The Philadelphia Inquirer from Philadelphia, Pennsylvania • Page 35

New York stocks 3 Stock options 6 American Exchange 8 New York bonds 9 Over-the-counter 10 section business Wednesday, November 28, 1984 By J.A. LIVINGSTON Ch. 65 S3 million for NJ. newspaper bids Business iJ outlookVv 7 jr yep- the station's trustee, said yesterday. Channel 65, with 14 employees, now broadcasts its own productions and the offerings of the Financial News Network during the day and transmits Wometco Home Theater's (WHT) subscription TV service over a scrambled signal at night, Milstead said.

A secretary in the Asbury Park Press executive offices yesterday said that officials of the privately owned company had no comment on the bid. The newspaper company also owns radio stations WJLK-AM By Neill Borowski Inquirer Stall Writer A $3 million bid by Asbury Park Press Inc. to take over' financially troubled WRBV-TV (Channel 65), a Vineland, N.J., station that covers the Philadelphia market, has been submitted to U.S. Bankruptcy Court by the court-appointed trustee. If the publisher of the Asbury Park, N.J., daily newspaper takes over the three-year-old station and its studios, it would operate it as an independent UHF station, Richard M.

Milstead, the Vineland lawyer who is and WJLK-FM in Asbury Park. WRBV went on the air in July 1981 and five months later, after owner Renaissance Broadcasting Corp. of Willingboro, N.J., was unable to make payments on a $4.8 million loan from Girard Bank of Philadelphia, Milstead was appointed receiver to run the" station. At the time, it was said to be the second black-owned station in the nation. Renaissance, principally owned by Donald C.

McMeans, filed to reorganize under Chapter 11 of the Federal Bankruptcy Act in the fall of But in July, the court designated it as a Chapter 7 bankruptcy and ordered it sold. The purchase of Channel 65 by Asbury Park Press must be approved by the bankruptcy court and objections to the proposal or other bids may be made until Dec. 6, according to Milstead. If the court approves the purchase, the new owner would have to ask the Federal Communications Commission to transfer the station's broadcasting license. Jonathan H.

Ganz, Renaissance's attorney in the case, yesterday said Renaissance would file an objection to the bid. He said McMeans wanted to run the station again and to operate it as a traditional, rather than subscription, UHF channel. Renaissance has agreements with advertisers that could, with court permission, give creditors more than they would get under the Asbury Park Press plan, (See CHANNEL 65 on 6-D) Wometco Home Theater is pulling the plug on its pay TV service in the Philadelphia area. Page 1G. Telltale trail left by money In this 100-page, $3.75 paperback.

you'll encounter ingenious, interest ing persons you probably would not want to encounter personally. The title is The Cash Connection: Organ ized Crime, Financial Institutions, ana Money Laundering. Publisher: The Government Printing Office. It's 1 ff TT. IE ll j.

1 1 DRY CLEANING ING and COPYING CONSULTANT NOTARY PUBLIC tfSMf-" PORARY AUTO ES it 1 TEU 3874857 ENTRANCE HOURS-MON fv TP! vaimcp The Philadelphia Inquirer TOM GRALISH On its window at the Divine Tracy Hotel, Divine Enterprise lists the services it offers to the West Philadelphia area Mission True to founder's teaching, it places service above profit Chase lowers prime Few banks follow move to 11.25 pet. By Steven P. Rosenfeld Associated Press NEW YORK Chase Manhattan Bank undercut competitors yesterday by lowering its prime lending rate to 11.25 percent. Chase's decision brought the prime, the base on which key banks compute interest charges on short-term business loans, to its lowest level since March. The move, which was followed by only a few regional banks, left the banking industry widely split on where the prime rate should be.

Analysts said they expected further cuts in the weeks ahead. Chase, the nation's third-largest bank, reduced its prime rate from the 11.75 percent it had adopted Nov. 7. Thus, it bypassed the 11.5 percent rate set Monday by number-two Citibank as well as First National Bank of Chicago and Mellon Bank. Area banks In the Philadelphia area, Provident National Bank, Pittsburgh National Bank and the National Bank of Boyertown, Berks County, joined Chase and lowered their rates half a point to 11.25 percent yesterday.

Cutting their rates a quarter-point, to 11.5 percent, were Fidelity Bank, First Pennsylvania Bank and Continental Bank. Most of the other large banks, including number-one Bank of America, remain at 11.75 percent, while Wells Fargo Bank has kept its prime rate at 12 percent, set Oct. 26. "It shows there's still competition in this world," said Maury Harris, senior financial economist at the New York investment firm Paine Webber Inc. "They'll all go to llVi percent.

I think it will be 11 percent by the end of the year." David Wyss, chief financial economist at Data Resources a private consulting service in Lexington, said the prime rate "has not stopped falling; it is just a question of what the next resting point will be, ll'j or ll'A." The most creditworthy clients often pay below the prime rate, while smaller businesses typically pay one or two percentage points above the prime. Although consumer loans are not directly tied to the prime rate, changes in the prime reflect the general trend of interest rates. Debtor nations The world's debtor nations are among those benefiting from a lower prime. Data Resources estimates that for every one-half percentage-point decline in the prime rate, developing countries that do not export oil save $370 million a year in interest payments to banks in the United States and about $740 million worldwide. Analysts said an 11.25 percent prime rate was justified by the decline in the cost of banks' funds.

