MAY 30 '89 10:58 KISSINGER ASSOCIATES N.Y.

NY TIMES 5/20/89

P.002

# DISCLOSURE SOUGHT FROM POLICY GROUP

## Measure Affecting Members of Federal Advisory Body Is Aimed at Kissinger

By JEFF GERTH

Special to The New York Times

WASHINGTON, May 19 — In a move aimed largely at former Secretary of State Henry A. Kissinger, the Senate Foreign Relations Committee has approved a measure requiring members of the President's Foreign Intelligence Advisory Board to file public financial disclosure statements.

The 16-member advisory board is a little-known but powerful group of scientists, business executives and former Government officials selected by the President to give independent advice about a wide range of intelligence issues and activities. Its members, in addition to Mr. Kissinger, include William French Smith, the former Attorney General, Jeanne J. Kirkpatrick, the former United Nations representative, and Zbigniew Brzezinski, the national security adviser in the Carter Administration.

Mr. Kissinger is chairman of Kissinger Associates Inc., a consulting company that does considerable business abroad on behalf of its clients, about 30 companies, including many foreign corporations. Mr. Kissinger says his company does not have any foreign governments as clients.

An official at Mr. Kissinger's offices in New York said today that she could make no immediate comment on the committee's action.

### 'He's Not King'

Under current practice, members of the advisory board submit confidential disclosure statements to White House lawyers, who then review them for potential conflicts of interest. Senator Jesse Helms, Republican of North Carolina, Thursday introduced a measure, an amendment to a State Department bill, that would require board members to file disclosure statements with the Office of Government Ethics, which would make them public after review. The amendment passed with only one dissenting vote.

The amendment made note of the importance and secrecy of the information provided to board members, and it cited a need for full disclosure to prevent conflicts when board members get income from foreign sources.

The amendment said for a time, earned a source, a senior senator at which he was a member of the committee.

"Henry Kissinger has been up to his armpits in deals with foreign countries," Mr. Helms said at the hearing. "He's not king; he doesn't have to serve on this board."

Thomas E. Boney Jr., an aide to Republicans on the committee, said today that what concerned Mr. Helms was a question of appearances and not any evidence that board members improperly passed on secret information.

### News Reports Cited

Mr. Boney said the amendment was prompted in part by news reports that examined Mr. Kissinger's role in advising the board on arms control issues while having clients involved in and affected by the issues. Mr. Kissinger and his lawyer said there was no conflict of interest because he was not aware of any financial interest he had in arms control issues.

But a former board official, who asked not to be identified because of the pledge of secrecy concerning the board's activities, was quoted as saying he believed Mr. Kissinger benefited from his association with the board. Mr. Kissinger could not have separated the insights he gained from his access to United States intelligence data from his ongoing analysis and advice to clients, the former official said.

Mr. Kissinger's lawyer said at the time that such a suggestion was outrageous.

If the amendment should become law, it will mean that Mr. Kissinger, if he stays on the board, will have to reveal for the first time all of his holdings as well as the names of clients whose names have not already been revealed.

Earlier this year 16 clients of Kissinger Associates and a related concern, Kent Associates, were made public in connection with the confirmation of Lawrence S. Eagleburger to become Deputy Secretary of State. Mr. Eagleburger was president of Kissinger Associates from 1984 until earlier this year. The clients he disclosed included ITT, Midland Bank, Fiat and Daewoo.

NY TIMES 5/20/89

P.002

## Measure Affecting Members of Federal Advisory Body Is Amed at Kissinger

By JEFF GERTH

Special to The New York Times

### 'He's Not King'

Source, earned senatoriversi-

### News Reports Cited

Earlier this year 16 clients of Kissinger Associates and a related concern, Kent Associates, were made public in connection with the confirmation of Lawrence S. Eagleburger to become Deputy Secretary of State. Mr. Eagleburger was president of Kissinger Associates from 1984 until earlier this year. The clients he disclosed included ITT, Midland Bunk, Fiat and Daewoo.

de-

ly

and others not to be identified because of the pledge of secrecy concerning the board's activities, was quoted as saying he believed Mr. Kissinger benefited from his association with the board. Mr. Kissinger could not have separated the insights he gained from his access to United States intelligence data from his ongoing analysis and advice to clients, the former official said.

urge charges to Gen- and the 3 the

ning he extra from can. and fre-

A measure sponsored by Senator Daniel Patrick Moynihan, Democrat of New York, would allow Medicaid to reimburse states for the costs of drug treatment. This concept of treatment on demand goes beyond the treatment proposals in the Bush strategy.

But other Democratic measures appeared to expand on the President's basic approach. For example, a measure written by Mr. Biden would authorize hiring 1,000 agents for the Federal Bureau of Investigation and 350 agents for the Drug Enforcement Administration.

Lawmakers said they expected the financing plan passed the Senate to be approved in a House-Senate conference committee. But a separate bill with many of the Democrats' changes in dependently by House lawmakers, who are eager to put their own fingerprints on the nation's anti-drug strategy.

## Former Indian Leader To Press Libel Action

BOMBAY, India, Oct. 7 (Reuters). Former Prime Minister Moraji Desai will continue pursuing legal action Mr. Desai was a paid informer for the Central Intelligence Agency, his son said today.

The former leader's son, Kanti Desai, spoke in a telephone interview one day after a Federal jury in Chicago decided that the author, Seymour M. Hersh, had not libeled the elder Mr. Desai. Kanti Desai said his father's lawyers would either petition for a new trial or appeal to a higher court next week.

Moraji Desai, 94 years old and in poor health, was unable to come to the telephone to comment, his son said.

Shopping narcotics to combating street, Demo- did not really voting the Gov- worked to build against major 10s.

Democrat of the compo- nate Demo-

as two main compromise the money to by $1.1 bil- allots mosteded or new- ment, educa- new taxes the addi- from cuts in ing. Pro- benefits Security,

leny'
man lies in measures, a Republic week in tions. The ing, and at a Demo- berative feeding

atic pro- parlay as more
"This
the Ad- is not

New York Times
Sunday

October 8, 1989

INTELLECTUAL
Meeting With Gorbachev

To meet the General Secretary
of the Central Committee
of the Communist Party of the Soviet Union
Mikhail Sergeyevich Gorbachev
The Ambassador of the Union
of Soviet Socialist Republics
Yuri V. Dubinin

requests the pleasure of the company of
Mrs. Joyce Carol Oates
at 4:30 - 6 p.m.

on Tuesday, December 1, 1987

at the Embassy

not transferable
Please present this
card at door

1125 State Street
N.W.
Washington, D.C. 20003

The invitation and place card.

By Joyce Carol Oates

A great man? All I see is
the actor creating his own
ideal image.

LISTENING TO MIKHAIL S. Gorbachev's impassioned address in the rococo white-and-gold ballroom of the Soviet Embassy on 16th Street in Washington, on the late afternoon of Dec. 8, in a heterogeneous gathering of some 50 fellow American "intellectuals" and "artists," I recalled these cryptic words of Nietzsche's; but wondered if my habitual skepticism, particularly regarding politics in its most public, theatrical mode, might be irrelevant here, unjustified. Simply because one of the world's most powerful men, in-

deed the world's supreme Communist leader, the General Secretary of the Central Committee of the Communist Party of the Soviet Union, Mikhail S. Gorbachev, was speaking to us in warmly seductive tones, employing words reminiscent of the social optimism of the 1960's — "interrelatedness, integral, global peace, democratization" — and assuring us of matters that sounded almost literally too good to be true, as if our deepest, most desperate wishes were being uttered in an exotically foreign language and translated into our own, did it mean that these matters could not be true? — or even probable? Though the grim lessons of history suggest otherwise, and idealism's trajectory usually falls off rapidly, man is, of all creatures, the hopeful animal; and it is a hard task to resist believing in the very things (above all, an end to the fanatic arms race of past decades) that we have been talking about for so long.

Shaking Mikhail Gorbachev's hand, looking the man in the eye — he is famed for making “eye contact” and is clearly happiest in such quasi-intimate public situations — one comes away with the visceral certitude that this is a person of surpassing integrity; a man of the utmost sincerity; somewhat larger than life, perhaps. And so brimming with energy! And a sense of his own historic worth! Yet one recalls too, more soberly, that the political enthusiasms of past eras (for Uncle Joe Stalin, for the bearded revolutionary Castro, for the ascetic Ayatollah Khomeini, among others) can look rather bleakly ironic in retrospect. History is the only true philosophy.

It was with the evident intention of circumnavigating, perhaps frustrating, conventional political and media channels, and speaking directly to a

presumed intelligentsia, with a presumed power of its own to shape public opinion, that Gorbachev chose to arrange a special meeting at the Soviet Embassy, on his own territory, so to speak, with American "intellectuals" and "artists" in the midst of his heroically crammed three-day schedule. Here, in an elegantly Old World setting, with enormous crystal chandeliers hanging from the ceiling, and vases of white tulips on our tables, the heated air given an added incandescence by ubiquitous television cameras, Gorbachev spoke with disarming candor of domestic Soviet problems, economic and moral; of the political necessities that brought glasnost into being; of his many-times-reiterated hope for world disarmament and peace; of his sense of the world's nations as "contradictory" yet "integral."

Such words and noble concepts are hardly new, but their utterance, by a Soviet leader of proven shrewdness and prescience, is certainly new; even rather astonishing. From

Joyce Carol Oates is the Roger S. Berlind Distinguished Professor at Princeton University. Her most recent novel is "You Must Remember This."

PHOTOGRAPHS BY JOHN R. VAN BEEKUM/U.S. NEWS & WORLD REPORT

Paul Newman, his arm in a sling, and Norman Mailer after the reception.

where, within the repressive Soviet system, did such a man come? And how, and why?

