax: (213) 852-4411
Lewis
McCur
Smith
moore, M
Cos
Copied
what happens
pocket
lugust 4 in
ly hour ntaneous
eciate a
Also CC video
ban
on
need
&
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VIBE
7800 Beverly Boulevard
East Building, Suite 258
Los Angeles, California 90036
California 90036
Quincy Jones
The Honorable William J. Clinton
President of the United States
c/o Ann Stock
Suite 200 - East Wing
Washington, DC 20500-2000
Phone: East 852-4309 Building, Suite Fax: 258 Los Angeles,
(213) 852-4411
1600 Pennsylvania Avenue
(213)
LL
Pr
The
Boulevard
c/o
160
Suite
Wash
Dear M
You, an
when yo
I'm writir
with what
98% of magazine U.S
television, f.
fun. David
the next time
brief "good 1ₗ
We feel it mak
objectives you.
bringing full sp
in the process.
David will be fol.
approaching. Th.
7800 Beverly
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TELEFAX TRANSMITTAL COVER SHEET
DATE: July 25, 1997
TIME: 10:25 AM
PLEASE DELIVER TO:
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SENT BY:
7-25-97 :11:16AM :
MITCHELL LAW FIRM-312#10709#111##12024: J
LAW OFFICES
MITCHELL. WILLIAMS, SELIG,
GATES & WOODYARD. P.L.L.C.
320 WEST CAPITOL AVRNUE. SUITE 1000
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VIA FACSIMILE
The President
The White House
1600 Pennsylvania Avenue, N.W.
Washington, D.C. 20500-2000
Dear Mr. President:
1 am writing to request that you oppose a provision in Senate version of the Budget
Reconciliation Spending Act which will significantly impact premiums paid by senior citizens on
private Medicare supplement insurance. It has received support from some in your
Administration.
The provision at issue extends a new right to the under 65 Medicare-eligible disabled
population to obtain Medicare supplement insurance on a guaranteed issue basis. On its face, the
provision sounds good, but it could have disastrous consequences on premiums paid by existing
Medicare supplement policyholders. Generally, most Medicare supplement policies written today
cover only the over 65 population.
As a former Insurance Commissioner in Arkansas, I am keenly aware of insurance
company experience regarding the cost of insuring both the traditional Medicare population and
the under 65 Medicare-eligible population. Due to the medical needs of the under 65 Medicare-
eligible individuals, their claims experience as a group is substantially higher than that of the senior
citizens who make up the traditional Medicare supplement market. As a result, if Congress
creates a new right allowing Medicare-eligible individuals under age 65 to purchase the
same Medicare supplement coverage sold to senior citizens, there will be an immediate,
significant premium increase for all present Medicare supplement policyholders. A study
conducted earlier this year by the American Academy of Actuaries confirmed that requiring
carriers to guarantee issue to the under 65 population would result in higher premium costs for all
policyholders.
I question the wisdom of having senior who purchase private Medicare supplement
insurance cross-subsidize this higher risk group. This group will already be impacted by other
changes in the Medicare program promoted by the Administration and by Congress. You are well
SENT BY:
7-25-97 :11:16AM
:
MITCHELL LAW FIRM-312#10709#111##12024:
MITCHELL. WILLIAMS. SELIG.
GATES & WOODYARD. P.L.I.C.
The President
July 25, 1997
Page 2
aware that senior citizens have fixed incomes, experience the greatest incidence of non-covered
prescription drug costs and generally are a very price-sensitive group to insure. An abrupt
increase in Medicare supplement premiums will cause substantial consternation among senior
citizens and some loss of coverage as individuals are forced to drop their policies. In fact, the
Congressional Budget Office's analysis of the Senate provision predicts that approximately
40,000 seniors will drop their Medicare supplement policies as a result of the anticipated premium
increase.
In summary, I have serious reservations about the Senate approach, which will
immediately and significantly affect senior citizens' Medicare supplement premiums. I request
that you reconsider the Administration's position on this important subject and take alternative
means of covering the under 65 disabled population.
Thank you for your consideration of this recommendation. If I can supply additional
information or if you have questions, please let me know.
Respectfully yours,
MITCHELL, WILLIAMS, SELIG,
GATES, & WOODYARD, P.L.L.C.
By
Ark Monroe, III
TAM/jad
CC: Chris Jennings
Copied
COS
Mathews
Winston
July 23, 1997
MEMORANDUM FOR THE PRESIDENT
7/25/97
THROUGH
:
ERSKINE BOWLES
SYLVIA MATHEWS
FROM
:
JUDITH A. WINSTON Jaw
SUBJECT
:
FIRST ADVISORY BOARD MEETING ON THE RACE INITIATIVE
This memorandum provides a summary for you of the July 14 meeting of your Advisory
Board on the Race Initiative. In brief, the meeting was constructive and productive, keeping in
mind that it was the first meeting of a group generally not familiar with each other and the
difficulty of beginning a discussion on this issue in front of media cameras and a nationwide
audience. I expect that as the Board members become more familiar with one another and more
comfortable in the public setting of their full Board meetings, some of any initial tentativeness
will fade.
