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Vol. LXXXVIII, No. 137 Ann Arbor, Michigan, Friday, March 24, 1978 Ten Cents
Lawyers to cash in on
Edison
By DENNIS SABO
Copyright 1978
The Michigan Daily
First in a two-part series
What began as a friendly chat bet-
ween a Chicago lawyer and a Southfield
drug store owner on the scenic ski
slopes of Aspen, Colorado, six years ago
has developed into a multi-million
dollar anti-trust suit against the Detroit
Edison Company.
That suit will soon bring an end to
Edison's 92-year-old light bulb ex-
change program. It may also put up to
$L5 million in the pockets of the attor-
neys who pursued the case against the
utility.
THE SUIT against the bulb exchange
program was filed in July, 1973 when
drug store owner Lawrence Cantor
claimed that he, as well as other
Southeast Michigan light bulb retailers,
were being deprived of profits on bulb
sales by Edison's exchange program.
Under the system, Edison customers
could - and still can - trade burnt-out
bulbs for new ones at Edison service
outlets. The program's costs are in-
cluded in Edison customers' electric
rates.
Now, however, the 47-year-old
druggist acknowledges he will never
make a profit on bulb sales. He claims
he has little to gain (other than having
his electric bill adjusted) from the suit
and regrets he ever started the lawsuit.
BUT IF Cantor has little to gain from
the suc
the atto
gain qui
Micha
Robertl
lawyer:
seeking
Detroit
$1.5 m1lioncourt
settlement sought
ccessful settlement of his suit, of-court settlement. Federal District
rneys representing him stand to Court Judge John Fiekins is expected to
te a bit. issue a written opinion on the proposed
ael Sklar, Burton Weinstein, settlement and legal fees within a mon-
Holstein and David Nelson, the th.
s representing Cantor, are "We will undoubtedly petition for the
$1.5 million in legal fees from fee," said Michael Sklar, one of Can-
Edison. Lawyers for the utility tor's four principal attorneys.
light bulb suit
a result of that meeting and further PLAINTIFF Gowdey was a friend of
conversations, they agreed to bring suit attorney Paul Lurie, an associate in
against Edison for the bulb exchange Sklar's law firm prior to the lawsuit.
program. Lurie joined Weinstein and Holstein,
Two of the other attorneys who later two of Cantor's attorneys, in the Coma
joined the case, Weinstein and Holstein, monwealth Edison lawsuit.
were involved in a 1970 suit against In that suit, Commonwealth Edison
Chicago's Commonwealth Edison appealed a district court ruling in favor
which maintained a bulb exchange of the school teacher, and lost. In the
program similar to Detroit Edison's. still-pending settlement, which has
In that lawsuit, they represented a been appealed twice by interest groups
school teacher, Marilyn Gowdey, who since the 1973 decision, the attorneys
claimed the program was not funded are requesting more than $2.7 million int
properly and most customers were legal fees.
unaware of the program. Common- In the Detroit Edison suit, two ap-
wealth Edison lost the suit and has sin- peals by Cantor's attorneys eventually
ce increased publicity for the program brought a U.S. Supreme Court ruling
and offers the customers the choice of that Detroit Edison was subject to anti-
using it or not. See LAWYERS, Page 9
have agreed to discontinue the bulb
program and pay Cantor's lawyers up
to $690,000 in legal fees as part of an out-
CANTOR AND Sklar both said they
first met in Aspen, Colorado, in 1972. As
REP. CHARGED WITH TAKING KICKBACKS:
Democrat Diggs
MONROE FREEDMAN, an American lawyer who has been observing the
trial of Sami Esmail, relates the MSU student's treatment by Israel jailers*.
Esmail getting fair
trial lawyer says
WASHINGTON (AP) - Twelve-term
Rep. Charles Diggs Jr., a founder of the
Congressional Black Caucus, was
charged yesterday with padding his of-
fice payroll and taking $101,000 in kick-
backs.
The rotund Michigan Democrat, the
senior black member of Congress and
the chairman of the committee that
oversees Washington's city gover-
nment, was named by a federal grand
jury in a 35-count felony indictment that
carries potential penalties totaling 175
years in prison and $224,000 in fines.
DIGGS, 55, IN Mozambique on a 15-
day tour of African nations in his role as
chairman of the House subcommittee
on Africa, said in a telephone interview
that he could not respond to the charges
until he saw a bill of particulars. But his
office issued a statement in which he
declared "I am innocent. I do not
believe I have violated any federal or
House rule."
