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October 15, 1977 - Image 1

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Michigan Daily, 1977-10-15

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Vol. LXXXVIII, No. 33 Ann Arbor, Michigan-Saturday, October 15, 1977 Ten Cent Ten Pages

Investment firm renews

'A-1' rating on ci


For once, the cfty has gotten
some good news about its recent
excursions into highly specula-
tive investments. Moody's In-
vestor Services has reinstated
the city's "A-1" bond rating after
suspending it a week ago.
The suspension, though brief,
may still cost the city some
waste water treatment plant, which
will be partially financed through bon-
ds, were opened last month, but the city
was unable to accept any bids until the
bond rating qjuestion was settled.
Moody's, reinstating the city's good

standing Thursday, suspended it after
learning of the city's arbitrage tran-
The arbitrage transaction, in essen-
ce, is a form of borrowing.
State law says that no community can
make an investment with borrowed
money, which is what the city did.
BOND RATINGS are used by in-
vestors as indicators of a community's
financial credability. It also helps
determine how much interest a
municipality will be charged when it
borrows money. The city's "A-1" rating
is the third highest rating used.
At the outset of the crisis, when it was
first learned that the city had been
engaging in highly questionable and
unauthorized investments, City Ad-
ministrator Sylvester Murray was

asked how the city would be spared
from financial sanctions by either the
state, brokerage houses, or financial
"I think they will be pleased to know
that when responsible officials were in-
formed of the problem, the city acted
quickly and sustained no financial
loss," said Murray. "They will also be
pleased to know that we have made a
full disclosure of the entire affair."
THE ARBITRAGE investments were
entered into by former City Accountant
Marc Levin and City Controller Lauren
Jedele. Murray did not become aware
of the transactions until September 12,
when Levin and Jedele informed Ac-
ting City Attorney Bruce Laidlow, who
subsequently informed Murray.
Levin has since been fired by the city,
and Jedele has announced that he will
retire after a short sick leave.
Murray's optimistic belief became
reality on Thursday, when Moody's in-
formed the City Administrator that the
rating had been reinstated after it was
determined the city's problems were
bureaucratic, not economic.
HOWEVER, THE city's arbitrage
transactions with the firm of Merrill,
Lynch, Pierce, Fenner, and Smith are
still under investigation by the
See 'A-1', Page 10


Sen. committee okays energy tax
bill; Carter's proposals omitted

WASHINGTON (AP) - The Senate
Finance Committee approved a
patchwork energy-tax bill yesterday,
rejecting virtually all of President
Carter's recommendations.
Backers of the measure approved
by the committee say it goes about
halfway toward meeting the goals set
out by Carter without imposing the
stiff new taxes the President had
ALTHOUGH the legislation rejects
Carter's proposals, action by the full
Senate and later by a Senate-House
conference committee probably will
lead to major alterations. The energy
package finally approved by Con-
gress could meet fully the Presi-
dent's goal of sharply reducing oil
imports by 1985.'
The bill approved by the Finance
Committee would rely on $32 billion
worth of tax breaks over the next
eight years to encourage conserva-
tion and provide the energy industry.
added incentive for increasing pro-
duction and developing new energy
It would reduce oil and natural-gas
consumption by the equivalent of 2.2
million barrels per day by 1985, its
backers say. The House bill, relying
mainly on Carter's proposed taxes to
force conservation, would save an
estimated 1.7 million to 2.5 million
barrels a day.
The Literary College Student Gov-
ernment (LSASG) appears to be
alive and well at the University.
Members of the student organiza-
tion have set many priorities for the
group this year, as LSASG President
Dick Brazee will testify.
students' role in the decision-making
processes of LSA government," Bra-
zsee said. The president added he
would be working toward "better
communication between students
and LSASG."
Other student government mem-
bers, including LSASG Executive
Council and LSA Curriculum com-
mittee member Bob Stechuk, agree.
"One of our top priorities is to
increase our vitality by way of publi-
cizing events and giving information

CARTER'S entire energy pro-
gramincluding taxes, a restructur-
ing of utility rates and other non-tax
provisions, was aimed at reducing oil
consumption by 4.7 million barrels a
day. Current U.S. consumption is 18
million barrels daily.
The Finance Committee approved
its version yesterday on an 11-6 vote.
Republicans Carl Curtis of Nebraska
and John Danforth of Missouri joined
nine Democrats in favoring the bill.
Democrat Floyd Haskell of Colorado,
independent Harry Byrd of Virginia
and four Republicans ,voted no.
The committee will take a final,

formal vote on the bill late next week
after the technical language is ap-
proved and aides prepare a lengthy
explanation of the dozens of provi-
sions. Debate on the Senate floor
cpuld begin about Oct. 25.
Sen. Russell Long, chairman of the
committee, praised the bill as a
sensible compromise that will not*
only reduce U.S., dependence on
imported energy bu-t fight unem.
ployment as well. In fact, he said,
"this bill has more potential for jobs
than any single program we've
talked about in this Congress.
See SEN.: Page 10

Good-bye, 'ole friend
Bing Crosby, one of the most applauded entertainers in the last half century,
died yesterday while playing golf in Madrid. He starred in more than 70
films, many of which were world-wide hits. See story, page 5.

