Page 2

COLUMBIA DAILY SPECTATOR

April 9, 1990

We're looking to hire 3 or 4 of the best
from this year's class...

Are you good enough
to be one of them?

MBI, Inc. wants three or four of the top individuals from this year's graduating class. We offer an unusual management opportunity to someone interested in a young and highly successful enterprise in a fast-paced, expanding, and competitive industry.

**The Industry:** Direct marketing is a $100+ billion industry. It accounts for more than 15% of all consumer purchases in America and more than 20% of total advertising dollar volume. Well over half of the Fortune 500 companies are engaged in some way in direct marketing, yet the industry remains powerfully entrepreneurial - with the opportunity for well-managed firms to achieve rapid growth.

**The Company:** MBI, Inc. is a medium-sized ($200+ million in sales) privately-owned company engaged primarily in the creation and marketing of fine collectibles. (Increasingly, too, we are bringing our direct marketing skills to entirely new product areas.) The business is young: it was launched in 1969; most top division managers are in their 30's. MBI's track record is one of outstanding growth in a highly competitive field.

**The Products:** Through its operating divisions, MBI markets an ever-expanding line of high quality products designed to enhance the quality of life. The current product line includes philatelic and coin items; collector dolls; leather-bound books; die-cast automobile replicas; porcelain collector plates and sculptures; jewelry; audio and video cassettes.

**The Structure:** Organization is on the Program Group basis, with Program Managers having total responsibility for individual programs. The structure offers a unique opportunity for direct and broad experience in all areas of business management (not available in larger organizations where positions tend to be more functionalized or narrow).

**The Position:** Entry to management is at the Assistant or Associate Program Manager level, depending upon experience. Assistants and Associates share in program development and implementation responsibilities as an extension of the Program Manager. Typically, a Program Group is comprised of the Program Manager and several Assistants and/or Associates. MBI is committed to the internal development of managerial talent and our growth provides for unusual advancement opportunities for unusually talented individuals.

**The Rewards:** Our view is that outstanding achievement should meet with outstanding reward. Our success has been built on the excellent performance of a motivated, well-rewarded management team.

The successful candidate will be intelligent and highly self-motivated with entrepreneurial instincts and high personal standards of excellence. A high energy level and a willingness to work hard are essential to keep pace with a rapidly growing business. Involvement in the business, keen attention to detail, and a take-charge attitude are crucial success factors. To the individual with proper motivation, we can provide the challenge that permits maximum development of each person's general management potential.

If you are a top individual who is interested in a truly outstanding career opportunity and would like to learn more about MBI, Inc., send us your resume and a letter of introduction. We'll get back to you.

MBI, Inc.

47 Richards Avenue
Norwalk, CT 06857

Attention: Bill McEnery

Personnel Manager

OPERATING DIVISIONS:

DANBURY MINT

EASTON PRESS

POSTAL COMMEMORATIVE SOCIETY

DAILY SPECTATOR

April 9, 1990

Kissinger

continued from page one

and arrogance," Kissinger told the audience of about 150 people. "That was perhaps his greatest triumph. . . He restored to France a sense of identity and a sense of prestige."

Kissinger spoke of his own brief meetings with De Gaulle, a man he described as charismatic, with a great "power of the personality." His first meeting with De Gaulle took place in 1969 when, as National Security Advisor, he accompanied President Richard Nixon, who he described as a man who "had many great qualities as well as a few suicidal impulses," to Paris.

Kissinger said that De Gaulle came up to him without being introduced and said "Why don't you get out of Indochina?" After a few exchanged remarks, the French president moved on to another diplomat.

"That took care of me until the next evening," Kissinger said.

The next night Kissinger said he asked the French president how he proposed to prevent Germany from dominating Europe again.

"Par la guerre," De Gaulle responded, he said. "By war."

Later in his presentation, Kissinger critiqued the current German problem of re-unification. Kissinger said the current process was only concerned with geographical unification of the two countries and was not adequately considering the future consequences of the actions. The

process must insure that German nationalism will not dominate the European continent again, he said. A united Germany must remain a member of NATO and should be firmly tied to the European community, Kissinger said.

He also told the audience that the United States must be careful in its support of the Soviet Union. Kissinger said a broader consideration of foreign policy must be implemented, because if perestroika succeeds the Soviet Union will become a strong and dominant power in the world affairs again.

"If you handle every problem tactically in the view of domestic politics, you get into trouble down the road," he said.

"We are now [at a time] in the United States in which international events have satisfied the objectives we set for ourselves in the 1950s," Kissinger said, indicating that the United States must now reformulate its identity in the changing world.

"I have a great nostalgia for an American version of Charles De Gaulle," he said.

Kissinger was the luncheon speaker at a three-day conference on De Gaulle sponsored by the Maison Francais of Columbia and New York University in celebration of De Gaulle's 100th birthday. Over 40 academicians and former politicians from France and the United States participated in the events.

April 9, 1990

COLUMBIA DA

## Vote

already been placed on the ballot, as part of their "Student Bill of Rights."

Goldman claims that a second referendum was needed because the original one doesn't specifically mention seniors. But that's simply not true. the SDC referendum says, "No full time Columbia College student-be they first-year, sophomore, junior, or senior-shall be denied the right to vote."

So what are Goldman and Hunt really after? First of all, they get to put their referendum, with their wording, on the ballot in the first position. This small advantage could very well be decisive. In a close race, some pro-senior voters will probably miss the SDC referenda, which has been buried in the fifth slot. And, of course, it was the Elections Commission that determined the order in which the referendum appear on the ballot.

Goldman and Hunt also seem to be counting on voter confusion. Their referendum appears in the voter guide with the misleading

title, "Senior Voting." Come election day, voters face thirteen questions, filling four pages. Many will simply check off "Yes," because they favor "senior voting," just as they vote "Yes" on question ten because they favor "Divestment from South Africa."

But it turns out that "Yes" means "No, seniors should not be allowed to vote." If you support senior voting, you have to vote "No," on one and "Yes" on five. Clear as mud.

Goldman and Hunt also had the advantage of seeing what their opponents' referendum would say. Their position on the Elections Commission really paid off. Realizing that someone had already put the same referendum on the ballot, they decided to hedge their bets. They added a phrase to their referendum: "This amendment will supercede any conflicting amendments."

The Elections Commission is dreaming if they think that just because they got to read SDC's referendum before writing their own,

## Fun

continued from page three

some sort of charm on his woman, for her to wear around a gold necklace. She is then "lavaliered." The final stage comes when he gives her an even more valued possession. What? you ask. Not a car, a CD player, or even a cool leather jacket, but his fraternity

pleasure of hearing a group of drunken PiKAs from Florida State crashing around at 4 a.m.

By Tuesday we realized that if we wanted to have fun, we would just have to join in and act as stupidly as everyone else. This entailed getting very drunk. Unfortunately, the rest of the week is a bit busy, but I do remember

ORRIG SS YAM YABDEUT TOAR NYAR NEW

[L.C]

NEW YORK POST, TUESDAY, MAY 22, 1990

# He wants to keep going up the River

RIVER House could be called the big house, there are so many ex-cons in the posh co-op apartment building.

A source says the residents — who include Henry Kissinger, Angier Biddle Duke, Carter Burden, Bo Polk and William Laporte — have been in a state of siege since one of the building's employees, Salvatore Cannistraici, was fired last week for hiding his alleged criminal record.

On Thursday and Friday, Cannistraici pro-
tested his treatment by River House manage-
ment by staging a one-man picket line outside
the exclusive address.

He had worked as a service elevator opera-
tor in the building for two years. According to
the source, after Douglas Elliman took over
management of the building from Brown Har-
ris Stevens, the firm had all of the building's
employees refile applications in April.

Cannistraici was canned because of an al-
leged "weapons conviction," but he told PAGE
SIX's Frank DiGiacomo that he was arrested
— but never convicted — nearly 20 years ago
for having a billy club in his car.

"I never went to jail, so I answered no to the question that asked if I had ever been convicted of a crime," says Cannistraici, who's up in arms over his dismissal.

The source said two other employees with
criminal records, Thomas Mannix Sr. and Joe
Pascale, are also under investigation by Dou-
glas Elliman, after their original employment
applications "mysteriously disappeared"
from the superintendent's office. Both work-
ers, however, admitted to having criminal
backgrounds on their new applications.

Mannix and Pascale met when they were
both serving time in the Adirondack Correc-
tional Facility in Raybrook. Mannix was in on

a grand larceny charge; Pascale was there for
second degree robbery.

Mannix says he's heard rumors that he was
being investigated, but can't understand why.
"I have a police record. I put that on my appli-
cation. When I was hired eight years ago, they
knew about it," says Mannix, who adds that he
knows nothing about his original application
being lost.

A spokeswoman for the publicity-shy River
House declined comment, saying:

"It's a private matter that will be handled privately."

The building's superintendent, John Milne,
also declined comment.

River House galvanized its reputation as one
of Manhattan's most exclusive addresses
when, in 1980, the co-op's board of directors re-
fused to approve Gloria Vanderbilt's bid to
buy a $1.1 million duplex there.

TOR

Friday, June 1, 1990

# Kissinger, Investors
## Eye US-USSR Summit

It would have been unthinkable a year ago: a top economic adviser to President Mikhail Gorbachev saying the Soviet Union must turn to the West for massive financial and technical assistance!

Prof. Stanislav Shatalin, a member of Gorbachev's presidential council, spoke of this need for help in transforming the Soviet economy into a market-based system in an interview with the Financial Times of London on the eve of his departure with the Soviet leader to the summit with George Bush in Washington.

Commenting, former Secretary of State Henry Kissinger said the West doesn't have the massive resources to fix the problems of the Soviet Union, which are to do with "internal arrangements." But he did think the West might help in certain selected areas, such as consumer goods and training for management.

The talk of United States aid to its old political and military opponent reflects the dramatic changes in the world resulting from the collapse of communism.

Dr. Kissinger was in Boston for an investors conference, and some speakers at that gathering were speculating on the potential impact of the winding down of the cold war on investments.

For example, David Williamson, of David Williamson Associ-

ates Ltd., London, held that a revival of the Eastern economies should lead to "a takeoff" of base metal prices - such as copper, aluminum, lead, zinc, and nickel. He reasoned that the West will provide Eastern Europe, including the USSR, with an infusion of capital to modernize antiquated industry and run-down infrastructure. This will mean a huge increase in metal demand as factories, machinery, highways, and so on are rebuilt.

During the next five years these Eastern countries might increase their metal demand by an average 5 percent a year as they attempt to catch up, Williamson suggests. That compares with growth in the Western world of 2 percent per annum for these base metals. Since metal inventories are low and since it takes time to open new mines, this analyst sees prices going up, perhaps doubling or tripling in the case of zinc. The price of nickel has already risen 68 percent in the past four weeks.

Another speaker, David Edwards of United Services Advisors Inc., San Antonio, Texas, maintained that a dramatic $10 drop in gold prices last week resulted from bullion sales by the Soviet Union, sales intended to raise money to pay import bills. Some reports blamed Saudi Arabians for the slump. Mr. Edwards, who manages the largest no-load South African gold fund, said the Saudis are too sophisticated to dump gold in that fashion.

If Edwards is right, the changes in the Soviet Union have taken shareholders in his mutual fund, US Gold Shares, for a roller coaster ride - up a record 64.7 percent in net asset value last year, up another 20 percent by the end of February, back down around 40 percent since then.

At the geopolitical level, Kissinger called the Gorbachev-Bush get-together "the last of the traditional summits." This type of summit produces formal, signed agreements, particularly in arms control, designed to ease Soviet-American tensions.

The new summits, says Kissinger, will be aimed at creating a new world order out of the old order. Thus he regards the informal conversations between Gorbachev and Bush at Camp David tomorrow as likely to be more important than the signed agreements arising from this summit.

Should Gorbachev be replaced at home, a new leader will face the same problems of the Soviet economy and the shape of Europe, says the former adviser to presidents Richard Nixon and Gerald Ford.

Kissinger predicts that a deal on Europe will allow a unified Germany to be de facto a member of NATO - "but no statement to that effect." Further, NATO troops will not be based in what is now East Germany. An agreement, he says, must be structured not to look like the total collapse of the Soviet Union. "It is more of a question of presentation than reality," he says.

Friday, June 1, 1990

THE

# It's 27 miles long, both celebrities turf from too much of a good time
## Malibu Gets

By Scott Armstrong

Staff writer of The Christian Science Monitor

MALIBU, CALIF.

So this is the way the better-off live. I'm sitting on a wood deck overlooking the Pacific at a home in the fabled Malibu Colony, retreat of the rich and famous.

A chromium sun watches overhead, gulls skitter off the surf a few feet away, and, up and down the beach, homes protrude out into the sand worth an amount only the Pentagon could appreciate.

What could be wrong with life here? Apparently several things. Listen to what the owner of this house, actor Burgess Meredith, who is sitting in a denim cap, loose cotton shirt, shorts, and high-topREEboks with no socks, has to say.

"We are trying to keep a few places left where you don't inhale gasoline fumes all the time," he says in his signature gravel-road voice. "This could become a Coney Island or an Atlantic City."

They are raising Cain in Eden. Amid concern about controlling growth and their own destiny, residents of this legendary seaside community will go to the polls June 5 to decide if they want to become a city.

At present Malibu is an unincorporated town administered by the five-member Los Angeles County Board of Supervisors. But many residents, chafing at what they consider distant and deleterious rule by the board, want to run the area themselves. They are being driven in part by the fear that Malibu will become Miami Beach under the "pro-development" supervisors.

Yet even though the cityhood measure seems likely to pass, not everyone is pleased. There are differing opinions on how fast the town should be growing and whether a place more often identified with surfers and sybaritic delights will have the money and wherewithal to deal with such unglamorous things as traffic, police, and sewers. Some folks want the community to stay under the wing of the

MALIBU COLONY: This could be Burgess Meredith. The development

county.

"We have never had fore," says Arnold York, weekly Malibu Times. learned how to criticize without getting mad."

Malibu is a beautiful place: 27 miles long and Within that space reside some of whom live in the mountains overlooking the ers who live on the water Highway runs down the

There is really no do stand a string of sometimes outlets, real estate of restaurants, and mini-mart highway.

The town is more diverse. Robin Leach view would there is the Hollywood Carsons and Larry Hagin whom live in homes along the coast, where a dwelling lot can fetch $3.5 million. has a large number of just came in the 1950s and ranch home cost under that wouldn't buy the doc

## GOP Unknown to

RYE BROOK, N.Y.

After searching nearly a year for a candidate, New York Republicans nominated Pierre Rinfret, a political unknown with deep pockets, to challenge Gov. Mario Cuomo.

Mr. Cuomo is expected to announce a bid for a third four-year term within days. Considered a potential 1992 Democratic presidential contender, he is viewed as a big favorite for reelection, even by Republicans.

In trying to find a candidate to challenge him, the state GOP had been turned down by one big-name Republican after another, including US Sen. Alfonsé D'Amato. It was only last week that party leaders settled

on Mr. Rinfret.

Rinfret, he doesn't the Shorewood development Adirondack than Mario

Born in fiscal heads the political intelligence at about $1.50 a day he was will

The Dehest.

PEOPLE WATCH

USA Today [LC]

July 3, 1990

► **Barbara Bush** and ex-first ladies Nancy Reagan, Betty Ford and **Pat Nixon** — who’s not been seen in public in more than a decade — will be among those at the Richard Nixon Library and Birthplace dedication, said library spokesman **Kevin Cartwright**. They will accompany their husbands to the July 19 event in Yorba Linda, Calif. — first time since **George Bush** took office that the four living GOP presidents have met. The only living Democratic ex-president, **Jimmy Carter**, and wife **Rosalynn** sent regrets, citing

a previous engagement. Also expected: ex-secretaries of State **Henry Kissinger**, **Alexander Haig** and **William Rogers** — and **Tom Brokaw**, who'll anchor *NBC Nightly News* from the nine-acre grounds.

► **Sen. Claiborne Pell**, D-R.I. — who's seen the National Organization for Women, National Women's Political Caucus, Women's Campaign Fund and Women's Action for Nuclear Disarmament endorse his opponent, GOP Rep. **Claudine Schneider** — Monday announced formation of Rhode Island Women for Pell. Said spokesman **Richard Gureghian**: “We are not creating this group. They are leaders in their own right.” But had the women not formed the group, “of course” Pell's campaign would have, he said. Among leaders: abortion rights leader **Marti Rosenberg**; lawyer **Doris Licht**, wife of ex-lieutenant governor **Richard Licht**.

AP

**NIXON:** In public for first time in decade

► Marcos' future, TA

Underdogs

Far from his home in the wide open spaces of Jackson, Wyo., Spence appeared out of his element at the Marcos trial, his first in the concrete canyons of Manhattan. He stumbed in his opening statement and came under fire from co-counsels for being unprepared.

But Spence's folksy ways may have balanced the lavish image of Marcos and swayed the jury to believe she was simply a “naive housewife” in her husband's government, says New York City trial expert Aaron Broder. “No question that scored,” Broder says.

Austria, Luxembourg, the Cayman Islands or Switzerland.

The government said it uncovered $700 million in bank accounts. The Swiss government has agreed to freeze $400 million on deposit with Swiss banks, which it is willing to turn over to the Aquino government if the Philippine Supreme Court rules against Marcos.

**Real estate:** Banks have auctioned off Manhattan properties that authorities say were bought with money stolen from the Philippines. The Manhattan town house she once used as her private home now is the Philippine consulate.

**Personal property:** Her 3,000 pairs of shoes, 500 bras, 200 girdles and other personal items are displayed at Malacanang Palace in Manila.

