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March 23, 1994 - Image 3

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The Michigan Daily, 1994-03-23

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The Michigan Daily - Wednesday, March 23, 1994 - 3

Former Arkansas judge to testify against Clinton in Whitewater


WASHINGTON - Former Little Rock
municipal judge David L. Hale's decision to
enter a plea in connection with a federal fraud
case opens the way for special prosecutor
Robert B. Fiske Jr. to bring a direct allegation
against President Clinton before a grand jury.
It also allows Hale to do what he has said
he wanted to do since September: Tell in an
Aflicial forum how Clinton and other influen-
Wa1Arkansans pressed him in 1986 to make
loans to politically connected borrowers from
his funded finance company, Small Business
Administration (SBA). Hale's lawyer, Randy

Coleman, said Monday night his client will
plead guilty this morning to two felony charges
- one of them conspiring to defraud the
In bargaining with Hale, Fiske has secured
a promise of grand jury testimony from the
only person to have alleged Clinton is directly
involved in any of the questionable financial
transactions linked the collapse of Madison
Guaranty Savings & Loan. The second felony
count to which Hale will plead guilty involves
wire fraud in his dealing with Madison.
Clinton Monday dismissed Hale's story as
"a bunch of bull" and said he was not con-

cerned about his possible testimony.
Hale's attorney sought unsuccessfully last
fall to negotiate the case directly with the
White House. A contact by Hale's lawyer to
White House deputy counsel William H.
Kennedy was reported to counsel Bernard
Nussbaum and dropped. White House press
secretary Dee Dee Myers has condemned
Hale as a man trying to "save his butt."
Hale also has no known corroboration for
his charge against Clinton. But he has offered
specific details, saying Clinton asked him
twice to use his company to help Madison
owner James B. McDougal. The White House

denies that Clinton had such conversations.
At the time, Madison, which McDougal
owned, was in distress and trying to improve
its financial posture before a scheduled ex-
amination by federal regulators.
After the conversations, Hale said he made
a $300,000 loan to a small marketing com-
pany owned by Susan McDougal, then James
McDougal's wife.
The loan, Hale says, violated his
company's mission to lend money to disad-
vantaged entrepreneurs, and also left it
strapped for cash when the loans were not
repaid. In return for his testimony Fiske has

agreed not to seek any other charges and file
papers with the court that would allow the
judge to impose a lighter sentence than called
for in sentencing guidelines, Coleman said.
U.S. District Judge Stephen Reasoner has
scheduled a 10 a.m. hearing to accept Hale's
plea both to the charge that he defrauded the
SBA in the late 1980s by claiming to have
invested more money in his company, Capital
Management Services Inc., than he really did
and the previously undisclosed wire fraud
charge. The extra money, according to his
September indictment, was supplied to mis-
lead the SBA into giving Hale more funds.

U.N. flight
Jxings relief
to Bosnian
I TUZA Bosnia-Herzogovina -
lie .N. peacekeeping force in
Bosnia flew its first relief flight into
the Tuzla airport yesterday, symboli-
cally ending the isolation of central
Bosnia after nearly two years of war.
The arrival of a giant Russian-
made Ilyushin-76 transport craft with
22 tons of flour, medical supplies and
educational materials aboard raised
hopes that more badly needed sup-
Oes will shortly be arriving by air for
this regional center, which houses
400,000 residents and 240,000 refu-
gees, and for surrounding towns long
cut off by the fighting.
"I think the bad days are almost
over," U.N. Special Representative
Yasushi Akashi told a crowd of inter-
national an local dignitaries assembled
at the airport. "But there will be more
*allenges and difficulties ahead of
The opening of Tuzla's airport to
planes flown by the U.N. Protection
Force marks another step in the accel-
erating process to end this conflict
that has already seen a peace accord
signed between Croats and Muslims,
the end of the Serb shelling over
Sarajevo and, today, the partial open-
ing of roads in and out of the Bosnian
Russian leaders were reported to
have put a lot of pressure on Bosnian
Serb leader Radovan Karadzic when
he visited Moscow early this month,
after which he agreed to the U.N. air
bridge to Tuzla.
But Karadzic insisted that Rus-
sian monitors be stationed at the air-
port to inspect cargoes to ensure no
4ms are slipped through to the Mus-
Tim-led Bosnian army.
Months of U.N. negotiations with
the Bosnian Serbs for the regular land-
ing of U.N. relief flights have still not
overcome Serbs objections and de-
mands that their officials be allowed
to inspect the cargoes at the airport.
Akashi said he had proposed a
compromise by which Serb liaison
cers would inspect cargoes at their
int of departure in Split and Zagreb
and that he hoped relief flights would
begin "within three weeks."
He said that "some Russians"
would be included among the 40 U.N.
observers and civil policeofficers in-
volved in the inspection process.
The immediate impact of the
airport's opening here was above all
sychological, boosting morale of
idents who have long been isolated
and suffering from a food shortage.


Council delays
vote on YMCA
loan guarantee

Jeff Maynard, a member of the University Flyers, puts gas in his aircraft at the Ann Arbor Municipal Airport.
E ibi-tion honors art students,
displays awar-inning work

The Ann Arbor City Council now
has several options to untangle itself
from a legal dilemma over a five-
year-old loan guarantee for low-in-
come YMCA housing. But no solu-
tion is expected to come to the council
table for weeks.
YMCA and city officials will meet
tomorrow to discuss several propos-
als to sidestep the legal turmoil that
surfaced when City Attorney Eliza-
beth R. Schwartz called the original
loan illegal.
Meeting Monday night, council
members did not discuss the loan guar-
antee. They have avoided public com-
ment on the issue since conflicting
legal opinions threw the guarantee
into question.
Among the options the parties will
consider is a plan to refinance the
$1.6 million loan on bonds from the
city's Economic Development Corp.
The development bonds offer a lower
interest rate than commercial bonds.
"We have a lot of legal maneuver-
ing that we can do," Mayor Ingrid B.
Sheldon said last night. "One option
we probably don't have is to back out
of the full faith and credit" of the
original guarantee.
Schwartz's legal opinion was re-
quested by council members at their
Feb. 9 meeting, when the city's gov-
erning body learned that the original
loan guarantee may have been illegal.