With Gorbachev, a personal anecdote has the weight of the political parable, conversationally, even confidentially, delivered: he told us of vacationing in Italy some years ago, with his wife, Raisa, and attending an evening entertainment in their hotel in which actors portraying national types greeted one another and behaved in comically characteristic ways; and when the "American" and the "Russian" met, each man looked stonily away without acknowledging the other. The Italian audience laughed at such idiotic behavior, Gorbachev said, and he was struck by the irony that two "such great nations" were at an impasse, and that the rest of the world should laugh: "I thought, why can't something be done to change our mutual attitudes? Why should the world find Americans and Russians so laughable?"

Though by this time Gorbachev had been speaking for perhaps a half hour without pause, only now and then glancing down, unobtrusively, at his notes, he is so practiced and charming a speaker that those of us who are usually stupefied by speeches remained attentive, even rapt, throughout. Yes, really, why can't something be done? The question hung in the air, eminently answerable. Though Paul Newman would afterward comment that Gorbachev is a gifted performer in whom you don't see the "machinery" of his technique, does it necessarily follow that histrionic gifts exclude sincerity? Must surface and substance be at odds?

I asked Henry Kissinger, seated beside me at our table, whether Mr. Gorbachev was radically different from other Soviet leaders he had known, and Kissinger paused, and thought, and said, "This one is more skillful."

WHEN, AT ABOUT 10 P.M. on Nov. 30, the wholly unexpected telephone call came from the cultural attaché of the Soviet Embassy in Washington, inviting me to meet Mr. Gorbachev and the Soviet Ambassador to the United States, Yuri V. Dubinin, at a reception for artists, writers and intellectuals the following week, my first instinct was to decline: Thank you for the honor, I said, but I'm afraid I am too busy. (Such is the trovert's habitual response: did not William Faulkner laconically decline an invitation to dine at the White House, with the remark that it was too far to go for dinner?) But my husband was appalled, and insisted I re-think my decision. It was a "historic" occasion, he said.

And so it was, and so I did, telephoning back the next morning to accept. And were spouses included in the invitation? I asked. Sorry, spouses were not.

When we arrived in Washington for the 4:30 to 6 P.M. reception, we discovered that the block containing the Soviet Embassy, at 1125 16th Street N.W., was officially cordoned off; the area was alarmingly aswarm with officers, both uniformed and plainclothes, and one could not help but imagine marksmen hidden in upstairs windows, regarding

targets thoughtfully through telescopic lenses.

Guests to the reception were required to proceed through three checkpoints, the first on the street, where an unidentified man (Soviet? American?) examined my gilt-embossed invitation, checked my name on his list, and allowed me through. My husband, who had accompanied me, stood behind, watching the activity in the sealed-off zone — with hundreds of policemen milling about, he thought, something was sure to happen — but simply by standing there, outside the barrier and gazing in, he aroused the suspicion of a Washington policeman, who advanced upon him belligerently. "He's just watching his wife walk away," the man with the checklist explained. By this time my husband had become discouraged at the prospect of participating in the historic event.

Guests went through a second, less formal, checkpoint, in front of the heavy wrought-iron gates of the embassy, and, inside, just beyond the mirrored foyer, we were asked to walk through a metal-detector frame. Handbags and attaché cases were carefully examined, with apologies — "We are very sorry to do this," an embassy official said. I said, "I understand." I didn't want any violence at the reception either.

At the crowded, buzzing reception, I gravitated toward Bill Styron, the only familiar face. Invitations to the meeting had gone out so mysteriously, with no American influence or involvement, we were at a loss to know which of our friends and colleagues might be there. Norman Mailer had been mentioned, but we hadn't yet sighted him. And who else? Anyone else? "Look over there," I said, pointing to a far corner of the room, "that man in profile, isn't he Paul Newman?" Styron considered, but shook his head. "Too young," he said.

A few minutes later, we were introduced to Paul Newman, whose left arm was in a sling, and who was a member of our very small "cultural" contingent. (Most of the invitations to

No one seemed sure how the ‘intellectuals’ and ‘artists’ list was compiled.

the reception had gone to American scientists, academicians, and men of the stature of Henry A. Kissinger, John Kenneth Galbraith, George F. Kennan and Cyrus R. Vance; the "artists" consisted of William Styron, Norman Mailer, Paul Newman, Sydney Pollack, John Denver, Yoko Ono, Bel Kaufman — whose "Up the Down Staircase" was enormously popular in the Soviet Union — one or two others, and me.) Amid the crowd, Paul Newman, slender, almost slight, with his eerily lapidary features, stood out dramatically; introduced, he had the guarded expression of a man who has been told too frequently that his eyes are blue. "Why are you here?" someone asked. "I was invited," he said.

And then there was a murmur of excitement, and the Gorbachevs were entering the room, and it was as if royalty had appeared in our midst; or media celebrities whose actual faces — youthful, high-colored, smiling, assured — were considerably more attractive than their reproductions. In newspaper photographs, Gorbachev has looked jowly, heavy-set, and stolid; in person, he fairly radiates energy and vigor, the warmth of a naturally charismatic leader who knows his worth and de-lights in its reflection in others' eyes. The first thing one sees about him is the cranberry-red birthmark, descending on the right side of his head, with a look of a hieratic (or demonic) sign out of Dostoyevsky.

To shake hands with Gorbachev — that is, to have one's hand shaken vigorously by Gorbachev — is to feel

the grand conviction, no less powerful because it is absurd, that the man has hurried to you for this purpose alone; that, for a blurred moment, you are indeed the center of his universe. By way of his interpreter, the General Secretary seemed to be telling me that he was an admirer of my work — or was it, yet more unexpectedly, “I am a great admirer of your work, Mrs. Oates”? To this I could say only, “I am honored to meet you, Mr. Gorbachev,” or some such banality, for to my shame I had not read Gorbachev's recently published “Perestroika,” and at this great moment the inappropriate thought had entered my mind that the real Mrs. Oates, my mother, was in upstate New York.

Then I was shaking hands with Raisa Gorbachev, yet more warmly, and through the interpreter, we managed to talk, to a degree, for as it turned out (Continued on Page 35)

The Rev. Billy Graham

Carl Sagan

Yok

John Denver

Henry A. Kissinger

Robert S.

William Styron and Bel Kaufman

Robert De Niro

THE NEW YORK TIMES MAGAZINE / 1975

A12 SATURDAY, JULY 8, 1989

...RI

THE WASHINGTON POST

# Nixon Plans Trip to China

## Kissinger Also Considering Fall Visit

By Don Oberdorfer
Washington Post Staff Writer

Richard M. Nixon and Henry A. Kissinger, who reopened the U.S. relationship with China after a period of hostility in the early 1970s, are likely to be among the first prominent Americans to visit that country after the bloody crackdown in Tiananmen Square, U.S. officials and diplomatic sources said.

Nixon is reportedly planning a visit to China in September, which would be his fifth since resigning the presidency in 1974. White House and State Department officials said there are no plans to send any mes-

sages to the Chinese government via Nixon, although they said they would not rule out such a role for him.

Former secretary of state Kissinger said in a telephone interview that he is considering a "long-standing invitation" to visit China in early October to participate in a government-sponsored investment organization's conference. If that does not work out, Kissinger said, he might go to China in November.

"I won't conduct foreign policy on my own," Kissinger said. "I wouldn't do anything without consulting the administration."

Nixon did not respond to inquiries about his China plans.

President Bush on June 20

barred high-level official trips to China as a sign of U.S. disapproval of the repression that began with the June 4 massacre in Tiananmen Square.

The order extends only to executive branch officials, but no members of Congress have indicated that they plan visits, according to State Department sources. One prominent lawmaker who frequently visits the area, Rep. Stephen J. Solarz (D-N.Y.), chairman of the House Foreign Affairs subcommittee on Asian and Pacific affairs, is seeking to avoid making even a brief stopover in China this summer on a trip to North Korea.

Nixon, in a June 25 article in the Los Angeles Times, expressed his disapproval of U.S. sanctions, saying that "they would have no effect whatsoever on China's hard-line leadership," except possibly to drive China "back into the shadows of the Soviet Union and the oppressive

economic system Deng Xiaoping has tried to reform."

Nixon proposed that, instead of sanctions or "pious pronouncements," messages be sent "through private channels" to Chinese leaders asking them to show restraint. He did not say whether he hopes to be such a "private channel," although sources said Nixon's trip was planned well before he wrote the article and before the Tiananmen crackdown.

Nixon's trip to China as president in February 1972 reestablished a Sino-American relationship for the first time since the 1949 communist revolution.

Kissinger, whose secret trip to China in 1971 broke the ice and set up Nixon's trip, has often visited China in recent years as the head of Kissinger Associates. He said he agrees with "the basic approach" of Bush toward China but not with the sanctions the House recently passed.

PHOTOS BY JOEL RICHARDSON—THE WASHINGTON POST

Top, Han Xu and his wife, Ge Qiyan, with Kissinger; above, Han with former ambassador Mike Mansfield.

Old Friends &
Strained Relations

Bidding Farewell to
China's Ambassador Han Xu

By Don Oberdorfer

Washington Post Staff Writer

Chinese Ambassador Han Xu, who has devoted most of the past two decades to advancing Sino-American relations, said his farewells to Washington last night with those ties under severe stress.

Han and his wife, Ge Qiyan, welcomed 528 guests to their farewell reception, including Henry Kissinger and many other old friends but not high-ranking Bush administration officials. Many were away on vacation, but others were ordered not to attend as a show of U.S. displeasure with China's recent crackdown on students and other pro-democracy demonstrators.

Acting Secretary of State Lawrence Eagleburger did not attend, nor did top Defense Department officials, nor generals or admirals over three-star rank, by government directive. Assistant Secretary of State for East Asian and Pacific Affairs Richard Solomon (an old China hand) and arms control adviser Edward Rowny described themselves as the highest of

See FAREWELL, C13, Col. 1

China
Envoy's
Farewell

FAREWELL, From C1

the low-ranking officials permitted to show up at the embassy.