Each of the Board members talked generally about their expectations and priorities for
the Advisory Board. They had a healthy exchange of information and perspectives on the Race
Initiative, which unfortunately was mischaracterized in some newspapers as "disagreement"
about the extent to which the Board should focus on "black-white" relations versus a broader
discussion of race relations and reconciliation and future-oriented policy and action. Based on
my observations, none of the Board members viewed these as mutually exclusive propositions. I
believe the Board members will work well together under Chairman Franklin's leadership, and
they are looking forward to assisting you on this Initiative.
As an initial matter, the Board decided to focus on two areas -- education and economic
opportunity among the many subject areas affecting and affected by race, including housing,
health care, criminal justice, and the environment. They plan to follow the basic framework
already outlined for the Initiative, which will include gathering and examining existing data,
finding "best practices" of people and organizations who are exercising effective leadership to
connect communities across racial boundaries, and having a serious dialogue in communities
across the nation about both the common ground among us and the sensitive, dividing issues that
may be difficult, but essential, to discuss. I am fast assembling a staff to assist you and the
Board in this effort.
2
I have recommended to the Board that they meet again in September, which I believe will
provide sufficient time to make that meeting effective and productive. In the interim, they will
be talking in their communities, with each other, and with me and my staff to further develop the
ideas discussed at the Board meeting.
I am honored to be serving as the Executive Director of your Race Initiative, and I look
forward to working with you, the Advisory Board, and the White House staff, who could not
have been more helpful to me during this initial period and whose assistance will be critical in
the coming months to the success of this effort. Erskine Bowles and Sylvia Mathews particularly
have been supportive and encouraging and accessible in the midst of significant demands on their
time.
I will keep you informed of the Board's activities and progress and am always available
to you if you have any ideas, questions, or concerns about the Board's or the staff's work.
Send to Scheduling
Yes
Council on Competitiveness
July 25, 1997
CHAIRMAN
CCI John Podesta
William Hambrecht
Hambrecht & Quist Incorporated
pen Phil Caplan
VICE CHAIRMEN
Jack Sheinkman
Amalgamated Clothing and Textile
Workers Union, AFL-CIO, CLC
The Honorable William J. Clinton
Charles M. Vest
Massachusetts Institute of Technology
President of the United States
EXECUTIVE COMMITTEE
1600 Pennsylvania Avenue, N. W.
Paul Allaire
Xerox Corporation
Washington, D.C. 20500
Donald R. Beall
Rockwell International
George Becker
United Steelworkers of America, AFL-CIO
CLC
Dear Mr. President:
Linda Chavez-Thompson
AFL-CIO
John L. Clendenin
BellSouth Corporation
We are following up on the interest you expressed in the National
Thomas E. Everhart
California Institute of Technology
Innovation Summit to John Young and Chuck Vest at the June meeting
George M. C. Fisher
Eastman Kodak Company
of your Committee of Advisors on Science and Technology (PCAST).
Raymond Gilmartin
Merck & Company, Inc.
Joseph T. Gorman
TRW Inc.
You may recall that the Summit will be organized by the Council
Katharine Graham
The Washington Post Company
on Competitiveness and hosted by the Massachusetts Institute of
Jerry Jasinowski
National Association of Manufacturers
Technology on March 13-14, 1998. It will bring together 150 CEOs,
Thomas G. Labrecque
university presidents, labor leaders, and government policy makers to set
The Chase Manhattan Corporation
Peter Likins
an agenda for strengthening the U.S. position as the world's best
Lehigh University
Robert Mehrabian
platform for innovation in the 21st century.
Carnegie Mellon University
Victor E. Millar
AT&T Solutions
Thomas J. Murrin
We believe that your personal leadership of a high-profile,
Duquesne University
Richard C. Notebaert
bipartisan forum could make a historic contribution to the future strength
Ameritech Corporation
Michael Porter
of the U.S. economy:
Harvard University
Heinz C. Prechter
ASC Incorporated
Ray Stata
1) You can and should present to the nation a compelling post-
Analog Devices, Inc.
Cold War vision to underpin long-term investments in our innovation
William Steere
Pfizer Inc
system. It has been more than half a century since President Roosevelt
Gary L. Tooker
Motorola Inc.
commissioned the celebrated report from Vannevar Bush which inspired
John A. Young
Hewlett-Packard Company
many of the nation's stunning achievements in science and technology.
PRESIDENT
You are uniquely qualified to redefine the context and frame the new
John N. Yochelson
challenge at the National Innovation Summit.
VICE PRESIDENTS
Suzanne P. Tichenor
Debra van Opstal
DISTINGUISHED FELLOW
2) The Summit will create an opportunity for you to deepen
Erich Bloch
public understanding of the importance of innovation for our economic
SENIOR FELLOWS
Howard D. Samuel
future. Too few Americans appreciate how critical new knowledge,
Deborah Wince-Smith
products, and services are in creating high-wage jobs and underpinning
FELLOW IN ECONOMICS
& EMPLOYMENT
U.S. competitiveness in world markets. The Summit at MIT will
Amy Kaslow
NATIONAL AFFILIATES
showcase vivid examples of innovation in health, communications,
CO-CHAIRMEN
Richard S. Nicholson
information processing, transportation, advanced materials, and
American Association for the Advancement
of Science
consumer products. Your taking part would make a tremendous
Barry K. Rogstad
American Business Conference
difference in driving home the message that every American has a vital
stake in innovation.