The Michigan Constitution prohibits
cities from loaning to most public
In the past six weeks, the council
has agreed to two loan payments for the
YMCA to sustain the 100-unit devel-
opment. The $50,000 the city has for-
warded to the YMCA will keep the
housing development through March.
But council members said the pay-
ments were intended as a stopgap
measure until Schwartz issues a final
opinion on whether the city can le-
gally guarantee the loan. The city
attorney has yet to issue an opinion on
the issue.
But in a March 18 memo distrib-
uted to council members, Schwartz
outlined several of the YMCA's obli-
gations to the city. According to the
memo, the non-profit YMCA must
present fiscal information at the city's
Several council members have
criticized YMCA officials for failing
to recognize the housing center's fi-
nancial plight.
Great Lakes Bancorp, which is-
sued the loan, will not be represented
at tomorrow's meeting. Sheldon said
subsequent discussions between city,
YMCA and Great Lakes Bancorp are
planned during the next week.
The loan issue resurfaces at the
council table each month as payments
come due. The council will be forced
to consider another $25,000 appro-
priation at its second meeting in April.

Students' award-winning artwork
is now being shown at the ninth an-
nual Undergraduate Student Awards
Exhibition in the Jean Paul Slusser
The 500 entries were narrowed
down by the Art School staff, then
voted on by a jury process, which
included two guest faculty jurors -
Larry Cressman and Susan Crowell.
In addition, there was a students'
choice award that was picked solely
by students' votes.
More than $14,000 in prizes was

awarded by emcee Dean Pijanowski
at the crowded awards ceremony over
the weekend.
"Over 300 students, parents,
siblings, significant others- and
interested bystanders attended the
event," Pijanowski said.
Heather Dornoff, secretary of the
event, said, "There was a lot of energy
and excitement and the food was
In all, there were 80 cash winners
and 150 honorable mentions were
given out. Sophomore Stacy Kerman
earned the spotlight, having five metal
jewelry and sculpture pieces in the

show and winning six awards. Her
piece, "Leaking Water," won the
important Student Choice Award.
"I was really surprised," Kerman
Another eye-catching piece was
Ruth Jeyaveeran's "Self-portrait."
"It's well done," said LSA
sophomore Jason Meister. "There is a
lot of depth and texture in the face."
The works utilize a wide variety
of media including printmaking,
photography, fibers, industrial design,
metals, painting, sculpture and many
more. The exhibition runs through


Mich. small-business owners meet with Clinton

opposite ends of the health care spec-
trum for small businesses in Michigan.
Heidi Jacobus competes with uni-
versities and automakers to attract
topnotch engineers to her high-tech
business in Ann Arbor. She said she
cannot be competitive if she does not
offer her 20 fulltime employees ex-
cellent health benefits.
Patrick Murphy said his custom
furnishings business in Marquette
could not compete if it did provide his
eight workers with health insurance,
adding another 12-15 percent to his
payroll costs.
"A competitor that doesn't offer
health insurance can undercut a bid
by those percentages," says Murphy,
co-owner of Taylor Made Furniture.

Murphy and Jacobus, president of
Cybernet Systems Corp., were among
several small-business owners who
met with President Clinton yester-
day. They talked about Clinton's pro-
posal to revamp the nation's health
care system.
Despite their differences, Jacobus
and Murphy say they support the
president's proposal because the ex-
pense of getting insurance under the
current system is prohibitive.
"I am frank to say that while most
of the people who are on this panel
who are providing health insurance
today would actually pay less under
our plan, some would pay more, and
they know it," Clinton said during the
"But they also know that for the

first time their competitors would as
well, putting them on a more even
footing," he added.
The Marquette business would pay
S percent extra under the Clinton pro-
posal, a cost much more easily ab-
sorbed, Murphy said.
A big concern among the business
owners was the issue of pre-existing
conditions - that many people can-
not get insurance because they have
an illness like diabetes or congenital
heart disease.
Clinton said 81 million Ameri-
cans are faced with that problem.

Continued from page 1
But Councilmember Ulrich Stoll
(D-3rd Ward) said the extra load of
adding Kerrytown to the art fairs
would not overtax city services. "The
Farmer's Market generates more traf-
fic than this," he said, referring to the
weekly summer event at Kerrytown.
People who support inviting
Kerrytown to the art fairs maintain that
people will migrate to the shopping
district afterthebooths close. Kerrytown
merchants say police and other services
will sirnply move from the downtown
to Kerrytown, causing little extra strain.
Peterson, a member of the Mayor's
Art Fair Committee, disagrees. She

said fire and electrical inspectors will
be "stretched really thin."
Mayor Ingrid B. Sheldon said the
proposal deserves consideration.
"This is not just a group of mer-
chants," she said of the people who
support of closing the street. "This is
a community-based group trying a
first-time effort and they have the
support of their neighbors."
In separate votes early yesterday,
the council approved a request from
non-profit groups to waive $1,600 in
fees and agreed to close several down-
town streets during the fairs. Stretches
of Liberty Street, North University,
South University, State Street and
Main Street will be closed. These are
the same roadways that were turned
over to the art fairs last year.

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The students seated next to Dr. Jack Kevorkian in a photo were not necessarily his supporters. This was incorrectly
reported in yesterday's Daily.









Ual I








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