Philippine government investigators say she took the best of her jewelry when she and her husband fled the country. About $6.67 million is known to have been spent on jewelry at such houses as Cartier and Van Cleef & Arpels.

JOHN McDERMOTT

Trying to avoid a major slip-up: Italian player trips in match against the United States

SPORTS

# A Host of World Cup Problems

## What if we gave a tournament and nobody came?

Italy—shaped like a foot, centrally located in the soccer universe and seething with enthusiasm for the game of long, scoreless stretches and short pants—seemed like the perfect place to stage a World Cup competition. Yet for all the hoopla that surrounded the final match between West Germany and Argentina last Sunday in Rome, the 1990 tournament could not be considered an unqualified success. Tourism *dropped* an estimated 25 per-

cent during the World Cup, as travelers resisted costly package tours and worried about the hooliganism. Even in the late rounds, many seats remained empty, the result, partly, of corporate sponsors getting more tickets than they could distribute. If the cup had been held someplace less steeped in soccer tradition, it could have been a disaster. Which is what worries some people about the next tournament. The 1994 World Cup will be played in the United States, a country that has venues separated by 3,000 miles and four time zones—not to mention a populace that tends to thinks of soccer as something you drive the kids to on Saturday morning.

Even those involved in the effort to stage the World Cup in America admit to a huge challenge. The potential for failure on a grand scale—sparsely filled stands, scant attention

from the media, broadcasts on obscure cable stations—is great. "We're on a missionary enterprise," said former secretary of State Henry Kissinger (now vice chairman of the tournament's organizing committee) last week. "We've got to make this sport as popular in the United States as it deserves to be."

Soccer is popular here, but not as a spectator sport. Washington Post columnist Tony Kornheiser spoke for many last week

when he wrote, "I have trouble with the sentence, 'They built an insurmountable 1-0 lead.'" American teams also tend to fare poorly in international play. (In Italy, the United States was eliminated in the first round.) Nor has it helped that American TV networks can't figure out how to work commercials into the nonstop 45-minute halves. The TNT network got poor ratings and lost money on the '90 cup. NBC has announced that it will not bid for the '94 cup, and ABC said it would be interested in "selected matches." Only CBS—where Kissinger has a seat on the board of directors—says that it will consider a full-fledged bid.

Even if a major network signs on, other obstacles remain. America has only one facility with a field wide enough for international play: Joe Robbie Stadium in Miami. But none of these problems is insurmountable, according to World Cup USA 1994, the group that convinced soccer's governing body, FIFA, to award the games to the United States. Soccer, the organizers say, was the best-attended sport of the '84 L.A. Olympics. And facilities such as Kansas City's Arrowhead Stadium can be re-modeled once the organizers make their venue choices next June. "Once Americans see the game as it's meant to be, they'll get excited," says Kissinger. The spokespeople like to point out that 12 million kids play soccer in the United States and that we have more collegiate soccer than football. Those same arguments were once advanced by the North American Soccer League. The now defunct North American Soccer League.

CHARLES LEERHSEN with KEN SHULMAN in Rome and TODD BARRETT in Chicago

# Zina's Breakthrough

Tennis has moved out of the country club in recent years, but it remains a sport heavily tilted in favor of players who grew up with money. Zina Garrison, a hard-luck 26-year-old who learned to play on a Houston playground, struck a democratic blow last week with a shocker upset of top-ranked Steffi Graff in the Wimbledon semifinals, 6-3, 3-6, 6-4. After a hard-fought first game, she succumbed to the unsinkable Martina Navratilova in the finals, 6-4, 6-1, giving the 33-year-old veteran a record ninth Wimbledon singles title. But even while falling

short, Garrison left the tennis world with a memorable taste of grit, advancing further than any black woman since Althea Gibson in 1958.

For years, Garrison has been stopped just short of center court, lacking that last winning instinct required of all top-seeded players. Her personal setbacks have been considerable, from the death of both parents to a bout with bulimia. Now they merely underline how far she has come. Despite her much-expected loss in the finals, Zina broke through last week. And Houston wasn't the only place that smiled.

AP

Garrison exultant: True grit

NEWSWEEK: JULY 16, 1990 65

ST 12, 1990

Church Issues Challenge
And Kissinger Responds

WHITE PLAINS
CHALLENGE by one man
and a promise from an-
other have been instrumen-
tal in an effort to establish a
new education fund to aid Westches-
ter youngsters.

Kortright Davis, a religion profes-
sor at Howard University in Washing-
ton, said from the pulpit of Grace
Episcopal Church here about two
months ago that the church should
have a scholarship fund to provide
incentives for young people. And he
challenged his listeners to establish
such a fund.

The promise came from Dr. Henry
A. Kissinger, former Secretary of
State. Attending Grace Church in Oc-
tober last year for the funeral of his
mother-in-law, Agnes Maginnes, he
told the pastor, the Rev. Peter Larom,
that he was impressed with Grace's
community efforts. He also offered to
help by speaking at a benefit.

Dinner-Discussion Benefit

The benefit will be a dinner for the newly established Dare to Dream Education Trust Fund. It will be held Oct. 21, starting at 6 P.M. at the Westchester Marriott Hotel in Tarrytown. Dr. Kissinger, now chairman of Kissinger Associates, an international consulting firm with offices in Washington, will speak on "Our Re-Shaping World."

"We had this pre-existing offer for Henry to come and raise money," Mr. Larom said. "This was the ideal way to use that offer."

Mr. Larom said his goal was to
raise $50,000 that night with the sale
of 700 tickets for at least $75 each.

A number of business, academic
and nonprofit-organization leaders
have lent their names to the dinner's
honorary committee.

"We picture the fund as a variation of the I Have a Dream Foundation," Mr. Larom said. "But we want to see it working at every level, as early as day care; the reason being the drop-out, the failure rate starts at a very early age."

The I Have a Dream Foundation
assures a college education to select-
ed school classes of youngsters who
complete high school. Dr. Stanford E.
Wrubel, assistant superintendent of
the Mount Vernon Public School Sys-
tem, said a sixth-grade class from the
Cecil H. Parker Elementary School
therehad been chosen four years ago.
Its benefactors are Donald and Jane
Cecil, local residents.

Focus Will Be on Four Areas

The committee to administer the
Dare to Dream fund has yet to be set
up, but Mr. Larom said the four areas
that would receive the fund's atten-

tion were day care, after-school pro-
grams, summer camp and college
scholarships.

"We're using the word deserving but not underprivileged," Mr. Larom said. "The assistance could be for academic or financial reasons." He said he saw the fund assisting 10 to 15 youngsters a year, with its impact growing through corporate support and the establishment of funds by other churches.

For the Oct. 21 dinner, the county's
10 colleges have been invited to send
student representatives who will be
able to ask questions of Dr. Kissinger
following his talk and meet with him
at a separate reception.

Mindful that the students are at-

The Dare to
Dream educational
fund seeks
to raise $50,000.

tending free of charge and that the
event is a benefit, Mr. Larom added,
"I hope the corporations will pay for
that."

Among Those Participating

The honorary committee includes
S. J. Schulman, president of the West-
chester County Association, a private
group that represents and promotes
business; John E. Hand, chairman of
the County Board of Legislators; Nel-
son A. Rockefeller 3d, a philanthro-
pist; Basil Filardi, a retired City
Court judge and former White Plains
Republican Party chairman; Hector
Hyacinth, a business leader, and Mar-
garet Soter, director of the County
Office for Economic Development.

Also, Dr. Sal Prezioso, chairman of Westchester 2000, which studies the county's future; Robert Feder, a White Plains lawyer; Jon Halpern, vice president of Halpern Enterprises, a developer; Dr. Margaret Gotti, vice president of Pace University's White Plains campus; Richard Biondi, vice president of development for New York Medical College, and Robert Fletcher, vice president of administration at Ciba-Geigy in Ardsley.

HERBERT HADAD

TWO WEEKS OF FUN COST $268

A16

TUESDAY, MAY 8, 1990 ★

# CUP: Big Tournament

Continued from A15

2.6 million spectators at the 52 games will have an individually numbered seat.

Inspectors from FIFA, the international soccer federation and father of the cup, visited all 12 sites and reported serious problems in Milan, Naples and Rome, which has been enlarged to seat 80,000 but, in the view of some critics, not improved.

"With a little bit of foresight we could have avoided this monstrosity," said Antonio Jannello, head of Italy's largest environmental organization. The stadium in Florence, home field for the United States, was criticized by FIFA for bad planning.

Milan's field was resodded only last week. Whether it will be ready for the inaugural match between defending champion Argentina and Cameroon is now up to the elements.

"As usual, all the city officials blame their failures on government red tape," the Rome newspaper La Repubblica noted tartly in a recent editorial.

Then, too, the newspaper observed, Di Montezemolo says his responsibility stops at the stadium gates, the national minister of sport and tourism says he got his job too late to be useful and his predecessor "was too busy campaigning for mayor of Rome" to immerse himself in cup preparations.

Overall, stadium costs have soared to about $800 million, nearly double the budget. Infrastructure projects—a rail link between Fiumicino Airport and Rome and a light-rail line from downtown Rome to the Olympic stadium are examples—have also mushroomed in cost. Neither is finished.

The Italian Communist Party, which has a reputation for probity in the cities it governs, is demanding a parliamentary inquiry to account for the many millions of fire that seem to have fallen off trucks on the way to the ballpark.

Somewhere in the welter are billions of fire being spent to guard Italy against the hooligans, those 20th-Century descendants of Northern European vandals who have sacked Italy before.

Holland has been banished to Palermo for its matches, and England to Cagliari. As riotous Dutch and British fans may have occasion to observe, Sicilians and Sardinians are not among the sweetest-tempered Italians.

Fifty carabinieri have spent a month in Britain learning from the British police how to deal with the rowdies. In all, 20,000 police officers, including 11,000 specially trained for the cup, will patrol training camps and stadiums where

## No Sex Till It's Over, Coach Asks

COVERCIANO, Italy— The coach of Italy's national soccer team has asked his players not to engage in sex until the World Cup tournament ends July 8.

Azeglio Vicini said Monday that this weekend will be the last at liberty for the players before a long period of "seclusion."

"Chastity of players prior and during a major competition has been a long-debated but unsolved problem," Vicini said.

For entertainment, he said, the players will have videotapes and a few excursions out of the training center—under the watchful eye of Vicini and other team officials.

—Associated Press

a big-brotherly eye will monitor crowds for a police-only TV network. Fans who survive checkpoints 100 yards away will be frisked again at stadium entrances.

Sardinia has long been reckoned the No. 1 trouble spot, but lately it has dawned on planners that Genoa may blindside them. The Scots will play in that Mediterranean port, which is preparing for the 500th anniversary of the discovery of the New World by its native son. And it is on Columbus' Genoa that British, Dutch and Irish fans will converge to catch ferries for games in Sardinia.

If, as expected, England advances to the second round, it could actually play in Genoa, thereby offering a potential battleground for the Italian army.

The rowdies tend to be young, noxious and out of work, but the cup's charisma also entices the elite. His Royal Highness Zayed ibn Sultan al Nuhayan, ruler of Abu Dhabi and the owner of the United Arab Emirates team, will have a king-size hot tub with inlaid brackets big enough for champagne bottles in his marbled hotel suite outside Bologna. In the hotel garden, Italian workers have set up a tent for use as a mosque by the sheik and his entourage of 40.

Despite a pricey Brazilian coach, the Emirates are hardly better than the Americans. They won't win the World Cup either. Beyond that, in an Italy gridlocked and soccer-crazed for the next two months, anything at all is possible.

[LC]

# Many Prominent Americans Say Vital Interests Are at Stake in the Gulf...

The New York Times

## Henry Kissinger

National security adviser to Richard M. Nixon, 1969-75; Secretary of State, 1973-77. Now chairman of a consulting firm, Kissinger Associates.

The fundamental problem, it seems to me, is that this is the most blatant case of 1930's-style aggression in the entire postwar period. In the middle of peace, without any particular provocation except the desire for more territory, Iraq has annexed Kuwait. If that is permitted to stand it will lead to a whole series of conflicts and revolutions in the region.

I referred to Germany in the 30's and not to Soviet expansionism in the 1950's because the Soviet Union did not actually annex those countries. Rather, it insisted on its right to impose puppet governments on unwilling populations. Saddam Hussein is actually abolishing a state and a dynasty that has ruled Kuwait for 250 years.

If Saddam Hussein succeeds, in particular on the basis of the arguments he has used — that Iraq has an implicit right to supplant Arab states by military action — all the principalities in the gulf will be put at risk because virtually every country in the area, including Jordan, fits Hussein's criteria for justifying the overthrow of Kuwait, with the possible exception of Egypt.

If Hussein succeeds, a cycle of conflicts in the Middle East is absolutely inevitable, probably culminating in an Arab-Israeli war.

If Saddam Hussein can make his coup stick, in the face of unanimous opposition from the United Nations, a worldwide embargo and a U.S. military deployment, we will enter a period of growing chaos.

These comments were elicited in telephone interviews by Eric Pace and Alessandra Stanley.

The New York Times

## Edward W. Said

The Old Dominion Foundation Professor in the Humanities, Columbia University; a member of the Palestine National Council.

As an Arab and an American, the awful events unfolding in the gulf fill me with dread and sorrow. I have grown up with the spectacle of Arab and American interests in the Middle East for the most part in conflict. My assessment of American interests today as they have been acted upon and spoken about by President Bush now and in the past is that these interests are the unimpeded flow of relatively inexpensive and abundant Arab oil, the compliance of one or several Arab leaders with U.S. interests basically in protecting the flow of oil and not standing in the way of America's other major interest: Israel.

Beyond that, I have felt that the aspirations, the attempt to deal with a difficult historical legacy, the desire to achieve development and independence which have characterized the best of Arab nationalism — all these have never been considered to have entered the pursuit of American interests in the region. It is true that the Arab world today presents a sorry spectacle, with all sorts of inequities, tyrannies and mediocrities to make us all feel ashamed. Saddam is one of the results of the difficulties the Arab world faces — a tyrant and an aggressor, who seems nevertheless to speak to hidden emotions and frustrations in the collective Arab soul.

I am also angered as to why an illegal Iraqi occupation of Kuwait has aroused far more American force and passion than the brutality and callousness of Israel's 23-year-old occupation of Arab land.

Brian LaPointe/The Island Packet

## John C. West

Attorney and Distinguished Professor of Middle East Studies at the University of South Carolina; Governor of South Carolina, 1971-75; Ambassador to Saudi Arabia, 1977-81.

We do have a tremendous economic stake in the Mideast. We cannot afford to have Saddam Hussein or anyone else who is unfriendly to the United States control nearly half of the world's oil supplies. The fact is that we are far more dependent on imported Mideast oil than we want to admit. For example, in 1973, when we had the first oil embargo, we were importing less than 30 percent of our oil. President Nixon declared Operation Independence, saying we would be free of imported oil in seven years. . . . The crisis ended, Mr. Nixon's plans were shelved, the next crisis came in '79, and at that time we were importing 40 percent of our oil.

In the late 70's, the Congress appropriated $88 billion for alternate energy sources and to meet the problem of dependence upon foreign oil. Again, the crisis ended, and there is at most only one small part of that program still alive.

Today . . . the person who controls half of the world's oil resources determines the world economic outlook, inflation, and whether we have a depression or whether we have prosperity.

The United States has some difficult times ahead. The history of boycotts' working is not good. But the hope must be maintained that the boycott of Iraq, including a shutting off of the oil supplies, will cause Saddam Hussein to retreat. If that does not work, we are faced with a long stalemate with our soldiers and airmen in a combat status in a hostile foreign environment, not unlike Vietnam.

The New York Times

## Rep. Ted Wels

Democrat of New York, a member of the House Foreign Affairs Committee.

For those of us who remember World War II, and know how it happened, what Saddam Hussein is doing bears a startling resemblance to how Hitler behaved. There were terrible consequences then, when the International community did not stand up — it just encouraged aggression.

I have had no reluctance whatsoever to speak out against American military action when it was illegal or improper, but I support U.S. policy when it stands up to illegal and improper behavior in other nations. . . . Sec-ondarily, what is happening in the Middle East is important because of the oil — it is of terribly important concern to our economy.

If you allow someone like Saddam Hussein to get a stranglehold on oil production, it gives him control of our economy. The price of oil operates on the basis of availability.

If you give that kind of control to a person such as Saddam Hussein, who is very, very ruthless, the consequences would be very, very dire.

I've been touting Saudi Arabia as a moderate force in the region, one we had the capacity to rely on, so it is nice to know that in fact, they are willing to let us help them defend themselves.

Also, the crisis demonstrated that when Israel expresses its concern for its security, it is not being paranoid. There are nations surrounding her which are in fact very aggressive and very powerful. The safety and security of Israel has to be one of the top priorities for Israel and to her friends.

Associated Press

## Rep. Patricia Schroeder

Democrat of Colorado and a member of the House Armed Services Committee.

Basically, our main interest in Saudi Arabia and Kuwait comes down to a three-letter word, oil. It is oil, oil and oil. Regrettably, we have diverted all our attention away from an energy program, and alternate sources of energy. We don't seem to have any capacity as a nation to think long-term: anyone who looked at the region could tell it has not gotten any more stable, and we certainly know the entire industrialized world relies heavily on oil. The world economy is quirky enough without a massive oil shock.

That's why we didn't have time to play around in dealing with this crisis. . . . Saddam Hussein had to be told that if he crossed the border into Saudi Arabia, he would be picking a fight with a force that is far bigger than just Saudi Arabia. We had to do that to convey our seriousness.

