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October 06, 1977 - Image 1

Resource type:
Michigan Daily, 1977-10-06

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See Editorial Page

V' L

Sir iqan


See Today for details

Vol. IXXXVIII, No. 25 Ann Arbor, Michigan-Thursday, October 6, 1977 TenCen Ten Pages

Financial officials
shaken up in city
investment fiasco

The hand is faster than the eye at the keyboard of this automatic teller or "money machine." New safeguards are
needed to protect consumers from this and other electronic banking systems, according to Michigan's Senator Don
Sen. Riegle s bill .to protect
users of 'checkless' ban kng
By BRIAN BLANCHARD Yesterday the subcommittee finished three days of
hearings in Washington on EFT and co'nsumer rights.
Long after the last shops lock up and there's noth- EFT systems include teller machines, automatic
ing to buy, you can walk up to the small console on local payment of bills and retail sales that require nothing more
banks, punch in a series of numbers, and pull cash out than a number for payment. New York City, Denver and
of your account through the wall. California are the centers of activity, but banks around
But this simple idea of computer-quick finances is the country - including several in Ann Arbor.L are
only part of a new philosophy of a "checkless society," beginning to experiment with the systems.
built upon Electronic Fund Transfers (EFT). "SAY YOU BUY shoddy merchandise," said Riegle
SUCH SYSTEMS may someday replace cash, checks aide Ethan Siegal. "It's moving at such a fast pace that
and credit cards. But fears that they may also outpace you would have trouble getting your money back." Since
consumer rights have led Sen. Donald Riegle (D-Mich.), there is no time lag between the purchase and the with-
chairman of the Senate Banking Subcommittee on Con- drawal for the consumer to cancel the expenditure, and no
sumer Affairs, to introduce a bill which would protect receipt to show for it, people are easy targets for fraud.
consumers from the hazards of instantaneous buying. See SEN., Page 7

City Accountant Marc Levin has
been fired and Assistant City Control-
jer Steven Hendel has been tempor-
arily demoted as a result of each
official's involvement in the city's
recent investment fiasco, City Ad-
ministrator Sylvester Murray an-
nounced yesterday.
Murray also accepted the resigna-
tion of Levin's boss, City Controller
Lauren Jedele, who said he was
quitting voluntarily because of the
physical stress from the whole affair.
IT WAS THE Controller's office
that entered into the arbitrage
transaction with Merrill, Lynch,
Pierce, Fenner and Smith which
nearly cost the city $1.4 million. The
unauthorized investment in January
of this year was of highly question-
able legality under state laws regard-
ing community investments.
An arbitrage transaction involves
borrowing a treasury note, then
selling the note and using that
revenue to buy another note that will
hopefully be more profitable.
Levin, who vowed to fight for
re-instatement and said he was a
"scapegoat" for the city administra-
tion, was handed a two-week terrhin-
ationnotice effective Oct. 19. Murray
said he was fired because of "mis-
conduct in participating in the June
30-July 1 financial transaction which
misrepresented to city officials the
city financial position at the end of
the fiscal year."
More specifically, Murray said,
Levin was suspended because of
"misconduct in seeking to cover the

city investment loss by seeking an
agreement by which a scheme of
investment transactions would have
had the effect of spreading the city's
loss over a multi-year period and
thpereby possibly disguising the loss
to city officials."
LEVIN ENGAGED in the arbitrage
deals with Merrill Lynch in January,
but by June 30 realized the invest-
ment was declining rapidly. It took
six months to realize the inviestment
was failing because Merrill Lynch
investment counselor Michael Car-

'' --r-=-- -



roll, who has since been fired,
allegedly fabricated the market fig-
On June 30 and July 1, Levin and
Carroll agreed to another transac-
tion. Carroll returned the money to
the city, so the $1.4 million loss would
not be reflected in the final city
budget figures of fiscal year 1976-77.
On July 1 Levin returned the money
to Carroll, and it was reinvested.
Pglice Major Walter Hawkins, who
was assigned to make an "in-house"
See CITY, Page 7


priority for CRISP

U' slow to act on CIA guidelines

Beginning with early registration
in November, seniors will once again
have priority for CRISP appoint-
ments. Under a new, more perman-
ent system, seniors will be randomly
assigned to the earliest appointment
times, according to Ernest Zimmer-
man, assistant to the vice president
for academic affairs.
Underclass students will then be
combined into a single group and also
randomly assigned times. Students
will still be assigned within tthe
confines of alphabetic groups, rotat-
ing each term.
THE RANDOM, University-wide
scheme of assigning CRISP appoint-
ments began with last spring's early
registration, as an interim solution to
the long lines and inequities faced by
students who relied on their individ-
ual schools and colleges for CRISP
At the time, University officials
claimed senior priority couldn't 'be
programmed into the computer early
enough for last spring's registration.
In April, the administration and
Michigan Student Assembly (MSA)
conducted identical surveys, seeking
student input on five possible options
for a permanent appointment proce-
TWO OPTIONS included senior
priority. The first was the procedure'
now being implemented, with the
second a system giving seniors the
earliest times, the next earliest to
juniors, then sophomores, then fresh-
OF THE 6,500 respondents in the
University survey, two-thirds favored
one of the two options which included
senior priority. Within that number,
votes were split, with a slight edge
favoring the second option:
In the MSA survey, the 1,500 respon-
dents favored the senior priority op-

