Morehead State University - Raconteur Yearbook (Morehead, KY)

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Stocks, Talks, and Lies Events 172 Stock market crashes! American troops sent to Nicaragua! U.S. retaliates in the Persian Gulf! These and many other stories made headlines here and abroad this year. Numerous events oc- curred in Kentucky and around the globe that affected our world. United States- Soviet Summit One of the most significant happenings was the United States-Soviet summit that was held in Washington, D.C., between President Ronald Rea- gan and Soviet leader Mikhail Gorbachev. The three-day summit, which began Dec. 7, started with a meeting between the two leaders with only translators and a notetaker present. Their discussion was mainly about human rights. After the meeting, Reagan and Gorbachev signed the Treaty, both Russian and English versions, which banned short and medium-range nuclear missiles, this resulted in the destruction of 2600 warheads. After signing the treaty, President Reagan and Gorbachev resumed their talks with their top advi- sors present. This time the discussion centered around regional conflicts, such as the war in Afghanistan. Almost no progress was made in this area. Later that day, Gorbachev met at the Soviet President Reagan talks with Soviet leader Mikhail Gorbachev during arrival ceremonies at the White House. The two superpower leaders held a three- day summit meeting in December and signed a nuclear arms control agreement. AP PHOTO

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the Contras; and Albert Hakim, the Iran- ian born business partner of Secord who helped keep the books on the entire deal. The scandal seemed to involve ev- eryone from millionaires to secre- taries.Oliver Northis secretary, Fawn Hall, admitted that she helped North remove, falsify, and shred key docu- ments even after an investigation had been launched. The chain of events began in the sum- mer of 1985 when Ghorbanifar in- formed two Israeli businessmen that certain moderates in Iran would be will- ing to use their influence in Lebanon for the release of American hostages in ex- change for arms. In addition to this, Mc- Farlane saw this as an opportunity to reopen friendly relations with a faction in Iran who could possibly be the Ayatol- lah Khomeiniis successors. The moderates are a group of Iranian olficials who are battling with other fac- tions for the position of successor to the Ayatollah. They are referred to as mod- erates because their political views are less fanatical than the present regime. The moderates are pragmatists who want to open relations with the West and who are willing to compromise in order to end the Iran-Iraq war. From September of 1985 until Octo- ber of 1986, seven shipments of ma- chine parts, TWW missiles and HAWK missiles were delivered to Iran. At first, ,6 the weapons were shipped from Israel,s x stockpile with the US. resupplying Is- rael. Later, the US. began sending its own weapons to Iran through Israel. The weapons were sold at three or four times supposed to be in a contra-controlled Swiss bank account. Calero did add that they received some services that they did not pay for but they do not know who provided these services or the mag- nitude of them. A significant portion of the missing profits were given to subsidize the pro- Western Iranian politicians so that they could have an advantage in gaining con- trol of the Iranian government when the Ayatollah Khomeini is succeeded. Some of this money was placed into a CIA account that supports Angolian fighters, or perhaps it was lost, as was a 10 million dollar contribution from the Sultan of Brunei. The money may also have been used in the secret training and weapons their book value. After expenses were ; , subtracted and middlemen skimmed their fees, profits were deposited in Swiss accounts listed as Lake Resources, Secordis business acc0unts. During this time three hostages were released. Reverend Benjamin Weir was released September 14, 1985. Father Lawrence Jenco was released July of 1986. David Jacobsen was released November of 1986. The profits from the sales were origi- nally to be used to help aid the Contra rebels in Nicaragua. But according to Adolfo Calero, one of the three leaders of the United Nicaragua Opposition, the Contras never saw any money that was for certain Iranian officials to assasinate factional rivals, and possibly to aid in the assasination of the Ayatollah. During the investigations, it was dis- covered that several of the key figures used some of the profits for personal reasons. Secord used $350,000 to buy a Porsche, a Piper airplane, and a months stay at a health resort. North had a $200,000 death benefit contract and was made the beneficiary of another $2 million fund. It was also discovered that North was given $90,000 from Calero for itthe furthering of freedomis cause , instead North used it for his personal expenses. The biggest question of the scandal was, what President Ronald Reagan knew. The President has admitted to knowing about the arms shipments. In fact, it was discovered that in January of 1986 he secretly signed an executive order lifting the Iranian arms embargo. But the President did deny having any knowledge of the diversion of profits to the Contras. One of the major concerns of the pub- lic has been exactly what laws were bro- ken by these actions. The three main violations were an oversight of laws which require the administration to re- port covert activities to Congress; in- fringement of Congressional prohibi- tions on aid to the Contras; and going against the Arms Export Control Act which prohibits the sale or transfer of US. arms to countries which support terrorism. Other possible violations of the law include: perjury; obstruction of justice, and defrauding the US. govern- ment. In March of 1988, McFarlane pleaded guilty to four counts of illegally with- holding information from Congress dur- ing its investigation. McFarlane has yet to be sentenced. The maximum penalty would be four years in prison and up to $400,000 in fines. ' North, Poindexter, Secord, and his business partner, Albert Hakim, were V indicted by a federal grand jury on , charges of conspiring to divert Iranian ' arms sales profits to the Nicaraguan Contra rebels. They are all awaiting trial. North maintains that he broke no laws and that those involved saw themselves as nyoung men and women who have taken up the cause of democracy against a government that is cruelly oppres- sivefi Since it has been suggested that these men are taking the blame for President Reagan, it is doubtful that the public will ever know if Reagan was a figurehead who could not control his advisers or if he was a man who placed himself above the law. It is also doubtful whether the public will ever know the entire truth about the Iran-Contra scandal. 6 - By: Christie Sheppard lran-Contra Affair