The thing I wish is that we had gone in under a United Nations flag. We did it the last time — reflagging the Kuwaiti tankers. We have become the 911 for the world. This time, we obviously had international support . . . and the Soviets also sided with us. As a military exercise, this is going to be very costly, and I wish we didn't have to bear all of the cost by ourselves.

The tragedy of this is that some will use the crisis to insist that we need an MX missile and a B-2 bomber and S.D.I. If we had spent the billions of dollars those weapons systems cost on building up our energy independence, we would have something to sell to the rest of the world, we would be like Saddam Hussein.

[L.C]

... Resistance to Blatant Aggression, Defense of Allies and, Above All, Oil

The New York Times

Associated Press

Frank C. Dougherty for The New York Times

Associated Press

William F. SAURE/The New York Times

Jesse Jackson

Ran for the Democratic nomination for
President in 1984 and 1988.

My position has been that we must defend
our allies, protect our national interests, and
contribute to world stability...

Kuwait and Saudi Arabia are our allies and whenever the free passage of traffic in the gulf has been threatened, they have alled with us. In the cold war, they have been our trading partners, and have played a factor in the price stability of petroleum, which affects us and the Western world. They have done things to support us, when we needed it, and they had no place else to go.

Saudi Arabia is more of an asset to us than
Grenada was a threat, Kuwait is more of an
asset to us than Norlega was a threat...

We went to Saudi Arabia with an Invitation, so it was not an invasion as it was in Panama and Grenada. In Panama and Grenada, we violated international law and put in our own governments and the world scared us for doing so. In this case Hussein broke international law. He said he would not invade, and he did. He said he would withdraw from Kuwait, and then he annexed. And then he began moving toward Saudi Arabia. Saudi Arabia asked for our help. It seems to me that we were obliged to respond.

Hopefully, our military presence there will
serve as a deterrent to Hussein's expansion,
and our diplomatic and economic initiatives
will be a factor in getting him back to his borders
and getting all parties around a table for
a negotiated settlement... Our military
presence must be temporary, for the longer
they are there, the more hostilities they will
engender. And that's why we must put at
least as much energy into helping the Arab
nations' summit succeed, led by Mubarak, as
any other tactic.

James R. Schlesinger

Richard M. Nixon's Secretary of Defense, 1973-1975, and Jimmy Carter's Secretary of Energy, 1977-79. Now a counselor at the Center for Strategic and International Affairs in Washington.

Why is Saudi Arabia so important? Because it is the largest producer of oil, and the U.S. is becoming increasingly dependent on foreign sources of supply.

Could we survive without Saudi Arabia?
Sure. We would find ourselves more subject
to the whims of those who control the supply,
but the U.S. is a large and powerful country.

Oil prices would be higher, and probably
more erratic; there would be conservation,
fuel switching, and there would be a tendency
to turn to other sources of supply for oil itself.
Even if Venezuela and Mexico could meet the
U.S.'s oil needs, they could not compensate
for the oil dependence of Europe and Japan.
But the U.S. would then lose its position as the
leader of the world in the post-cold war atmosphere.

We were right to provide troops in Saudi
Arabia as a deterrent to dissuade Iraq from
attacking Saudi Arabia. We had a commitment,
which has been stated and restated
since the late 1970's... For us to stand aside
and watch Saudi Arabia be swept away
would be the equivalent of standing by and
watching Berlin be swept away in the 1940's.

I'm not sure Mr. Bush's political objectives of immediate and total and unequivocal withdrawal of Iraq from Kuwait and the restoration of its legitimate rulers, are achievable. We may have prematurely set our feet in concrete over this.

George W. Ball

Lawyer; Under Secretary of State, 1961-
66; United States Representative to the
United Nations, 1968; a senior partner,
Lehman Brothers, 1969-1982.

President Bush basically had no serious
option but the one he is pursuing. I think it is
very important, however, that he not fall into
the habit of talking about this as though this
were an American operation... The legiti-
macy of what the United States is doing de-
pends now on the Security Council resolution.
It's a United Nations action; he's got to keep
that firmly in the forefront.

Even in the most moderate Arab countries, the Arabs privately have a considerable admiration for Saddam Hussein because they have such contempt for the Kuwaitis, who have been the beneficiaries of enormous wealth and . . . have behaved in an extremely self-indulgent way.

One of the major reasons that the Saudis
are not better equipped than they were to re-
sist this aggression is because the American
Congress has bowed to the pressure of the Is-
raell lobby and denied the Saudis the military
hardware that they have tried to buy.

While the United States a few years ago
was the greatest creditor nation in the world,
we are now the greatest debtor nation, and,
we are able to maintain ourselves in substantial
part because of the flow of investment
money from the oil-producing countries...
Should Saddam Hussein be permitted to roll
over on the Saudis, then with his Iraqi Ku-
waiti-Saudi production, he would have a
stranglehold on the world oil market — and
he would be the last person who would be in-
clined to use his money to . . . mitigate our
position as a debtor.

Richard Helms

Former Director of Central Intelligence
and former Ambassador to Iran, now an
international consultant in Washington.

The vital interest of the United States in
Saudi Arabia is oil. With a capital of. Any in-
terest that we have in Kuwait is the same:
oil.

When I use the term "oil," I am referring
of course to crude oil production. It is the
movement of this crude oil to refineries
around the world which keeps the wheels of
industry humming and the wheels of automobiles
turning. Also oil, as the Shah used to
say, is a precious commodity, because it provides
the basis for a whole series of plastic
byproducts as well as petrochemicals of dif-
ferent kinds.

The current crisis in the Middle East indi-
cates once again how important it is for the
United States to establish an energy policy.
We have made various passes at this difficult
activity, but each time whatever crisis has
arisen, it has passed over, and the American
public has forgotten the vital importance of
crude oil to our economy, if not our very ex-
istence.

In recent years our import of crude oil has
steadily risen until it is now almost 50 per-
cent of our needs. This is a dramatic change
from the days when Texas oil dominated the
American domestic scene. It is incumbent
upon the country — the President and the
Congress — to wrestle with this difficult
problem of an energy policy. Otherwise the
United States, in fact the free world, will be
come increasingly hostage to unpredictable
events in the Persian Gulf area.

Bernard Lewis

Cleveland B. Dodge Professor of Near
Eastern Studies Emeritus at Princeton
University.

I can understand the irritation of people
who ask why on earth should we get involved
with all these difficult and troublesome peo-
ple in far places... Nevertheless I feel that
irritation is misplaced.

It seems to me that there are two major
reasons why we should be concerned about
the Middle East to the point of doing some-
thing about it — and even incurring some
risks. The first point is oil, which is necessary
not only for this country, which now imports
almost half its oil, but also for the free world
generally.

There is a real danger that one country,
one government, you might almost say one
man, would control so large a proportion of
the world's oil that he would have power over
not only pricing but also supply. He could al-
locate and price as he chose, and thereby ex-
cerp a degree of control which is more than
unacceptable — which is positively danger-
ous.

Ultimately the only way to escape from
this dilemma is to escape from oil, which pol-
lute the sea, the land, the air, politics, the
economy, and much else besides.

The second point, which I think is even
more important, is that if in this year 1990 a
country may simply invade and annex a
neighbor while the world merely says tut, tut
and does nothing effective about it, then this
is the first step to the breakdown of the inter-
national order... If we let this pass, we shall
be back in the international jungle of the
1930's, and we know where that led.

# CORRESPONDENCE

## China men

**To the editors:**

In his cover story "Bullish on Beijing" (April 9), Arthur Waldron demonstrated the danger of an area specialist who becomes so narrowly focused that he misses the big picture. Waldron's assertion that the rapprochement between China and the United States was originally motivated by the three convictions of the "New China" position is unequivocally wrong. Kissinger was a strategist, not a romanticist; what he hoped for was a dramatic change in international relations favorable to the United States.

The key to this change was the increasing Sino-Soviet hostility at the end of the 1960s, something Waldron inexcusably failed to take note of. His only comment was that China was "perhaps suspicious of the USSR...," a drastic understatement. Nixon and Kissinger understood the potential opportunity that the Sino-Soviet split held for the United States. They also understood that this split could not be affected by the United

States; China had to realize on its own the need for an American counterweight to the USSR. A number of factors explain the Sino-Soviet split, but two most likely pushed the Chinese to seek a triangular relationship in 1969. One was the Soviet invasion of Czechoslovakia, since the Chinese probably feared that the Brezhnev doctrine applied equally as well to them as to Eastern Europe. The other was the border clash between the two Communist powers throughout 1969.

Geopolitics was Kissinger's guiding principle. A decreased Chinese threat in Asia; an end to the Vietnam War; a shift of Soviet military concern away from Europe toward its border with China: these goals, which seemed more attainable with a triangular relationship, were the explanation for Kissinger's excitement over Nixon's visit to China, not a sentimental conviction learned from the academic left.

ROBERT SOMERVILLE

Alexandria, Virginia

## Plane truths

**To the editors:**

In "Remote Control" (TRB, April 23), Michael Kinsley writes: "Deregulation in general—of airlines, for example—has been a great success of free market eco-

nomi
from
aren't

Fly
airline
agency
time
an e-
a te-
state
two-

reach a major carrier. A suc-

market economics? For the few remaining airlines, maybe. We don't know yet.

For the rest of his life Kinsley will help to pay for the deregulation of the S&Ls. For much of the nation, the success story also includes the dismantling of rail branch lines and resulting pulverization of highways; the non-emergence of high-speed transit; 800 numbers in place of personal presence in the service industries; the priority of consumables over the means to save energy and resources.

Debt is deferred to another generation. Infrastructure built by past generations rusts and rots. Assuming no reversal of the mindset now hardening at the center of power and no restoration of institutional memory among the apparatus of the financial community, the unenlightened regions, ungrateful to the double-speak philosophy that neither freed the marketplace nor reduced federal intervention, will someday proclaim their autonomy from the equivalent of White Russia—seeking moral support from Europe and Japan.

PERRY SWISHER

Boise, Idaho

The writer is commissioner of the Idaho Public Utilities Commission.

## Pet peeve

**To the editors:**

In Veronica Geng's article on Monty Python's Flying Circus ("It's ...", April 23), she identifies John Cleese as the actor who plays a "shopkeeper trying to sell [a] dead parrot." In point of fact, Cleese appears in the role of a pet-shop customer trying to return a dead parrot to the shopkeeper, Michael Palin.

I realize that some will claim such facts are trivial. Need one point out that the willful neglect of small matters is just the kind of thing that could result in the fall of the Empire?

BRAD STRICKLAND

Oakwood, Georgia

The editors welcome correspondence from readers. Letters should include the writer's full name, address, and telephone number; be typed double-spaced; and be held to under 200 words. Letters may be edited for space. Please address letters to: Correspondence, TNR, 1220 19th Street, N.W., Washington, D.C. 20036.

Photo: Jeffrey

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> —Meg Wolitzer,

The New York Times Book Review

> "Move over Toni Morrison and Alice Walker, make room for Itabari Njeri."

> —Houston Chronicle

*Tina McElroy Ansa, New York Newsday

RANDOM HOUSE

At bookstores everywhere, or call 1-800-733-3000

6 THE NEW REPUBLIC MAY 21, 1990

Inside the right's China closet.

BULLISH ON BEIJING

By Arthur Waldron

When it comes to China, no one can accuse George Bush of being a political weather vane. Faced with a tempest of outrage over the Tiananmen Square massacre, he held himself to a carefully modulated response. Shortly thereafter (and in violation of his expressed policy) came the decision to re-establish high-level contacts with the Chinese leadership by secretly sending Deputy Secretary of State Lawrence S. Eagleburger and national security adviser Brent Scowcroft to Beijing in July and December. Then the president surprised many analysts by conducting a ferocious full-court press to defeat the bill, sponsored by Representative Nancy Pelosi of California, that would have protected Chinese students in America from deportation. By early March of this year the president was admitting that he wished "there would be more" response to those initiatives. But he apparently recognized no need to reconsider policy more generally. Far from it: on March 13 he told reporters, "We're right on track."

What lies behind this unusually steady and determined course? Principally, I would suggest, three deeply held convictions. One, American intervention can make a major difference in China's future, particularly if it takes the form of personal diplomacy. Two, the possibility of making such a difference is important enough to justify accepting substantial political damage at home. China holds primacy in Asia and has the potential to be a world superpower. Three (a carefully hedged but nevertheless detectable belief), China is somehow different enough to be partially exempted from the moral considerations that increasingly guide and constrain American policies elsewhere.

These beliefs are by no means unique to Bush. They characterize what may be called the "New China" (in Chinese, Xin Zhongguo, a common official synonym for the People's Republic) approach. In America they were articulated forty years ago by thinkers, mostly on the left, who maintained that the establishment of the People's Republic of China marked a new, definitive, and

ARTHUR WALDRON, author of *The Great Wall of China: From History to Myth* (Cambridge University Press), teaches Chinese history at Princeton University and is the Hooper Fellow at the Foreign Policy Research Institute.

on balance highly positive step in China's twentieth-century evolution. Dominant in the academic world by the 1960s, this approach was adopted by the Nixon administration as the rationale for its opening to China, and with various modifications has formed American policy ever since. It is a policy in which Bush has been intimately involved at least since his service as U.S. envoy to China in the mid-1970s. That, most likely, is why it has such a hold on the president. And that is also why the fate of the New China approach as the guiding rationale for American policy may well rest with the success or, as now seems more likely, the failure of Bush's initiatives.

What would failure mean? Traditionally the New China approach has been opposed on three grounds. One, China's power potential is small, although obviously sufficient to cause trouble. Two, American influence in China is limited, and therefore the primary focus of America's Asian policy should be elsewhere (Japan is the usual suggestion). Three, there is little in China's political or philosophical tradition (which stresses virtue as the basis for rule) that justifies suspending human rights considerations when dealing with it. If the energetic Bush initiatives do bear meager fruit, this line of reasoning may begin to displace the New China position in policy-making.

The first sketch of the New China view came from French Enlightenment figures such as Voltaire, who hung a portrait of Confucius in his study. Their descriptions depicted the country as strong, organized, and both morally and rationally distinct from the West. But for our purposes the story of the New China approach begins in the war-torn China of the 1930s and 1940s. During that time, many of those who built or influenced the academic field of China studies passed through China, and the impressions they formed proved to be particularly important, since direct access to China effectively ceased between 1949 and the early 1970s.

The China of the Second World War was scarcely the Enlightenment dream. The Japanese invasion had laid waste to the country; refugees were everywhere; the economy was a shambles. But many of the Westerners who visited nevertheless found cause for hope. They had little use for the Nationalists, who still resisted Japan from the city of Chongqing, beyond the Yangzi

20 THE NEW REPUBLIC APRIL 9, 1990

gorges and therefore virtually impregnable. The Na-
tionalist government seemed "proto-fascist," as the
Harvard China specialist John Fairbank wrote to an
acquaintance working in the State Department. But
they saw in the increasingly powerful Communist Party
an organization that, by blending Marxism with ele-
ments drawn from traditional Chinese culture, could
create a strong and united China that would be able to
take its place both in the country's proud historical
tradition and in the world. The belief that this process
had actually gotten under way after the 1949 revolution
gained greater and greater credence in left-leaning in-
tellectual circles until, by the 1960s, it verged on being a
consensus.

All of this, of course, was almost entirely at odds with
official interpretation and policy. America and the PRC

had become estranged shortly after the Communist
victory in 1949, as initial American plans to deal
with the new regime were rapidly superseded by non-
recognition of Beijing and political, economic, and mili-
tary support for its rival on Taiwan. The reasons for this
American-PRC estrangement are complex, and the ex-
plosive political debate at home over "Who lost Chi-
na?" was certainly one of them. But even in the 1950s
American diplomacy was not entirely irrational. Recent
scholarship is beginning to make clear both the objec-
tive basis and the logic of the China policy laid down in
the Eisenhower administration. From the 1950s on, the
American government's information about China, the
product of a sustained intelligence effort mounted from
Hong Kong and Taiwan, was good. The picture ob-
tained from this effort and from informal contact was of

The Lost Generation

BEIJING
The pseudonym he chooses is George—for George Bush, whom he thanks for preserving Sino-U.S. relations. Unlike Chinese students in the United States, many Beijing students worry that noisy U.S. protests against China's repressive policies could backfire, perhaps leading to a ban on overseas studies. George, a graduate student at China's Technology University, is a product of Deng Xiaoping's open-door policy. He likes to wear a Princeton T-shirt that an American friend gave him. He prefers the Beatles and Hemingway to *The East Is Red* and the works of Mao. George's hope in life is to go to the United States to study.

Last spring, when thousands of
students started marching to Tianan-
men Square, George thought there
was little hope for a successful popu-
lar rebellion. But by May 4, the sev-
entieth anniversary of China's first
democracy protests, he was swept up
by the huge numbers. Wearing his
Princeton T-shirt, he sat with his
classmates singing Russian revolu-
tionary songs. His department's Par-
ty leader even joined in. There was
an exhilarating sense that through
the people's sheer willpower, China
might really become a more open
and democratic country.

After Tiananmen Square, George,
like other students, wrote a report
supporting the crackdown for his
school's Communist Party leaders. "It
made me sick," he says, "but I had to
do it." One of his classmates was
crushed by an armored personnel car-

rier. Another was just released from
the hospital after recovering from a
gunshot wound. But nobody mentions
that night to him, or asks about his
experiences. "What's the point in get-
ting things stirred up?" says George.
"We've learned no student movement
means anything here."