The federal-funds rate, which is the interest on overnight loans between banks, dropped below 9 percent yesterday. Yields on three-month certificates of deposit in denominations of $100,000 and up were about 8.9 percent. Last week, the Federal Reserve Board lowered its discount rate, which is the interest on its loans to banking institutions, to 8.5 percent from 9 percent. Analysts said banks traditionally have been reluctant to lower interest rates, especially when earnings have been reduced by problem loans at home and abroad. "Banks are doing everything in their power to protect profit margins," Harris said.

By Peter Binzcn Inquirer Stall Writer In the shop at 20 S. 36th Street in West Philadelphia, business is brisk, even though the place breaks many of the rules of modern merchandising. It pays cash for its inventory and forces its customers to do the same. No checks or credit cards. It operates only five days a week Mondays through Fridays.

Its employees are unsalaried. All work there as full-time volunteers. And the small shop is, at the least, very unusual in the variety of its offerings. It sells digital watches, pocket calculators, wool sweaters and specialty items. It types term papers for college students, takes in suits for dry cleaning and helps prepare tax returns.

It also makes a profit which, says its president, is always plowed back into the business. The shop is Divine Enterprise Services. It has operated since March 1979 from the basement of the Divine Tracy Hotel. The Divine Tracy and a second hotel, the Divine Lorraine, at Broad Street and Ridge Avenue, are owned by followers of the late Rev. M.

J. Divine, better known as Father Divine, and his widow, who is known as Mother Divine. Father Divine, a religious leader who brought his "Peace Mission Movement" from New York to Philadelphia in 1942, developed a wide following before his death in 1965. Since then, his widow has carried on the movement from her residence at the 70-acre Woodmont estate that followers purchased for her in Glad-wyne in 1952. The Divine Lorraine and Divine Tracy hotels provide housing for followers but also rent rooms to transients.

They are unlike other hotels serving the public here in that both adhere to the "Modest Code" established by Father Divine no smoking, no drinking, no profanity, no tipping, and the sexes are housed on separate floors. Separation of the sexes is in keep-(See DIVINE on 10-D) a report, dated October 1984, to President Reagan by a 20-member Cora-mission on Organized Crime, chaired by the distinguished federal jurist Irving R. Kaufman. Isaac Kattan is one of the persons you'll encounter. Of him, the report says, he "functioned virtually as Chancellor of the Exchequer," but don't confuse him with Nigel Law-son, Britain's Chancellor of the Exchequer.

Kattan developed expertise in transferring cocaine cash from New York City to Miami, then transferring it to Colombia where it would be converted into pesos to pay for narcotics. Eduardo Orozco is another of the characters. He and associates deposited "approximately $151,000,000 in cash in more than 18 bank and currency exchange accounts." Then the money was transferred elsewhere in the United States, Panama, the Bahamas, and the Cayman Islands. "Oroz-co's customers included Sicilian heroin traffickers of La Cosa Nostra, including Antonio Turano, who was found murdered in New York in March 1983." Bank's cover-up also meet Lionel Paytuvi, a vice president of the Great American Bank of Dade County, who arranged, for a fee, to have the bank accept boxes and suitcases of dollar bills for deposit. Cashier's checks then would be issued as a cover-up to make it seem as if loans had been made.

Paytuvi had confederates in the bank who shared the payola. The bank received fees for handling the money and failed to issue Currency Transaction Reports, which would disclose to the Treasury and banking supervisors the large cash transactions, and would raise questions: What and where did the cash come from? The bank was fined $500,000. Money laundering, as you surely know, does not involve soap and water. It does not refer to washing unclean bills or exchanging torn and wrinkled ones at banks for crisp, shiny new ones. The term is "derived from the argot of criminals, who refer to dirty or black cash being washed so that it can be used openly." Money's trail Money has no odor, said the Roman emperor, Vespasian, when his son complained because he put a tax on urinals.

But large amounts of money can leave a telltale trail. Consequently, drug traffickers, to escape detection, contrive ingenious ways to entwine the biggest and the best in "legitimizing" their cash flow. Pizza parlors will be established to conceal the origin of cash. Why should banks or brokers reject dollars from "overtly" legitimate enterprises? And so you encounter in the report respected names like Merrill-Lynch, E.F. Hutton, Citibank, Chase Manhattan, Irving Trust, Chemical Bank, Deak-Perera and Marine Midland.

"Chemical pleaded guilty to more than 200 misdemeanors; it failed to report more than 500 cash transactions involving $8.5 million. Thomas Spinelli, a branch manager, received fees for helping a La Cosa Nostra representative exchange small bills for large ones. After its prosecution, Chemical adopted a "know-your-cus-tomer" rule to avoid repetition. Corporate misdeeds The commission- concentrated on "organized crime," yet discovered that "illegal payments to foreign government officials to win lucrative overseas contracts" were made by Gulf Oil, Lockheed and McDonnell Douglas Aircraft. And Bethlehem Steel paid kickbacks to obtain work at its shipyards.