"I am confident that due process of
law will vindicate me," Diggs said. The
statementcomplained about the timing
of the indictment, saying Diggs'
lawyers had pleaded with the Justice
Department to delay it until he com-
pletes his overseas mission.
Diggs was scheduled to join
President Carter during the chief
executive's state visit to Nigeria next
week. The statement indicated the
congressman plans to go through with
those ceremonies even though the in-
dictment "may hamper meaningful
dialogue between the parties."
DIGGS WAS CHARGED specifically
with 14 counts of mail fraud, carrying
penalties of 5 years in prison and $1,000
per count, and 21 counts of making a
false statement to the government via
payroll vouchers, punishable by 5 years
and $10,000 per count.
The grand jury accused Diggs of in-
flating and taking kickbacks from the
salaries of three of his House em-
ployees and of using federal funds to
pay three other persons who worked for
his private business.
Diggs was the target of federal in-
vestigators for about a year. The indic-
tment charged also that Diggs paid
three employees of the House of Diggs,
believ
I hacre eiolaite(I
any federal or House rule.
I am confident that due
process of law will vindi-
cate me.'
-Rep. Charles Diggs
a Detroit funeral home inherited from
his father, out of his federal payroll.
DESPITE EARNING $57,500 as a
congressman and falling heir in 1967 to
his father's prospering mortuary and
real estate holdings, Diggs was known
I am in inocent. 1I(10 not
to have deep personal debts.
An earlier tax case charged
failure to pay $36,223 on his
estate. Diggs, himself a licen
tician, has since sold the fune
one of the largest in Michigan.
ISRAELI SOURCES CHARGE CARTER WITH PLOT:
indicted
A credit firm in Minneapolis has sued
him for more than $5,000 on a personal
['<$ loan. He also defaulted on a $6,235 home
improvement loan in 1975 and had other
credit debts in the thousands of dollars.
DIGGS HAS SERVED in Congress
for 23 years. He followed his father first
into undertaking, then into politics via
the Michigan legislature. Now he faces
the possibility of matching his father on
a third score - a prison term for graft.
The elder Diggs served 15 months for
taking bribes while a state senator.
Diggs was elected to the House in
1954, and helped found the
Congressional Black Caucus in 1969,
him with when there were nine black representa-
s father's tives. There now are 16 and Diggs, in
used mor- his 12th term, has the longest tenure
ral home, among them.
By SUE WARNER
An American lawyer who has
been in Israel observing the trial
of jailed Michigan State Univer-
sity student Sami Esmail said
yesterday Esmail is receiving a
fair trial under Israel's judicial
system.
Monroe Freedman, a law
professor at Hofstra Law School,
returned from Israel this week
where he watched the trial as an
independent observer. Although
he is a member of the American
Civil Liberties Union (ACLU)
National Board, Freedman paid
for his trip himself, with help
from a New York lawyer.
ESMAIL WAS arrested at Tel
Aviv's Ben Gurion airport last
December when he arrived to
visit his dying father in the West
Bank. He was charged with being
a member of an outlawed group,
the Popular Front for the
Liberation of Palestine (PFLP),
and with having contact with an
enemy agent. If convicted,
Esmail could face 10 years in
prison.
The Israeli government
secured a confession from'
Esmail, stating he received
See ESMAIL, Page 9
U.S. wantts
JERUSALEM (AP) - Qualified there is reason t
Israeli sources asserted yesterday that these difficulties w
the Carter administration has launched ED PENNY, a
a carefully orchestrated campaign to National Security
force Israeli Prime Minister both Secretary of
Menachem Begin from office. and Zbigniew B
The sources, who have access to Carter's nationa
Begin's inner circle of advisers, denied making su
claimed the White House and State Begin, meanwhi
Department were manipulating the called "three diff
media to create a crisis atmosphere in with President C
U.S.-Israeli relations in hopes the saying Israel had
Israeli public would turn against Begin. structing peace."
