Banner Graphic, Volume 18, Number 211, Greencastle, Putnam County, 13 May 1988 — Page 2

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THE BANNERGRAPHIC May 13,1968

Bayh, Mutz square off for first time, clash on economic development

INDIANAPOLIS (AP) Republican Lt. Gov. John M. Mutz lists economic development among his major achievements in office, but that hasn’t stopped Democratic Secretary of State Evan Bayh from criticizing Mutz’s policies. Appearing before the Indiana Gas Association Thursday, Bayh questioned the Mutz economic development strategy, claiming the state paid too much for a foreign auto plant and should give more assistance to existing Hoosier companies. MUTZ, SPEAKING AT the same meeting after Bayh left, defended his record. He said the state will recover its investments in the deals he has negotiated. Indiana also has devoted more than 60 percent of its economic development resources to Hoosier companies, Mutz said. The trade association meeting marked the first time the two men have appeared at the same forum since winning their respective parties’ gubernatorial nominations on May 3. Bayh specifically questioned the $55 million cost to the state of the Subaru-Isuzu car and truck assembly plant under construction near Lafayette. The Japanese manufacturers who plan to employ up to 1,700 people will receive a total of SB6 million in state, federal and local incentives. “If you take just the state money, that’s about $35,000 per job,” said Bayh. “That, ladies and gentlemen, does not strike me as a good bargain. “YOU TAKE THOSE funds and plow them back into small Hoosier businesses (and) ... we

Reagan plea bargains with Noriega amid U.S. protests

WASHINGTON (AP) The Reagan administration's bid to drop drug smuggling indictments against Panamanian strongman Manuel Antonio Noriega is drawing expressions of outrage from the two Democratic presidential candidates, members of Congress and law enforcement officials. At issue are the terms under which Noriega would surrender his post as commander of Panama’s Defense Forces as part of what the administration hopes will be a transition to an elected civilian government next year. WHITE HOUSE spokesman Marlin Fitzwater acknowledged Thursday that U.S. officials were engaged in “plea bargaining” with Noriega, but he stopped short of saying that dismissal of the indictments was under negotiation. A top State Department official,

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JOHN MUTZ Hoosiers to recoup money

would have reaped a return on our investment that would have been even greater,” he said. Bayh said he would also try to target development funds to economically depressed areas such as northwest Indiana. The lieutenant governor claimed “our major commitment is to existing Indiana companies.” Mutz also said that in agreeing to more than 800 economic development deals during his 7Vi years in office, he has always required that the state recover its investment within eight years. Mutz has estimated the state will get all of its Subaru-Isuzu investment back within seven years. IN SOME CASES, the payback comes much quicker than that, he said. For example, the state will recover its $6 million share of in-

Michael Kozak, has been engaged in secret negotiations with Noriega in Panama, and administration sources said Wednesday the military chieftain was told that if he left Panama for a year, perhaps in August, the indictments would be dropped. The State Department apparently believes that dismissal of the indictments is the only way to induce Noriega’s departure, but the Justice Department sees that concession as too high a price to pay. NORIEGA HAS SHOWN extraordinary staying power, surviving sustained widespread public protests and an economic collapse at home as well as sustained U.S. diplomatic and economic pressure. One State Department official, insisting on anonymity, attributed the news leaks of the offer to Justice Department officials attempt-

Two Hoosier companies are named in $24.5 million East River helicopter crash suit

NEW YORK (AP) A $24.5 million suit by the helicopter company that owns the aircraft involved in the fatal crash into the East River names two Indiana companies. One is the engine manufacturer, the other made an engine part found to be faulty. Island Helicopters Corp. of Garden City alleged that a fracture in the power turbine governor, an engine part that controls the turbine’s speed, caused a reduction in engine power which contributed to the May 1 crash. A JAPANESE tourist was killed

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EVAN BAYH Jobs cost state too much

centives for the Inland-Nippon steel venture in St. Joseph County before the plant opens, he said. That money will come from sales taxes on material used in construction and taxes paid by construction workers, he said. Mutz said that in cases when bidding for large new industries “gets beyond that point (of an eight-year payback), we courteously withdraw.” An example came when Indiana decided it could not meet Illinois’ offer for the Diamond Star auto plant, he said. Mutz also countered a Bayh claim that local governments need more flexibility to conduct their own economic development affairs. The lieutenant governor said the state tries to let local communities make development decisions. The state steps in to help with expenses

