STUDENT AID See Editorial Page 1r tir UIQ PASTORAL High -44 d Low--24° See Today for details 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) . a .;- ig ht ..t inn fim etin, ..nt M im i} tom::. .: >..