For many top officials, including President Bush, saying goodbye to Han was a personal imperative beyond the protocol of strained relations. Bush, who dined at Han's house four times before becoming president, had a private and unannounced farewell talk with the ambassador at the White House Monday. Vice President Quayle, Secretary of State James A. Baker III and leaders of Congress had personal and mostly unpublicized goodbye sessions with Han.

Two former secretaries of state, Kissinger and Alexander Haig, headed the large number of former officials who did attend last night's reception. Kissinger, who recently criticized economic sanctions against China, plans to visit the Middle Kingdom this fall, probably in November. Kissinger's former boss, Richard Nixon, gave a farewell dinner for Han in New York Aug. 3 and is considering a trip to Beijing in October.

Kissinger recalled last night that Han, then acting chief of protocol, was waiting on the tarmac when Kissinger arrived in Beijing on his ground-breaking secret trip in July

1971. When China opened its liaison office in Washington in 1973, Han became its deputy chief and played a key role in negotiating the full normalization of U.S.-China relations with the Carter administration in 1978.

When he left for Beijing in 1979 Han was given unusual honors here, including a luncheon hosted by the leaders of both houses of Congress.

Things are different now. Congress recently voted overwhelmingly to impose economic sanctions, over the objections of Bush, and in an abrupt turnabout, the Gallup polling organization reported, Americans now view the Soviet Union more favorably than China for the first time in recent decades.

Han returned to Washington as ambassador in May 1985 after several years of directing U.S. affairs in the Chinese foreign ministry. Now 65, he will retire from active diplomatic service but is expected to head a semi-official association dealing with international contacts.

John Holdridge, a veteran China hand who accompanied Kissinger on his secret trip and later was assistant secretary of state in the Reagan administration, said the unexpected events of last June proved that "20,000 China experts can be wrong." Among the experts last night were A. Doak Barnett of Johns Hopkins School of Advanced International Studies, Harry Harding of Brookings Institution and Robert Sutter of the Congressional Research Service.

Former New York Times correspondent Harrison Salisbury, whose eyewitness account of the June events, "Tiananmen Diary," is already in the bookstores, said he expects no major change in China for a

Nancy Marchand at home, top; with Ed Asner on "Lou Grant," and with Keene Curtis in "The Cocktail Hour."

By David Richards

Washington Post Staff Writer

NEW YORK—Actress Nancy Marchand has a tendency to drift off in the middle of a conversation.

No insult intended, she assures you. It's just her way. An imaginary veil descends over her eyes, her speech slows to a halt, rather like a Victrola that's wound down, and she's gone. Temporarily out to lunch. Back in a moment.

"My husband's always saying, 'Nancy, where *are* you?'" she notes. "Off somewhere, thinking, dear,' I tell him. 'Thinking about what?' 'Oh, nothing. Just thinking.'" She lets out a throaty laugh, rendered even deeper, one suspects, by the Carlton cig-

arettes she claims she's going to give up one of these days.

"When I was growing up, I was never really with it," she continues. "I was always off in some fantasy world. I mean, I wasn't someone who jumped up when an adult came into the room and said, 'Hello, I'm Nancy. Won't you please take a seat?' I was such a clod—physically and socially. It devastated my mother. When I decided I wanted to take acting lessons, she was so grateful. I think she thought, maybe this will center the child."

It didn't. At 61, Marchand has mastered the basics of hospitality. ("Coffee, tea, seltzer?" are the first words out of her mouth when a visitor arrives.) And she certainly hasn't

done badly in public at large as Mrs. Pye Grant," she says, "I shunned credits and regarded in the wrong way. I wasn't a Kennedy Center actor of 'The Gurney's' salary. On one night I was a little distracted as

"I guess that's the head of the talk about being back in Buffalo, go there. I school and have

See M/

ART BUCHWALD

August 29, 1989
Washington Post

## The Envoy of His Peers

The recent Malcolm Forbes mega-zillion-dollar junket to Tangier once again raises one of society's most pressing questions: "Was it good or bad for the Nouveaux Riches?" It came at a time when instant millionaires have been under tremendous fire for spending their money with gay abandon, while the middle class is trying to find the wherewithal to get pipes fixed under the kitchen sink.

But there is a lot more to this junket than the tabloids would have you believe. The Forbes bash was *really* designed to be a diplomatic mission of extreme urgency and importance.

This is how they tell it around the water fountains at the State Department. This summer U.S. relations with Morocco had reached such a low point that neither country could be civil with the other. To make matters worse, Morocco had agreed to sell the Soviet Union 100,000 tons of Sahara sand, which because of agricultural failures had become a delicacy in Armenia and Georgia.

The president had decided to send a high-ranking emissary to Tangier to try to get top-level talks going with Hassan, the king of Morocco. The natural choice was Henry Kissinger,

who knows the king on a first-name basis. But Henry complained that because everyone recognized him it would be impossible to go to Morocco secretly. He needed a cover story.

"Why not have Malcolm Forbes organize a flying carpet for the rich and famous on his 70th birthday?" he suggested. "I could be a guest on that. It would be a perfect cover because no one would guess I was doing anything more than romping with the Nouveaux Riches."

The CIA man liked the plan, though he objected to Forbes being let in on it.

"Then I won't tell him. We'll have him think the party was his idea. We'll let him invite all the people who have it made, and they can play in Tangier while I take the king for a walk in the casbah."

"How many rich and famous do we need to make your presence credible?" Henry was asked.

"I figure a 747, a DC-8 and the Concorde ought to do it," Henry said. "But we can expect flak from the press for me being part of a junket to nowhere. I am used to getting flak for serving my country."

The CIA man asked, "How can we be sure all the rich and

famous will agree to go to the bash?"

"Because the rich and famous are always worried that they will be in the wrong place at the wrong time. Once the word is out that I am on the trip, everyone will fall in line," Henry told him. "To make this work we don't want the rich, we want the super-rich—people who fly to the Mayo clinic to go to the dentist."

"Once you get to Tangier, you will be whisked away to have a tete-a-tete with the king," the CIA man told him.

"That comes in time. I have to toast Malcolm and Elizabeth Taylor first, so as to alleviate any doubts why I came. Then they can sneak me off to the palace."

"Good thinking," the CIA man said.

Henry said, smiling, "I will not fear to negotiate or negotiate out of fear."

Everything went as planned with one exception. When Henry got to Tangier the king up and left for other business in Rabat and poor Kissinger never did have a chance to negotiate anything with Morocco, except to make Tangier a duty-free port for any future parties Malcolm wants to give in Morocco.

© 1989, Los Angeles Times Syndicate

## Japan's Democratically Love Affair
### Prince Aya to Marry Commoner 'Kiko-Sa

By Fred Hiatt

Washington Post Foreign Service

TOKYO, Aug. 28—After a filled with state funerals, political scandals and other weighty events all Japan seemed to glow with light today at the simple news its second most eligible bache Prince Aya, has wooed and won hand of a cheerful and attractive commoner.

Aya, 23, second son of Emperor Akihito and second in line to the Chrysanthemum Throne, let it be known that he will marry his university sweetheart, Kiko Kawashima 22—whom the nation has now braced as “Kiko-san.” The next from the normally stuffy and disingenuous household was greeted triumph of democratic spirit, common sense and old-fashioned love.

The marriage cannot take place until after Jan. 7, the first anniversary of the death of Emperor Hirohito. Aya's grandfather. But the gr-

SOCIETY

NEWS MEDIA

# Forbes's Publicity Machine

A gift for the man who has everything: ink

The Kissingers, Barbara Walters: Bad air conditioning

And you thought the 1980s were finally over. Not to worry. In 1994, Malcolm Forbes will celebrate his 75th birthday by flying 600 of his nearest and dearest to Mars for the weekend. The Capitalist Tool never disappoints. His $2 million, 70th birthday party last weekend in Tangier, Morocco, had to be the most conspicuous shindig since the shah of Iran celebrated the 2,500th anniversary of the Peacock Throne.

Breathe deeply and remember what most of the media coverage tells us: excess and ego are harmless fun. Only jealous killjoys begrudge any millionaire his 274-man cavalry honor guards (with swords) and his 600 Moroccan belly dancers. (Attention: Forbes gives millions to charity.) Only people who weren't invited would complain about having 189 waiters and 82 waitresses wash the guests' hands with scented water before they feast at the Palais Mendoub on pigeon pie and grilled lamb with the likes of Walter Cronkite, Lee Iacocca, Henry Kissinger and Rupert Murdoch. Only cynics would laugh at the news that the weekend guests—you know, the people who run the world—flew across the ocean to a hotel with faulty air conditioning.

After all, party poopers are out of step not just with the plutocrats, but with the common man, who we're told has always admired the way Forbes throws his wealth around. Besides that warm self-congratulation that comes from just being there, the invitees have their own vicarious pleasures. Many of the guests are actually richer than Forbes, but more bashful, unwilling to fly their friends across the world or pose on the cover of Outlaw Biker magazine. And as chiefs of publicly held companies they aren't at liberty to spend company money with such abandon.

Forbes, by contrast, gets to write off much of his lifestyle as a business expense. For all of the personality hype, this fete was just as much about selling advertising, a tax-deductible activity. Other than social X-rays and media titans, the bulk of the birthday list contained not faithful Forbes magazine employees (only two from the editorial side were invited), not retired business

friends (if you lost your position you're likely off the list), but current chief executive officers and their wives, most of whom are advertisers in Forbes. Their friendship is usually convertible in the hard currency of ads and access. On that score, Forbes's parties are just splashier versions of the country-club outings sponsored by most publications, including NEWSWEEK.