1401 H Street, NW
Suite 650
Washington, DC 20005
(202) 682-4292
FAX (202) 682-5150
3) Your leadership could play a decisive role in building consensus on a national action
agenda to strengthen innovation. Industry, labor, universities, and government are all being
forced to adjust to wrenching budget pressures, the information revolution, the globalized
economy, the end of the Cold War, and other profound changes. Broad agreement on how each
sector can sustain its contribution to the R&D enterprise in the face of these changes, and on
practical ways to collaborate more effectively, would be a huge step forward.
We have laid the groundwork for this initiative with a series of highly successful regional
summits across the country involving governors, members of Congress, corporate chief
executives, university presidents, and senior administration officials. A summary of participants
and findings is attached along with a list of the Steering Committee that has been formed for the
National Summit.
We are eager to make your participation the centerpiece of the March 13-14, 1998,
program. We look forward to hearing from you and will follow up with key members of the
administration.
Sincerely,
2R Alt
Charles m. Vest
William R. Hámbrecht
Charles M. Vest
Chairman, Hambrecht & Quist Inc.
President, Massachusetts Institute of Technology
Chairman, Council on Competitiveness
Vice Chairman, Council on Competitiveness
John Jon young A. Young
Jack
Jack Sheinkman
Co-Chair, PCAST
President Emeritus, Amalgamated Clothing
Chairman, Council on Competitiveness 1986-90
and Textile Workers, AFL-CIO
Vice Chairman, Council on Competitiveness
George Fisher
Daned R Banee
George M.C. Fisher
Donald R. Beall
Chairman, CEO & President, Eastman Kodak
Chairman & CEO, Rockwell International
Chairman, Council on Competitiveness 1990-93
Co-Vice Chair, Council on Competitiveness
Parl All
Speeph T. Homan
Paul Allaire
Joseph T. Gorman
Chairman & CEO, Xerox Corporation
Chairman & CEO, TRW Inc.
Chairman, Council on Competitiveness 1993-97
Co-Vice Chair, Council on Competitiveness
Council on Competitiveness
National Innovation Summit Steering Committe
List of Members to Date
Co-Chairs:
William Hambrecht, Chairman, Hambrecht and Quist
Charles Vest, President, Massachusetts Institute of Technology
Members:
F. Duane Ackerman, CEO, BellSouth Corp.
Richard Atkinson, President, University of California
Paul Allaire, Chairman and CEO, Xerox Corp.
Donald Beall, Chairman and CEO, Rockwell International Corp.
Steven Beering, President, Purdue University
Gordon Binder, Chairman and CEO, Amgen Inc.
William Brody, President, Johns Hopkins University
Gerhard Casper, President, Stanford University
G. Wayne Clough, President, Georgia Institute of Technology
Robert C. Dynes, Chancellor, UC San Diego
The Hon. John Engler, Governor, State of Michigan
Thomas Everhart, President, California Institute of Technology
Raymond Gilmartin, Chairman and CEO, Merck & Co.
Joseph Gorman, Chairman and CEO, TRW, Inc.
Rich McGinn, President and COO, Lucent Technologies
Emmit McHenry, Chairman and CEO, NetCom Solutions, Inc.
The Hon. Zell Miller, Governor, State of Georgia
Richard Notebaert, Chairman and CEO, Ameritech Corp.
Michael Porter, Professor Business Administration, Harvard University
Judith Rodin, President, University of Pennsylvania
Jack Sheinkman, Chairman, Amalgamated Bank of New York
Ray Stata, Chairman and CEO, Analog Devices, Inc.
William Steere, Chairman and CEO, Pfizer Inc.
Gary Tooker, Chairman, Motorola, Inc.
Julie Meier Wright, Secretary of Trade and Commerce, State of California
John Young, Former CEO, Hewlett-Packard, Inc.
1401 H Street, NW
Suite 650
Washington, DC 20005
(202) 682-4292
FAX (202) 682-5150
COUNCIL ON COMPETITIVENESS
A Call to Action --
1997 Regional Summits on
American Innovation:
San Diego, California
Atlanta, Georgia
Indianapolis, Indiana
1401 H STREET, N.W., SUITE 650 . WASHINGTON, D.C. 20005
PHONE 202-682-4292 FAX 202-682-5150
TABLE OF CONTENTS
EXECUTIVE SUMMARY
1
SUMMIT HIGHLIGHTS
I.
THE RISK OF NOT PROVIDING FOR THE FUTURE
2
II.
STATES AT THE CUTTING EDGE
4
III.
TAPPING THE POTENTIAL OF COLLABORATION
5
IV.
GOVERNMENT'S PIVOTAL ROLE
7
V.
NEXT STEPS
8