The report estimates that $5 billion to $15 billion of the $50 billion to $75 billion of illegal drug money earned in the U.S. moves into international channels. It recommends stiff fines and penalties in a proposed law called the Financial Institutions Protection Act, which would specifically make money laundering a crime. Present penalties, the report contends, are "far too lenient: When the Treasury Department can impose a civil penalty of no more than $1,000 per violation and federal courts can sentence defendants to no more than, one year in prison per violation (absent of showing a pattern of such violations), the risk is negligible when contrasted to the limitless financial potential of laundering." Mother Divine in the shop's dry-cleaning room Appeals court says no to Mellon- Heritage merger By Alexis Moore Love Inquirer Stall Writer Mellon Bank, Pennsylvania's larg est bank, may not acquire Heritage Bank of Jamesburg, N.J., the Third U.S. Circuit Court of Appeals in Philadelphia ruled yesterday.

Mellon plan to merge Heritage U.S. Comptroller of the Currency. Mellon announced the deal in October 1983. Mellon had argued that prohibitions against interstate banking did not affect the proposed Heritage-Mellon East merger because Heritage has operated a branch in Philadelphia since 1813, more than 100 years before interstate banking was outlawed. The Fed, which regulates bank holding companies, acted in the case after Michael Horn, then New Jersey banking commissioner, objected to the merger.

The Fed contended, and the appeals court agreed, that "by all common-sense criteria" Heritage is locat ed outside Pennsylvania, Mcllon's. home state, and that the transaction is "not specifically authorized" by New Jersey law and is, therefore, prohibited under federal law. The three-judge court said if. found the Fed's position "to be persuasive. This interpretation also provides New Jersey with the control over the ownership of banks within its borders that Congress clearly intended the states to have." Yesterday's ruling puts a dent in Mellon's ambitious interstate banking plans, which include setting up 15 consumer, or "non-bank," banks across the country.

As of Friday, Mellon had received the comptroller's approval to establish six of the banks, which can do business across state lines under a loophole in federal banking laws. In a statement, Mellon's general counsel, Martin G. McGuinn, said the bank was "disappointed by the decision. Before we can make any further comment, we want to study this decision in detail, consider our options and consult with Heritage." Heritage also expressed disappointment and said it would study the decision before commenting further. Bank industry analysts "said the ruling probably would merely delay the deal until interstate banking becomes a reality.

Bills to permit interstate banking are in the works both in New Jersey and Pennsylvania. with Mellon Bank (East), formerly Girard Bank of Philadelphia, is not authorized under New Jersey law, the appeals court affirmed. The Fed eral Reserve Board had barred the deal on those grounds, and yesterday's ruling affirmed the Fed's decision and its jurisdiction in the case, both of which Mellon challenged. Pittsburgh-based Mellon last spring won conditional approval of. the $175 million' transaction by the The Dow surges 7.84 pts.

as blue-chip stocks propel rally By James F. Peltz Associated Press NEW YORK Blue chips led a broad advance in the stock market yesterday as trading volume rose to its highest level in three weeks. The Dow Jones average of 30 indus trials climbed 7.84 points to 1,220.19, chose to cut their rates only a quarter-point, to 11V2 percent. Wall Street also got its first look at the Treasury Department's long-awaited proposal to overhaul the federal tax system. Investors hope the plan represents a breakthrough in the effort to narrow the federal deficit, but they want to see further details before judging the proposal's full effects, said Ralph Acampora, an analyst at Kidder, Peabody Co.

"The initial response on Wall Street is favorable, but whether lion shares, up from 76.52 million in the previous session and the highest since Nov. 7, when turnover hit 110.80 million shares. The market opened with scattered losses, but in afternoon activity the blue chips led by IBM Corp. and Merck moved ahead and most of the market followed suit. The rebound came amid mixed signals on the interest-rate front.

Chase Manhattan Bank and many regional banks cut their prime, or base, lending rates by a half-point to ll'A percent. But several other banks there's a follow-through is questionable," he said. Nationwide sales of NYSE-listed issues, including trades in those stocks on regional exchanges and in the over-the-counter market, totaled 112.81 million shares. Standard Poor's index of 400 industrials rose 0.87 point to 186.26, and 500-stock composite index was up 0.74 point at 166.29. At the Amex, the market value index fell 0.52 point to 207.06.

The NASDAQ composite index for the over-the-counter market closed at 245.41, up 0.51 point. Among the blue chips, IBM jumped 1 to 124, American Telephone Telegraph edged up to 18 and General Electric rose to 57. Merck climbed 2Vb to 91 'A; the company raised its dividend and authorized the purchase of $100 million worth of its common shares. Auto stocks advanced as the domestic industry reported a 28.8 percent gain in mid-November sales. General Motors rose to 77, Ford Motor gained to 47 and Chrysler was up at 28.

nearly erasing its 7.95-point loss on Monday. Stocks that gained outnumbered losers by 3 to 2 on the New York Stock Exchange, whose composite index rose 0.39 points to 95.81. Big Board volume totaled 95.47 mil.