Chairman Malcolm gets what he pays for. Over the years, the breathless coverage of his colorful enthusiasms has helped his magazine stand out from the pack. To that end,

about 100 reporters from around the world were flown free to the Tangier party, provided they wore black tie. The New York Daily News, for instance, allowed Forbes to pick up the tab for its two working gossip columnists, Liz Smith and William Norwich, as well as the publisher. Had they flown commercial, the cost would have been $3,847 each for first class, plus at least $400 for accommodations. "As far as I'm concerned, no one should pay a nickel," says Forbes spokesman Wm. Donald Garson.

This may all seem innocent enough, but most major news organizations have rules against it. At Forbes magazine, for example, reporters are forbidden to take free rides. "We don't generally approve junks," says longtime editor James W. Michaels. (Katharine Graham, chairman of the board of The Washington Post Compa-

ny, and NEWSWEEK Editor-in-Chief Richard M. Smith reimbursed Forbes for their expenses. So did a few others.)

**Puff clips:** The self-publicity machine is carefully built. "Forbes co-opts the press in a very sophisticated way," says Martha Sherrill of The Washington Post. "The attitude isn't 'We're so glad you're covering it,' it's 'We're so glad you are here.' It's seductive." The resulting celebrity clips are often misleading. Most convey an impression of Forbes's personal life (e.g., a romantic liaison with Elizabeth Taylor) that reporters believe is fake but print anyway. And the stories never seem to end. According to the NEXIS computer retrieval system, Forbes's name ran in 293 articles in 1989, *before* the accounts of the Tangier party began. That's compared with, say, 283 mentions for Samuel Pierce, the then secretary

of the Department of Housing and Urban Development, during 1988.

When his party guests (or their employees) don't provide enough promotion, Forbes simply creates a vanity section in his magazine. "Christopher Columbus discovered America nearly 500 years ago. Now the New World, in the form of Malcolm Forbes and the Capitalist Tools, rediscovers Spain," read the table of contents of the Aug. 7 issue, which contained a nine-page spread on the motorcycle and balloon trip.

For all that, Forbes maga-

JOSE GOITIA—AP

Tangier pleasure dome: Six hundred Moroccan belly dancers

50 NEWSWEEK: AUGUST 28, 1989

MARIO SURIANI—AP

Malcolm and Liz outside the palace: *Media romance?*

**Press gate:** Columnist Smith, sisters Ann and (Dear) Abby

PHOTOS BY BARBARA ROSEN—IMAGES

zine is still often the punchiest of the business magazines, with aggressive reporting and iconoclastic conservative comment. It was, for instance, one of the few publications to predict that the 1987 stock-market crash wouldn't cause permanent damage. The problem is that the junkyard dog of American business reporting has become disturbingly choosy about the bones it will pick. While small companies (and the government, of course) continue to be attacked, large firms with large ad budgets tend to get off. "It's not as fearless as it used to be because it has more to lose," says Allan Sloan, a senior editor who left last year for Newsday.

Staff reporters sometimes worry that

certain stories may involve Forbes's close friends or big advertisers, and shy away from looking into them. They've learned that from bitter experience. For instance, a prescient story on management woes at Allegheny International cleared through editors in 1986 but was killed by Forbes, who had several pals on the board. An expanded form of the story ran in 1986 as an explosive Business Week cover that demoralized much of the Forbes staff. Editor James W. Michaels, a 35-year veteran of Forbes, says he regrets losing the Allegheny story, but insists that the magazine is not "pulling its punches." Forbes was too busy with the Tangier party preparations last week to comment.

... And he was there: *Cronite*

The magazine has had some embarrassments in recent years. In 1987, Srully Blotnick, a columnist on business psychology, was reported to have faked his résumé and made up the research statistics he had used for years in the magazine. He left Forbes as a result, but readers were never given an explanation or apology, and Michaels defends the magazine's willingness to continue to quote Blotnick favorably even today. In a more recent controversy, senior editor Joe Queenan wrote an article this June about an author who believes the number of AIDS victims has been exaggerated. Forbes, facing gay-rights pickets outside the building, publicly repudiated the article in his column, though it had been backed by editors and his son.

**House party:** While advertising and circulation (now 741,000) have flattened, Forbes is still a money factory, with cash flow estimated in the $40 million range. But not much has been pumped into expanding the magazine. Despite the globalization of financial markets, a huge business story, Forbes has only two reporters in all of Europe. In recent years Forbes has bought American Heritage and a growing group of New Jersey weeklies. Next year a new magazine called EGG (Forbes collects Fabergé eggs) will chronicle fashion and night life.

With Forbes playing Andy Warhol, much of the management of the magazine has passed into the hands of his bland sons, Steve and Kip. And Michaels, now 68, has an untested designated successor. The birthday boy had better live to be 100. For Forbes won't be Forbes without Malcolm. And the swells may have to go to someone else's house to play.

JONATHAN ALTER

NEWSWEEK : AUGUST 28, 1989 51

Wednesday, July 12, 1989

DAILY NEWS

C 11

Abrams

Koufax

Cohen

Shamsky

Rosen

Carew

Greenberg

Koufax & Greenberg on
All-Jewish All-Star team

They don't make baseball
stars like Hank Greenberg
and Sandy Koufax anymore.

When the Stage Deli yester-
day announced the results of
its "All Time All-Jewish All
Star major league baseball
team," Greenberg and Kou-
fax were certainly on board.

The squad also has Rod Ca-
rew of Minnesota at second
base; Andy Cohen of the New
York Giants (1926-1929) at
shortstop; Al Rosen of the
Cleveland Indians at third;

and Cal Abrams of the Brook-
lyn Dodgers, Elliot Maddox of
the Yankees and Art
Shamsky of the Mets in the
outfield. Moe Berg of Brook-
lyn and the Chicago White
Sox (1923-1932) is catching,
and the pitchers are Ken
Holtzman of the Chicago
Cubs, Larry Sherry of the Los
Angeles Dodgers, and Steve
Stone of the Baltimore Ori-
oles. Of course, Greenberg
would be on first and it's
Koufax on the mound.

Heel, Amelia! Please?

AS SECRETARY of State, Henry Kissinger had little trouble making nations listen, but he isn't getting any attention from his 4-month-old Labrador, Amelia. The puppy has a mind of her own about taking orders.

TED LLEYSON PHOTO

PEOPLE

By PHIL ROURA & TOM POSTER with PATRICIA O'HARE

Kemp will stump for 'nice guy' Tyson

Mike Tyson is really a swell
guy. Ask Donald Trump. Or
Eddie Murphy.

They'll tell you about what
a swell, easy-going, misun-
derstood gentleman the
champ is in a television show
geared to improve his image.

Trump and Murphy are fea-

tured in the 60-minute TV
special to be aired on Ch. 5
this month, called "A Special
Look at the People's Champi-
on - Mike Tyson."

Other guests include Jack
Kemp, the secretary of hous-
ing and urban development,
Chevy Chase, Arnold Schwar-

zenneger, Arsenio Hall,
Larry King, Paul Rodriguez,
Yakov Smirnoff, L.L. Cool J,
Paula Abdul and Kenny Rog-
ers.

The show is pegged to the
July 21 championship fight
Tyson has with Carl Williams
in Atlantic City.

PAWS OF FAME: The original Monkees — Mickey Dolenz, Michael Nesmith, Davy Jones & Peter Tork — the hot 1960s singing group, can finally prove they're stars. They can point to the one that was dedicated to them yesterday on the Hollywood Walk of Fame. Hey, okay! We're all believers!

HERE & THERE

PETER ALLEN, who opened
in Atlantic City last weekend,
told our Bruce Chadwick he's
trying to put "Legs Diamond"
behind him, but fans won't let
him. After his shows, fans ask
him to sign mementoes of the
Broadway disaster.

"HOT MEN" is the title of a
movie about greats Benny
Goodman, Gene Krupa, Lionel
Hampton and Teddy Powell,
who made up the famed Good-
man Quartet of 1938.

GENE HACKMAN, Tommy
Lee Jones and John Heard
star in "The Package," to be
released later this year. Pro-
ducer Beverly Cambe and Ori-
on's marketing head, Charles
Glenn, were at the Russian
Tea Room, planning a big ad
campaign.

THEM THAT has, gets, dept.:
"Anything Goes," the Cole
Porter musical at the Beau-
mont Theater, just opened in
London to raves. Elaine Paige
plays Reno Sweeney and is
also co-producer (with Tim

Rice and Robert Fox).

GEORGE BRETT of the Kan-
sas City Royals, a 36-year-old
bachelor, takes beautiful
Penthouse Pet Patti Mullen
out for batting practice tomor-
row in Central Park.

MARTY MITCHELL, daugh-
ter of the late John and Mar-
tha Mitchell, gets married
Sept. 16 at the Tavern Club in
Washington. Society band
leader Emory Davis is playing
for the bash.

DR. WILBUR GOULD, throat
specialist to such stars as
Frank Sinatra and Dan Rath-
er, offers an age-old cure for
laryngitis — plenty of warm
fluids and rest, "which brings
quick results in cases where
there's no major infection" —
in Longevity mag.

BILL SHOEMAKER, who is
retiring after 40 years as a
jockey, will be given a special
tribute on July 21 at Holly-
wood Park.

Morgy: 'I need cash'

Manhattan DA Bob Morgen-
thau, a shoo-in for his eighth
term with no opposition, will
speak tomorrow at the Coali-
tion of Italian-American Or-
ganizations dinner in the
New Forum Club. The group
will also hear U.S. Attorney
Sam Alito of Newark. In the
audience will be acting U.S.
Attorney Benito Romano,
Donald Trump and ex-ambas-
sador to Italy Maxwell Rabb.
Morgenthau, longtime prez of
the Police Athletic League,
told us, "I've got 102 play
streets designated, more than
ever before, and the baseball
and track teams are going
great guns. I'll be asking the
coalition for money and, of
course, I'll report on the lat-
est in the war on drugs."

