Bush Vows More Open Ties With Soviet Union : Dukakis Asks Curbs on Wall St. Mergers

Michael S. Dukakis on Tuesday denounced “sharp operators” on Wall Street and “vast concentrations of power” in the economy as he stumped the industrial Midwest, calling for new limits on the “merger and acquisition binge.”

And he once again raised the “sleaze factor,” seizing upon a new case in which a firm headed by one of Vice President George Bush’s former aides tried to solicit lobbying business from the military dictator of Haiti.

The attack on mergers is the latest note in the song of economic populism with which the Democratic presidential nominee hopes to woo voters in this final week of the presidential campaign.

“We’ve got an epidemic on Wall Street,” he warned his audiences, “gobbling up billions and billions of capital resources” without creating new jobs.

“I’m not interested in the sharp operators, I’m interested in the lathe operators and the machine operators,” he told a town meeting here.

“You’re the people that built this country, you’re the people that made it, you’re the people that pay its taxes, fight its wars.”

He later told a crowd of several thousand jammed into Milwaukee’s Mecca Auditorium: “Hard workers, not high rollers, built this country, and they deserve a President who stands up for them.”

Outside, a line of supporters circled the block, standing in the 40-degree chill under the gray November sky. Inside, the crowd sang “Happy Birthday” to Dukakis, who turns 55 on Thursday, and Wisconsin Democratic officials presented him with a new snow blower to replace the 20-year-old model he uses at home.

Former Campaign Aide

As the crowd cheered, Dukakis used his speech to denounce the apparent attempt by the firm of a former Bush campaign deputy finance director to obtain work from the Haitian government.

According to an article in Tuesday’s Miami Herald, Bush & Co., a lobbying firm run by Frederick M. Bush, who is not related to the vice president, suggested the firm would be in a “unique position” to influence a Bush Administration on behalf of Haitian strongman Lt. Gen. Prosper Avril.

Although the letter bore Frederick Bush’s signature, he denied to the Herald that he had seen it, blaming it on his partner, Michael Govans. Frederick Bush was deputy finance director of the vice president’s primary election campaign and is now a financial consultant at the Republican National Committee working on the general election.

Dukakis cited the case as one in a series of ethics problems that have embarrassed the Republicans in the last two years. “We Americans have had a bellyful of allowing representatives of foreign governments easy access to the White House,” he said.

‘Divided Loyalty’

“We don’t need a White House staff with divided loyalty” or a “White House where the back door is a front door for lobbyists . . . a meal ticket for former campaign aides.”

Democratic leaders find Dukakis’ sharper message of the last week encouraging. But the candidate’s hectic schedule for the day illustrated the daunting nature of his task.

From Youngstown and Milwaukee, Dukakis flew on to Detroit, where he spoke before a predominantly black audience at the Greater Grace Temple. There he was introduced by Detroit Mayor Coleman A. Young, who, noting that some observers were predicting a low black voter turnout this year, called such suggestions “an insult to our intelligence.”

“We need a change and we need it desperately,” Young said. “Are we going to vote,” he shouted to the crowd.

“Yes,” came the enthusiastic reply.

Truman Legacy

The next stop was Kansas City for Dukakis’ second visit in a week. This time he spoke to a large and boisterous rally at the Penn Valley Community College and accused Bush of trying to claim the legacy of the late President Harry S. Truman, a Missouri native.

“Can you believe these Republicans,” Dukakis asked. “I guess they just don’t have any heroes so they’ve got to try to steal ours.”

Finally, well after 10 p.m. here, Dukakis headed for Minneapolis to visit his wife, Kitty, who has been hospitalized with a respiratory virus.

In a day that lasted more than 13 hours and touched five states, he had crisscrossed the Midwest industrial heartland trying to convince voters that he is “on your side” and that they should “come home” to their Democratic roots.

But Dukakis needs virtually a clean sweep of the industrial states to win, and while some polls show him gaining, he remains behind. Bush, by contrast, has a fairly solid hold on his core vote and needs only to block Dukakis in a few key states.

Seen as Best Shot

The Republicans have seized upon Ohio as their best shot at locking the election away, knowing that the state has always been difficult for Democrats to carry.

Bush is devoting huge resources to the state, spending hundreds of thousands of dollars on television and direct-mail advertising, sending his running mate, Indiana Sen. Dan Quayle, to rural Ohio on Monday and Saturday, dispatching President Reagan today and visiting the state himself Thursday and Friday.

“It’s starting to feel a little bit like Gallipoli,” said Dukakis aide Paul Bograd, referring to the massive British invasion of the Dardanelles Strait in Turkey during World War I.

Economic Traumas

But at least in this part of the state, still suffering from the economic traumas of the last recession and the decline of the American steel industry, Dukakis’ words have special resonance.

He spoke in what was a steelworkers union hall. Today, it is a bingo parlor.

And his strategists hope the attack on mergers will appeal to a broader audience that may be growing uncomfortable with recent news about ever-larger mergers, takeovers and leveraged buyouts.

Recently, many leading business leaders and economists, including former Federal Reserve Board Chairman Paul A. Volcker, have warned that the growing amount of corporate debt used to pay for takeovers could destabilize the economy.

“God help us if we have a recession and those companies that are borrowing and borrowing and borrowing have to pay back these loans and those bonds,” Dukakis said.

Impact Statement

His proposals for dealing with mergers were, however, more mild than his rhetoric. Companies, he said, should be required to file an “employment impact statement” that would allow the government to consider possible job losses when deciding whether to approve a merger.

In addition, those who conduct takeovers would be barred from using surplus cash in a target company’s pension fund to pay off the cost of the acquisition.

And rules on insider trading would be tightened, giving federal regulators more power to hold large brokerage firms liable if their employees engage in insider trading.

Under Dukakis’ plan, a firm would be held responsible for the actions of individual employees unless it could show that it had adequate internal safeguards to detect insider trading and prevent it, according to Dukakis’ campaign chairman, Paul P. Brountas, himself a corporate lawyer whose business involves many mergers.

Clears Up Loose End

Dukakis also belatedly cleared up one loose end Tuesday, answering a question that had thrown him badly at the second presidential debate nearly three weeks ago.

In an interview with Cable News Network’s Bernard Shaw, who had asked him the question at the debate, Dukakis said that he would “have (the) kind of emotion” that would make him want to kill a person who raped and killed his wife.

But, he added: “This is not a country where we glorify vengeance.”

Shaw had asked Dukakis the question about rape in the context of the Democratic candidate’s opposition to the death penalty. Dukakis and his aides have since conceded that his unemotional answer to the question was a serious blunder. The question “took me aback a little bit,” he said in Tuesday’s interview.