With the help of a propaganda
book called 56 Terrifying Days, each
student wrote a required account of
his activities for each day of the
movement. Students were given
three chances to report everything
they did; if the third version was still
unacceptable, they would get black
marks in their Party files. Those files,
called "dangan," follow citizens for
life: black marks mean a bad job,
even possible banishment to far-
flung, undeveloped parts of the
country after graduation. But unlike
former political campaigns, this time
nobody rats on friends; nobody even
mentions that their Party leader was
in the square. He stands at the front
of the classroom praising the stu-
dents for their restraint. "Nobody
went to the square," he says. "Your
attitude was correct."

The authorities have imposed a
mind-numbing program of political
indoctrination. On top of the usual
required heavy dose of politics—in-
cluding history of the Communist
Party, Marxist philosophy, history of
the Chinese revolution—the weekly
political study session includes lec-
tures and small group discussions on
the "quelling of the counterrevolu-
tionary rebellion." In recent years,
as Deng policies stressed pragmatism
and economic efficiency, politics
courses had become less and less im-
portant. Now students must score
well in them if they want to get as-

signed good jobs by the state.

Though students are forced to
publicly renounce the movement,
they find ways of resisting. When
George's department Party chief
showed students a propaganda mov-
ie about the Nationalist era, students
hooted and cheered when Chiang
Kai-shek, supposed to represent the
epitome of evil, conceded to a dia-
logue with demonstrating students,
then used only water cannon to dis-
perse the crowd. Qinghua Universi-
ty, China's most prestigious science
institute, also showed students pro-
paganda films with the hope of incul-
cating a bit of the spirit of hard work
and plain living that the Communist
revolutionaries lived by in the Yanan
guerrilla base some fifty years ago.
Instead, the students started cheer-
ing when a Nationalist soldier in one
old film began beating a Communist
agent.

In discussion groups each student
is expected to explain why the gov-
ernment was right to smash the stu-
dent movement. To avoid having to
speak, one group of students at Bei-
jing University cleverly asked the
blue Mao-suited Party cadre running
the discussion to reread the speech
being discussed—so they could catch
each important point, they said. But
most students play the game, mouth-
ing the lines they read in People's Dai-
ly. "We have to speak," says Xiao
Zhang (a pseudonym). "Otherwise
the leaders will say we have ghosts in
our hearts—that there's something
wrong with our thinking."

Xiao Zhang and his classmates en-
dure a bleak nightly routine. Wear-
ing five or six layers of clothing, they
trudge across campus through biting
winter winds to study in a bare, un-

22 THE NEW REPUBLIC APRIL 9, 1990

a highly repressive state, sometimes reckless, repeatedly shaken by political crises, perhaps suspicious of the U.S.S.R. and yet not particularly receptive to the United States or the West. American policy was therefore two-fold: containment, plus pressure designed to split China away from its Soviet alliance.

But in the 1960s and early 1970s, both such American policies and the facts on which they were based came under increasingly vigorous challenge from intellectuals. For example, despite compelling evidence from refugee and official sources, the reality of the great famine of 1959-61, in which tens of millions died, was almost uniformly denied by China specialists, who instead argued that the People's Republic had eliminated hunger for the first time in Chinese history. Even when abuses such as "thought reform" were admitted, they

were often implicitly justified by the invocation of Chinese traditions of ideological unity, differing conceptions of individual rights and freedoms, etc.

The view presented China as a country that was good if understood in its own terms, terms that were morally different from but equivalent (if not superior) to our own. The problem was that China was frequently misunderstood. And so this view called for extreme sensitivity in dealing with China: we should seek to understand, and never to impose. To apply our ideas of "human rights and legal procedure" was wrong; to do so risked sitting in inappropriate judgment "on a largely unknown country from a great distance." Our diplomacy had to be sensitive to China's amour propre and sense of place (what scholars called "The Chinese World Order").

heated classroom. By nine they return to their dorm rooms, off an unlit hallway. Their cluttered, filthy concrete cubicles are just big enough for four bunk beds and a table. Cigarette butts and squashed food litter the floor. At 10:30 students receive a fifteen-minute warning: clutching tin pails, they rush to wash their faces and feet. Because there is no hot water in the dorm, it's far too cold to take showers every day. At 10:45 authorities pull the switch. There is no more electricity in the building for the night.

But students don't accept authority as readily as they once did. "Lights out is when the dorms come to life," says Xiao Zhang. "Everyone pulls out their shortwave radios and the rooms buzz with talk of the latest changes in Eastern Europe." When Voice of America reported that Ni-colae Ceausescu had fallen, he and his friends threw bottles out their windows in celebration. It was a bold act. Since the words for little bottle, "xiao ping," are a homonym for Deng Xiaoping's name, the message was clear to all who heard the glass tinking on the frozen ground outside. The university's Party leaders subsequently posted warnings in dorms that announced: "Anybody who breaks bottles will be dealt with severely."

Eastern Europe has provided a spark of hope for China's demoralized students. But nervous campus authorities have stepped up surveillance, and students know that tens of thousands of troops are still poised at the edge of the city. Late last year three students at Qinghua University killed themselves, jumping out the windows of their dorm buildings.

Two others have tried. Terrified that the deaths might stir up protests again, university authorities quickly spread the word that the suicides were love-related. But one student chose October 1, China's National Day, to jump, suggesting he had a desperate political message to deliver. Xiao Zhang says glumly, "It will be ten years before we can have any freedom again. I have no real hope anymore."

Beijing University, the traditional heart of China's democracy movement, has been labeled a "disaster area" by Party leaders because of the deep-seated resistance to Party propaganda. Following Ceausescu's downfall, students posted a hand-scrawled "big-character poster," or dazibao, describing him as a lost dog looking for the other three dogs named after China's top leaders. "If anybody finds these dogs," the sarcastic poster said, "please call 890634." The number represented the date of the June massacre. The university's president was replaced by a conservative economist, Wu Shuqing, who led a witch-hunt to root out rebellious students and, more important, teachers who had participated in the movement.

One young teacher, who calls herself Susan to avoid identification on the phone, was under investigation for some eight months after June. At irregular intervals, she was called in to sit across the table from three teachers from her department, all Party members, answering their stern questions as if she were a criminal. At first she denied that she had participated in pro-democracy activities—until one day one of her questioners produced evidence that she

had attended a meeting of young teachers supporting the students. "We cannot protect you," the teacher said angrily. "If you confess, the Party will be lenient." Her worst "crime," she assumes, was talking occasionally to foreigners about what she saw on campus. In China, that could be called treason. So far Susan has not been punished; but she worries that authorities are watching her carefully and that she still could be fired.

A new educational policy is restricting study in the West. The State Education Commission in February issued a regulation requiring graduates to "serve the country" for five years before being allowed to study overseas. Universities last year began sharply limiting the number of students who could take the TOEFL English proficiency test needed to enter most U.S. schools. This year George's school announced that graduate students cannot take it at all unless they have relatives overseas. To discourage students from wasting days lining up for the limited chances to take the test, Qinghua University officials didn't announce the place of registration. Panicked students lined up anyway in random spots around the university. The final announcement sparked a chaotic stampede from all over campus. One of the students who recently jumped to his death carried a notebook with the words "TOEFL, TOEFL, TOEFL. CONFIDENCE, CONFIDENCE, CONFIDENCE" etched on the cover.

DORINDA ELLIOTT

Dorinda Elliott is Beijing bureau chief for *Newsweek*.

APRIL 9, 1990 THE NEW REPUBLIC 23

Associated with such views about China's internal developments, and also based on recollections of the 1940s, was the belief in a "lost chance in China." American writers such as John S. Service and Barbara Tuchman maintained that the Chinese Communists had wished to establish good relations with the United States, only to be rejected. In its most comprehensive form, the "lost chance" became a complex counterfactual analysis that suggested not only that good relations with China might have been secured earlier, but also that such good relations might have secured a more humane China. As Service, a China-born diplomat forced out of the State Department in the McCarthy period, put it: "Mao's China, having come to power in a different way and not thrust into isolation by a hostile West, might be quite a different place." In sum, the United States had misunderstood China and, in doing so, had misunderstood its own interest as well. Such views were at odds with our government's views and are increasingly doubted by scholars today. But in the 1960s, with Vietnam in the background, they became broadly accepted in the intellectual community.

And ironically enough it was to exponents of these views, rather than to its own experts, that the Nixon White House turned as it formulated the China initiative. In *White House Years* Henry Kissinger sweepingly dismisses the official understanding of China up until his arrival: "For twenty years U.S. policy-makers had considered China as a brooding, chaotic, fanatical, and alien realm difficult to comprehend and impossible to sway." Somehow Kissinger knew (as Voltaire had?) that China was in fact rational and accessible. provided one adopt the right interpretative tack. So Kissinger and his staff read "books by Edgar Snow, Ross Terrill, Dennis Bloodworth, John Fairbank, C. P. Fitzgerald, Stuart Schram, and André Malraux"—varied authors, some genuine scholars, others little more than journalistic "friends of China," but all far more upbeat about the People's Republic than the official American view had been.

The reading had its effect. Although in *White House Years* Kissinger dismisses as "well-meaning but woolly" the pro-China groups that were so influential in the 1960s, his own emotional approach was more like theirs than he knew. Both were in awe of China. When in early 1971 the message arrived from Beijing approving Nixon's visit, Kissinger delivered it to the president with the words: "This is the most important communication that has come to an American president since the end of World War II." Kissinger's reactions to travel to China were also like those of the "friends of China." In the summer of 1971 the national security adviser and a delegation of radical American students made separate but overlapping visits to China. Here is how the students described the almost mystical experience of crossing the border from Hong Kong:

> Now, first foot on the bridge, walk across slowly, halfway there—we were in China! There could have been brass

bands to welcome us and we never would have noticed; the thrill of simply thinking "I'm in China" absorbed us all.

Now compare *Kissinger*, rejuvenated as he enters China by air from Pakistan a few weeks later:

> Only some truly extraordinary event, both novel and moving, both unusual and overwhelming, restores the innocence of the [childhood] years when each day was a precious adventure defining the meaning of life. This is how it was for me as the aircraft crossed the snow-capped Himalayas, thrusting toward the heavens in the roseate glow of a rising sun.

In effect the administration of the strongly anti-Communist Richard Nixon had adopted the romantic view of the People's Republic developed by the academic left. The president, who as a candidate a dozen years earlier had hammered rival John Kennedy for alleged willingness to abandon the Nationalist-held islands of Quemoy and Matsu to the Communists, now waxed sentimental over the possibility that his daughter Tricia might be able to spend her honeymoon seeing the "great cities and the people" of China. This astonishing intellectual convergence was sustained at its peak for a few years in the 1970s. China cooperated, confirming for the steady trickle of visitors on carefully orchestrated tours just how much and how positively it had changed since 1949.

But the convergence could not last. Even as the official consensus on China and China policy was solidified through the Ford and Carter administrations, the academic view began slowly to shift. Following the Nixon breakthrough, scholars and journalists (many of whom had also been to graduate school and thus absorbed New China ideas) were able to go to the People's Republic. What they found on arrival was that the New China model could not survive long exposure to Chinese reality. The Belgian sinologist Simon Leys's 1974 volume, *Ombres Chinoises*, demolished the mythology about China. In 1982 long-serving *New York Times* correspondent Fox Butterfield published *Alive in the Bitter Sea*, a deeply pessimistic picture of life in China. Scholars began to question the whole analytical approach that Thomas Metzger and Ramon Myers, in *The Washington Quarterly* in 1980, called the "revolutionary paradigm." Like their antecedents in the 1940s, Americans living in China began more and more to identify with dissidents and criticize the Chinese government.

As long as China continued to reform, however, the national consensus on China policy held together. We might have no New China today, optimists said, but it was coming tomorrow. This last illusion died on June 4, 1989. The outpouring of indignation from the academic community after Tiananmen Square indicates, for intellectuals at least, the end of the road for the New China paradigm.

The American government's official reaction was different, as the Bush diplomacy demonstrates. But why? And for how long can it be sustained? Psychologists suggest that the first reaction to a tragedy or grievous setback is denial; social scientists have documented that

24 THE NEW REPUBLIC APRIL 9, 1990

the failure of prophecy can lead not to its abandonment but to its reassertion. The decisions to send Scowcroft and Eagleburger seem broadly to fit this pattern. China policy has gained much realism and sophistication since the sometimes starry-eyed days of Nixon and Carter. Nevertheless, post-Tiananmen Square diplomacy had a certain aura of denial and unawareness. In the months since the secret trips, we have learned something of how the policy was made. Evidently neither the lower levels of the State Department nor the professional staff of the National Security Council originated it. Like the initial Nixon initiative, the Bush decision came not from those charged with making China policy, but from the very top, presumably from the president himself.

It was Bush, apparently, who decided that instead of keeping a cautious distance after Tiananmen Square, the United States should try actively to influence events in China. And it was evidently the president who, on the basis of information suggesting that the Beijing situation was ripe for change—that Prime Minister Li Peng might resign, that astrophysicist Fang Lizhi might be given safe passage abroad from his refuge in the American Embassy—decided on the high-stakes gamble of the Scowcroft mission. But he clearly had strong support from authors of previous China breakthroughs, among them Michel Oksenberg, a professor at the University of Michigan who helped plan Carter's recognition of Beijing, and most important, Nixon himself.

In a memorandum Nixon circulated shortly after his return from a trip to China last fall, he made an analogy between the promises and the difficulties of the present and those his administration confronted. The Tiananmen Square massacre, though appalling to him, did not change his estimate of China's importance. It was still "a nuclear power." With Japan growing ever stronger, "a strong, stable China with close ties to the United States is essential to balance the power of Japan and the Soviet Union in East Asia." China still "has an indispensable role to play in the maintenance of peace and stability in the Asia-Pacific region." "China inevitably will become a major economic power," and so on. The need in American policy, Nixon stressed, is for the same kind of boldness he showed in 1971-72.

Oksenberg, now one of the handful of American China specialists willing to support the president, accompanied Nixon on his trip and went to the informal White House dinner on their return. In a December 13 *New York Times* op-ed piece titled "WHY BUSH IS RIGHT ON CHINA," he argued along lines similar to Nixon's: China is indispensable both geopolitically and in Asia's regional politics; U.S. failure to move has risked letting Beijing slip "into a position of dangerous isolation."

In addition to such foreign policy arguments, we have been hearing special pleading based on China's unique cultural traits. In January John Fairbank explained in *The New York Times*, apropos the Pelosi bill: "It isn't the students as such that bothers [the Chinese leaders]." Rather, it is concern about loss of face if Congress passes a law.

Fairbank is liberal, and Oksenberg is a Democrat, but otherwise the supporters of the president's position are mostly conservatives like Nixon. As such, they are heirs to those who opposed the New China approach when it was first created. On the other side of the division (in addition to many other conservatives) are scholars who once sympathized with the PRC but now condemn the Chinese government and work with dissidents. This is one of the ironies associated with the New China approach. *The Nation* publishes articles condemning Beijing, while the Heritage Foundation circulates an "Executive Memorandum" and a "Backgrounder," which, with qualifications, support the administration's policy.

Meanwhile, the validity of the New China approach is being tested as never before by the Bush initiatives. The president stands by his policy, and the administration explains its failure so far as the product not of a fundamental misjudgment but rather of capricious international developments (the Romanian revolution and the invasion of Panama in particular). The direction of policy will not change: thus the White House will apparently recommend renewal of most-favored-nation status for China in June.

The president is looking less and less like someone creating change and more like a political hostage, as Beijing almost daily tightens its grip on its people and turns up the volume on attacks on the West. The issue today is not whether a stable and unified China would make an important and positive contribution in a whole variety of ways. No one doubts that it would. The problem is that no such China appears to be forthcoming.

The years ahead will likely find China not helping to solve problems in Asia, but rather creating them. The crisis in Hong Kong will almost certainly deepen. Tension may rise between the two Chinas, as a wealthy and increasingly democratic Taiwan seeks its own appropriate international status while Beijing insists on unity. China's long-term economic prospects may deteriorate as central planning is reimposed, while the next succession crisis could bring regional or civil division. There are reports of more unrest in Tibet. The people of China are almost certainly as dissatisfied with their government as the Czechs or the Poles were with theirs, and though China differs from Eastern Europe in certain key respects, nevertheless a Romanian-type explosion is not to be ruled out.

Under such circumstances, how appropriate is it for the U.S. government to follow a policy of active and top-level involvement in pursuit of the New China chimaera? Wouldn't quiet watching and waiting, with diplomacy handled by our ambassador and not special envoys, make a lot more sense? Clearly we need a new paradigm, one that says China is not as stable as we thought or as amenable to our influence, and is as likely to be a minus as a plus in international relations. Those analysts whom Kissinger dismissed twenty years ago for believing China was "difficult to comprehend and impossible to sway" may yet turn out to be close to the mark.

APRIL 9, 1990 THE NEW REPUBLIC 25

Choices Troubling Bush

If It's Force, How Much and What Kind?
And When Will Support Start to Wane?

By R. W. APPLE Jr.

Special to The New York Times

WASHINGTON, Aug. 20 — The clock is running for President Bush, with the moment drawing ever closer for several major policy decisions in the crisis in the Middle East.

News
Analysis

Will he try to rescue at least some of the 2,500 Americans whom he acknowledged today are hostages in Kuwait? How far will he go in using armed force to prevent two Iraqi tankers, now under close surveillance by the United States Navy, from delivering their cargoes? What will he do about the American Embassy in Kuwait, which has been ordered by Iraq to close on Friday?