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Embassy with such people as Paul Newman and Henry Kissinger. That evening a state dinner was held at the White House. On the second day of the summit, Gorbachev met with nine congressional leaders, then had a private meeting with President Reagan, with only translators present. On the last day of the summit, Gorbachev met with American business men. He showed his inter- est in broader economic relations, but to do this, the Soviet Union must reshape their economy to deal with the world market. One of the ever-present issues of the summit was human rights. Time and time again the Soviet leader was questioned in this area. Apparently it became tiresome to Gorbachev who exploded at a meeting when again asked on freedom ofthe press and human rights. To make any headway with the U.S., Gorbachev must yield more to his people in this area. At the summit Gorbachev was pretty inflexible on human rights issues. The Soviet Union will still not allow Jews to leave the country in great numbers. Soviet analyst Sew- eryn Bialer of Columbia University be- lieves the Soviets fear repercussions if the Jews leave. Besides human rights, the conflict in Afghanistan was a hot issue. The Soviet Union planned to withdraw their troops within twelve months of the summit, but Gorbachev insisted that their with- drawal can begin only after the end of U.S. aid to the rebels and the creation of a neutral, nonaligned coalition govern- ment. The summit brought no real break- through in strategic arms negotiations or regional conflicts; also, no common ground was found on the issue of human rights. Since the 1970's the chief threat to the U.S. has been Soviet land-based in- tercontinental missiles which could de- stroy a great part of our nuclear forces. Gorbachev now seems willing to take steps to limit these missiles. Part of the reason for Gorbachevis change of heart could be the change in his position on Reaganis Strategic De- fense Initiative tSDD. The Soviets have been afraid of the plan since it was pro- posed in 1983. They did not want to have to build costly defense systems of their own, especially since the U.S. would have the technological edge. Until recently, the Soviets have re- jected any Strategic Arms Reduction Treaty tSTARTl deal unless SDI was severely limited. But, SDI is already un- der constraints from Congress until al- most the end of Reagan's term, and its fate after then is uncertain, so the Sovi- ets are more willing to talk How arms are cut is an important issue of any treaty. Neither country wants to be left at a disad- vantage, both want to keep their present advan- tages. The key to nuclear balance is whether a nation who is attacked has a survivable force, if they only have enough weapons to attack major cities, theory says they will surrender rather than be completely destroyed. At the summit, Reagan agreed to fix limits on sea-launched cruise missiles and Gorbachev agreed to a sublimit of 4,900 bal- listic warheads and submarine missiles. Verification is the second most important issue. At the summit Gorbachev agreed to on-site inspec- tion of each countryis territory. Both leaders have ordered negotiators to come up with a treaty for restrictions and sub-limits by mid-i88. Stock Market Crash The stock market crash was another far-reaching event. On Monday, Oct. 19th, the market saw a 508-point drop. The Dow Jones industrial average lost 13?6. The market value ofU.S. securities went down by $500 billion. Most people just lost money on paper through mutual funds, pension funds and savings plans. Many world markets were aEected. The London and Tokyo exchanges went on wild selling hinges. A number of reasons were suggested for the crash. One was that stocks were simply overvalued and were ripe for a fall. Another suggestion was trading methods. Index futures markets, which are bets on future stock increases instead of actual stock, are highly criticized. Also computerized programs which insure against momentary price spreads are blamed for exaggerating wild swings in the market. One other reason that was cited was a failure in governmental policies. The U.S. is the largest debtor, West Germany and Japan are our largest creditors. Both countries want us to lower the deficits in our budget and balance of trade. But oHicials say the U.S. cutback would cause world depression unless West Germany and Japan stimu- lated their own economies to soak up the goods that the U.S. would no longer import. Because they fear inflation these two countries are against the idea. To avoid another Great Depression our govern- ment must work towards lowering the budget deficits. The week before the crash, prices had started falling sharply when the government re- ported a worsened trade deficit, this triggered worries about inflation and the dollar. After the crash, there was a fear of recession. Scared people were saving more and spending less. Experts agree that even if there was a recession, it would not be another Great Depression. Persian Gulf The Persian Gulfhas been a hotbed of action and reaction. The war between U.S.-backed Iran and Soviet-backed Iraq has been going on for almost seven years. In July 87 the conflict escalated. U.S. warships were sent in to escort oil tankers to secure the oil supply to the West. The first U.S. casualty was the tanker, Bridgeton, which hit a mine. Missiles hit an oileloading facility, which Iraqi ally, Kuwait, said were fired from Iranian- held territory. Iranian Silkworm missiles hit two tankers in Kuwaiti waters; the American-owned Sungari and the U.S.- flagged Sea Isle city. The U.S. finally retaliated by ordering four destroyers to bomb an Iranian oil rig, which the U.S. claimed was being used as a base for speedboat attacks on shipping in the Gulf. Though the U.S. is trying to protect the Westis oil supply, their presence of approximately 40 warships is almost un- necessary. Europe receives only one- twelfth of its oil from the Gulf and the U.S. only 5912. Even ifthe Gulfwas cut off oil could be pumped through the pipe- lines OPEC has constructed since the war began. The Gulf conflict has really not affected the world market. Other World Events Other events range from sex scandals to a Vlsit from the Pope. In May 87 Gary Hart, former governor of Colorado announced that he would drop out of the presidential race after the press accepted his challenge to follow him and uncovered his relationship with model, Donna Rice. But that was not the last we heard from Hart. He re-entered the race in December, and was the frontrunner at first, but since has fallen to the back of the pack. Two other major sex scandals rocked Christian- ity. It was uncovered that Jim Bakker, television World Events 173