Peter Noone's due here

Peter Noone of Herman's
Hermits arrives from Lon-
don, where the act started 25
years ago. He's donating
some Hermits memorabilia
to the Hard Rock Cafe July 25.

# McCloy's Role in Rebuilding War-Torn Europe Recounted

## Bush's Message Commemorates 'One of the Giants'

By Ethan Schwartz

Special to The Washington Post

NEW YORK, March 21—John J. McCloy, an architect of Europe's postwar reconstruction and one of the last of the great diplomats from that era, was remembered in a message from President Bush at a memorial service today as "one of the giants and true heroes in the history of this country."

Speakers at the service for McCloy, who died March 11 at age 93, included former secretary of state Henry A. Kissinger, former West German chancellor Helmut Schmidt and former Chase Manhattan Bank chairman David Rockefeller.

Among dozens of other dignitaries in the crowded Brick Presbyterian Church were former president Richard M. Nixon, former West German president Karl Carstens, former secretary of state Cyrus R. Vance and former Federal Reserve chairman Paul A. Volcker.

McCloy rose from humble origins as the son of a Philadelphia hairdresser to become assistant secretary of war during World War II, an early president of the World Bank and U.S. high commissioner in Germany during the early 1950s. He helped to plan the war effort and postwar reconstruction of West Germany, effecting a range of policies that shaped American and European politics for decades.

Once dubbed in a biography the "most influential private citizen in the United States," McCloy had an influence that was greater than the sum of his individual posts. It was to this sort of master diplomat and statesman that speakers paid tribute today.

"John McCloy never served in the Cabinet of any president and, after 1952, never occupied a full-time position in government," said Kissinger, who gained one of his first opportunities to work with government policymakers in 1956 when McCloy invited him to join a task force on U.S.-Soviet relations. "Yet few Americans have had a greater impact on their time."

Secretary of State James A. Baker III, reading the message from Bush, said, "The American people join you in mourning the passing of one of the giants and true heroes in the history of this country. He was a trusted adviser of American presidents from Franklin Roosevelt to Ronald Reagan."

Bush cited as McCloy's "most lasting contribution" his role in establishing "the democratic tradition of the Federal Republic of Germany and the unbreakable bonds of friendship between the American and the German people."

A Harvard-trained Wall Street lawyer,

McCloy first entered public service as assistant secretary of war under Henry L. Stimson during World War II. He was appointed World Bank president in 1947 and became U.S. commissioner in Germany in 1949, where he served for four years.

If McCloy had a persistent vision throughout those postings, it was his will to see a revived Germany reintegrated into the European and western community, speakers said today. "McCloy deserves much of the credit for the high quality of German-American relations which we now take for granted," Bush said in his message.

At the War Department, McCloy argued against the proposal of then-Treasury Secretary Henry Morgenthau Jr. for "pastoralization," or deindustrialization, for the long-term suppression of the German economy.

As World Bank chief, he floated a successful $250 million bond issue for the revival of war-torn Europe. And, in Germany, he oversaw provision of more than $1 billion in U.S. aid, then supported West German rearmament and the country's integration into what would become the European Economic Community.

Schmidt and Carstens recalled these actions in their eulogies.

Schmidt called McCloy "the architect of Germany's rehabilitation from an occupied country to an independent state."

"Over more than four decades, he rendered outstanding service to the world at large and in particular to my compatriots in Germany," Schmidt said. "German historiography will give credit to John McCloy's unique role in establishing a morally healthy climate in my country and viable economic structure."

Schmidt cited a response of Abraham Lincoln who, when asked why he befriended instead of destroyed his enemies, answered, "This is the best way to destroy them."

"This is what John McCloy did for Germany," Schmidt said.

Carstens remembered McCloy as a "wise man who had sound judgments about events and men."

All of the speakers mentioned McCloy's addiction to public service and his role as adviser to presidents, particularly on arms-control issues, after his retirement as high commissioner in 1953.

Kissinger told of an evening when, as secretary of state, he invited McCloy to share a drink and give advice.

Months later, Kissinger said, he learned that it had been McCloy's 80th birthday, and the meeting had forced McCloy to "miss the better part of his celebration," Kissinger said. "For John McCloy, public service was a way of life."

State Department

NYT 3/20/89

# The New No. 2: Heavyweight With His Guard Up

By ELAINE SCIOLINO
Special to The New York Times

WASHINGTON, March 19 — In his confirmation hearings before the Senate Foreign Relations Committee last week, Lawrence S. Eagleburger spoke with two distinct voices.

Questioned about his relationship over the last four years with two consulting firms headed by Henry A. Kissinger, Mr. Eagleburger flipped through a loose-leaf binder and recited written answers prepared by his lawyers.

Called on to give his views on foreign policy issues, he seemed downright comfortable, speaking with the flair and bravado he developed in nearly three decades in the Foreign Service.

The hearings brought into sharp focus the tension accompanying Mr. Eagleburger's re-entry into public service. He was one of the most respected Foreign Service officers when he retired from the State Department's No. 3 post in 1984; he returns to public service regarded as a changed man who has profited handsomely as president of Kissinger Associates and its smaller affiliate, Kent Associates.

A different political environment greets the 58-year-old Mr. Eagleburger on his return. The ethical rules are still being written in an Administration that has vowed to avoid even the appearance of a conflict of interest. He is going beyond the requirements of existing ethics laws by disqualifying himself for one year from any State Department business related to any client of the two consulting firms in the past two years; he has said he would not take part in any policy decision involving the clients, which included some of the world's largest multinational corporations.

## Not Afraid to Speak Out

It is also an Administration in which many senior officials lack foreign policy experience and have been reluctant to make public policy pronouncements. With so many jobs unfilled and so many policy reviews flying around, Mr. Eagleburger assumes the role of Deputy Secretary of State, the No. 2 slot, as a heavyweight who, knows the system and is not afraid to speak his mind.

"Larry knows what he thinks and he's not afraid to say so," said Warren M. Christopher, who held the job in the Carter Administration. "After he's in office for a month or two I expect that people will stop arguing about the foreign policy vacuum in this Administration."

In diplomatic limbo before his confirmation, Mr. Eagleburger has not always been privy to the conversations between Secretary of State James A. Baker 3d and his close-knit team. But that did not stop Mr. Eagleburger from having an opinion on

every issue on which he was questioned last week.

"Since I've been hiding out in a back office trying not to know what's going on in the State Department, I'm not at all sure I know exactly where the thinking is," he replied when Senator Richard G. Lugar, the Indiana Republican, asked him to comment on the coming election in Panama. Then Mr. Eagleburger proceeded to predict that the election would be rigged and to add that the new Administration must devise a way to proceed with what he suggested was a flawed policy inherited from the Reagan era.

## On Efforts to Oust Noriega

"I hope we've learned one thing, which is, don't undertake actions against someone you don't like unless you think you can succeed," he said of the Reagan Administration's efforts to force Panama's leader, Gen. Manuel Antonio Noriega, from power.

At times in his testimony, the free-wheeling Mr. Eagleburger seemed unconcerned that he might have been going beyond the carefully worded policy guidance of the State Department.

When Senator Nancy Landon Kassebaum, Republican of Kansas, asked him if Lebanon's constitutional crisis could be resolved, he replied bluntly that Lebanon would be facing the same crisis a year from now. In fact, he added, the situation was so bad that "if the Syrians were to withdraw, I suspect things would be worse rather than better." He added, "They at least maintain some constraint on the warring parties."

His remarks prompted the State Department to issue a clarification the following day saying that the withdrawing of all foreign forces and the disbandment of the Lebanon militias continues to be a foreign policy goal.

Mr. Eagleburger said the United States should formally rupture relations with the Soviet-backed Afghan Government, even though the issue is still under discussion in the State Department and no decision has been made. He said the Bush Administration was currently incapable of dealing administratively or financially with the extraordinary new influx of refugees, particularly as a result of eased restrictions on emigration of Soviet Jews.

## Dialogues With Other Lands

He acknowledged that the United States has "not found the right way to carry on a dialogue" with Tokyo. He called it "unnatural and unhealthy" that Washington and Teheran do not have a better relationship, and said that if Western Europe's integration of its markets in 1992 produces a closed trading system, "the rest of us are all in trouble."

Mr. Eagleburger, who among other things was Ambassador to Yugoslavia

during the Carter Administration, so dazzled committee members with his institutional memory and command of issues that many did not question his ties to former Secretary of State Kissinger.

Senator Lugar called Mr. Eagleburger's confirmation "absolutely essential to the success of this Presidency and to the State Department and Jim Baker." Senator Alan Cranston, Democrat of California, said Mr. Eagleburger "brings the experience and the background that is essential to the effective functioning of the State Department," especially since Mr. Baker "is not an expert in foreign policy," and "the other top people around Mr. Baker are not that experienced in foreign policy."

Mr. Eagleburger says he does not think that disqualifying himself from State Department matters involving former clients will hamper him in doing his job. But a senior Administration official said with concern that current guidelines are too vague for comfort, and Mr. Eagleburger's four-year fling with the private sector may come up again.

"Will Larry have to disqualify himself from any issue that affects the bottom line of any of the companies involved?" the official asked. "If that's what's done, I don't know how he can do what we need him to do."

In an interview after his confirmation by the Senate Friday, Mr. Eagleburger said the biggest problem facing the United States was not "East-West," relations with the Soviet Union, but "West-West," the relationship between the United States and its allies.

"If we can manage West-West at a time when we are no longer the single cock on the walk in the West, we can manage East-West and North-South," he said. "But we Americans need to accept that we are no longer the only dominant influence in the decision-making process in the West."