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JOHN F. KERRY A victory for Noriega?

ing to kill the proposal by making it public. Democratic presidential can-

and the pilot and three other passengers injured when the sightseeing helicopter crashed and then sank into the river. The suit filed Thursday in federal court in Brooklyn names Allison Gas Turbine Division of General Motors Corp. of Indianapolis and Allied Signal Aerospace Co.-Ben-dix Engine Control Corp. of South Bend, Ind. Allison was the engine manufacturer; the governor part used in the engine was made by Bendix, the suit said. Island Helicopters cited preliminary results of an investigation by the National Transportation and Safety Board that discovered the fractured part and sent it to Washington for further testing. George Dempster, chairman of Island Helicopters, said he had been told by NTSB officials that

ISTEP scoring snafus shake school confidence in the test and the IDOE

INDIANAPOLIS (AP) State education officials admit there arc some snafus in the results for the Indiana Statewide Testing for Educational Progress, but they say the problems should be resolved soon. The state reaction came as the research director for Indianapolis Public Schools said Thursday it is losing confidence in the quality of the competency test results. MISSING AND ERRONEOUS test information is creating major problems and delays in getting results to parents, said Richard

for road building or training grants that the communities cannot afford, he said. REPLYING TO ANOTHER Bayh criticism that the state has lost high-paying jobs, Mutz cited statistics that showed Indiana industrial jobs created in the last year had an average hourly wage of $13.72 while jobs lost had wages averaging $11.50 per hour. Both candidates also addressed other topics in separate 15-minute speeches. Bayh pledged to make government more responsive and frugal, promised to make education reform a priority from the first day of his administration and said he would devote state resources to improved pre-natal care and home health care. The 32-year-old secretary of state also made a passing reference to his recent residency dispute, claiming Republicans were trying to deny Hoosier voters a choice by challenging his eligibility. HE ALSO HEARKENED back to a theme of his 1986 campaign by criticizing the politically controlled license branch system that is being phased out Bayh said he feared the new system run by a bipartisan, five-mem-ber commission will also become a patronage sj :tem with employees asked to donate 2 percent of their wages to the party in power. Mutz gave an upbeat message that praised student achievement on the recent ISTEP competency test, the state’s low unemployment rate and the prospect that “Indiana will be one of the boom states of the 19905.”

didates Michael Dukakis and Jesse Jackson both spoke out against withdrawing the indictments. “I don’t think you drop indictments against drug pushers and people suspected of murder,” Dukakis said. Said Jackson: “They want to onerate him (Noriega) altogether. It’s not just Noriega. Others are dealing in drugs. We can’t indict them one day and exonerate them the next day. That is no policy at all.” BUT WHITE HOUSE Chief of Staff Howard Baker defended the concept of a deal to win Noriega’s removal, calling it “the most fruitful and productive plea bargain.” In Panama, a government spokesman said “there has been no agreement about anything,” adding that Noriega had not agreed to step down.

the crack was caused by metal fatigue. Frank Ghiorsi, chief of the NTSB’s New York Field Office, however, said there had been no public statement on the cause of the fracture and whether it contributed to the crash. ‘THE GOVERNOR PART and the engine’s latently dangerous and defective conditions and consequent crash were proximately caused and contributed to by the negligent acts, carelessness, wrongdoing and ommissions of Allison and Bendix,” the suit charges. Anthony A. Perona, a spokesman for Allied, said the company was assisting the NTSB in its investigation. “Because that investigation isn’t completed, we feel it’s inappropriate to comment on any lawsuit against us at this time,” Perona

Frisbie. “The main effect is threatening the level of confidence in any of the results.” The problems are significant enough that two State Department of Education staff members flew to the testing company in Monterey, Calif., Thursday to establish better communications between the department and the company. “I would have to admit IPS is probably facing the largest problem of any school district, largely due to its size,” said Rick Peters, ISTEP program manager for the state department

world

Producer prices rise .4 percent in April, along with fears of inflation

WASHINGTON (AP) The steepest energy price gain in 15 months pushed wholesale costs up a moderate 0.4 percent in April, the government said today. Food prices were modestly higher. If the April increase held for 12 straight months, inflation at the wholesale level would register an annual increase of 4.6 percent, more than double the 2.2 percent 1987 wholesale price rise. The April increase, coming after a 0.6 percent gain in March, the sharpest rise in almost a year, seems certain to add to concerns that inflation is reheating. In an effort to cool off the economy, the Federal Reserve has recently moved to make cash less readily available to the nation’s banking system. That credit tightening prompted the nation’s major banks cm Wednesday to boost their prime lending rate from 8.5 percent to 9 percent as concern spread that inflation is now a greater threat than recession. Energy prices, which had posted sharp declines from September through February, recorded a 3.1 percent surge, dramatically higher,

