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Dl. 82 No. 186 GSPS 045360 6 pages
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College Station, Texas
Thursday, July 31, 1986
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Texaco, Pennzoil head
for state appeals court
HOUSTON (AP) — Bitter oil in
dustry rivals Texaco Inc. and Pen
nzoil Co. meet in a state appeals
court today and Texaco will seek to
overturn an unprecedented $10.53
billion judgment for interfering in a
planned Pennzoil-Getty Oil Co.
merger.
The landmark case kindled so
much interest from stockbrokers, re
porters, law students and others that
the scheduled hearing before a
three-judge 1st Court of Appeals
panel has outgrown the courtroom.
The hearing was slated for a 750-
seat auditorium at the South Texas
College of Law, adjacent to the ap
peals court building in downtown
Houston.
Pennzoil’s lead attorney, Joe Ja-
mail of Houston, would not reveal
his game plan but said six Pennzoil
attorneys would argue before Jus
tices James F. Warren, Jack Smith
and Sam Bass.
Texaco attorneys refused to re
turn numerous telephone calls from
The Associated Press. Texaco
spokesmen declined to comment
about the case.
The three judges were likely to
take the case under advisement and
issue no immediate opinion.
In November, a Houston jury or
dered White Plains, N.Y.-based Tex
aco, the nation’s third largest oil
company, to pay Houston-based
Pennzoil $10.53 billion in damages
for wrongly interfering in Pennzoil’s
planned merger with Getty in 1984.
State District Judge Solomon Cas-
seb Jr., who stepped in as the presid
ing judge after State District Judge
Anthony Farris became ill, upheld
the damage award — the largest in
U.S. history — and added another
$600 million in interest. Since the
November award, the total has been
gaining interest at a rate of $3 mil
lion a day, for a total of $708 million.
In February, Casseb refused to
overturn the jury verdict, effectively
denying Texaco’s request for a new
trial. Texaco then filed with the 1st
Court of Appeals.
According to court procedures,
Texaco had 60 minutes today to pre
sent its case. Pennzoil was given 90
minutes. Texaco then had 30 min
utes to close.
The panel’s ruling could result in
affirming the judgment, ordering a
new trial or sending disputed points
back to the lower court for rehear
ing. If the judgment is affirmed,
Texaco may appeal to the U.S. Su
preme Court.
Texaco filed a 100-page brief with
the court in April, complaining that
Casseb misinterpreted New York
contract law and Texas procedural
law. The New York law is an issue
because discussions of the mergers
were held in New York.
Other parties, including the New
York attorney general, have filed
briefs with the appeals court,
agreeing on Texaco’s behalf.
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Air controllers disagree
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A Hot Game — Literally
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Photo by Tom Ownbey
Temperatures have been soaring in the Bryan- 108-degree thermometer reading at Olson Field
College Station area, and these junior league base- Wednesday afternoon. The players are taking part
ball players seem to be staring in disbelief at the * n a tournament that ends today.
DALLAS (AP) — Air traffic con
trollers said their workload would
increase if they followed im
provements recommended in con
nection with last year’s crash of Delta
Flight 191.
The National Transportation
Safety Board ruled two weeks ago
that the jet was caught in a micro
burst. T he board also found contrib
uting factors were insufficient 1
weather warnings, pilot error and
inadequate airline training.
The board said air controllers at
Dallas-Fort Worth International Air
port were not to blame for the crash,
which claimed 137 lives last Aug. 2.
But the board did make several rec
ommendations that would require
controllers to make more detailed
and frequent weather reports.
Air traffic controllers told the Dal
las Times Herald Tuesday that it of
ten is difficult to give more than es
sential weather reports during peak
periods.
Controllers said following orders
to give more information could in
terfere with their main responsibility
of directing air traffic.
The board recommended that a
meteorologist or weather-trained
controller be placed in every tower.
Controllers suggested an auto
matic communications link between
the tower and the cockpit would be
better.
Senate vote restores automatic spending cuts
.
Sen
WASHINGTON (AP) — The
ate voted Wednesday to restore
thf automatic spending cuts that put
teeth into the Gramm-Rudman defi-
citlreduction law.
■The Senate ratified by 63 to 36 a
retised plan to give the president’s
rlget director the power to order
across-the-board cuts — but with
gress keeping reins on the proc-
1‘We’re trying to save the disci
pline,” Sen. Lawton Chiles of Flor-
Ba. the senior Democrat on the Sen
ate Budget Committee, said. “We
want to keep it (automatic spending
cuts) there as the enforcer that keeps
our nose to the grindstone.”
The amendment was supported
by 42 Republicans and 21 Demo
crats, with 26 Democrats and 10 Re
publicans voting against.
