Historical Newspapers of South Carolina

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'Che ©amecock Senate Committee passes tax break bill by Curt Anderson Associated Press ^ WASHINGTON — The Senate Finance Committee approved a bill Tuesday to provide about $4.5 billion in tax breaks for foreign sales by U.S. corporations to replace a tax system ruled an illegal subsidy by the World Trade Organization. The WTO decision, which upheld a cltallenge to U.S. For eign Sales Corporation laws from the European Union, gave the United States until Oct. 1 to replace the invalidated sys tem. After that date, the EU could begin imposing new tariffs and sanctions on U.S. products that officials fear might spark a massive trade war across the Atlantic. At the same time, the estimated 6,000 U.S. companies that operate offshore sales subsidiaries don’t want to lose a lucra tive tax .benefit. “This legislation satisfies the United States’ WTO obliga tions and ensures that U.S. companies will compete on a lev el playing field in the global marketplace,” said Sen. William Roth, R-Del., chairman of the Finance Committee. The Foreign Sales Corporation rules invalidated by the WTO allow U.S. companies to reduce income taxes by 15 percent through subsidiaries set up outside the United States. It is roughly equal to a tax rebate provided by the EU to its ex port companies. The WTO, however, determined that FSC is a special ex ception not permitted under international trade rules. The new system, costing $4.5 billion over 10 years, addresses that ob jection and moves these U.S. tax laws closer to those used by Europe. “This whole bill is an effort by the United States to show good faith,” said Sen. Charles Grassley, R-Iowa. The bill, approved by the committee on a voice vote, next goes to the Senate floor. The House last week passed similar legislation, although the Senate bill included an amendment by Grassley to remove a 100 percent deduction corporations can claim for dividends paid out of earnings and profits from certain foreign income. Some lawmakers questioned continuing laige tax breaks to certain corporations. Sen. Richard Bryan, D-Nev., wanted to offer an amendment barring pharmaceutical companies from benefiting because drugs frequently cost more in the United States than they do abroad. “Most Americans do not understand the nuances of in ternational trade, but they do understand when they are get ting gouged,” Bryan said. Deputy Treasuiy Secretary Stuart Ezenstat, however, said the trade tax bill is essential to avoid a trade war and is not the proper place to debate the high cost of prescription drugs. “It would not be appropriate and it would also delay pas sage of the legislation,” Ezenstat said. Haiti failed to use aid effectively, report says vTB by David Briscoe Associated Press WASHINGTON — Pulling the plug after $97 million in U.S. police and judicial aid has left Haiti with an ineffective system of justice, but Haiti’s government is largely to blame, con gressional investigators said Tuesday. “Haiti’s judicial system is exceedingly weak and subject to manipulation,” Rep. Benjamin Gilman, R-N.Y., chairman of the House International Relations Committee, said at a hear ing. The United States spent $70 million over six years to help Haiti recruit, train and equip a police force and $27 million to beef up courts ;uid prosecutors. But there is little evidence of success, said investigators for Congress’ General Accounting Office. “The key factor affecting the lack of success of U.S. as sistance has been the Haitian government's lack of commit ment to addressing the inqjor problems of its police mid judi rial institutions,” said Jess T. Ford, GAO associate director U.S. concern for the future of democracy in Haiti has ac celerated since critics accused the government of manipulat ing the May election results. The Lavalas Party of fomier Haitian President Jean-Bertranc Aristide appeared to have clear election victories. But critics say manipulation of the vote count to avoid runoffs in some races appears to be aimed at perpetuating the fomier Catholic priest’s hold on power even further, possibly eliminating his opposition and creating a one-party state. Aristide is widely expected to be elected president again in Nov. 26 balloting. Nearly all U.S. aid to Haiti has been suspended. It has to taled more than $500 million since a $1.5 billion U.S. inva sion aimed at establishing democracy in 1994. Judicial aid was cut off in July. The GAO, which conducts inquiries for congressional committees and members, is to release a detailed report on justice in Haiti and the effectiveness of U.S. aid next month. The preliminary report presented by Ford says U.S. as sistartce helped Haiti recruit and equip a 4,000-niember