## Skeptical of Gorbachev

Like Mr. Kissinger, he remains highly skeptical of Mikhail S. Gorbachev's motives, saying, "The only purpose that explains his policy is to create a stronger, more efficient Soviet Union."

How Mr. Eagleburger will translate his strong views into action is unclear. Asked whether he and Mr. Baker differ on substantive policy issues, he replied: "I can't tell yet. I don't know him that well yet."

As for his own role, he said he would function as Mr. Baker's "alter ego."

"I've got to be," he went on. "I'm there to fill in behind him to do the things he doesn't do. I'm not going to do what some deputies have done and pick a piece of the world and just take care of that."

"All the News
That's Fit to Print"

The New York

VOL.CXXXVIII.... No. 47,856 Copyright © 1989 The New York Times

NEW YORK, SUNDAY, APRIL 30, 19

Kissinger and Friends
And Revolving Doors

By JEFF GERTH
with SARAH BARTLETT
Special to The New York Times

WASHINGTON, April 29 — At a time when Washington is agonizing over how to insure that official responsibilities are adequately separated from private interests, the example of Kissinger Associates Inc. raises some particularly thorny questions.

Until recently, Henry A. Kissinger, a former Secretary of State, and his two senior colleagues, Brent Scowcroft and Lawrence S. Eagleburger, were principals in a unique enterprise. On some days, the three might be found discussing East-West relations with top American and Soviet officials or serving on Government advisory boards. On others, they might be consulting, for substantial fees, for some of the world's largest corporations on behalf of the seven-year-old firm.

The Thorny Questions

Through their close relationships with foreign governments and their extensive knowledge of foreign affairs, they have made a good living by offering geopolitical insight, advice and entree to about 30 leading global companies. Among those willing to pay $200,000 or more to be clients of Kissinger Associates are ITT, American Express, Anheuser-Busch, Coca-Cola, H. J. Heinz, Fiat, Volvo, L. M. Ericsson, Dae-woo and Midland Bank.

In a field as subtle as foreign policy, can people like Mr. Kissin-

ger and his associates wall off what they know of confidential Government discussions from what they can legitimately advise their corporate clients? And when people of their stature help shape Government decisions, can they ignore what they know of their corporate clients' interests?

And finally, is it possible to meet those legitimate concerns without imposing so burdensome a set of requirements that they drive able people away from public service?

The 'Revolving Door'

A number of present and former Government officials, none of whom would allow themselves to be identified, have questions about potential conflicts of interest involving Kissinger Associates. But many Government officials and clients of the firm have no problem with the multiple roles of its principals and are open in their support.

"I think we're nuts," James D. Robinson 3d, chairman and chief executive of the American Express Company, said of the Senate's questioning of Mr. Eagleburger over his work for Kissinger clients. "It's almost as though we want to find someone who's the least qualified for the job."

The Kissinger group is a prominent instance of a pervasive

*Continued on Page 30, Column 1*

Political Fallout From Smog
Blurs Future for Los Angeles

By ROBERT REINHOLD
Special to The New York Times

U.S. ANGER RISING
AGAINST GERMANS
OVER NATO STAND

Out of the Arc

KOHL APPROACH FAULTED

Washington Moving to Head
Off an Anti-Missile Drive
Before Alliance Meets

By THOMAS L. FRIEDMAN
Special to The New York Times

WASHINGTON, April 29 — Some Bush Administration officials say they are growing increasingly upset with the West German Government for threatening NATO's unity by pressing for speedy negotiations with Moscow on short-range nuclear weapons in Europe.

Administration officials today insisted that Washington would not back down on its opposition to negotiations on short-range missiles. They also expressed intense displeasure with the Government of Chancellor Helmut Kohl for apparently seeking to line up other European nations against the United States stand.

The United States sees Mr. Kohl's move as an effort to help him overcome domestic political difficulties.

A Series of Moves

"The Germans know what our position is and if they continue trying to build this up as an issue, they are not going to succeed," said one Administration official. "We have told them that they should think about the implications of their position for the alliance as a whole. The ball is now in their court. We are not going to back down on our position. If there are tensions in the alliance, they will be responsible."

The expressions of anger by the Administration appeared to be part of series of moves by Washington designed to head off the anti-short-range missile movement before it sweeps the rest of Western Europe, the way it seems to have West Germany.

Russians Out
By Painting a

30

THE NEW YORK TIMES, SUNDAY, APRIL 30, 1989

# Kissinger Associates Has the Ear of Presidents and the Fees of Businesses

*Continued From Page 1*

Washington phenomenon: the "revolving door." Mr. Scowcroft now serves President Bush as national security adviser, a post he had previously held under President Gerald R. Ford, succeeding Mr. Kissinger. And Mr. Eagleburger, who served as Under Secretary of State before becoming president of Kissinger Associates in 1984, recently stepped up to Deputy Secretary, the department's second-ranking position.

The jobs are among the most sensitive and influential in Washington. Mr. Scowcroft now briefs President Bush on pressing diplomatic and military matters, and Mr. Eagleburger helps formulate the Administration's strategy for East-West relations and other leading issues.

The tensions surrounding the revolving-door issue were at the heart of President Bush's ethics commission. He recently adopted most of its recommendations on ways to improve the handling of conflict-of-interest issues.

## Particulars of the Debate

Underlying the case of Kissinger Associates are these particulars:

1. In his financial disclosure statement, Mr. Scowcroft did not list the Kissinger clients he worked with or his positions at the firm. The day after an inquiry by a reporter, he amended the statement to reflect his position as vice chairman.

2. Mr. Scowcroft belatedly disclosed that he held stock in Kissinger Associates and, according to Mr. Kissinger and public documents, he arranged last month to have Mr. Kissinger buy it back for nine times its estimated worth. Mr. Kissinger subsequently reduced the price to be paid for the stock, but the deal could have been construed as an undisclosed "golden handshake" or gift.

3. Mr. Kissinger and Mr. Scowcroft, as frequent unpaid members of Federal advisory boards, advised President Reagan on arms control issues at the same time that they worked for clients involved in missile systems and missile making. The two men have said

The New York Times

Henry A. Kissinger and his two senior colleagues, Brent Scowcroft, center, and Lawrence S. Eagleburger. Until recently they were principals in the foreign affairs consulting firm of Kissinger Associates Inc.

there was no conflict, or even an appearance of a conflict, between their Government advice and their private consulting.

## Firm's Activities

### An Unusual Claim Of Confidentiality

From two discreet, unmarked offices in New York and Washington, more than 20 staff members of Kissinger Associates work on research and analysis for the presentations, mostly oral, that Mr. Kissinger and his colleagues make to their clients. For his efforts, Mr. Eagleburger earned a total of $674,000 last year, $214,000 of which was paid by Kent Associates, an affiliate of the company that handles more specific assignments. Mr. Scowcroft made $293,000 as a consultant to Kissinger Associates.

What exactly do they do for that much money? An executive from H. J. Heinz said that Mr. Kissinger helped provide background and introductions when the company was considering building a baby food factory in China. And an executive at the Swedish bank Skandinaviska Enskilda Banken, a former client, attributed its early selloff of Latin American loans to Mr. Kissinger's insights.

Other than a few sparse anecdotes like those, little is known about what Kissinger Associates does for its clients. When the Senate Foreign Relations Committee first tried to elicit more information on the firm's activities as part of the confirmation process, Mr. Eagleburger "was adamant in his refusal" to discuss any details, according to a committee staff memorandum. He invoked a confidentiality clause in the firm's contracts that prohibits any discussion of its contractual arrangements unless mandated by law.

Later, he provided a general description of some of the advice the firm gave most clients. The committee, apparently satisfied, declined to push him for more details, and he was unanimously confirmed. A survey of other international consulting firms found such a written prohibition unusual. In an interview, Mr. Kissinger said he has the

clause to protect his clients and to insure that they do not abuse their connections with him.

Mr. Kissinger said that he and his colleagues went to great lengths to avoid any conflicts and to keep their policy recommendations separate from their business interests. Neither he nor his associates will work on behalf of any government. Nor, he added, does anyone from the firm lobby American officials on behalf of a client.

## Government Role

### Kissinger's Window On Intelligence

Mr. Kissinger and his colleagues are not the only consultants to serve on Government commissions or go through Washington's revolving door. Where they differ from other consultants, however, is in the extent to which they maintain other roles. For the last five years, for example, Mr. Kissinger has had a continuing window into the Government's most sensitive information as a member of the President's Foreign Intelligence Advisory Board, or Pfiab (pronounced PIEF-ee-ab).

The 16-member board is a little-known but powerful group of scientists, business executives and former Government officials that gives independence advice about a wide range of intelligence issues and activities. Some of the board's other prominent members are William French Smith, the former Attorney General, and Zbigniew Brzezinski, national security adviser in the Carter Administration.

Members of the board must submit confidential lists of their holdings and clients, as lawyers, scientists and other professionals do for many other Government posts. Sometimes, after consultation with Government attorneys, or even voluntarily, board members have stepped down from matters that would have had a financial effect on clients, according to Government officials. The recusal standard applies even if board members advise their clients on different matters from those that are before the board, a Government lawyer said.

### 'All Sorts of Conflicts'

"There are all sorts of conflicts" on the board, said Anne L. Armstrong, chairman of the board and a former ambassador, but she added: "I'm totally satisfied. It comes down to believing in your board members' integrity."

Mr. Kissinger said he had not concerned himself from any matter before the advisory board, nor has he participated in any board matter in which, "to his knowledge, he has a financial interest," said Michael T. Masin, Mr. Kissinger's lawyer.

Asked about the appearance of a conflict, a Government-wide standard, Mr. Masin added: "There is no appearance problem because nobody knows about it, and nobody knows about it because the law requires that Pfiab matters are secret, and the Kissinger confidentiality agreement prohibits people talking about it."