At the moment, the conventional wisdom in Washington says that the Presi-

dent must not let the hostages' plight control his overall policy, that he must keep to his dual strategy of deterring an Iraqi attack with American troops in Saudi Arabia, and using the United Nations embargo to force President Saddam Hussein of Iraq to pull out of Kuwait or at least to come to the bargaining table prepared to yield virtually everything that Washington is seeking.

In a speech in Baltimore this morning, Mr. Bush echoed that view, pledging that "America will not be intimidated" by Iraqi threats to the hostages. He seemed to be suggesting that a long, warlike period without much combat, not unlike the so-called "phony war" in Western Europe in 1939-40, was at hand.

But at the same time, a belief that war may be imminent is taking hold here. In a syndicated newspaper column over the weekend, former Secretary of State Henry A. Kissinger advised the Administration to "take care not to wallow in the wide domestic and international support it now enjoys,"

*Continued on Page A13, Column 4*

Increasingly Grim Questions for Bush

*Continued From Page Al*

because it may prove transitory. He argued that Mr. Bush may soon be forced "to consider a surgical and progressive destruction of Iraq's military assets."

Representative Les Aspin, the Wisconsin Democrat who heads the House Armed Services Committee, spoke on television of "the possibility of military action at any time."

And an Administration policy maker conceded, "'Steady as she goes, no precipitate action' is fine for the moment, but it gets hard to maintain as the yellow ribbons multiply and public pressure to do something mounts."

Some experts doubt that a blockade can begin to show results in less than six months, a long time to maintain public support and hold together an international coalition like the one Mr. Bush has assembled.

It is probably too late to extract many of the hostages in Iraq itself, because they have been widely dispersed to act as shields; the 2,500 Americans in Kuwait will probably be scattered soon, as indicated by the transfer of 12 United States hostages seized in their hotels today.

Large-Scale and Dangerous

Even leaving that consideration aside, though, a mass rescue is a very difficult prospect, partly because of the Iraqi troops and anti-aircraft missiles now in Kuwait, partly because of the number of hostages involved. A senior official said it would verge on an invasion of Kuwait, rather than a raid, because the airfield would have to be made secure, and perhaps the port, for a considerable time.

If force, how much? And how long will public support go on?

"We aren't talking about helicopter-loads of people, but planeloads, maybe-shiploads," he said.

And anything on that scale would run the risk of touching off a full-scale conflict. Said a retired American diplomat with extensive experience in the Middle East: "If either side attacks, it's a blood bath — open desert country, smart bombs, missiles, tanks, maybe gas — that's no option."

The Israelis advocate a full-scale air assault on Iraqi targets now. The United States has ample air power to mount such an attack, but some strategists here, including the former chairman of the Joint Chiefs of Staff, Adm. William J. Crowe Jr., doubt that American strength has yet reached the point where the United States force in the region could withstand the all-out war that might well follow.

In addition to endangering the hostages, such an action could also lead to assaults on American embassies in some hard-line Arab countries.

The use of armed force to prevent the tankers from reaching port could also set off a shooting war, but Washington seems much more disposed, at least for now, to take a chance at sea than to bomb Baghdad.

"With or without the United Nations approval that we're trying to get," a military official said, "we will stop the tankers. because not doing so would

the foreigners and offer to provide ships and planes to evacuate them.

The Bush Administration already seems to be leaning harder in its policy-making on the United Nations, now more functional than in decades because of the passing of the cold war.

But there are other options, too, that lie somewhere between war and diplomacy. Among them are electronic disruption of Iraqi telephone, radio and radar communications; sabotage of vital Iraqi sites like power stations by paramilitary units; assisting in or even carrying out an assassination attempt on President Hussein, or promoting a coup.

By their very nature, such possibilities are not discussed in public.

So Washington, with the rest of the country, was grasping at straws to-night, searching for clues in Mr. Bush's speech. Some noticed that he had gone right to the brink of threatening retaliation for Mr. Hussein's hostage-taking, then held back, and they concluded that he had decided to stick with diplomacy for now.

Others noticed that the President had pointedly said that he would hold the Iraqis responsible for the safety of the hostages, the same warning he addressed to Gen. Manuel Antonio Noriega with regard to American servicemen and their families just before invading Panama, and they concluded that Mr. Bush was just about at the point of using force.

In Israel, the Feeling
That It's Best to Use
Force Without Delay

A18

T

Utah Is Divided Over Prayer

SALT LAKE CITY, Aug. 26 (AP) — An impending legal battle over prayers at public school graduations has divided Utah residents on religious lines perhaps more sharply than any other issue since efforts to permit liquor served by the drink failed in 1968.

Backers of the prayers, including Gov. Norman H. Bangerter, say it is a local issue that should not be interfered with by lawmakers or the courts.

But opponents argue that this predominantly Mormon state's image in the global marketplace is being adversely affected and that Salt Lake City's bid to be host of the 1998 Winter Olympics could be hurt.

Dismissing the critics, Governor Bangerter said, "I doubt anyone who's going to come to the Olympics worried whether there's prayer in graduation at high school."

But Michele Parish-Pixler, state director of the American Civil Liberty Union, is among many non-Mormons in Utah who believe that the Governor's attitude helps perpetuate some outsiders' image of the state as a narrow-minded theocracy.

"We spend all this money to promote tourism, then we do this stuff," she said.

The battle was joined July 30 when the A.C.L.U. went to Federal cour

Be
fuel pri
Lock i
as lo

NY Times Aug. 20, 1990

ESSAY | William Safire

# Saddam's Last Roundup

WASHINGTON
The question is no longer "will there be war?" between the world and Iraq, but "what is the best strategy to win the war already begun with the least loss of life?"

The conflicting choices now before Mr. Bush are not secret: two different strategies have been laid out in public by former national security advisers Zbigniew Brzezinski and Henry Kissinger.

Our object should be "to squeeze but not strangle Iraq," says the author of the Carter Doctrine. Zbig holds that we should defend Western access to oil, but not seek to roll back the conquest of Kuwait — to rely on international cooperation to negotiate a compromise with Saddam rather than try to defeat him.

Henry differs. Our goal should be the removal of Saddam as a threat to the world's economic lifeline, says the author of the Nixon Doctrine. A settlement leaving Saddam with growing military might would be "only an interlude between aggressions," writes Dr. Kissinger; he urges "a surgical and progressive destruction of Iraq's military assets" before the world's will dissipates.

I believe the Brzezinki "squeeze option" was destroyed in the past few days by the Iraqi decision to hold Western nationals as hostages. Saddam's promised starvation of Western children would squeeze us, not him, to negotiate "peace in our time."

But if Mr. Bush moves quickly, we can counter the Iraqi threat to use our nationals as human shields at military installations. He need not be the third consecutive U.S. President to be humbled by kidnappers.

Saddam has already told Westerners trapped in Kuwait to assemble at three hotels to be saved from a threat he will soon cook up. Mr. Bush—with Mrs. Thatcher and as many other leaders as he can induce to join him—should announce that any "roundup" or harassment of up to 10,000 non-Communist Western nationals taken in the capture of Kuwait would be considered an act of war triggering potent military retaliation.

Such fair warning has been delayed, I presume, to permit a buildup of our forces in Saudi Arabia. But action is now urgent; we can do little at the moment for the two-score Americans already condemned to target duty in Iraq, but we can use a credible threat to protect thousands of others in Kuwait who—once rounded up for designation as human shields—may be doomed.

Suppose President Bush goes on the air quickly to tell the putative hostages in Kuwait to evade capture as long as they can and to urge loyal Ku-

waitis to hide them; and suppose he adds that any attempt at a "roundup" will be answered by bombers taking out all Iraqi strategic sites.

In that circumstance, let us consider the options open to Saddam:

**Option One:** He could ignore the threat and order his troops to hunt down the foreigners, or promise death to any who do not surrender at a given time.

**Option Two:** Saddam could let the foreign nationals leave as evidence of his desire for peace.

**Option Three:** He could neither round them up nor let them out; he can say defiantly he will take them prisoner whenever he decides to, but not yet.

He is likely to select the first: to order his army to arrest, alive, every non-Kuwaiti in Kuwait.

The U.S., with whatever supporting cover it can get from the U.N., would then carry out its solemn commitment. We would bomb every key war-making center in Iraq — nuclear, poison-gas and missile-production in-

> How to turn the hostage tables.

stallations first — including the tanks assembling on the Saudi border.

In this way, the shooting war would begin as a direct result of Saddam's grab for hostages. His hostage "roundup" would pull our trigger; kidnapping on top of invasion would call down the ensuing destruction. The world, and Iraqis, would know why the first nuclear-preventive war was being carried home to its source.

What if he outsmarted us, choosing options two or three? That would prolong the crisis, which is in his interest, but would save the lives of thousands of trapped innocents — not our central purpose, but no small thing.

By waging a decisive, conventional World War II/2, we avert a nuclear World War III. Our national interest is not primarily to protect an oil supply, or to save our way of life from depression, or to make the world safe for sheiks, or even to assert the noble principle of collective resistance to aggression.

What makes an interest "vital" is its centrality to life and death. The world interest in bringing down Saddam Hussein is to insure that the means of mass destruction never fall into the hands of a mass murderer. ☐

32

DAILY SPORTS NEWS

Saturday, July 7, 1990

## Voeller, Germany poised for final

By FILIP BONDY

Daily News Sports Writer

ROME — Striker Rudy Voeller, one of West Germany's primary scoring threats, says he will be ready for the final against Argentina. Voeller was kicked in the calf by center-back Des Walker during the England match and had to be replaced.

"For 20 minutes I lost all feeling," Voeller said yesterday. "But now, it is much better."

The Germans enter the final in great shape and heavily favored. Argentina has lost three starters — Ricardo Giusti, Julio Olarticoechea and Claudio Caniggia — and one reserve, Sergio Batista.

Coach Carlos Bilardo says he is very concerned with a shortage at midfield, but he might miss two-goal scorer Caniggia the most. The lanky blond has been the chief target of Diego Maradona's play-making.

Argentina has scored only five goals in the whole tournament. Germany has scored 14.

More fallout from the shootout spree that has infected Italia '90. Gianni Agnelli, president of Juventus, argued that the Italians were ill-prepared for the showdown and deserved to lose.

"Penalties are an important part of football, particularly of World Cups, now," Agnelli said. "It is unprofessional of teams not to prepare players to cope with them."

The Sunday Times of London argued otherwise. "It is as separate from soccer as a team is from ballet," the paper argued. "Cheap drama, cheap thrill."

Clearly, losing teams preferred to lose on the coin flip, as was used before 1982. Then, losers could argue correctly they were eliminated by pure chance. Now, elimination is by a device that falls somewhere between fortune and skill. There is a real sense of defeat.

A group of 12 journalists was granted a private audience yesterday morning at the Vatican with the Pope,

ON THE HOT SEAT: Former Secretary of State Henry Kissinger, a director of the 1994 U.S. World Cup Organizing Committee, fields some tough questions at press conference in Rome yesterday.

AP

### CUP ON TV

#### CONSOLATION

Today
At Bari
Italy vs. England, 2 p.m. (TNT, Ch. 41)

FINAL
Tomorrow
At Rome
Argentina vs. West Germany, 2 p.m. (TNT, Ch. 41)

who admitted he was powerless in matters of soccer.

"The Irish were here, but it didn't help," Pope John Paul said.

The Pope said he wasn't certain yet whether he would attend tomorrow's Argentina-West Germany final.

"I don't know," the Pope said. "Somebody will tell me the result anyway."

Tomorrow's match will be seen by about one billion television viewers, or 20% of the world's population.

For the sixth time in 14 Cup finals, the match is between Europe and South America. South America holds seven titles, Europe six.

### The Cup cash-in Losses prove a windfall

By MICHAEL LEWIS

Special to The News

ROME — The World Cup makes for some strange financial bedfellows. Take, for example, the two losers in the semifinal. The Italians watched their financial stock tumble, while some English concerns were relieved despite the loss to West Germany.

William Hill, a London bookmaker, faced a $3.6 million loss and the bookmaking industry a $15 million bath had England won the Cup.

The bookies have made West Germany 4-9 favorites and Argentina 7-4 for tomorrow's final here.

"(Diego) Maradona and his side are so unpopular that very few people have backed them," said Graham Sharpe of William Hill. "We will win 500,000 pounds ($750,000) if they win the World Cup."

Rumbelows, an electrical retailer, had promised to refund millions of dollars in a special sales promotion had England returned home with the Cup.

It was far from a happy ending for Italy. Its players, who already had earned $123,000 for reaching the semis, lost $41,000 for failing to reach the finals. For winning it all, they could have made an additional $41,000.

And pity the poor entrepreneurs who planned to sell a piece of the turf of Stadio Olimpico, the site of tomorrow's final. Prices for a piece of turf, packed in glass containers, have plummeted 33% from $180 to $120 since Italy's elimination.

also inquired about U.S. immigration policies toward prospective Latin fans.

Kissinger did his best to deflect the questions with humor. "Please identify your media affiliation," he said once. "I want to know where the assault is coming from."

But try as he might, the man who once sold Vietnamization to the world had an even tougher time selling American soccer. Finally, Kissinger had to admit there were some big problems ahead for the organizing committee.

#### 'Missionary work'

"We have a lot of missionary work to do," Kissinger said. "Italy has the advantage of fans that understand and love the game.

"We have no support from our government," Kissinger said. "Maybe it will be a good experience for America to be a poorer country for awhile."

On the question of immigration for Central and South American fans in 1994, Kissinger promised cooperation.

"People must be able to come in a joyful manner, as they have in Italy," he said.

Kissinger said the U.S. would not push for rule changes in the sport, but would not be averse to alterations by FIFA — such as breaking the match into four 25-minute quarters for the sake of commercial television broadcasts.

#### Change of coach?

Finally, Kissinger sounded ready to join the chorus of critics seeking the oufer of U.S. coach Bob Gansler, who has a four-year contract endorsed by U.S. Soccer Federation president Werner Frieker. There has been considerable talk that Franz Beekenbauer, currently coach of West Germany, will replace Gansler by 1994.

"I don't know the coach (Gansler)," Kissinger said. "But we need to be competitive. If Costa Rica could do it, we ought to be able to do it."

"None of us wants to disgrace the United States."

## Expos nip Astros; Reds' Jackson tops Phils

THE ASSOCIATED PRESS

MONTREAL — Jerry Goff and Andres Galarraga had RBI singles as the Montreal Expos scored two eighth-inning runs, then held off Houston, 3-2, last night, handing the Astros their sixth straight loss.

With the game tied at 1-1,

Junior Noboa drew a leadoff walk from reliever Juan Agosto (4-3). After Larry Walker sacrificed, Tim Wälach was given an intentional walk and Agosto was relieved by Larry Andersen.

Goff, pinch-hitting for Nelson Santovenia, who was pinch-hitting for reliever Bill Sampen (7-1), singled to right

to score Noboa. Galarraga, who had two doubles, followed with his third hit to score Wallach.

### Reds 4,Phillies 1

PHILADELPHIA — Danny Jackson pitched another strong game, getting home runs from Barry Larkin, Billy Hatcher and Hal Morris as the Cincinnati Reds beat the

Philadelphia Phillies, 4-1.

Jackson (3-2), who has allowed two earned runs or less in nine of his last 10 starts, gave up five hits, struck out six and walked five in 7½ innings. Randy Myers, the third pitcher, got the last three outs for his National League-leading 17th save as the Reds won for the third

time in four games.

Rookie Jose DeJesus (0-2) landed into the seventh inning, allowing nine hits, while striking out six and walking none as thePhillies dropped their third straight game.

The Reds took a 1-0 lead when Larkin for the second straight might hit,

Saturday, July 7, 1990

DAILY **SPORTS** NEWS

## Herzog folds his Cards

THE ASSOCIATED PRESS

SAN DIEGO — Whitey Herzog resigned as manager of the St. Louis Cardinals yesterday, taking the blame while admitting he was embarrassed by a team he had made into one of the best of the 1980s.

Herzog, who took the Cards to the World Series three times in the last decade and won it once, confirmed at a news conference what radio station KMOX already had reported in St. Louis.

"I made up my mind in San Francisco," he said. "I was totally embarrassed by the way our team played. I just feel very badly for the ballclub, the organization and the fans."

The Cardinals were in San Francisco last weekend and lost a three-game series by scores of 3-2, 4-0 and 9-2.

Herzog will be replaced on an interim basis by coach Red Schoendienst, the only man who has won more games as a Cards manager than Herzog. Herzog, in his 11th year as manager, has 822 victories. Schoendienst won 1,028 games in 12 years in the 1960s, '70s and briefly in 1980.

"I don't think that I have done a good job as a manager this year," Herzog said. "I just can't get the guys to play, and I think anybody could do a better job than me."

"I'm not going to single out any players. My players are all trying. The effort is there, but sometimes I don't know if the minds are there."

First baseman Pedro Guerrero said he and his teammates were partly to blame for Herzog's resignation. The Cardinals are in San Diego for a series against the Padres, but news of the resignation first broke in St. Louis, where it was reported by KMOX, flagship station of the Cardinals, and television station KSDK.

"When Whitey brought up the subject of resigning several weeks ago, we said, 'No,'" Cardinals president Fred Kuhlmann said at the news conference. "But everybody feels it's in the best interests of the team to make a change now."

The Cardinals are 33-47 this season and in last place in the NL East, 14½ games behind the Pirates.

"I am the manager, and I take full responsibility," Herzog said.

ON TO THE FINAL: Boris Becker jumps for joy after polishing off Goran Ivanisevic to reach tomorrow's men's final at Wimbledon. AP

# Can Zina stop Martina now?

BY RICHARD FINN

Special to The News

WIMBLEDON — Trying for a record ninth Wimbledon singles title is old news for Martina Navratilova. But today she is expected to get it.