Pan ama treaty clarified

WASHINGTON (AP) - President -
Carter and'. Panamanian leader
Omar Torrijos, trying to dispel
questions about the new Panama
Canal treaty, agreed yesterday the
United States can defend the water-
way against any threat and send its
warships through it ahead of others
in any crisis.
But they also agreed in a joint
statement that the treaty allows the
United States to direct its actions
only toward insuring that the canal
remain open and "never against the
territorial integrity or political inde-
pendence of Panama."
CARTER said he thought the
statement resolved "the major dif-
ferences of interpretation" that
threaten Senate ratification of the
treaty. His negotiator, Ambassador
Sol Linowitz, told reporters he
showed the statement to Senate
leaders and "the reaction was very
favorable, I'm pleased to say."
As Torrijos left the White House, he
told reporters through an interpret-
er, "If a great power attacks the
canal or puts in danger the canal, it is
the right of the United States . . . to
go and defend the canal."
However, he added: "The U.S.
participates in defending the, canal,
but the United States has no right to
intervene or interfere in the internal,
affairs of Panama."
"NO MORAL leader of the world
would sign a receipt allowing a for-
eign country to intervene in its coun-
try," Torrijos said. "If he would sign
such a treaty, don't trust him

because there must be something
wrong with him."
"Intervention is as bad a word here
as it is in my country," Torrijos de-
. The President told a group of
visiting newspaper editors and
broadcast news directors from
around the country:
"I THINK his (Torrijo's) and my
statement ... will successfully re-
solve the major differences of inter-
pretation thathave been raised about
our right to defend the canal and also
about the right of our ships to have
expeditious passage through the

Carter also said the United States
has ."'no intention to intervene in Pan-
ama,' citing Panama's own sover-
eignty as a nation.
The President made his statements
after meeting with Torrijos for more
than 90 minutes. The Panamanian
general stopped at the White House
on his way home from a trip to
Europe and the Middle East. His
meeting .with Carter had been sched-
uled to last only an hour.
AFTERWARD, White House Deputy
Press Secretary Rex Granum said
See PANAMA, Page 10

Baskin Rob bins: new
boys on the block

Tony Kane looks forward to the day
when he can fling aside his books on
ancient Chinese civilization, and
instead, apply his intellectual prow-
ess to more challenging issues, like
deciding where he will indulge his
cravings for jamocha almond fudge
ice cream.
Such decisions will plague Kane, a
Chinese history graduate student,
and other ice cream lovers as they
stroll down S.- University because
Miller's Ice Cream will soon have
competition from a Baskin Robbins
parlor a few blocks away.

Bryant finds pie distasteful
Anita Bryant, target of pie throwing homosexual Tom Higgins recovers after being
struck in the face with the banana cream variety. Bryant's- husband said they
would pray for him and would not press charges. Bryant, a staunch anti gay
activist, was nailed last night at a press conference in Des Moines.

Ex-Rep. indicted in Korea probe

WORKMEN ARE busily convert-
ing what was once Stephan's, a food
store on the corner of South and East
University Streets, into the 31 flavors
store. They're shooting for comple-
tion Nov. 1.
According to the regional director
of B.Askin Robbins, Ray Brooks,'
Stephan's owner did not have a lease
on the building, so Brooks' company
negotiated to buy the building from
the owner.
With the new ice cream store just
down the street from Miller's, some
have speculated that Baskin Robbins
may be trying to muscle in on
Miller's territory.
BUT BROOKS contends Baskin
Robbins is not aiming to put Miller's
out of. business. They simply want to
bring their product to University stu-
dents, he asserted.
"We do have the Cadillac of the
industry;" he added.
-The manager of Miller's said she
doesn't feel the least bait apprehen
sive about South University's upcom-
ing addition.
"THERE'S ENOUGH business for
both of us," said Barbara Kelley;
Kelley would not comment on the
difference in quality between Baskin
Robbins and Miller's.
"I've only had one Baskin Robbins
ice cream cone in 27 years, so I really
can't make a judgment," she said.
RUT ANOTHER Miler's amnlove

WASHINGTON (AP) - A federal
grand jury indicted former Rep.
R chard Hanna cn corruption
c arges yesterday and described
him as a prominent partner in an
alleged South Korean scheme to buy
favors from members of Congress.
The indictment was the third pro-
duced by the Justice Department probe
of the Korean scandal and the first to
charge a former member of Congress.
No current House or Senate members
have been charged.
HANNA, a California Democrat who
served in the House from 1963 through

has lived in seclusion in Fayetteville,
Ark. His wife told reporters he was not
at home yesterday.
The indictment described Hanna as a
partner with one-time Washington bus-
inessman Tongsun Park and two for-
mer directors of the Korean Central In-
telligence Agency in a scheme to ply
members of Congress with cash and
other gifts in exchange for actions
promoting South Korean interests.
HANNA periodically wrote South
. Korean President Park Chung-hee and
other South Korean officials to report

before returning to Seoul last summer,
was indicted on similar charges in
August but he has refused to return to
the UnitedStates to face trial. Hanna
and the former directors of the KCIA
were named unindicted co-conspirators
in the Park indictment.
Another Korean-born Washington
businessman, Hancho Kim. was indic-
ted for conspiracy, perjury and income
tax evasion in connection with the case
last month.
The government charged Hanna with
conspiring from 1967 through 1975 to

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