The Cincinnati Enquirer from Cincinnati, Ohio • Page 1

I C7 I 'Big Doggie' Has His Day lfy '4 Perez Grand Slam Lifts V. Reds To 7-3 Victory 1 1 Sports, Page C-1 1 Warm-Weather Whims Bring Fun To Summer Fashion Section THE CINCINNATI ENQUIRER FINAL EDITIONNEWSSTAND PRICE 35t TUESDAY, MAY 14, 1985 A GANNETT NEWSPAPER arner Suing ESM's Auditors For $1.15 Billion Ronnie R. Ewton, George Mead and the late Alan R. Novick in exchange for issuing favorable financial reports. The payments allegedly were obtained from ESM at a time when it could not meet its obligations to investors.

Warner charges Gomez and the accounting firm with racketeering, fraud and negligence. Warner, a wealthy financier and former U.S. ambassador to Switzerland under President Jimmy Carter, has contended that he was a victim of the ESM fraud. That contention permeates the law suit It alleges Alexander Grant participated with ESM "in a conspiracy and scheme to defraud plaintiff Warner and corporations in which he had an interest" and that Alexander Grant's "acts and omissions aided and abetted ESM Government (Securities) in defrauding Warner and corporations in which he had an interest." (Please see WARNER, back page, this section) BY KAREN GARLOCH The Cincinnati Enquirer Home State Savings Bank owner Marvin L. Warner filed a $1.15 billion lawsuit Monday against the accounting firm that is alleged to have filed false audits that concealed fraudulent activities at ESM Government Securities Fort Lauderdale.

Home State, which had invested heavily with ESM since 1977, closed March 9, after a run by depositors following the March 4 collapse of ESM. ESM has been charged by the Securi ties and Exchange Commission (SEC) with bilking Investors of more than $300 million. WARNER'S SUIT against Alexander Grant filed Monday in U.S. District Court in Fort Lauderdale, Is the fourth suit against the accounting firm. The SEC filed suit against Jose L.

Gomez, former managing partner of Alexander Grant's Miami and Fort Lauderdale offices, accusing him of accepting bribes of $125,000 from ESM officials. Other suits have been filed by Home State Savings Bank for $150 million and by American Savings and Loan Association of Florida, formerly controlled by Warner in a voting trust with Miami's Shepard Broad, for $55 million. Warner sold his interest in American Savings, and Loan for a profit to the Broad family just a month and a half before ESM folded. Named in Warner's suit are more than 100 partners of Alexander Grant since 1977, including Gomez. GOMEZ RECENTLY resigned from Alexander Grant amid allegations that he accepted $125,000 from ESM officials 6 Fortress9 Fire Devastates Area Police Bomb Blamed In Philadelphia Siege irv i 1 1 City Hub Proposals Aim High Building May Rise Over Carew Tower BY JOHN ECKBERG The Cincinnati Enquirer Two of the four developers bidding on the Fountain Square West development project would erect taller skyscrapers than any now in Cincinnati, according to their proposals unveiled Monday.

One would be 54 stories high and the other 52-both taller than" the Carew Tower. In addition to skyscrapers with soaring atriums, the proposals call for classy boutiques, nightclubs, more office space and a major commitment of tax dollars. One developer estimated that it could cost the city more than $25 million to acquire the site through eminent domain, demolish the existing buildings and pave the way for public underground parking. Parking alone could cost $4 million, according to another proposal. Bids for the project were opened Monday after Hamilton County Common Pleas Judge Thomas Nurre agreed to dissolve a temporary restraining order that had sealed the proposals.

A BID from the John W. Galbreath Co. is under a "cloud," according to Cincinnati council member David S. Mann. Mann on Monday called for public disclosure of project documents that allegedly were removed from offices at the Cincinnati Business Committee.

A Galbreath employee who allegedly photocopied the sensitive documents has resigned, company officials said last week. The project site, north of Fifth Street and bordered by Vine and Race, where the current Elder Beerman department store now stands, is owned by Emery Realty. Emery is a partner in Fountain Square West Associates and is also among the four groups bidding for the right to build a $325 million hotel and office development. (Please see DEVELOP, back page, this section) It i. a if i BY RANDY WHITESTONE Associated Press PHILADELPHIA Police trying to evict members of the radical group MOVE from their fortified rowhouse dropped a bomb on the building Monday, sparking a fire that destroyed up to 60 houses before being brought under control, authorities said.

The bomb was dropped around 5:30 p.m. during a daylong siege in which police also used water cannon, tear gas and traded gunfire with those inside. The flames had driven four armed MOVE members into the alley behind their house, forcing police to hold back firefighters as the blaze spread, Mayor W. Wilson Goode said at a news conference. "What we have out there is war," Goode said.

He said one of the four, a woman, was captured, and the other three "still are loose in the alleyway." THE OTHERS may have been hiding in a labyrinth of tunnels that police believe MOVE members constructed in the backyard and alley, said Leo Brooks, the city's managing director. The fire involved 50 to 60 homes and was brought under control at 11:40 p.m., but not before the houses were destroyed, said Fire Commissioner William Richmond. Two children were carried alive from the scene by police around 7:30 p.m., to cheers from hundreds of onlookers who also taunted officers with chants of "Murder! Murder!" One child was caught leaving the house, Goode said, adding that nothing was known of the fate of two or three other children believed to be living in the house. Authorities earlier had said as many as 10 children lived there. The bomb, which police dropped by helicopter on the house, was not an incendiary device, but an explosive designed to blow a hole in the reinforced house to give police a larger target for tear-gas canisters, Police till II II I II I II II jimm Commissioner uregore Sambor said.