"Israel has ne
TO SUPPORT their claim, the sour- never will obs
ces quoted an unnamed U.S. official as homebound prime
telling an Israeli leader in Washington a speech before
that Begin should. be replaced "for the Presidents of Maj
sake of continued negotiatiens" bet- Organizations.
ween Israel and Egypt. The sources did
not identify the Israeli leader. "WHY WAS IT
In an earlier speech before the "I will not go mt
National Press Club Begin directly or indire
acknowledged sharp differences with was made to me
the Carter administration, particularly structing peace.N
on interpretation of United Nations "There isn't on(
resolutions calling for Israeli with- for peace," he sai(
drawal from the lands occupied during The sources -sa
the six-daywar of 1967. opened the tal
But he denied reports that Carter was Tuesday, the Pre
trying to force him out of office and speaking in the g
said, "I believe there is basic friendship used before in
between the United States and Israel, achieve progress
so deep and engraved in our hearts that talks.
Begi
to believe very soon
mill disappear."
member of the U.S.
Council staff, said;
f State Cyrus Vance1
rzezinski, President
i security adviser,
ch comments.
le, concluded what he
ficult days" of talks
Carter on yesterday
been accused of "ob-
ver obstructed and
truct peace," the1
minister declared in
the Conference of1
jor American Jewish
difficult?" he asked.
o details, but, either
ectly, the impression
that Israel was, ob-
What an allegation!"
e day we didn't work
d.
aid that when Begin
ks with Carter on
sident was no longer
general terms he has
discussing ways to
s in Mideast peace
" A l l o
pointedc
or no a
source.'
to be no.
TH E
to the r
Resolut:
draw fr
wants a
ultimate
the Wes
somethi
he woul
Carte
the idea
ter an
Begin b
out?
of a sudden Carter was asking
questions and demanding a yes
answer from Begin," said one
"And he knew the answer had
SOURCE specifically referred
rift over U.N. Security Council
ion 242 calling on Israel to with-
om occupied territory. Carter
commitment from Begin for an
R evacuation of at least part of
t Bank of the Jordan River -
ng Begin has consistently said
Id not do.
r also pressed Begin to accept
of a West Bank referendum af-
nterim period, the source said.
believes this would lead to a
See U.N., Page 9
Rent hike spurs controversy
By RICHARD BERKE
Several 'residents of University
married housing units are unhappy
about the 13 percent rate jump the
Regents have approved for next fall. In
fact, they don't want to pay any more
than the 7.4 percent hike which residen-
ts of single student housing will have to
pay.
University officials say there is more
behind the percent figures than the
protesting residents realize and the 13
percent increase is unavoidable.
THE REGENTS approved the in-
crease at the recommendation of the
Family Housing Rate Study Commit-
tee, a group composed of University
Housing Office officials and residents of
married student housing. Last year's
Friday
" Candidates for the April 3 city
election exchange barbs at the
annual League of Women Voter's
debates. See story, Page 12.
* Members of the final Vietnam
teach-in panel discuss the anti-
Rate Study Committee proposed a eight
percent rate hike, but members said
surging inflation and rising utility costs
forced them to increase the figure this
year.
At February's Regents' meeting
Norman Snustad, acting associate
housing director, compared the 35 per-
cent increase in family housing bet-
ween 1974 and 1978 with the 34 percent
rise in the Consumer Price Index over
the same period.
Richard Tarrier, Rate Study Com-
mittee chairman and manager of
University family housing, said factors
involving General Student Residents
Reserve (GSRR) funds also con-
tributed to the 13 percent rate increase.
GSRR IS A contingency fund pool
which can be drawn on by any unit in
the University Housing system for
emergency repairs or special projects.
GSRR is funded through required con-
tributions by each housing unit.
"Last year we didn't contribute our
fair share to GSRR," Tarrier said. "We
were $25-30,000 short of what we'd like
to contribute." But Tarrier emphasized
that the primary cause for the rate hike
is inflation and not GSRR.
to gather 2,000 signatures from among
the 1,700 households in family housing.
He said the petitions will be presented
to the Regents within the next several
See MARRIED, Page 9
f C~
a'.
A'F,2
'e e e10
'U'hiring
freeze gets.
no union
reaction
By MITCH CANTOR
A University hiring freeze, in effect
now for over a week, has drawn a few
grumblings but no action from local
workers and their unions.
Harold Shapiro, Vice-President for
Academic Affairs and chairman of the
Committee on Budget Administration,
announced the move March 10. The
freeze, which became effective several
days later,.applies to all workers sup-
ported by the University's General
Fund, with the exception of instructors,
THE ACTION, which will remain. 01
effect until June 30, is an attempt on the
part of the University to save money, as
it faces a $2.7 million deficit for this
fiscal year (ending June 30).
Dwight Newman, president of the
American Federation of State, County
and Municipal Employees (AFSCME)
Local 1583 said, "They (the University)
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