Gramm-Rudman requires spend
ing cuts evenly divided between do
mestic and military programs if Con
gress and the president fail to
approve legislation to meet pre-set
deficit targets.
The targets get smaller each year
until a balanced budget is reached in
fiscal 1991.
Sen. Phil Gramm, R-Texas, an
original sponsor of the law, said the
amendment was needed to “commit
ourselves once again to balance the
budget, to make the hard choices.”
The compromise offered
Wednesday would replace the origi
nal spending-cut scheme in Gramm-
Rudman, which was thrown out by
the Supreme Court earlier this
month.
The justices said it violated the se-
paration-of-powers doctrine because
an officer of Congress — the comp
troller general — ordered the spend
ing cuts.
The replacement plan, which
Chiles called “a salvage operation,”
would let the director of the Office
of Management and Budget deter
mine the spending cuts.
However, Congress in fiscal 1987
would set the economic assumptions
upon which those cuts would be
based if the year’s $144 billion deficit
target is missed. Senate Budget
Committee chairman Pete V. Dome-
nici, R-N.M., said the assumptions
were based on an average of those of
the OMB and the Congressional
Budget Office.
The amendment estimated unem
ployment at 6.8 percent and an aver
age three-year Treasury bill rate of
6.2 percent during the fiscal year.
The growth in the Gross National
Product would average about 3.5
percent during the fiscal year.
OMB also would have only limited
discretion in its projections of fed
eral spending.
An OMB spokesman said the
agency was reviewing the amend
ment and had no immediate com
ment.
Economic
hard times
to continue
for Texans
AUSTIN (AP) — The state’s
struggling economy, already sag
ging under soaring unemploy
ment and falling oil prices, likely
will get worse before it begins to
improve in the last half of 1987,
says a senior economist.
Thomas Plaut of the state com
ptroller’s office said the agency’s
most recent forecast projects
Texas will lose 81,600 jobs this
year and another 33,000 in 1987
before the recession bottoms out
in mid-1987.
The current energy-driven re
cession will top the 1982-83
slump as the most severe Texas
recession in the 1980s, Plaut said.
“The economy continues to de
teriorate,” Plaut told a Tuesday
night meeting of the Austin chap
ter of the American Association
of Individual Investors.
“I’d like to say things will get
better, but right now we don’t see
any light at the end of the tun
nel,” said Plaut, who introduced
himself to the group as “Dr.
Doom.”
Bill Allaway, executive vice
president of the Texas Associa
tion of Taxpayers, said the state is
reshaping its economy and faces
some hard choices in revamping
the tax structure to match chang
ing economic strengths.
•eren colls for domestic industry protection
, oW
By Olivier Uyttebrouck
Staff Writer
I To dramatize the damage of foreign subsidies
and an inadequate U.S. foreign policy, 6th Con
gressional District Democratic candidate Pete Ge-
jijen held a Wednesday press conference at the
Abandoned International Shoe factory in Bryan.
Geren said the plant’s 150 employees were put
out of work by about a dozen foreign companies
ihat captured the U.S. shoe market because their
governments heavily subsidize their products.
I “They plunder our markets with subsidized
joods and bar us from their markets with tariffs
and quotas,” he said. “In other words, they get us
loming and going.”
The economy and the United States’ growing
foreign trade deficit are the issues Geren intends
emphasize in his race against incumbent Joe
Jarton.
Only 20 percent of the shoes sold in the
Jnited States today are manufactured domesti
cally, Geren said. He offered steel and sugar as
examples of other industries subsidized by for
eign governments to the detriment of American
producers.
The Korean government subsidizes up to 40
percent of the cost of steel exports to the United
States by offering tax breaks to Korean steel pro
ducers, Geren said. These subsidies make it more
profitable for Korean steel producers to export
to the United States rather than sell their goods
in Korea, he said.
The European sugar industry can sell sugar
for 3 cents a pound, or about one-seventh the
cost of production, because of subsidies offered
by the European Economic Community, Geren
said.
Texas has traditionally been a large producer
of the sugar beet, he said.
A second culprit is a confusing United States
trade policy devised by a number of different of
ficials and agencies, Geren said. Instead, he fa
vors making the U.S. Trade Representative, an
official appointed by the president, the chief
trade policy enforcer and spokesman.
Geren criticized Barton’s opposition to the
Omnibus Trade Bill, a package of nine bills that
would have transferred the responsibility for
identifying unfair trade practices from President
Keagan to the U.S. Trade Representative.
The bill was passed by the House in May by a
vote of 295 to 115 but was later vetoed by the
president.
Barton says the Omnibus Trade Bill would
have violated existing U.S. trade agreements and
would have sparked a trade war by restricting im
ports of U.S. agricultural products, hurting
Texas in particular.
