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News Briefs II

Greenspan Defends Fed's Role in Rescue of Hedge Fund

The Washington Post

Federal Reserve Chairman Alan Greenspan defended the Fed's role in brokering a rescue of Long Term Capital Management LP last month, saying Thursday that failure of the huge investment fund could have severely disrupted world markets and damaged "the economies of many nations, including our own."

But skeptical members of the House Banking Committee peppered Greenspan and William J. McDonough, president of the New York Federal Reserve Bank, with questions about why government regulators didn't know much sooner that the fund was in deep trouble and that some of the nation's largest banks and brokerage firms were exposed to very large losses if it went under.

Committee chairman Rep. Jim Leach, R-Iowa, acknowledged that failure of the fund would have posed a risk for financial markets, but he labeled the episode a "fiasco."

"From a social perspective, it's not clear that Long Term Capital or any other hedge fund serves a sufficient social purpose to warrant government-directed protection," he said.

Leach and several other members suggested that additional regulatory powers might be needed, either by the Fed or other government financial agencies, to prevent such situations from occurring again.

However, Greenspan and McDonough said no additional powers are needed and that direct regulation of hedge funds - unregulated investment funds organized for large, savvy investors - isn't feasible. If it were attempted, the funds could easily leave the country, the officials said.

Presidential Spokesman Says Goodbye

The Washington Post

The aisles were packed, the air was festive, and CNN's Eileen O'Connor was doing a live introduction from her second-row seat in front of the famous blue curtain.

But when he appeared Thursday for his 539th and final White House briefing, Mike McCurry was all business: "Story of the day. News of the day. Let's go. Mr. Donaldson."

Sam Donaldson obliged with a question about Bill Clinton having said in 1974 that lying to the American people was reason enough to impeach a president. McCurry replied that Watergate "was a lot more than lying to the American people, Sam," and that as far as Clinton having committed impeachable offenses, "this ain't it."

McCurry, 43, seemed embarrassed at what one reporter called his "superstar" status. In a bizarre way, eight months of bobbing and weaving and just plain stonewalling on Monica Lewinsky have made him a celebrity, a fixture on the all-Monica cable channels.

Yet the press secretary admitted he was worn down by scandal. And moments later, when Donaldson and CBS's Bill Plante pressed him about defending what turned out to be a presidential lie, McCurry offered this bit of self-defense:

"The one thing I was determined, when that story broke back in January, was to never come here and do what some of my predecessors, unfortunately, did, which was to lie to you and mislead you. And sometimes not knowing the answer - even though that puts you in a tough position, too - is better than consciously misleading people. Now, I know that at times I came up short. I know at times that I didn't, you know, have the right information. And frankly, the president misled me, too, so I came here and misled you on occasion. And that was grievously wrong of him, but he's acknowledged that.

"But, you know, did I ever knowingly come here and send you folks in the wrong direction? I did not. I'm confident of that."

McCurry replaced Dee Dee Myers after the Democratic wipeout in the 1994 elections and tried, with limited success, to ease the tensions between the president and the press. McCurry's signal accomplishment is that after all the hand-to-hand combat with journalists, the late-night arguments and lectures on media sloppiness, most of the correspondents still love him.

"I think he's actually been remarkable under some incredibly ugly circumstances, and has managed to deal with this with grace and a sense of respect for what we do," says Reuters correspondent Larry McQuillan. "Mike truly enjoys being with reporters."

Three Children in Car Hit by Ambulance Die


Three children who had spent the day with their mother at work were killed shortly before midnight Wednesday when an ambulance on a non-emergency call sped through a red light and rammed into their car as they were traveling to their home, police said.

Their mother, a 32-year-old hairdresser who moved to New York from Nigeria 12 years ago, and a 9-year-old sister were critically injured in the crash. The ambulance driver was later arrested and charged with manslaughter.

Police said no one in the car was wearing a seatbelt or using a child seat when the ambulance slammed into their compact car.

Killed were Damilola Morak, 7, and her two brothers, Olusegum Morak, 5, and Akintunde Morak, 2. Their mother, Angela Igwe Morak, and sister, Ibironke Morak, 9, were listed in critical condition at Kings County Hospital Center.

The ambulance driver, Anne Lamberson, 34, an employee of Transcare Ambulance Service, was arrested at her home Thursday morning and was being held Thursday night for arraignment on three counts of second-degree manslaughter, said Detective Thomas McGrath, an accident investigator.

According to McGrath, the private ambulance was going 50 to 70 mph on "a non-priority transport" of a patient. He said its lights were flashing and its siren was on when it ran a red light and smashed into the Moraks' Nissan.

"It was not a legitimate emergency," Police Commissioner Howard Safir told reporters. "She (Lamberson) should not have been driving with her lights and sirens on, and she should not have gone through a red light."