po lice force, create a police academy mid establish an inspector general for monitoring the police force, hi addition, the U.S. Coast Guard provided $4.6 million to help oiganize and train the Haitian Coast Guard to deal with drug smuggling and il legal migration. Major weaknesses persist in botli forces, the GAO said. The Haitian Coast Guard is poorly equipped mid the police are lmgely ineffective, subject to corruption and politiciza tion, it said. U.S. help for the judiciary created a case registration sys tem, training forjudges mid prosecutors mid a magistrate school. But the system continues to “exhibit major shortcomings,” the GAO said, including corruption, continued control by the executive branch, a lmge case backlog, mi outdated legal code, mid dilapidated facilities. It also conducts business in French, making the system in accessible to the majority of Haitians, who live in extreme poverty mid speak only Creole, the report said. t Pentagon knew Deutch had info on computers in 1998 by Larry Margasak Associated Press WASHINGTON —Alerted in the summer of 1998 that former CIA Director John Deutch kept classified defense in formation on his personal computers, the Pentagon started in vestigating only this yettr alter the spy agency turned over in vestigative material,' documents show. Defense Secretary William Cohen was among those told of Deutch’s possible security lapses in 1998, according to the Pentagon documents, which were obtained by The Associat ed Press. Rear Adtn. Craig Quigley, a spokesman for Cohen, said the |* secretary did not act in 1998 because the Pentagon was “not in possession of any documentation from the CIA’s investiga tive efforts.” He said that when CIA information was turned over to the Pentagon in February, Cohen “turned right mound” and ordered a probe now under way. In a July 1998 memo to Cohen and his top deputy, acting inspector general Donald Mancuso wrote, “The CIA believes it may be necessary for DOD (Department of Defense) to con duct an assessment of any possible security compromises iden tified in their investigation.” The memo said the CIA already was “investigating alle gations that Mr. Deutch created and maintained highly classi fied ;uid compartmcnted documents and journals on a number of computers, including personal computers at his homes in Maryland mid Massachusetts.” The computers “were regularly used” in conjunction with Deutch’s America Online Internet account and “may have been used to transfer such information without regard to se curity procedures,” the 1998 memo said. ^ Efforts to reach Deutch and his attorney for comment were not immediately successful. He left the CIA in 1996 mid now teaches at the Massachusetts Institute of Technology. On Feb. 9, Cohen told the Pentagon’s general counsel mid the inspector general that he had ordered mi investigation of Deutch two days earlier. “On or about that date, the Department of Defense re ceived for the first time certain material from the Central In telligence Agency which the CIA inspector general gathered in the course of their investigation” of Deutch, Cohen wrote. “Included in this material is a lengthy journal reportedly kept by Dr. Deutch during the time he served as undersecre tary of defense... mid deputy secretary of defense. ” Quigley, the DOD spokesman, said the Pentagon inspec tor general mid the assistant defense secretary for command, ^ control, communication mid intelligence are conducting sep arate, parallel investigations. The inspector general’s office is “trying to track the hard drives mid the floppy drives that were in Dr. Deutch’s posses sion over time,” he said. The assistant secretary was “doing the damage assessment” mentioned in the July 1998 memo to Cohen, Quigley said. That probe is trying to “look at the actual content of materi al that was present on those computers,” he said. A month before the 1998 memo to Cohen, a Pentagon in vestigator for the inspector general gave further information on what the Pentagon had le;trned from the CIA at that time. “Mr. Deuich kept very thorough journals, which include significant quantities of DOD classified and other sensitive in formation,” investigator Mark Spaulding wrote to his boss. The CIA believed that “a damage assessment by DOD is required to protect the significant qiuuitities of DOD infor mation on the computers,” Spaulding added. Ollier Pentagon documents said Deutch also was under in vestigation for carrying, in his shirt pocket, a 1,000-page journal on computer disks ;uid cards containing classified in formation. i i Peru minister denies arrest of controversial ‘spymaster’ til lVlUINIfc n A T fci Associated Press LIMA, Peru- Peru’s justice minister denied reports Monday that the nation’s shadowy intelligence chief