Geren wants the United States to use its lever
age as the world’s largest consumer to force for
eign governments to stop subsidizing imports to
the United States.
Jenco meets with pope,
delivers Shiite message
LONDON (AP) — An American
priest held in Lebanon for nearly 19
months gave Pope John Paul II a
message from his Shiite Moslem cap-
tors Wednesday and then flew to
London to deliver it to the arch
bishop of Canterbury.
“The religious factor is of great
importance” in achieving his free
dom, the Rev. Lawrence Martin
Jenco, 51, told reporters in Rome af
ter his audience with the pope.
Jenco arrived at the Royal Air
Force base at Northolt outside Lon
don with the Anglican archbishop’s
special envoy, Terry Waite.
The Roman Catholic priest, a na
tive of Joliet, Ill., was kidnapped Jan.
8, 1985, and released Saturday. He
is to deliver the message to Runcie,
spiritual head of the Church of En
gland, on Thursday.
Runcie’s office said Jenco would
spend Wednesday night at an undis
closed location arranged by the Ser
vile Order of Brothers, his religious
order.
Jenco met with reporters in Rome
but would not disclose the message
he was carrying from his captors. He
said he also had one for President
Reagan but would not say whether it
was the same.
“Sometimes I can’t answer your
questions,” he said softly. “I have
fear that what I may say might be
detrimental to my brothers who are
still held hostage in Lebanon. . . . My
silence is a shout of care and concern
for those who are still held.”
'Rehnquist denies harassment of minority voters
Ll
■WASHINGTON (AP) — Su
preme Court Justice William H.
Rehnquist, seeking confirmation as
cnief justice, told a Senate committee
■ednesday he never harassed or in
timidated black or Hispanic voters in
Ppoenix, Ariz.
■ And Rehnquist said he was
amazed to find out days ago that a
wreensboro, Vt., home he bought in
1974 has a restrictive deed prohibit
ing sale of the house to anyone “of
th( Hebrew race.”
■ Rehnquist, under intensive ques
tioning from Sen. Edward M. Ken
nedy, D-Mass., said he is not sure
whether as a Republican poll-
watcher in Phoenix in the early
1960s he ever challenged anyone’s
right to vote.
Committee Chairman Strom
Thurmond, R-S.C., later granted a
request by Democratic committee
members to allow the appearance of
10 witnesses Friday who say Rehn
quist did try to harass or intimidate
some minority voters as part of a Re
publican ballot security program.
Rehnquist denied those charges
before his confirmation to the Su
preme Court in 1971.
Sen. Patrick Leahy, D-Vt., re
vealed the existence of the restrictive
deed on the Rehnquist family’s sum
mer home, asking the justice
whether he considered it a problem.
Rehnquist conceded that it was,
but he added that the restriction “is
meaningless in today’s world — it is
unenforceable under the Constitu
tion or federal law.”
After Rehnquist had testified
more than five hours, the committee
adjourned until today, when he
again will be in the witness chair.
Sen. Howard M. Metzenbaum, D-
Ohio, engaged Rehnquist in a sharp
exchange over the ballot-challenging
episodes.
Metzenbaum said the issue is not
harassment but whether Rehnquist
was “factually accurate” with the
committee in 1971 and is being com
pletely candid now.
“Did you ever approach any vot
ers in polling booths and speak to
them about their qualifications to
vote?” Metzenbaum asked.
“No, I don't believe I did,” Rehn
quist responded.
Metzenbaum said one Phoenix
resident says he saw Rehnquist ha
rassing minority voters at a polling
place, quoting the man as saying “If
Rehnquist did not do it, it was his
twin brother.”
Earlier Wednesday, Rehnquist
testified that as a young Supreme
Court law clerk he never decided
how he would have voted in the Su
preme Court’s 1954 decision outlaw
ing segregated public schools.
The landmark desegregation case
Brown vs. Board of Education of
Topeka was pending before the
court when Rehnquist was a clerk to
then Justice Robert Jackson in 1952-
53.
Answering the opening salvo in
an attack on his qualifications bv lib
eral Democrats, Rehnquist told Sen.
Joseph Biden, D-Del., “I did not
have to vote” on the Brown case, in
which the court unanimously ruled
that separate but equal education fa
cilities for blacks were unconstitu
tional.
But Biden quickly criticized Rehn
quist for his answer, saying, “Law
clerks surely have to think.”
Rehnquist, who wrote a memo as
law clerk supporting the 1896 Plessy
vs. Ferguson ruling that upheld sep
arate facilities, told senators he actu
ally believed the pro-segregation rul
ing was wrong.