"Now I'm pretty sure it's Martina's tournament," said two-seeded Steffi Graf after her semifinal ouster by Zina Garrison Thursday.

Graf's loss removed the road-block that in the past two finals had stymied Navratilova's bid to break her deadlock with Helen Wills Moody for most Wimbledon singles crowns.

Now, with Graf packed and gone, Navratilova roars into this final packing her own lopsided 27-1 career record against the upset-streaking Garrison in the first all-American final since 1985.

"Obviously my record is overwhelming," said the Czech-born naturalized American of her nine-year domination of Garrison, which includes seven grass-court wins without the loss of a set.

Following the pattern of her 1983, '84 and '86 championship fortnights, Navratilova has not

dropped a set in the tournament.

In Thursday's semifinals she mowed down fourth-seeded Gabriela Sabatini, 6-3, 6-4, with a precision serve and volley effort in a little more than an hour.

Yet the meteoric run of Garrison to her first Grand Slam final, highlighted by back-to-back upsets of third-seeded Monica Seles and Graf in the semifinals this week, has the 2-7 (bet 7 pounds to win 2) book-maker-favorite Navratilova guarding her optimism.

"She has beaten me once," said Navratilova, referring to her 1988 U.S. Open quarterfinal loss to the Texan. "She has done it before and this is the surface on which she has the best chance to do it again."

The first black woman to reach any Grand Slam final since Althea Gibson won Wimbledon and the U.S. Open titles in 1958, Garrison has no apprehensions about her capabilities of pulling off yet another upset.

"I've beaten her once, and I've played her close in a lot of situations," said the 26-year-old Garrison.

# Lendi falls to Edberg; Boris wins

BY RICHARD FINN

Special to The News

WIMBLEDON — Stefan Edberg crushed Ivan Lendi's magnificent Wimbledon obsession with his own grandiose semifinal performance yesterday.

"Under the circumstances, I don't think I could have played much better," said the 1988 Wimbledon champion after mowing down Lendi, 6-1, 7-6, 6-3. "It was as good as as it could be today."

In destroying Lendi in less than two hours without losing his serve and facing only one break point, the third-seeded Edberg marched into a third consecutive and rubber Wimbledon final against defending champion Boris Becker.

The second-seeded Becker held off the free-swinging, power-serving, unseeded Yugoslav Goran Ivanisevic, 4-6, 7-6, 6-0, 7-6, to reach his fifth final since 1985.

## Jogs Becker memory

The hitting might of 14 aces and the go-for-it attitude of the 18-year-old Ivanisevic reminded the West German of his playing youth.

"During the match I thought about somebody 17 who was playing like that," said Becker, who was an unseeded 17-year-old when he won the first of his three Wimbledon crowns in 1985.

"The way he hit his serve, his groundstrokes, the volley; he is doing the same things."

Turning ahead to Sunday's final, Becker offered no revealing insights about his 24th career matchup against Edberg.

"I know him blind; I don't need to watch him, and he knows me the same," said Becker. "It is going to be whoever wakes up with the better frame of mind."

Lendi's mindset was focused on nothing else but Wimbledon this year after already having won more than once in his career each of the other three Grand Slam titles — U.S., Australian and French Opens.

## Death of a dream

And after suffering his worst defeat since his first futility attempt at Wimbledon in 1979, the 30-year-old's eyes glistened as he dealt with the death of his year-long dream.

"I knew that it was always a possibility that I would take lots of time, prepare well and may not win," said Lendi, whose third consecutive semifinal loss was the fifth time he had been beaten in the Wimbledon final four. "I was willing to take the

chance."

Lendi promised that his resolve to conquer Wimbledon's All England Club grass courts would not be weakened by this one-sided setback.

"I'm probably going to do it again," said Lendi of his two-month grass-court preparation regimen. "I can imagine a time where I'm not going to be playing any more and then obviously I won't be coming here, but I think as long as I play I will give it my best shot."

His preparation, however, had not prepared him to deal with Edberg's rock-solid serving and volleying or the Swede's pinpoint passing shots.

"I really could not get into the match," acknowledged the Czech-born Greenwich, Conn., resident. "Stefan didn't give me a chance; he did not give me anything, and I didn't create enough."

The other semifinal battle turned Becker's way in the second set when Ivanisevic succumbed to youthful nerves with a chance to go up 2-0 in sets. The lefthander blew a 6-5 lead by losing his serve with a handful of anxious errors.

"His arm got heavier and heavier and I was hoping for that," said Becker, who had 15 aces.

## Bad luck strikes

Ivanisevic regrouped momentarily in the tie-breaker, taking a 3-0 lead before Becker won seven of the next eight points to take it, 7-4, to even the match.

"He started to play unbelievable, but you know that's bad luck," reasoned Ivanisevic.

More bad luck came his direction in the final-set tie-breaker won by Becker 7-5 after winning the final three points.

Becker applauded his foe's effort. "It was one of the best grass-court matches I've played, probably because of my opponent," he said.

WIMBLEDON TV

WOMEN

Today

At Wimbledon, England

Zina Garrison vs. Martina

Navratilova, 9 a.m. (NBC, Ch. 4)

MEN
Tomorrow

At Wimbledon, England

Boris Becker vs. Stefan

Edberg, 9 a.m. (NBC, Ch. 4)

GRAPEVINE

By DAVID ELLIS/Reported by Daniel S. Levy

A Wilder
Tax Ploy

Here's a radical notion: put-
ting the Democrats on record
as the party committed to "no
new taxes." The scheme is the
latest ploy from Virginia Dem-
ocratic leader Paul Goldman,
political aide to Douglas Wild-
er, the nation's only black Gov-
ernor. Goldman will present a
read-my-lips resolution to this

week's meeting of the Demo-
cratic National Committee,
where its chances are akin to
Michael Dukakis' making a
comeback. But Goldman's
gambit highlights the distinc-
tion between his man Wilder
(who has slashed spending
rather than raise taxes in Vir-
ginia) and both the Democrat-
ic congressional budget negoti-
ators and Mario Cuomo, who
personally favors a federal tax
hike for the most affluent
Americans. "We have too
many rubber stamps in Wash-
ington," says Goldman, strik-
ing a populist chord that Wild-
er may echo in 1992.

The Water
Weapon

If the economic blockade
against Iraq does not bite
quickly enough, and Bush de-
cides he would like to raise the
ante without launching an at-

tack, he has an intriguing op-
tion: cut off the water. Iraq's
major rivers wash down from
Turkey and Syria, two nations
that are part of the alliance
against Saddam Hussein. Tur-
key, which has already cut off
key Iraqi oil pipelines, is in the
better position to severely dis-
rupt the flow. With some effort,
the Ataturk dam on the Eu-
phrates River could be used as
a plug on the crucial water sup-
ply, and there are already
enough antiaircraft missiles in
place to defend it from Iraqi
bombers. Another, more waste-
ful proposal is simply to divert
feeder rivers into desert areas.
U.S. officials are aware that the
Iraqi regime worries about a
cutoff: in the early days of
the crisis, Baghdad pointedly
warned Turkey not to tamper
with its water.

Vanity Flare

For 20 years, California's mo-
tor vehicles department has is-
sued aptly named vanity li-
cense plates to 1.1 million
drivers who feel the need to
show off their initials, spouse's
name and favorite baseball
teams to fellow travelers.
While the state has always cast
a cold eye toward entries that
use nasty ethnic or sexual
terms, more than 300 tags with
variations of the words dago
and wop slipped through. Re-
sponding to complaints from
the Sons of Italy organization,
California has issued an un-
precedented recall of dicey
plates that sport such titles as
DUMDAGO, 14KWOP, DAGO-
GOD and TOPWOP. Some driv-
ers were allowed to keep their
tags, like the '50s music-enthu-
siast owner of DUWOP39. But
many of the Italian Americans
who proudly tool around above
the offending plates are balk-
ing at giving them up: 162 driv-
ers have requested a hearing in
order to hold on to them.

Indecent Exposure

Military officials note that since
media outlets started reporting
the names and hometowns of
departing servicemen, there
has been a dramatic and dis-
turbing increase in pornograph-
ic calls to the wives and families
left behind. "That's why we
didn't want the names pub-
lished in the first place," sighs a
Pentagon spokesman.

PATRIOT
OF THE WEEK

DON KING

The boxing promoter placed
ads thanking the lawyers who
helped him beat tax-evasion
and fight-fixing charges and
called for unity at "this time of
world crisis ... Only in America
can a man survive ... alleged
involvement in national and
international scandal. Not once,
but three times!"

THE GOLDEN
BOOKMARK AWARD

ALLEN NEUHARTH

The former chairman of
Gannett newspapers and
founder of USA Today hit the
best-seller list last year with his
Confessions of an S.O.B. Now it
turns out that the foundation he
heads spent $40,000 to buy
2,000 copies of the book—at
retail price—at various
bookstores around the country.

THANKS, WE NEEDED
THESE CITATION

LIFE SAVERS
HOLES

Marketing, like nature, abhors
a vacuum, so the real question
is what took them so long. In
November Life Savers will
introduce packages of bite-size
"holes" in an attempt to add to
its domination among hard
candies. Only a killjoy would
point out that they're not really
the holes.

THE RETURN TO
SENDER STAMP

STEVE
GOBIE

The former male prostitute and
companion of Congressman
Barney Frank has quietly
returned to Capitol Hill: he now
works as a bike courier
delivering mail around
Washington but has yet to visit
the office of his former
roommate. Apparently his
book-writing plans are on hold.

Talking Heads
Sweepstakes

Who is winning the battle to be the
most interviewed "outside expert" on
the Iraqi crisis? Here is a tally of TV
appearances (on the three morning
shows, the weekend gabfests, MacNeil/
Lehrer and Nightline) and of mentions in major print publications
(as tabulated by the Nexis database) during the month of August.

<table>
  <thead>
    <tr>
      <th>Expert</th>
      <th>TV / Print</th>
      <th>Basic Wisdom</th>
    </tr>
  </thead>
  <tbody>
    <tr>
      <td>
        <div><strong>Les Aspin</strong><br>House<br>Armed<br>Services<br>chairman</div>
      </td>
      <td>
        <div><strong>10</strong></div>
        <div><strong>275</strong></div>
      </td>
      <td>
        <p>That the public may not support any military action that is not purely defensive.</p>
      </td>
    </tr>
    <tr>
      <td>
        <div><strong>Sam Nunn</strong><br>Senate<br>Armed<br>Services<br>chairman</div>
      </td>
      <td>
        <div><strong>6</strong></div>
        <div><strong>266</strong></div>
      </td>
      <td>
        <p>That the taking of hostages "cannot be allowed to dominate our policy."</p>
      </td>
    </tr>
    <tr>
      <td>
        <div><strong>Henry Kissinger</strong><br>Former<br>Secretary<br>of State</div>
      </td>
      <td>
        <div><strong>6</strong></div>
        <div><strong>170</strong></div>
      </td>
      <td>
        <p>That America's national interests require forcing the Iraqis out of Kuwait and a long stalemate would be dangerous.</p>
      </td>
    </tr>
    <tr>
      <td>
        <div><strong>William Crowe</strong><br>Former<br>JCS<br>chairman</div>
      </td>
      <td>
        <div><strong>8</strong></div>
        <div><strong>65</strong></div>
      </td>
      <td>
        <p>That the U.S. could "clean the clocks" of Iraq in combat, but then warns that the operation would be bloody.</p>
      </td>
    </tr>
    <tr>
      <td>
        <div><strong>Judith Kipper</strong><br>Brookings<br>expert</div>
      </td>
      <td>
        <div><strong>4</strong></div>
        <div><strong>58</strong></div>
      </td>
      <td>
        <p>That the crisis has ushered in a new era of belligerence over resources like oil.</p>
      </td>
    </tr>
    <tr>
      <td>
        <div><strong>James Schlesinger</strong><br>Former<br>Defense<br>Secretary</div>
      </td>
      <td>
        <div><strong>2</strong></div>
        <div><strong>54</strong></div>
      </td>
      <td>
        <p>That freeing Kuwait is unrealistic. "We should forget right now about that particular objective."</p>
      </td>
    </tr>
  </tbody>
</table>

TIME, SEPTEMBER 17, 1990

CLOUGHSTONE FROM UPPER LEFT: A. TANNENBAUM—SIGMA, Y. GUNNER—SIGMA, B. MARKEL—CAPRI NO.CREDT; R. FRIEDMAN—BLACK STAR; TERRY ASHE; RODIN ARUNITON; TERRY ASHE, P. DUHARD—SIGMA, D. BRACK—BLACK STAR; DIRK HALSTEAD

[LC]

19

LCL

# WASHINGTON WHISPERS

**OIL COMPANIES** exporting U.S. gasoline to Europe

**HENRY KISSINGER'S** China venture hits Great Wall

**NEIL BUSH** to get 'Roger and Me' film treatment

■ **Supplies and demand.** Even though American refineries are running wide open and experts warn of possible gasoline shortages later this year, gasoline from the United States is suddenly being exported, adding to potential energy problems at home. While the amount involved is relatively small, the effect is multiplied because the United States normally imports refined gasoline. Two factors explain the turnaround: Supplies are tighter in Europe, which is more dependent on the output of Kuwaiti refineries, and so oil companies there are bidding at least 10 cents a gallon more for gasoline than they are in the United States.

■ **Lost opportunity.** In his speech to Congress last week, George Bush pointed up the dangers posed by Iraq's chemical and nuclear facilities. However, in the mid-'80s, when Israel proposed to attack the installations, the Reagan administration—tilting toward Iraq in its war with Iran—objected so strongly that the idea was dropped. The Israelis, who smashed Baghdad's first nuclear complex in 1981, wanted to strike again after gaining access to U.S. spy-satellite maps pinpointing the Iraqi facilities. Friends of Jonathan Pollard, who is now serving a life sentence for espionage, say the maps were among the U.S. intelligence materials he turned over to the Israelis.

■ **Beijing bust.** China Ventures, the $75 million partnership formed by Henry Kissinger and a group of multinational corporations to locate investment opportunities in the People's Republic, will be formally dissolved November 1. The reason: For the 17 months of the group's existence, the high-powered partners could not find a single opportunity worth their investment dollars. Kissinger, who ran the partnership on behalf of such blue-chip companies

as H. J. Heinz, Coca-Cola and the American International Group, the insurance multinational, attributed the failure of China Ventures to the unfavorable economic climate and the political instability that followed the clashes in Tiananmen Square in June, 1989. Afterward, Kissinger quietly suspended the partnership's investment activities. Despite the disappointment in China, Kissinger Associates expects that both its client list and its revenues will reach record highs this year.

■ **Shadow Senator Jackson.** Is Jesse Jackson slipping? In last week's Democratic primary in the District of Columbia, Jackson, who first declined a difficult run for mayor, won a race against four unknowns to become one of Washington's two "shadow senators"—in essence, unpaid lobbyists on Capitol Hill. But only 65 percent of the 130,727 Democratic voters bothered to cast their ballots for Jackson. By contrast, in the 1988 D.C. presidential

primary, Jackson drew 80 percent of the vote. Democratic pros believe Jackson's disappointing showing in a city 70 percent black could make prospective presidential candidates less hesitant about confronting him during the 1992 primary season.

TAYLOR JONES FOR USN&WR

Henry Kissinger

$75 million ventured, nothing gained

■ **A vote for Volsky.** Front-runner to replace the stumbling Nikolai Ryzhkov as Soviet Prime Minister: Arkady Volsky, longtime Communist Party apparatchik who is one of Mikhail Gorbachev's most trusted behind-the-scenes aides. Volsky, once a personal assistant to the late Soviet leaders Yuri Andropov and Konstantin Chernenko, was given by Gorbachev the thankless job of cooling ethnic passions between Armenians and Azerbaijanis. What makes Volsky, now back in Moscow, right for the job is that he is acceptable to the Kremlin's feuding factions.

■ **Neil and me.** The First Family's embarrassment over son Neil Bush's involvement in a Denver savings and loan scandal is almost certain to get worse in the months and years ahead. Michael Moore, producer of the controversial movie documentary, "Roger and Me," about former General Motors Chairman Roger Smith, says he has concluded a $10 million deal to create a similar film about Neil Bush and the failed Silverado S&L.

■ **Frankly speaking.** Bob Michel, the House minority leader, last week quietly introduced legislation that would allow U.S. forces in the Persian Gulf to send letters back home for free. He proposed to support the stamps-for-soldiers program by shifting funds from the $68 million budget for the political mail with which lawmakers regularly bombard their constituents. Michel, whose bill is up for a vote this week, thought that sacrificing a portion of the congressional franking privilege would be a nice gesture of support for the men and women in the Saudi desert. But House Democrats are not sure. While they agree on the need to provide free postage for the troops—a measure already approved in the Senate—they do not necessarily want to do so at the expense of one of their own political perks.

EDITED BY CHARLES FENYVESI

40

U.S.NEWS & WORLD REPORT, SEPTEMBER 24, 1990

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# Rinfret Is Said to Be Sitting on Own Funds He Donated to Campaign

By FRANK LYNN

While telling Republican leaders that his campaign is broke, Pierre A. Rinfret has not spent the $540,000 of his own money that he had contributed to the campaign, top Republicans said yesterday.

Instead, they said, Mr. Rinfret was trying to set up a meeting with them today in which he would insist that they raise at least $1 million for radio and television advertising before he will agree to spend his own funds. Several Republicans said he told them at a reception for Vice President Dan Quayle on Tuesday that he had transferred the funds to a separate bank account.