has been detained, saying the military was not holding the pow erful behind-the-scenes figure who is at the center of a growing political crisis. The reports and denial of spymaster Vladimiro Mon tesinos’ arrest further deepened the mystery surrounding his whereabouts and raised questions about the stability of the government. Earlier Monday, independent radio station CPN re ported that Montesinos had been detained on orders of the commander of Peru’s armed forces. Then, a lawyer claim ing he represented Ana Montesinos, whom he identified as the spymaster ’s.sister, sought out reporters alleging that her brother was being detained at the headquarters of the National Intelligence Service. He presented a writ of habeas corpus saying the de tention was illegal and demanding that Montesinos be freed. However, Justice Minister Alberto Bustamante denied that Montesinos had been taken into custody and cast doubt on the identity of the lawyer and the sister he claimed to represent. i www uuu iiu ui Lima tuiu x kjiuw urh lie xjy nui detained,” Bustamante told a news conference late Mon day. Referring to Ana Montesinos, whose name appears on the writ, he said that “she is not a sister or a relative of Mr. Montesinos.” A retired army general and several opposition leaders also charged that the reports of Montesinos’ detention were a ruse to buy time. “Vladimiro Montesinos is not detained, but I don’t know exactly where he is,” said retired army Gen. Jose Salinas Sedo, who led a failed coup against President Al berto Fujimori in 1992. “They're protecting him. They’re playing with the Peruvian people and winning time to see how to manage the situation." The lawyer, who gave his name as Jose Carmen Oje da, did not answer his cell phone later to respond to the ac cusations. There was no listing for Ana Montesinos in the Lima telephone directory. Despite the tumult in the media, the streets of Lima were quiet Monday evening. Peru has been thrown into political turmoil since the release of a videotape allegedly showing Montesinos bribing an opposition lawmaker to support Fujimori. On Saturday, Fujimori said the video had damag&i the credibility of his government and that he was deactivating the National Intelligence Service. In the bombshell an nouncement, he said he would call new elections mid not run himself, ending his decade-long hold on power. He did not say when the new elections would be held, or whether he would remain in office until then. Meanwhile, some 10,000 people packed into a downtown plaza Monday night and roared their approval as opposition leader Alejandro Toledo called on Fujimori to have Montesinos arrested. “There cannot be a healthy democracy in Peru with Montesinos free," he told the crowd. Toledo, the leading opposition candidate in May’s pres idential runoff against Fujimori, demanded between cho ruses of“the dictatorship will fell” that an emergency tran sition government be put in place-immediately and that elections conie within four months. The reports of Montesinos’ detention came after op position leaders had angrily demanded that Fujimori or der his detention. Miguel Gutierrez, a member of the investigative unit at the opposition paper La Republican, said earlier Mon day that high-ranking military officers had confirmed Mon lesinos’ detention. Lima Mayor Alberto Andrade earlier charged that Mon tesmos was still ninmng tne intelligence service ana was holed up in the agency's headquarters. Unconfirmed news reports said he was feverishly destroying documents that would incriminate him. The CPN radio report, citing unidentified military sources, said the arrest older liad been issued by Montesinos' close associate, Gen. Jose Villanueva Ruesta, commander of Pern’s armed forces. Fujimori’s critics say Montesinos has manipulated Peru’s intelligence network to infiltrate illegally all branch es of government for Fujimori, and they liave accused him of masterminding a campaign of smear attacks and dirty tricks to assure Fujimori’s political power. Mario Vaigas Llosa, the famed novelist defeated for the presidency by Fujimori in 1990, warned that the generals placed in key positions by Montesinos were dangerous be cause “they are defending the little power they still liave left.’’ “A wounded beast is more dangerous than a healthy beast,” he said in aratlio interview from Puerto Rico. “Mon tesinos is a person who has no place to run to, who is known to the whole world for his misdeeds." Military experts said Fujimori’s decision to deacti vate the intelligence service was likely supported by dis contented midlevel officers, fed up with Montesinos’ med dling in the armed forces. Economy from page 4 for “soft landing” in the United States that the Federal Reserve has been trying to bring about by raising interest rates to slow growth and keep inflation in check. While U.S. economists think the Fed’s six interest rate increases since June 1999 will be enough to get the job done, the IMF cautioned that the Fed may have to boost rates fur ther to ensure that the slowdown occurs. For Japan, the world’s second biggest economy, the IMF predicted modest growth of 1.4 percent this year and 1.8 percent in 2001. It warned, however, that Japan, which hits been struggling economically for a decade, hits a recovery that “remains fragile and subject to downside risks.” Water from page 4 fresh water into the North Atlantic. If that happened, it would reduce the ocean’s salinity and, thus, its density. That could pre vent the Gulf Stream from sinking, possibly changing the over all current and, in the process, Europe’s climate. Over time, these probes will help scientists collect data to see if such changes are taking place. The probes, costing an estimated $12,000 apiece, are ex pected to last four or five years. Deployment of the probes is expected to reach 700 per year by 2002 ;uid eventually total 3,000. The Uni tod States hits committed to supply 1,147 floats. Ivory Coast discusses assassination attempt on military general by Gleen McKenzie Associated Press ABIDJAN, Ivory Coast — Only the hardcore drinkers and socializes remain at this clapboard drinking spot near the home of the Ivory Coast’s junta leader, where loyalist soldiers had driven back mutinous attackers earlier in the day. Many customers left after surly soldiers erected a bar ricade across the street from this “maquis”— the name giv en to Ivory Coast’s open-air meeting places where rich and poor alike go to share braised chicken and quart-sized bees on low, rickety tables. On Monday, customes are anxiously discussing the grow ing threat of civil war, a coup or anarchy following the ap parent assassination attempt on military leader Gen. Robert Guei. The attack rattled what has long been one of Africa’s most stable and prosperous nations and marked widening po litical and military divisions ahead of the Oct. 22 presiden tial elections. Banks, schools, cafes and nightclubs were all closed for the day following the early morning shooting that left two presidential bodyguards dead. dui ai inis maquis — miormaiiy Known as tne laxi i>tand Maquis, after the nearby rank of cabs — the shooting has only added to the lively thirst for talk and drink among the die-hard few. Customers vigorously aigue whether the clash was an attempted coup or a drama staged by the military regime for political purposes. The conversation is interrupted by a tall thin man wear ing a wooly hat and bedraggled jacket with the words “Dis arm all the chiefs of state” daubed in paint on his back. The man, who had a half-full bottle of Coke stuck in his belt, shouts above the pounding African pop music. “Ivorians have lost their spirits from their heads and that is why they are willing to die,” he yelled. He does not give his name. “The military are getting ready to go to the land of the dead. Some are already there.” This brings a roar of laughter from one table, and starts a discussion between the three young men about whether there is life after death. “When I get there I will give you all a full report,” says one of the three, Lamine Dokui. The waitress, 40-something Mariam Sanogo, dismisses the threat of war, even though she heard the shooting early in the morning, which left the president’s villa pocked with hundreds of bullet holes. Guei said his men were search ing for the attackers and their political backers — which many observers took as a veiled threat at one of his main rivals, popular opposition leader Alassane Dramane Ouat tara. Prisoner from page 4 “The nature of my cancer, the longer we’re here, the greater the danger of a problem,” Pope said. “Morally, I’m not very happy, of course, being here in this situation. It’s taking a long time. It should not have oc curred in the first place.” The Federal Security Service arrested Pope on April 2, saying he had illegally bought plans for a high-speed torpe do. He faces 20 years in prison if convicted. Pope denies doing anything illegal, and the United States hits called repeatedly for his release. His representative in the U.S. Congress, John Peterson, says Pope was seeking in formation on an underwater propulsion system that is at least 10 years old and has already been sold abroad. Pope worked for the Applied Research Laboratory at Pennsylvania State University after retiring from the U.S. Navy. He later founded CERF Technologies International, a company specializing in studying foreign maritime equip ment. He frequently traveled to Russia. 156 Days until Dance Marathon Feb. 23-24 ■Che (Samcrocli supports you!