The Michigan Daily - Wednesday, March 23, 1994 - 3 Former Arkansas judge to testify against Clinton in Whitewater A V THE WASHINGTON POST 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 SBA. 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 community THE WASHINGTON POST 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 us. 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 Spital. 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. FILL ER UP Council delays vote on YMCA loan guarantee ANASTASIA BANICKI/Daity 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 By JAMES M. NASH DAILY STAFF REPORTER 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 projects. 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 request. 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. By JULIANA BECKETT FOR THE DAILY Students' award-winning artwork is now being shown at the ninth an- nual Undergraduate Student Awards Exhibition in the Jean Paul Slusser Gallery. 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 great." 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 said. 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 Saturday. mmmv Mich. small-business owners meet with Clinton WASHINGTON (AP) - Meet 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 forum. "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. ART FAIR 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. !ex(ercise Rom"Std Pne V Lounge Computer R(oom "Laundry l'acikties 24 fwurAttendedLo66y " Game Room Mleat and2 Water Included( n %6 I Correction The students seated next to Dr. Jack Kevorkian in a photo were not necessarily his supporters. This was incorrectly reported in yesterday's Daily. ~E1 II 11 H~ I mI rf ,I Ual I 11 IA 1 I I 11 I Group Meetings U East Quad support group for lesbians, gay men, & bisexual people, call 764-3678 for info. i Focus Group - Research in p Clinical, Developmental and Personality Psychology, Psy- chology Peer Advising, West Quad, Ostafin Room, 7 p.m. U Hindu Students Council, Michigan Union, Wolverine Room, 8 p.m. U Indian American Students As- snciation. 4202 Michigan beginners welcome, CCRB, Center for Russian and East Room 2275, 8:30-9:30 p.m. European Studies, Lane Hall U Solar/Electric Boat Team Mass Commons, noon. Meeting, 1018 Dow Building, Student Services North Campus, 7 p.m. S ~~tSriO Q Undergraduate Law Club, of- U Alternative Career Center, ca- fice hours, 4121 Michigan reers in the nonprofit sector, Union, 12-4 p.m. 2213 Michigan Union, 10 a.m.- University Towers Apartments 536S. Forest Ave. Ann Arbor, MI 48104 761-2680 Put the paper chase behind you... Finish all your reports with us! RI VAN ED: BUSINESS- MINDED FRESHPERSONS SOPHOMORES The Michigan Daily Classified Department is now accepting applications for Fall '94. 9 Events J Opportunities to Research in the Venezuelan Amazon, sponsored by the Rainforest Action Movement. 1046 Dana 5 p.m. Q 76-GUIDE, peer counseling phone line, , 7 p.m.-8 a.m. U Campus Information Center, Michigan Union, 763-INFO; events info.. 76-EVENT: film I