## Campaigning Suspended

Mr. Rinfret's use of his own money as a lever on Republicans is particularly significant because Republican leaders have conceded that he would not have received the Republican nomination for governor if it were not for his promise to donate his own money to the campaign. The candidate, an economic consultant, has said that his net worth is $14 million.

On Wednesday, Mr. Rinfret told Republican leaders that he had no more money for campaigning and that he was "probably going to have to shut down our operations on Friday" unless Republicans started supporting him financially. That strategy, of pressuring party leaders, prompted Mr. Rinfret's campaign manager to quit. Mr. Rinfret, who said he would now be his own campaign manager, has suspended campaigning, and he and his staff continued to be unavailable for comment yesterday.

Mr. Rinfret's running mate for lieutenant

governor, George F. T. Yancey Jr., said that he had spoken to Mr. Rinfret and that in appealing to Republican leaders, he was "ratting the cage and hoping someone will come to the rescue." He added that "we need $1 million to get on TV." Mr. Yancey said that in any event he would continue his campaign, which has been conducted almost entirely upstate.

Peter Rinfret, Mr. Rinfret's son and business associate, declined to comment last night on whether the candidate's $540,000 was still available. "We'll file our financial reports and then everyone will know," he said. The next report is due Oct. 5.

The disclosure of the unspent money came as the Rinfret campaign shakeup continued with the ousting of the press secretary

and deputy press secretary, Bryan Flood and Kelly Naioti.

The campaign staff's key survivors have few ties to the state Republican Party. They are Eddie Mahe, a Washington political consultant; John Denny, a Pennsylvanian who was recommended by Mr. Mahe and is the deputy campaign manager, and Peter Rinfret.

## A Price of Cooperation

Republican legislative aides blamed Mr. Mahe for the pressure tactic and said Republican leaders might demand his removal from the campaign as a price of cooperation.

The disclosure that Mr. Rinfret has not spent his own money was buttressed by figures

he reported to the State Board of Elections and his own statement last week that he had raised $1.25 million. It was not known whether that figure included his own funds.

He has run so far a relatively low-budget campaign that Republican political consultants doubted has exceeded $700,000. He has had no radio or television advertising and his biggest expenses during the summer were payroll and chartered aircraft for campaigning.

Several Republicans, who spoke on condition of anonymity, said that Mr. Rinfret's $540,000 was to be used for late campaign commercials but that he has told them he will not spend that money at all if they did

Continued on Page B3

# Rinfret Said to Be Sitting On Own Election Funds

*Continued From Page B1*

not raise $1 million. Most state and local candidates in recent years have been expected to finance much of their own campaigns.

Another Rinfret campaign associate, William E. Simon, the former Secretary of the Treasury, said he had not quit as finance chairman but would "work hard for Pierre's election within the constraints of my travel schedule."

[lc]

He said Wednesday that he would leave for the Far East next week and not return until after the November election. He spent much of the summer on his yacht in Europe.

The main figures in the negotiations with Mr. Rinfret are J. Patrick Barrett, the Republican state chairman; State Senator Roy M. Goodman, the Manhattan Republican leader who recruited Mr. Rinfret as the candidate, and the Republican legislative leaders, Ralph J. Marino, the State Senate majority leader, and Clarence D. Rappleyea, the Assembly minority leader. Mr. Barrett and State Senator Guy J. Velella, chairman of the State Senate Republican Campaign Committee, planned to meet with him last night.

Mr. Goodman and Mr. Barrett are multimillionaires themselves and Mr. Goodman is sitting on at least $1 million in State Senate and Manhattan Republican campaign funds. Mr. Marino and Mr. Rappleyea have access to political action committees interested in state legislation.

## Steering Clear of Dispute

The state's two top Republican elected officials appeared to be steering clear of the controversy. State Comptroller Edward V. Regan said he had had no contact with his running mate, Mr. Rinfret, on the matter, while Senator Alfonse M. D'Amato did not return telephone calls to his office. A press aide said he was in Washington yesterday and today.

Rudolph W. Giuliani, the party's New York City mayoral candidate last year, did not return a telephone call seeking his reaction.

The mood among other leading Republicans was mixed — either anger at Mr. Rinfret for what they considered pressure on them and his isolation from the party, or sympathy with him because the party seemed to have isolated him.

Borough President Guy V. Molinari of Staten Island, the leading Republican municipal official in the city, reflected the latter view when he said that "you can't throw a neophyte to the wolves."

Let George Do It

9/11/90 [LC]

The Iraq crisis is no mere sport, but to understand the politics of this crisis a football metaphor helps. George Bush has become the quarterback everyone expects to lead his team to a final touchdown drive and victory. Meanwhile, all of his teammates and fans claim to "support" the President, but at just enough distance that they don't have to handle the ball themselves, or take any blame if he falls short.

Take Mikhail Gorbachev. The essential news from the Helsinki summit is that the Soviets are fundamentally on board with U.S. policy. They may not help the U.S. in a shooting war, but they won't lift a finger for Saddam Hussein either. This is the overriding strategic issue, and is what gives George Bush the freedom of action in this case that no U.S. President has had since the Soviets got the atomic bomb.

Yet Mr. Gorbachev isn't about to sign on without his own caviling and advice. He'll "reduce" the number of Soviet military advisers, but won't withdraw them straightaway—perhaps because he doesn't want to seem to be merely following Mr. Bush. He can't resist floating the utopian hope for a Middle East peace conference—an idea gently but firmly rebuffed by Secretary of State Baker.

Mr. Gorbachev even delivers a little lecture that "no single country, however powerful," can lead the world anymore. The Soviet leader still wants to talk as if he commanded a superpower, even if it can no longer act like one. Mr. Bush may feel that this is the price of the more important strategic cooperation from the Soviets on Iraq, and if that's true it's all right with us.

Something similar seems evident among Mr. Bush's domestic "sup-

porters." It's true enough that outright opponents are few—for the moment. But everyone's carefully hedged. George Will frets that by using the United Nations Mr. Bush has committed the U.S. to the hoariest notions of international law. Congresswomen Pat Schroeder rolls out her gripe for all seasons: What about the allies? Senator Joe Biden doesn't want to restore the emir of Kuwait, as if this is the main issue. Even Alexander Haig and Henry Kissinger, whom we earlier carelessly credited with urging a "pre-emptive strike," have in fact not gone that far.

In a letter today, Georgia Senator Sam Nunn objects to being included in a Paul Gigot column describing neo-isolationism among conservatives. In the interests of accuracy, what Mr. Gigot wrote was that "Mr. Nunn has typified conservatives who've worried, grumbled and caviled." Readers of his letter can judge that for themselves.

What is most revealing in all of this is the timidity among Washington's elites to state publicly the reality of this crisis. Either Saddam's aggression will succeed or it will not. The dispatches from Middle East capitals report that Arab leaders all say privately that Saddam has to be taken out soon with a military strike. But in the current American foreign affairs gestalt, it somehow has become taboo for anyone to be seen in public urging military action.

While all of these elites now claim to "support" George Bush, do they really? They're now well positioned to jump on board and be seen as backing any successful mission Mr. Bush decides to launch. But if the going gets tough, they're also positioned to get going. Either way, they'd all rather let George do it.

The Edge

The Consulting Publication of the Wharton Graduate Association

SUMMER/FALL 1990

# Fine Tuning
## Functional and Industry Specialization
### Come of Age

PROFESSIONAL
INSIGHTS

Deloitte & Touche

Achieving Administrative
Cost Effectiveness Through
Organizational Change

CONCEPTS

Bain & Co.

Customer Retention:
A New Star to Steer By

■ New Kid in Beantown:
Pete Dawkins

FACE TO FACE

The World According to
Kenichi Ohmae

COMPANY PROFILE

White House to Wall Street:
Kissinger Associates Moves
Diplomacy Into the
Boardroom

The Edge

CONTENTS

SUMMER/FALL 1990

Fine Tuning

Functional and Industry Specialization
Come of Age

John C. Shaw
Deloitte & Touche
Page 7

Kenichi Ohmae
McKinsey & Co.
Page 20

Ed Hearle
Booz, Allen &
Hamilton
Page 25

3 EDITOR'S NOTE

4 FEATURE

**Fine Tuning:** Functional and Industry Specialization
Come of Age

7 PROFESSIONAL
INSIGHTS

**Deloitte & Touche**
Achieving Administrative
Cost Effectiveness Through
Organizational Change

11 PERSPECTIVES

**Kurt Salmon Associates**
Developing a Real-Time
Merchandising Service:
Shrinking the Product
Development Cycle

14 CONCEPTS

**Bain & Co. Customer**
Retention: A New Star to
Steer By ■ New Kid in
Beantown: Pete Dawkins

16 STRATEGY

**Boston Consulting Group**
Strategy Consulting With
An Industry Focus: BCG's
Health Care Practice Group

20 FACE TO FACE

23 COMPANY PROFILE

**White House to Wall**
**Street:** Kissinger Associates
 Moves Diplomacy Into the
Boardroom

25 TRENDS

**A Piece of Free Advice:**
Pro Bono Becomes Big
Business

**When the Wall Came**
**Down:** The Rise of
Western Consulting in
Eastern Europe

**Marakon Associates**
**on Measuring Value**
**Contribution:**
A Key to Profitable
Strategic Management

36 IN THE NEWS

**Money-Back Guarantees:**
Insurance for Low-Risk
Engagements

38 ETC....

The Evolution of
Shareholder Value-Based
Management Concepts

2 Summer/Fall 1990

COMPANY PROFILE

# White House to Wall Street:
## Kissinger Associates Moves Diplomacy Into the Boardroom

by Maria Kozloski
Staff Writer

When oil industry giant Atlantic Richfield needed to negotiate a deal to market its petroleum products in mainland China, who did it call for advice? Henry Kissinger. When the infamous Hunt brothers of Dallas had to renegotiate an oil deal with the government of Yemen, who did they hire to help with the negotiations? Henry Kissinger. And when H. J. Heinz was considering building a baby food factory in China, who did it turn to for background and introductions? Henry Kissinger.

Since 1982, former Secretary of State Henry Kissinger's consulting firm, Kissinger Associates, has been helping major multinational corporations to analyze the impact of global trends on their businesses and devise appropriate negotiating strategies — an area in which Kissinger, with his years of experience as Secretary of State under President Nixon, is clearly in a league by himself. In plumbing this rarefied corner of the business strategy arena, Kissinger's firm leverages its international experience to provide an added dimension that few rival consulting firms can offer: access to government officials whose decisions often directly affect a project's viability.

Henry Kissinger
Kissinger Associates

In several ways, Kissinger Associates' work is different than that performed by many top management consultants. For one, its staff includes relatively few MBAs, but instead is laden with former members of the State Department and U.S. diplomatic corps, as well as a sprinkling of specialists with economic and business backgrounds. Furthermore, Kissinger's work often has more to do

with assessing the impact of broad macroeconomic and geopolitical trends than with looking at the competitive forces in an industrial sector. Often, the analysis the firm provides is more qualitative than quantitative, focusing on, say, developing a negotiating strategy rather than on optimizing a firm's factory operations or financial structure.

Kissinger Associates, in fact, quite unlike most major management consulting firms, admits that it does not even attempt to become versed in the details of its client's businesses. **The Edge** spoke with Ambassador L. Paul Bremer, managing director at Kissinger's New York headquarters. Says he: "We pick up where some of the traditional management consultants leave off. They will do an analysis for you on how your company fits into an industrial sector. We're looking at global strategy, how you position yourself in the world."

The two major global economic forces that clients are focusing on right now, Bremer says, are privatization and the opening of Eastern Europe. In Eastern Europe, many companies seek what Bremer calls "an extra dimension" in analyzing the profound political changes sweeping the region and how they will

THE EDGE: Wharton Consulting Journal 23

affect multinational businesses.

Privatization, too, is a trend that, though fundamentally economic in nature, invariably necessitates a keen awareness of political sensitivities. Says Bremer: "Every time you sell a state asset, whether you're a communist government becoming free market or a statist Latin American trying to become free market, it raises a lot of difficult questions." Kissinger Associates has counseled clients on privatization programs in Mexico, Argentina, Nigeria, Portugal, Malaysia, Spain, and Eastern Europe.

Often, companies seek Kissinger's advice on how to select local and joint venture partners. Says Bremer: "They ask us, 'What are the implications of the developments in Eastern Europe for our business? Where is the combination of political and economic developments favorable for commercial opportunities? Is it in Poland, Hungary or Czechoslovakia? Will the Soviet Union be a good place to invest? Will Gorbachev succeed or fail?' " Clients also occasionally seek specific, project-related advice, including how best to handle currency movements and other aspects of the operation.

Henry Kissinger founded his firm in 1982 and maintains two offices, one on Park Avenue in New York and the other on K Street in Washington, D.C. Many of the firm's 20 or so staff members have extensive foreign service and international affairs experience. Bremer, for example, worked 23 years in the United States diplomatic service, including stints as Special Assistant, Executive Assistant, and Advisor to Secretaries of State Rogers, Kissinger, Vance, Muskie, Haig and Schultz. Kissinger's staff has also included top government executives now with the Bush Administration, including Brent Scowcroft, currently National Security Advisor, and Lawrence Eagleburger, now Deputy Secretary of State.

Given its high-profile staff, Kissinger Associates has occasionally been in the spotlight regarding potential conflicts of interest that may arise when top government officials shuttle back and forth between the public and private sectors. During the Senate confirmation hearings for Eagleburger and Scowcroft, Kissinger stressed that the firm does not work on behalf of any government, nor does it lobby American officials on behalf of any client.

While Kissinger himself has served on the President's Foreign Intelligence Advisory Board for the past six years, the firm says it keeps its business interests separate from any policy recommendations its staff members may make. Bremer suggests that current U.S. law covering individuals moving between the private sector and the government may be overly restrictive. "The laws are being interpreted so narrowly by the Justice Department and Congress that we may be unable to attract good people from the private sector. If we make the threshold so high, we run a risk of impoverishing our government. We will simply have career bureaucrats."

Kissinger is also not a "door opener" to foreign leaders. Says Bremer: "We will not simply be retained to help clients meet top people." The firm feels that it must be able to add value to a project to justify taking it on. In most cases this means helping a client to devise and implement a negotiating strategy.

Kissinger, though, is not bashful about utilizing its network of connections to help clients when it feels that doing so is appropriate. Says Bremer: "We have an unparalleled range of high-level contacts in the business and government world in almost any country in the world." Anthony O'Reilly, CEO of H. J. Heinz, says that his relationship with Kissinger enabled him to meet several heads of state, including Felix Houphouët-Boigny of the Ivory Coast, Robert Mugabe of Zimbabwe, and Turgut Özal of Turkey.

The firm's success in advising clients on dealing with foreign governments is founded largely on the diplomatic skills developed by its top staffers during their stints in government. These worldly-wise tacticians are comfortable analyzing the pros and cons in situations where the party they represent has a clear commercial interest but where political and economic issues must also be considered carefully before an investment decision is made and implemented. Bremer, for example, played a key role in convincing the Dutch government to accept the basing of nuclear cruise missiles in the Netherlands. Says he: "In this business, you use basically the same kind of skills. The only difference is that now I'm doing this on behalf of clients instead of on behalf of the U.S. government."

In one of its more sensitive current engagements, Kissinger is representing a multinational interested in investing in Argentina, a country where doing business is difficult because of a volatile mix of factors, including historically high inflation, powerful labor unions, an occasionally restive military, and a government that after more than a year in office has failed to firmly implant its groundbreaking, free-market oriented economic plan. Says Bremer: "Argentina is a place where there are plenty of commercial opportunities, but obviously if you were the CEO, you too would want to have some sense of the political environment."

continued on page 37

Ambassador L. Paul Bremer
Kissinger Associates

ELCT

24 Summer/Fall 1990

[LC]

outcomes and costs of the projects are
well-defined and largely predictable.

Advertising agencies may be the lead-
ing service-sector firms in providing guar-
antees on services rendered. The New
York agency DDB Needham, this past
May, announced that it would tie its
compensation to the performance of
clients' products. The system, called
"Total Creativity/Guaranteed Results,"
calls for DDB Needham to receive up
to a 33% bonus on its base compensa-
tion if previously agreed-upon perfor-
mance goals are met. However, if goals
are not met clients could receive a rebate
of up to 30% of its payment. Advertising
industry analysts say the program pro-
vides an incentive for the agency to seek
out innovative media opportunities that
may provide less in commissions than
traditional print and broadcast media
but which may be more effective. "This
is a very competitive move," explains
Robert Huntington, vice chairman &
chief operating officer at DDB Needham
in New York. "It will raise our
profile."

Why are such guarantees being ex-
amined in the consulting profession?
Clients view them as an opportunity to
minimize risk. In a time of tightening
budgets, the guarantees help assure
them that they will see results that will
translate into improved long-term, bot-
tom line performance.

Consultants, meanwhile, see the ser-
vice guarantees as a way of insuring that
they are serious about creating value —
that they believe in their product. It is
also a way of gaining a competitive edge
in selling services where the client may
be seeking bids or shopping around.
Strategy consulting is not considered a
commodity and therefore bidding would
not be appropriate. For this reason, guar-
antees are not offered on strategy work.

Steve Hoffman, a vice president with
Bain, says that “for Bain, the emphasis
on service guarantees is a logical pro-
gression of Bain’s philosophy on results-
oriented consulting.” But Hoffman says
that service guarantees are not a mar-
keting tool. Rather, they are “a means

of internal feedback which the firms
can utilize to measure performance.”
John McConnell of Deloitte & Touche
has been involved in several projects
where service guarantees were used.
Explains he: “Clients do on occasion
request them. But it is difficult to agree
upon the criteria which performance
will be based upon and subsequently
measured against.”