tions with a margin similar to that in
the University poll. But the MSA results
showed the first option as slightly more
Zimmerman said the survey results
"came as no surprise." He said the
"notion is still pretty prevalent with
students that there must be something
pretty special to being a senior." ,,
Brian Laskey, who conducted the
MSA survey, said the method announ-
ced yesterday is the "most equitable"
of the two senior priority alternatives.
"If the other option had been chosen,
freshmen would not only have last pick
of courses in summer orientation, but
would also have last pick of courses in
the winter term," he said.



A special appeal from a Washington-
based organization to adopt guidelines
preventing secret CIA activity on cam-
pus appears to be getting very little at-
tention from the University com-
Using as its basis recent findings by
congressional committees that the CIA
has been operating on American cam-
puses for secret scientific and political
research, the Campaign to stop Gov-
ernment Spying has asked almost fifty
schools to initiate strict rules con-
trolling such research.
BUT OFFICIALS here in the ad-
ministration, the faculty senate and the
student government-while basically
supporting the call for guidelines-have
not even discussed, let alone taken
steps to compose such guidelines, as of
In April, 1976, the Senate Select

Committee on Governmental
Operations with Respect to Intelligence
Agencies revealed that there was CIA
activity on over 100 college campuses,
involving the recruitment of students
and hidden sponsorship andN sub-
sidization of research. The committee's
activities were at least in part spurred
by a June, 1975 disclosure that domestic
spying activities by the CIA were
Based on, that data, the Campaign,
located in the Center for National
Security Studies in Washington, sent an
appeal to University President Robben
Fleming on Sept. 12, pointing out that
over 80 academic and research in-
stitutions have been informed so far
that "their faculty and facilities were
used to carry out secret drug testing
and mind control experiments."
FLEMING SAID last week he had
sent a copy of the letter to deans of the

various schools for their reference,
along with a copy of precedent-setting
guidelines established by Harvard
University in May to prevent future
CIA spying there.
He also said he would talk to the
faculty's Senate Advisory Committee
on University Activities (SACUA) "to
see what they think can be done" with
the guidelines.
But as of yesterday, SACUA officials
said they had not been contacted on the
subject and five deans all said they had
received no such letter.
Just last wveek, Ohio State University
and Stanford University were given a
few details on past campus CIA ac-
AT OHIO STATE, a Freedom of In-
formation suit revealed that the CIA
had conducted secret scientific resear-
ch there in the late fifties and early six-

ties, but would not name those faculty
members recruited.
When OSU officials learned of the ac-
tivities, one source said they "were
scurrying-to say the least" to set up
strict guidelines preventing future
secret experiments.
The Harvard guidelines-which the
Campaign endorses-are the product of
a report made at that university on its
relationship with the CIA and other in-
telligence agencies.
THE REPORT recommended ban-
ning secret research contracts and con-
sultations between members of the
Harvard community and the CIA. It
also urged that anyone contacted by the
intelligence agency be required to
notify Harvard officials. It further
recommended that the University not
willingly participate in misleading
propaganda or undertake intelligence
oprations for the CIA.
See 'U', Page 7

LANSING (UPI)-The state House
yesterday stood by its decision this
summer not to liberalize Michigan's
marijuana laws.
The 51-48 vote came after nearly an
hour of debate which lacked some of the
emotionalism which characterized
discussion of the issue before. The
House, at that time, received nation-
wide attention when an opponent of
liberalized pot laws struck the bill's
chief advocate.
The reform bill, introduced by Rep.
Perry Bullard (D-Ann Arbor), would
reduce the penalty for possession of an
See MICHIGAN, Page 2

'U' defaces graffiti,
physics folks frown

With a few quick strokes of a paint brush, the
University took a giant'step towards eliminating
what was perhaps the finest collection of Star Trek
and assorted physics-oriented graffiti on campus.
University paint crews rolled into the stairwells
of the Physics and Astronomy (P and A) Building
Tuesday and painted over the well-known collection
of slogans, equations and often obscene epitaphs
with a blotchy coat of grey paint.
"IT WAS GREAT, I used to read it all the time,"
grinned physics sophomore Greg Heck, adding, "A
lot of it I wouldn't want to repeat."
According to Heck, the anonymous artwork in-
cluded equations and physics problems with "non-

Witherspoon said some of the material was ob-
scene and the University "doesn't like the public to
see that kind of thing."
ONE GRAFFITI LOVER, a physics student who
wished to remain anonymous, sullenly lamented,
"It's a dark day for physics students, it's a great
Physics student Steve Holden said his favorite
remark in the now-eradicated graffiti collection
was "something about bombing Toledo and going to
war with Ohio."
However, Holden said he thinks the walls look
better now and added, "People should have more
respect for the buildings."
"What they (the University) might do is paint
something more interesting than grey walls," he

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