## Involvement in Arms Control

Mr. Kissinger said that his principal area of involvement at the intelligence advisory board has been arms control and that he saw no conflict because

none of his clients are really involved in arms control matters.

Public records show that some clients of Kissinger Associates are in affected by military matters. For example, one client, the ITT Corporation, a $9 billion corporation with about 7 percent of its annual business in military contracts, operates various United States missile systems under a $700 million contract, according to the company's annual reports.

Mr. Eagleburger was an ITT director for the last four years, and told the Senate committee about cost problems with ITT's missile contracts. Asked if Mr. Kissinger was aware of ITT's military work, Mr. Masin said, "Clearly he's not."

## Eye on Intelligence Documents

A former Pfiab official, who asked not to be identified because of the board's secrecy pledge, said that Mr. Kissinger, using his authority as a board member, frequently reviewed intelligence documents outside the regular board meetings.

In addition, the former official said he believed that Mr. Kissinger's association with the board gave him benefit because he could not have separated the insights gained from his access to United States intelligence data from

> The group is a prominent instance of the 'revolving door.'

his continuing analysis and advice to clients.

Mr. Masin said such a suggestion was "outrageous." Referring to Mr. Kissinger's clients, he added, "I just couldn't imagine, anyone being impressed by Pfiab."

## Scowcroft at Lockheed

### Pentagon Lawyer's Second Thoughts

Hybrid commissions can come to play an increasingly important role in shaping Government policy, according to Government officials. In addition to Pfiab, Mr. Kissinger has worked on a number of other Government advisory bodies, including a 1983 Presidential commission on strategic forces headed by Mr. Scowcroft.

The principal mandate of that commission was to recommend alternative locations for the MX missile. At the time, Mr. Scowcroft was president of Kissinger Associates as well as a personal consultant on general arms control and military issues for the Lockheed Corporation, Hugh Burns, a Lockheed spokesman, said.

Mr. Scowcroft's ties to Lockheed, a major military contractor, were not publicly known, but were disclosed in a confidential statement to the Pentagon. A Pentagon lawyer who reviewed that statement discussed it on the condition that he not be identified. The lawyer said the Lockheed consultancy was not considered a problem because the

company was not likely to be affected by the MX decisions.

### Recommendations on Trident

The commission's final report, however, contained a number of other recommendations, including "continued development and the deployment of the Trident II (D-5) missile as rapidly as possible." Lockheed has long been the manager of the Trident missile program, including the D-5.

When asked whether Mr. Scowcroft should have participated in that recommendation, the Pentagon lawyer said, "If I realized they were going into that area I would have asked him to make some decision whether to discontinue his consulting with Lockheed or withdraw from the commission's deliberations in that area."

Mr. Scowcroft declined to respond to written questions about the Lockheed situation or any other matter. He told a reporter in 1986, however, that his work for his only military client, presumably Lockheed, was not a problem because he advised it not about arms but about "the future of arms control and Soviet-American relations." He added that his work on commissions "takes a tremendous amount of time, and it is done gratis for the national interest."

## Disclosure Practices

### Differences Noted On Ethical Issues'

If a certain one of President Bush's ethics proposals is adopted, part-time advisers like Mr. Kissinger could continue to advise the Government even on matters that create potential conflicts. Under the proposal, if part-time advisers were granted a waiver, an occasionally used way to handle conflicts, they would have to disclose the pertinent financial interests, which are not currently required to be made public.

Currently, when people like Mr. Scowcroft enter the Government full-time, fuller disclosure is demanded and greater attention is paid to avoiding conflicts of interest. This was the point where the bid by former Senator John Tower to become Secretary of Defense encountered problems. His disclosure that he advised contractors on arms control issues soon after leaving his post as arms control negotiator was a significant factor in his rejection by the Senate.

Mr. Scowcroft, as national security adviser, is not subject to the confirmation process. He told the White House he had to disclose only the name of Kissinger Associates, not the specific clients he worked with, because he was merely a consultant to the firm.

Indeed, when he described his positions in his financial disclosure statement, filed on Feb. 21, Mr. Scowcroft put down "consultant" but did not mention that he was also a vice chairman. He finally disclosed the position in a third amendment to his filing on March 17, one day after a reporter asked him why he had not reported it.

## Kissinger Implied Wider Role

In an interview last January, however, Mr. Kissinger gave the impression that Mr. Scowcroft's work for clients was more direct than that of a consultant. "We divided them up," he said of his clients, through an informal

arrangement among Mr. Eagleburger, Mr. Scowcroft and himself.

Gary Davis, general counsel of the Office of Government Ethics, said it was unclear whether this additional information about Mr. Scowcroft's position would have required him to disclose the names of the clients he worked with.

Mr. Scowcroft's public disclosure form indicates that he will disqualify himself from specific matters involving companies he holds stock in and former clients such as Kissinger Associates, but not from matters involving the firm's clients.

Mr. Eagleburger agreed, on the other hand, to disqualify himself for one year from any matter involving the clients he dealt with, and under Senate pressure he adopted the same standard for a few other, confidentially disclosed foreign clients.

Different disclosure practices were an issue addressed broadly by President Bush's ethics commission, which called for more uniformity across all arms of the Government.

## Scowcroft's Stake

### Adjustment Made On Stock Sale

The Bush ethics commission also addressed the severing of financial ties between incoming Government officials and their previous employers, an issue also pertinent to Mr. Scowcroft.

On March 8, the day after Mr. Eagleburger informed Congress about his $440,000 severance arrangement, Mr. Scowcroft filed a second amendment to his financial disclosure statement. The new amendment showed, for the first time, that Mr. Scowcroft owned one share of stock in Kissinger Associates. He said in the statement that he had "arranged to sell in the very near future" the share for a price between $50,001 and $100,000.

In two separate interviews in March, Mr. Kissinger said the share had been bought back. He later explained that he had valued the share by using an outside investor's previous offer for a stake in the privately held firm as a benchmark. Mr. Kissinger said that Mr. Scowcroft's share was then valued as if it were equal to 1 percent of the company, or one out of 100 shares.

### Error on Size of Holding

According to the company's latest annual report, however, Mr. Scowcroft

> 'It comes down to believing in your board members' integrity.'

does not own one-hundredth of Kissinger Associates, but one nine-hundredth, since the firm has 900 shares outstanding.

Government officials are prohibited from accepting gifts of more than nominal value from anyone who could be significantly affected by their actions. If the stock purchase deal were intended to be an indirect severance payment, it would have had to have been disclosed as such and approved by Government attorneys.

When Mr. Kissinger was questioned further about the transaction, Mr. Masin, the attorney, responded, "A subsequent review of the documents, however, determined that rather than 1 percent, General Scowcroft owns one share of Kissinger Associates."

Mr. Masin added that this resulted from an "honest mistake of recollection" and that no money had yet changed hands before the transaction was revised.

"Proper disclosure of the transaction will be made by General Scowcroft at the appropriate time," he said.

The New York
18258 9909
DR. H A KISSINGER,
1800 K ST NW
APT 1021

WASHINGTON DC 20006

VOL.CXXXVIII.... No. 47,811

16, 1989

## TRADE GAP SHRINKS AS U.S. EXPORTS DIP LESS THAN IMPORTS

### A SURPLUS WITH EUROPE

January's $9.5 Billion Deficit, in Line With Expectations, Stirs Mixed Reactions

By ROBERT D. HERSHEY Jr.

Special to The New York Times

WASHINGTON, March '15 — The nation's trade deficit improved in January to $9.5 billion as a decline in exports was more than offset by falling imports, the Commerce Department reported today.

This performance, the best since October, was marked by the first American trading surplus with Europe in more than five years and by the smallest deficit with Japan in about two and a half years.

The Bush Administration's top trade officials — Robert A. Mosbacher, the Secretary of Commerce, and Carla A. Hills, the trade representative — both called the report "encouraging," but private analysts expressed mixed views about the trade picture.

### Bill for Oil Imports Climbing

The growth of exports has slowed markedly since last summer, some pointed out, while the bill for imported oil seems on a sustained upward path.

To the extent that January's trade figures illuminated current economic conditions, they appeared consistent with the notion of slower consumer spending and less vigorous business expansion. But today the Commerce Department also reported that sales by manufacturers and distributors climbed a hefty 1 percent in January, exceeding a seven-tenths of 1 percent increase in inventories.

The January trade deficit, roughly in line with expectations, had little lasting effect on the financial markets.

## Senate Panel Challenges Nominee For No. 2 Job at State Department

### Eagleburger Is Pressed to Disclose All Clients of Consulting Firms

By ELAINE SCIOLINO

Special to The New York Times

WASHINGTON, March 15 — Lawrence S. Eagleburger, President Bush's choice to be Deputy Secretary of State, came under sharp questioning in his Senate confirmation hearing today about his relationship with two consulting firms headed by former Secretary of State Henry A. Kissinger.

Senators from both parties asked Mr. Eagleburger to go beyond what is required by law and reveal all of the clients of the consulting firms, not just the accounts that he personally worked on as president of the firms.

Mr. Eagleburger received $916,000 last year in salaries and bonuses from Kissinger Associates and an affiliated firm, Kent Associates, for his work for some of the largest multinational firms in the world. Today he told the Senate Foreign Relations Committee that he could not provide the committee with the names of all the clients because of a confidentiality agreement between the firms and their clients.

In addition, Mr. Eagleburger said that the confidentiality agreement prevented him from discussing the substance of his dealings with his own clients.

The concerns expressed in today's hearing reflected questions among the senators about how Mr. Eagleburger

The New York Times/Jose R. Lopez

Lawrence S. Eagleburger during confirmation hearing yesterday.

can avoid conflicts of interest if he assumes the number two post at the State Department. He has pledged to recuse himself for a year from any matters involving his former clients, but questions remain about how he can be seen to avoid potential conflicts if all the clients of the Kissinger firm are not disclosed, at least to the committee.