Performance guarantees have traditionally been used more in product industries, such as computers, than in service industries, and several hurdles may need to be overcome prior to their wide acceptance in consulting. First is the question of owner responsibility. “The consultant’s role is to advise and assist,” explains Darrell Rigby, a vice president with Bain. “Under present relationship structures ultimate responsibility lies with the clients.” Creating a set of criteria against which the consultant’s performance can be measured and tying it to compensation might shift the burden of ownership too far to the consultant’s side, Rigby says. Although the clients and consultants work together to analyze problems and implement changes, Rigby says the clients must in the long run be responsible for seeing that a consultant’s recommendations bear fruit.

Second, clients which hire consulting
firms are sophisticated buyers and are
familiar with the capabilities of each
firm. Given this familiarity, an explicit
service guarantee may be unnecessary
or redundant. Bain's Hoffman notes
that "many clients are not interested in
service guarantees and see little value
in them. Clients can measure satisfaction
and performance in other ways and do
not desire additional criteria." Mc-
Connell of Deloitte feels that his clients
can and do have a guarantee on each
project, whether explicit or implicit.
Says he: "If a client is not completely
satisfied with a consultant's work, they
have the option to withhold payment,
and they should."

Kissinger Associates

continued from page 24

Because of the high-level nature of
Kissinger Associates' work, clients are
almost exclusively major multinationals,
and the firm works almost exclusively
on the CEO level. Kissinger has approx-
imately 30 clients, including Coca-Cola,
Anheuser-Busch, ITT, Union Carbide,
Daewoo, Fiat, Ericsson, ASEA Brown
Boveri of Sweden, Midland Bank of
Britain, Volvo, Bell Telephone of Bel-
gium, Global Motors, manufacturer of
the Yugo automobile, and Enerjopro-
jeckt, the Yugoslav-based engineering
and construction company.

About half of the firm's clients are American and the other half are European, Asian, or Latin American. Annual fees range between $100,000 and $450,000. The firm grosses approximately $6 million per year. Relationships involve oral briefings and telephone access to Kissinger and his associates. "Dr. K," as he is known among colleagues, is actively involved in the daily operation of the practice, and meets with clients as many as four times per year.

In November, 1989, rumors surfaced
that the firm was holding talks with
Booz, Allen & Hamilton about a possible
business combination, but so far no
deal has taken place. According to Bre-
mer, the firm is "interested in getting
more clients," but will steadfastly resist
moving into areas such as lobbying
American officials in order to expand
the franchise.

Kissinger Associates maintains that no company provides exactly the same service as it does, but admits that consulting firms started by other former government officials, including a trade policy group formed by former Administration official William Brock, sometimes provide competition in sectors. Still, in an area of consulting where drastic political upheaval means business, Kissinger seems well positioned for growth.

37

ETC . . .

# The Evolution of Shareholder Value-Based Management Concepts

The concept of managing to create value for shareholders is intuitively appealing and perhaps somewhat obvious. Yet it wasn't until the 1980s that the discipline of strategic planning explicitly focused on creating shareholder value. Today, virtually everyone has jumped on the bandwagon and is in one way or another applying strategies to create value for shareholders. But it is interesting to note how this idea evolved.

Value-based management is the combination of developments in strategy analysis and the developments in finance over the past 40 years (see Exhibit, opposite page). Until the 1960s, corporations hired trusted advisers who, essentially by the seat of their pants, imparted wisdom on strategy development in a relatively unstructured fashion.

The first breakthrough in systematic strategy formulation came from the development of two important analytical techniques, the experience curve and the growth-share matrix. The experience curve was developed from observations that real unit costs tend to fall with accumulated volume. The experience curve was the first

quantitative tool developed for assisting business strategy development.

The growth-share matrix, with its now famous dogs, stars, question marks, and cash cows, was a perfect complement to the experience curve. Rather than focusing on business strategy, the matrix focused on the whole portfolio, providing management with a tool to develop a corporate strategy.

There were many other innovations in strategy formulation to come. The analysis of individual activities, often referred to as value-chain analysis, was developed in the early 1970s by Harvard Business School Professor Michael Porter. Porter's books on competitive advantage and the value chain popularized the work of the strategy firms and greatly increased demand for strategic consulting services.

While strategy consulting was evolving, a similar process was at work in the areas of corporate finance and investment management. In the mid-1960s, portfolio theory and the concept of efficient markets were developed. One of the key components of this work was the capital asset pricing model, which helped consultants understand how investors viewed risk.

The dividend discount and discounted cash flow models also came into vogue in the 1970s.

In the 1980s the firm of Kohlberg, Kravis, Roberts (KKR) took the concept of cash flow investing to new heights by adding 90% debt financing, thus inventing the leveraged buyout. Later in the decade, Michael Milken at Drexel Burnham Lambert revved up the growth of LBOs and takeovers by developing the high-yield debt, or junk bond, market.

The final step in this evolutionary process was the combination of the developments in strategy consulting with those in finance, thereby creating an integrated framework by which large companies could more effectively manage their businesses.

This framework was originally called value-based strategic planning. Some companies have expanded the approach to encompass more than just the planning function, taking into account operations strategy, market participation strategy, management compensation, and so on. This expanded approach, in wide use today, is commonly referred to as value-based management.

38 Summer/Fall 1990

[LC]

A10 THE WALL STREET JOURNAL MONDAY, DECEMBER 17, 1990

# Split Between Kissinger and Brzezinski on Iraq
Reflects Search for New Foreign-Policy Consensus

By GERALD F. SEIB

Staff Report of THE WALL STREET JOURNAL

WASHINGTON—Henry Kissinger foresees disaster if the U.S. waits for sanctions to drive Iraq out of Kuwait: International resolve will crumble, the military option will evaporate, Saddam Hussein will prevail. “I believe that many of those who advocate sanctions are using it as a cop-out,” he declares.

Nonsense, says Zbigniew Brzezinski. Sanctions will work over time, he insists. The real disaster, he argues, would be a war. “It could be quite expensive in both money and blood.”

He scoffs at Mr. Kissinger's theory that the conflict could be limited in scope, say-

ing acidly that it "reminds me a little bit of my arguments for how to terminate the Vietnam War."

Mr. Kissinger calls that an “unworthy comment.” The real calamity, he says, would be for the U.S. to slink away, which would “undermine all friends in the area.”

Henry Kissinger

In the first crisis of the post-Cold War era, these two titans of the foreign-policy establishment, whose world view was usually in sync during the Cold War, are proposing diametrically opposed courses of action. Mr. Kissinger thinks the proposed diplomatic mission to Baghdad by Secretary of State James Baker—which remains unscheduled because of a U.S.-Iraqi dispute over dates—is a bad idea; Mr. Brzezinski applauds it. They disagree on the usefulness of sanctions, on how much time the administration has and on what course would leave a more stable Middle East.

Their disagreement over virtually every aspect of the showdown with Iraq symbolizes the schism dividing America's foreign policy thinkers and the country at large—a schism that has only deepened since Iraq's decision to release American hostages.

These disagreements come from two men who exercise enormous influence on official American thinking in both political parties. Mr. Kissinger, the top foreign-pol-

icy adviser to Presidents Nixon and Ford, was a mentor of Brent Scowcroft, who is now President Bush's national security adviser, and Lawrence Eagleburger, the No. 2 man in the Bush State Department. White House aides say Mr. Kissinger has talked privately with Mr. Bush, and he has generally supported the administration publicly.

Mr. Brzezinski, who was President Carter's national security adviser and who has privately counseled Mr. Bush on European issues, is close to many in Congress, including Senate Armed Services Committee Chairman Sam Nunn (D., Ga.). His views have seeped into congressional broadsides.

Mr. Brzezinski recently had a private session with Democratic Sen. Edward Ken-

nedy of Massachusetts, for instance. Shortly afterward, the senator used statistics Mr. Brzezinski had provided on civilian casualties during the bombing of North Vietnam as ammunition against a witness testifying before the committee. The target: Mr. Kissinger.

Zbigniew Brzezinski

The two are also

illustrative of the schism in the nation's opinion-making community. In Mr. Kissinger's corner are such heavyweights as former top Defense Department adviser Richard Perle and former United Nations Ambassador Jeane Kirkpatrick. But this camp is an increasingly lonely place; Mr. Kissinger sometimes muses that his position is like Churchill's in the 1930s as he argued in vain about the dangers of Nazi Germany.

In Mr. Brzezinski's corner are such heavy hitters as former Defense Secretary James Schlesinger and many former U.S. military leaders, ranging from former Joint Chiefs Chairman William Crowe to former Navy Secretary James Webb.

The split also has important long-range meaning. In the past, the foreign-policy establishment was often galvanized around a strategy designed to deter Soviet advances, but the Soviet threat is gone. “The

old foreign-policy consensus built around containment and all those things that worked is no longer there, because the Soviets as a threat are gone,” says Nicholas Vellotes, a foreign service officer and former assistant secretary of state.

More immediately, the debate among opinion leaders is critical to the Bush administration as the clock ticks toward the Jan. 15 deadline contained in a United Nations resolution authorizing the use of force to drive Iraq out of Kuwait.

The debate even reflects some personal animosity. “Quite frankly, I don’t think Kissinger’s interested in resolving the issue,” Mr. Brzezinski says. “I think Kissinger wants to destroy Iraq, period. Kuwait is just an excuse.”

“A very unjust statement,” counters Mr. Kissinger, who asserts he hasn't any desire to destroy Iraq, merely to see its offensive capabilities reduced. He won't detail on the record what he thinks about Mr. Brzezinski's stand.

But Mr. Kissinger argues that if the U.S. had confined itself to protecting Saudi Arabia and had left the liberation of Kuwait to the world community—“the Brzezinski option,” he calls it—“it would have been a bad mistake, but a retrieveable one.” It didn't happen that way, though; the U.S. took the lead in pushing for liberating Kuwait and sent hundreds of thousands of troops. If the U.S. now shrinks away, he argues, “it will be perceived that the radicals faced us down, that 1,000 American hostages were taken without any consequence, that the moderate governments who bet on us would be discredited.”

At the heart of the split is a dispute over whether economic sanctions can be counted on to force Iraq out of Kuwait.

Mr. Kissinger says that there's nothing even close to a guarantee they will work. Sanctions advocates “are saying that they think in 12 to 18 months sanctions will work,” he says. “They have produced no evidence that this is true. ... I have said from the beginning that time wasn't on our side. I said from the beginning that we would have to choose between sanctions and military options somewhere along the line.”

Mr. Brzezinski counters that there isn't any evidence sanctions won't work in this case, because the sanctions on Iraq are far more severe than any ever imposed. “I think sanctions have already had a massive attriting impact on Iraq, and if maintained for a year or so they would probably bring that economy to a total standstill,” he says. “So they have already established the lesson that the aggression didn't pay.”

Mr. Kissinger maintains that “the best

that sanctions can do is to begin negotiations” —and negotiations are another area where the two men cleanly split.

Mr. Kissinger fears that a process of negotiating with Iraq will inevitably be dragged out by Saddam Hussein, leading to the collapse of the international coalition opposing him, an easing of sanctions and a reduction of the American military force in Saudi Arabia.

And in negotiations, he says, America inevitably would have to compromise on its goals to get a deal. “If the U.S. leaves under conditions that are a disguised Iraqi success—that is to say, where Iraq gains something in Kuwait even if it is given to them by the Kuwaitis, or by an Arab summit—and if the military preponderance of Iraq remains unaffected, then I think we will have suffered a defeat,” he says.

That's why Mr. Kissinger has publicly voiced his disapproval of Secretary of State Baker's trip to Baghdad, though he's now ceasing his criticism to avoid undercutting the secretary. The prospective Baker mission to Baghdad, though, remains in doubt after the U.S. and Iraq failed over the weekend to resolve a dispute over dates. Iraq has insisted that Mr. Baker see Saddam Hussein on Jan. 12. The Bush administration maintains that's too close to the Jan. 15 deadline set by the United Nations for Iraqi withdrawal and therefore would represent an opportunity for Iraq to push back the deadline. The administration has insisted on a date no later than Jan. 3. As a result of the dispute, a visit to Washington by Iraq's foreign minister, once expected to occur today, has been postponed.

The Brzezinski camp, by contrast, hasn't any such fear of negotiations. Mr. Brzezinski says he prefers the term “discussion,” but sees no problem in talking with Iraq about ways it could resolve its disputes with Kuwait over their common border, its desire to lease two Kuwaiti islands or its big debts to Kuwait. The discussions, he says, might produce “some arrangement for adjudication” of those issues.

“I see nothing wrong with that, and I find such an outcome perfectly acceptable,” Mr. Brzezinski says.

One of the most emotional splits involves the question of whether the U.S. could limit military action to air and naval strikes. Mr. Kissinger maintains that even with such contained fighting the U.S. could force Iraq to retreat. Mr. Brzezinski says wide-scale ground combat would be inevitable, arguing that air strikes didn't succeed in Korea or Vietnam.

The broadest area of dispute encompasses the future of the Middle East: whether war or a failure to cut Saddam Hussein down to size would cause the more dangerous mess.

Mr. Kissinger argues that the U.S. must find a way to scale back Iraq's dangerous chemical and nuclear weapons programs now or face a far deadlier conflict down the road as the Iraqi dictator expands his control over the Persian Gulf and its oil fields.

America's friends would crumble in the face of such a hostile power—an outcome Mr. Kissinger suggests needs to be prevented even if it means some military action now. “I balance the fear of the collapse of all the moderates against whatever the result may be of my preferred option of selective reduction of Iraqi military preponderance,” he says.

But in Mr. Brzezinski's eyes, military conflict itself would create “long-lasting enmity” toward the U.S. that would destroy governments friendly to the U.S. Just as bad, the positions of Syria and Iran would be enhanced and the region even more destabilized.

Continued Iraqi occupation of Kuwait would be “sad,” Mr. Brzezinski says—but not as sad as the result of military conflict. “I just don't see the argument for the proposition that a major war by the U.S. in this area is a solution,” he says.

By GERALD F. SEIB

Staff Reporter of THE WALL STREET JOURNAL

WASHINGTON—Henry Kissinger foresees disaster if the U.S. waits for sanctions to drive Iraq out of Kuwait: International resolve will crumble, the military option will evaporate, Saddam Hussein will prevail, “I believe that many of those who advocate sanctions are using it as a cop-out,” he declares.

ing acidly that it “reminds me a little bit of his arguments for how to terminate the Vietnam War.”

Henry Kissinger

icy adviser to Presidents Nixon and Ford was a mentor of Brent Scowcroft, who is now President Bush's national security adviser, and Lawrence Eagleburger, the North 2 man in the Bush State Department. White House aides say Mr. Kissinger has talked privately with Mr. Bush, and he has generally supported the administration publicly.

Mr. Brzezinski, who was President Carter's national security adviser and who has privately counseled Mr. Bush on European issues, is close to many in Congress, including Senate Armed Services Committee Chairman Sam Nunn (D., Ga.). His views have seeped into congressional broad-sides.

Mr. Brzezinski recently had a private session with Democratic Sen. Edward Kennedy of Massachusetts, for instance. Shortly afterward, the senator used statistics Mr. Brzezinski had provided on civilian casualties during the bombing of North Vietnam as ammunition against a witness testifying before the committee. The target: Mr. Kissinger.

Zbigniew Brzezinski

old foreign-policy consensus built around containment and all those things that worked is no longer there, because the Soviets as a threat are gone,” says Nicholas Velotelli, a foreign service officer and former assistant secretary of state.

But Mr. Kissinger argues that if the U.S. had confined itself to protecting Saudi Arabia and had left the liberation of Kuwait to the world community—“the Brzezinski option,” he calls it—“it would have been a bad mistake, but a retrievable one.” It didn't happen that way, though; the U.S. took the lead in pushing for liberating Kuwait and sent hundreds of thousands of troops. If the U.S. now shrinks away, he argues, “it will be perceived that the radicals faced us down, that 1,000 American hostages were taken without any consequence, that the moderate governments who bet on us would be discredited.”

Mr. Kissinger says that there's nothing even close to a guarantee they will work. Sanctions advocates “are saying that they think in 12 to 18 months sanctions will work,” he says. “They have produced no evidence that this is true. . . . I have said from the beginning that time wasn't on our side. I said from the beginning that we would have to choose between sanctions and military options somewhere along the line.”

that sanctions can do is to begin negotiations—and negotiations are another area where the two men cleanly split.

And in negotiations, he says, America inevitably would have to compromise on its goals to get a deal. “If the U.S. leaves under conditions that are a disguised Iraqi success—that is to say, where Iraq gains something over Iraq even if it is given to them by the Kuwaitis, or by an Arab summit—and if the military preponderance of Iraq remains unaffected, then I think we will have suffered a defeat,” he says.

The Brzezinski camp, by contrast, hasn't any such fear of negotiations. Mr. Brzezinski says he prefers the term “dissussion,” but sees no problem in talking with Iraq about ways it could resolve its disputes with Kuwait over their common border, its desire to lease two Kuwaiti islands or its big debts to Kuwait. The discussions, he says, might produce “some arrangement for adjudication” of those issues.

Continued Iraqi occupation of Kuwait would be “sad,” Mr. Brzezinski says—but not as sad as the result of military conflict. “I just don’t see the argument for the proposition that a major war by the U.S. in this area is a solution,” he says.

A10 THE WALL STREET JOURNAL, MONDAY, DECEMBER 17, 1990

[E]