Sen. John Kerry, D-Mass., said if descriptions of the offer were accurate, it would appear to be a victory for Noriega, allowing his loyalists to retain control while he spent “a year’s vacation on the Riviera.” Sen. Alfonse D’Amato, R-N.Y., said: “I think it’d be a terrible mistake to take the word of a drugdealing killer dictator that he’s going to get out and allow free elections sometime next year, and he’d be allowed to stay in until August. And the only thing you’re going to have is a transference of power to his cronies.” AT THE JUSTICE Department, U.S. Attorney Leon Kellner of Miami, whose office obtained an indictment against Noriega, met with Attorney General Edwin Meese 111 and later issued a statement saying he wants to carry out

said. Pete Leatherwood, a spokesman for Bendix, similarly said that the company was participating in the federal investigation and that it would have no further comment. According to the suit, Island Helicopters had removed and replaced the governor part prior to the crash after it had been used 1,496 hours, in line with service guidelines. THE PART, HOWEVER, was reinstalled after Island Helicopter received an updated service report last Feb. 24 that extended the time between overhauls from 1,500 to 2,000 hours. The part had logged 1,517 hours at the time of the crash, the suit said. “Had it not been for the fact that the service guidelines were extended from 1,500 to 2,000 hours, that

The biggest headache for IPS now is checking 12,000 student test results to tabulate the number oi students who have to take summei remedial classes. STUDENTS WHO DO not meet the test cutoff scores have to attend summer classes, then pass the test before being promoted to the next grade, unless they qualify for a waiver. Districts were supposed to receive summary information from the testing company listing each student who must take summer

even, than the 0.9 percent jump of March. Such prices, which Labor Department analysts said accounted for half of the rise in the overall index, have not jumped so steeply since January 1987. The energy price surge was widespread, with the cost of gasoline up 0.7 percent, the price of home heating oil up 5.2 percent and the cost of natural gas up 4.3 percent Analysts, noting that crude oil prices are on the upswing, say motorists can expect further rises in gasoline prices. The wholesale price of gasoline rose 1.5 percent in March, the first gain since August As for food, gains were posted for pork (1.7 percent), chicken (4.7 percent), vegetables (2.1 percent) and coffee (2.1 percent). These rises were offset, however, by sharp declines in the prices of eggs (16.3 percent), fruit (4.4 percent), fish (2.6 percent) and beef (0.1 percent). Overall, food prices at wholesale were up 0.4 percent about half of the 0.7 percent increase of the previous month.

the Noriega prosecution. Meese declined to comment on the Noriega situation. The lead prosecutor in the case, Chief Assistant U.S. Attorney Richard Gregorie, said Thursday he strongly opposes any deal. OBJECTIONS TO THE proposal also were raised by John Lawn, head of the Drug Enforcement Administration. In Miami, U.S. District Judge William Hoeveler questioned whether the government has the. lulhority to quash an indictment. But the State Department said in February, two weeks after the indictments against Noriega were returned, that it was “technically possible” for the president to dismiss an indictment. The State Department has maintained a studied silence on the negotiations.

part would not have ever been on that helicopter,” Dempster said. The suit alleged that a fracture in a similar governor part had occurred in another engine prior to the May 1 crash in a helicopter not owned and unrelated to Island Helicopters. DEMPSTER DECLINED to give specifics on this case because he said it was currently in litigation. The suit seeks $9 million in* damages for negligence, $7 million for strict liability, $8 million for breach of warranties and $550,000 for property damamges. Island Helicopter and the pilot were sued last week by one of the crash survivors, Christian Pelikan of Munich, WeU Germany, who iS seeking $5.1 million in damages.

school. IPS did not receive that information, but Peters said the company is sending the information to IPS by express mail and it should arrive today. Peters said he had not heard from other districts that lack the summer school information. But Superintendent G.W. Montgomery of Decatur Township Schools said his district also was waiting for that data. And he said he heard at a statewide meeting of superintendents Wednesday many others hadn’t received it yet