"WHEN THE charge hit the bunker, a subsequent minor fire starte when the charge was dropped the subsequent incipient fire started up on the roof," Richmond said of the explosive device that police dropped on the MOVE house. "The thought was that it would catch the bunker and drop It into the second floor, which it subsequently did." "If there's anything alive on Osage Avenue, it's a miracle," Richmond added, referring to the MOVE block. However, Sambor said, "We intend to go through the rubble and hope to find survivors." He said police would begin moving in at dawn. In an interview on ABC-TV's "Nlghtline," Goode said that the chances of the fire having been started by police "is probably better than 50-50." Officers decided to let the MOVE house burn to destroy a log-reinforced bunker that members constructed Inside the front of the house, Sambor said. The Inhabitants, who espouse a back-to-nature philosophy, had refused early Monday to leave the house under an eviction order from police, who had surrounded the house and evacuated about 200 neighborhood homes Sunday.

A 90-MINUTE gunbattle erupted after MOVE'S refusal. Group members said they would not leave until nine members imprisoned for a 1978 shootout that left one police officer dead and several wounded were released. Police said they decided to move on the two-story west Philadelphia house after obtaining arrest warrants Friday for four adults believed to be living there. The warrants accused them of harassing neighborhood residents, possessing explosives and disorderly conduct. (Please see MOVE, back page, this section) Warrantless Motor Home Search OK'd BY TONY MAURO Gannett News Service WASHINGTON Your home is your castle, but if it's a motor home police can search it without a warrant, the Supreme Court said Monday.

In a 6-3 decision that had been sought urgently by police nationwide, the Justices agreed that because motor homes can flee easily, police who suspect criminal activity within must be able to search them quickly without going through the court procedures needed to obtain a warrant for searching a traditional home. "This decision will take away the guesswork for police on when it's a vehicle and when It's a home," said Minnesota Special Assistant Attorney General Paul Kempalnen. "If you can turn on (Please see COURT, back page, this section) 5 III A WOMAN, top, is surrounded by police as she is brought out of the west Philadelphia rowhouse of the radical group MOVE. At left, flames rage through the block containing the rowhouse Monday evening. Fire started in the MOVE compound when police dropped an explosive into the house.

The Associated Press 111 -1 IMS, iV tm- GE Pleads Guilty To Fraud Co pany Agrees To Pay $1.04 Million Fin Terrorism Increase Predicted jj ill i The Justice Department said that a variety of other devices were also used to defraud the government. AS A result of the guilty plea, GE faces the possibility that some or all of its divisions will be barred from receiving new government contracts for up to three years. Air Force Secretary Verne Orr has the power to limit or eliminate the ban, which normally is automatic under federal procurement rules when a company is convicted of a fraud against the government. An Air Force spokesman said Monday that Orr is considering any action which may be precipitated by Monday's guilty plea. Until Monday, the company, the largest defense contractor ever indicted on charges of defrauding the Pentagon, had consistently denied any criminal (Please see GE, back page, this section) THE CINCINNATI ENQUIRER and ENQUIRER NEWS SERVICES The General Electric Co.

pleaded guilty Monday to defrauding the Air Force by filing 108 false claims for payment on a missile contract. It was fined $1.04 million, the maximum allowable, and ordered to pay back the $800,000 that was falsely billed. The company was indicted on March 26 and the trial was to begin Monday. The plea was unexpected and stemmed from new information provided to federal prosecutors by Roy Baessler, a former GE manager. Not only did he acknowledge his role in the false billings, but he Implicated "higher management" in the scheme, according to the Justice Department.

The company acknowledged that It submitted incorrect employee time cards in 1980. In a statement Monday, it said that, in light of Mr. Baessler's new information, "we accepted responsibility for these intentional errors and changed our plea." KHADAFY BY JOHN HANCHETTE Gannett News Service WASHINGTON Terrorism experts told a Senate panel Monday to expect a new wave of worldwide killings and bombings inspired by Iran's Ayatollah Khomeini and Libya's Moammar Khadafy, as the FBI announced that a Sikh plot had been blocked to assassinate Indian Prime Minister Rajiv Gandhi. European intelligence Sources are predicting Khadafy "Is about to unleash a chain of terror against Libyan exiles throughout the world," said Martin Sicker, director of the Center for International Security, a conservative think tank. SICKER, WHO Just returned from Europe, said Khadafy's aim is to "bring chaos to the United States and force it to withdraw all Interests from the Middle East." "His terror appears to be indiscriminate and it appears to be mad, (Please see TERROR, back page, this section) Index SPORTS RESULTS Telephone 369-1005, 369-1006 Six Sections, 145th Year, No.

36 horse RACING c-2 .1985 The Cincinnati Enquirer in STYLE Bi BUSINESS METRO D-1-4 CLASSIFIED C-5-8, D-4-8 PEOPLE EJ COMICS PUZZLES E-6-7 DEAR ABBY EJ SPORTS C5 DEATHS STARR CO EDITORIALS TEMPO EA HOROSCOPE Ej TV-RADIO EJ On The Inside Court rules on illegal aliens, Page F-8. Variable cloudiness today and tonight, with a chance of showers and thunderstorms. High today, 85-90. Low tonight, In the mid-60s. Chance of rain, 50 today and tonight.

Details and weather map on Page A-2. GANDHI.