"We have to figure out some procedure," said Senator Paul Simon, Democrat of Illinois, at the hearing. Mr.

Continued on Page All, Column 1

## The Search for an Issue

### President's Reversal on Assault Weapons Was Response to a Pressing Political Need

By R. W. APPLE Jr.

Special to The New York Times

WASHINGTON, March 15 —

Tuesday branded the presence of

## SCARE ON GRAPHICS
PROMPTS WORK OF MAJOR LENGTH

### CHILEAN FRUIT PILIN

Consumer Confidence
Safety of Fresh Food
Face Lasting Damage

By RICHARD W. STEVENS

Special to The New York Times

LOS ANGELES, March 15 — from Chile piled up on piers warehouses awaiting Government inspection, consumers continue to worry about what fruit was safe and the American food industry for losses that could reach millions.

Most supermarkets remove Chilean produce from their shelves Tuesday in the wake of a war in consumers by Frank Young, a commissioner of the Food and Drug Administration, to discard all fruit unless they were certain it was not from Chile.

The F.D.A. has detained all imports of Chilean fruit for inspection, has searched through hundreds of pieces of produce v finding any contaminated item, and yond the two grapes containing nide that were found several days in Philadelphia.

### Hundreds of Calls a Day

But the agency said its region fices were receiving hundreds of phone calls a day from people seeking advice on what fruit was safe to eat.

There have been no reports of a illness or death from Chilean fruit.

Representatives of several pro-industry trade groups met with officials, seeking clarification of agency's position and quick tests of the half-million cases of fruit that continue to arrive in the United States from Chile each day.

NOMINEE FOR STATE

*Continued From Page Al*

Simon, who favors disclosure of the names of all the firms to the committee, added, "Frankly, in your case, I know you well enough that I have confidence in you. But we shouldn't just be doing this on an ad hoc basis, because we happen to like Larry Eagleburger, we say, 'No, forget about who his clients have been.'"

As required by the Ethics in Government Act, Mr. Eagleburger reported on his financial disclosure statement the names of Kissinger clients he personally worked for and that generated more than $5,000 in fees in 1988.

By declining to further discuss his consulting work today, Mr. Eagleburger limited the ability of the committee to investigate his consulting activities in the four years since he retired from the Foreign Service. Despite the current political climate in Washington in which even the appearance of a conflict of interest has put some key Bush appointees on the defensive, the problem is not regarded as serious enough to block Mr. Eagleburger's confirmation, according to committee members and their aides.

Brent Scowcroft, the White House national security adviser, also worked for Kissinger Associates. Although his appointment was not subject to Senate confirmation, similar questions have been raised about potential conflicts of interest in his case. He, too, has said he would not become involved in decisions affecting any companies he advised while working for the Kissinger company.

Mr. Scowcroft, who reported that he worked as a consultant and did not have a list of Kissinger clients, said in a letter to C. Boyden Gray, the White House counsel, that Mr. Kissinger declined to provide a list of clients.

### 'Contractual Relationship'

"The contractual relationship between Kissinger and Kent and their clients is one of confidentiality, except when required by law," William D. Rogers, Mr. Eagleburger's attorney and a board member of Kissinger Associates, said in a telephone interview today.

He added, "The decision rests with both Kissinger and his clients. Henry also has a desire not to have his consulting relationship with a client a matter of public record because he doesn't want his name invoked on behalf of any particular client."

Mr. Kissinger, in an interview Tuesday before leaving for Japan, said he would comply with the law but added, "I violently object to this approach of being dragged through the mud" and having information about clients made public.

### 'A Matter of Principle'

In response to persistent questioning by Senator Jesse Helms, Republican of North Carolina, who asked whether Mr. Eagleburger was going to use the confidentiality agreement to refrain from answering questions, Mr. Eagleburger replied: "I am informed and, I think, as a matter of principle, having been involved in the organization of Kissinger Associates, that I cannot go

Goodbye

CTON POST

Wash. Post.-TUESDAY, FEBRUARY 21, 1989 C13

JACK ANDERSON and DALE VAN ATTA

The Ins and Outs of Eagleburger

If Lawrence S. Eagleburger is confirmed as deputy secretary of state, he will bring with him a wealth of experience in dealing with Yugoslavia—maybe too much wealth.

Eagleburger has revolved in and out of the diplomatic door. While he was in, he hustled loans from U.S. banks for Yugoslavia. While he was out, he joined the board of directors of a Yugoslavian bank that benefited from those loans. While he was in, he encouraged Yugoslavia to generate hard cash by producing exports. While he was out, he became the top American representative for one of those exports—the Yugo car.

Now Eagleburger is on his way in again, having been nominated as the No. 2 official at the State Department.

Eagleburger is a well-regarded former Foreign Service officer who spent 27 years with the State Department. His career was boosted during the Nixon administration when he became a protege of former secretary of state Henry A. Kissinger.

During the Carter years, Eagleburger was U.S. ambassador to Yugoslavia. Under the Reagan administration, he was assistant secretary for European affairs and undersecretary for political affairs, until he retired in 1984.

As ambassador and assistant secretary, Eagleburger leaned on U.S. banks to lend money to Yugoslavia, even though loans to East European countries were frowned on by the administration.

In a 1985 interview, a Yugoslavian newspaper asked Eagleburger if he felt some responsibility for putting Yugoslavia billions of dollars into debt. "I believe I did a great favor to Yugoslavs getting

them the money they felt was needed at the time," he responded. "I will not apologize because of this. If now Yugoslavia has difficulties in paying back, then maybe she should not have taken the loans."

That Monday-morning quarterbacking is little comfort to Yugoslavia, which is $20 billion in debt and has an inflation rate of 200 percent.

When he left the State Department in 1984, Eagleburger went to work for Kissinger's consulting firm. In short order, he also became the American representative for Yugo mini-cars.

A Yugo sells for $8,000 in Yugoslavia and for $4,000 in the United States. To critics, that looks like a blatant attempt to raise hard currency by dumping a product for less than it is worth.

The Yugo is built by a division of the huge conglomerate which is the backbone of the Yugoslavian arms industry. Among its clients are Iraq, Libya and East European countries.

As a private citizen, Eagleburger also became a director of the New York branch of Ljubljanska Banka, a bank owned by the Yugoslavian government. In December, a wholly owned subsidiary, LBS Bank of New York, was indicted for allegedly laundering more than $1.4 million for U.S. Customs agents who were posing as drug lords. Eagleburger resigned from the bank after he was picked for the State Department post.

There is no indication that Eagleburger was involved in anything criminal at the bank or at Yugo, but his choice of work as a private citizen is bound to bring questions when he appears before the Senate Foreign Relations Committee for confirmation.

Eagleburger did not return our phone calls.

THE WASHINGTON POST

WEDNESDAY, JANUARY 25, 1989 E1

Kissinger's Associates and Gorbachev

As James A. Baker III prepares to take charge of U.S. foreign policy, he appears to be in easy command of an awesome array of strategic concepts and tactical details. He already exercises a calm mastery over foreign affairs.

But sources close to Baker tell us that, privately, he feels insecure about foreign policy. He has deployed two seasoned veterans to protect his flanks—Brent Scowcroft as national security adviser and Lawrence S. Eagleburger as deputy secretary of state.

Both come out of Henry A. Kissinger's shop, a consulting firm called Kissinger Associates. This could mean that Kissinger will be the shadow secretary of state, guiding foreign policy from behind the scenes.

Eagleburger is as cynical and pragmatic as Kissinger. Scowcroft is a modest, conscientious man who shuns the spotlight.

A source who knows both men says they share Kissinger's distrust of the Soviet Union. They suspect that behind Mikhail Gorbachev's amiability could be a move to diminish American influence in Europe. As Kissinger, Scowcroft and Eagleburger see it, that could lead to a Europe dominated by the Soviet Union. Then the Soviets could nourish their sick economy by feeding off Western Europe.

Kissinger Associates doesn't regard Gorbachev as a born-again Western liberal, but as a hard-bitten communist who has been forced by a failing economy to adopt western methods.

In the Kissinger view, Gorbachev cannot count on continued public support just because he has reformed and softened the Soviet system. Most

Soviets have adjusted to the communist dictatorship; they have learned to live with it. At this point, they are more concerned about food on the table than about any intangible new freedoms.

To maintain popular support for his reforms, Gorbachev must improve the quality of daily life in the Soviet Union, so he is turning to western ideas for a quick economic fix.

Meanwhile, his reforms are opposed by the entrenched commissars and bureaucrats who support the hard-liners in the Kremlin. Should Gorbachev falter, he would likely be succeeded by a repressive regime that would discard his reforms, crack down on the populace and revive the Cold War.

Kissinger and company believe it would be a mistake for the United States to let down its guard and base its foreign policy on Gorbachev.

They fear the greatest danger could come from Eastern Europe. Now that the Soviets have relaxed their grip on their satellites, they might show too much independence and antagonize the Kremlin.

The views of Kissinger, Scowcroft and Eagleburger add up to a Europe-first policy. But other strategists believe the danger lies in Asia. They point out that national security has three dimensions—military, economic and political. The United States may be a military superpower, but if its economy declines and its people lose confidence in the government, then it would become vulnerable.

Thus, these strategists contend, the real threat to U.S. security is posed by Japanese economic power, not Soviet military power. But with Scowcroft and Eagleburger in positions of influence, Kissinger's view is likely to prevail.

BROOM HILDA RUSSELL MYERS

MOTHER GOOSE & GRIMM MIKE PETERS

THE WASHINGTON POST

BROOM HILDA RUSSELL MYERS

THE WASHINGTON POST

BROOM HILDA RUSSELL MYERS