The Los Angeles Times from Los Angeles, California • 1

Bxwt Circulation: 1 ,036,522 Daily 1 ,290, 1 94 Sunday Sunday, March 28, 1982 CCt476 pagesCopyright 1982, Los Angeles TimesSunday 75c Sunday Final New IRS 'Sting' Salvadoran Rebels Intensify Attacks 4th-Largest City Block Roads and Besieged; Convoy Menace Towns Brings In Troops to Reduce Voting uiii-r ThiiiinniiiTniiiiii'iiiHiTiT'-ff'ttTt' larry Armstrong Los Angeies Times Salvadoran soldier is alert as Red Cross van moves down deserted street By LAURIE BECKLUND, Times Staff Writer USULUTAN, El Salvador-Guerrillas attacked this country's fourth -largest city Saturday in a pre-election show of force that left 27 soldiers wounded and at least one reported dead, outgoing roads nearly severed and today's balloting here at best uncertain. "The truth is there will be no votes here tomorrow," said Lidia Courtade de Vergelly, one of three election officials in this provincial capital, as gunfire sounded outside. "There will be no votes because there will be no election officials. The army's going to have to come take me if they want me to go to the polls." The polls are only two blocks from her home. Heaviest Fighting By midafternoon, however, a military convoy with 300 reinforcement troops was making its way from the capital, San Salvador, 70 miles to the west of this beseiged city of 40,000.

The fighting was some of the heaviest in El Salvador's two-year-old civil war. It was impossible to obtain an accurate casualty count, but one convoy leader told a reporter that 28 soldiers and police had been wounded in the battle. At least one of them was reported dead. Guerrilla casualties were not available. The fighting began just after 1 a.m., local residents said, when guerrillas drove into the edges of the city from three sides, encircling a military garrison and its 600 soldiers.

Staccato of Gunfire Usulutan is normally bustling on weekends as peasants from surrounding areas flock in to sell their goods. But the town was virtually closed on Saturday, as the staccato of gunfire was heard almost continuously. Most of the fighting was around the perimeter of the city. The town square, desolate and dusty, was occupied most of the day by just a few police, who stood wearily under hundreds of plastic election banners. Please see ATTACK, Page 6 By DIALTORGERSON.

Times Staff Writer SAN SALVADOR Leftist guerrillas who oppose today's elections struck hard in El Salvador on Saturday, blocking roads in many areas of the country and menacing major cities in an effort to keep thousands of people away from the polls. The government massed troops in this capital, where more than half of today's vote is anticipated. Despite heavy patrols, a sniper fired at the U.S. Embassy, and bombs toppled power poles, causing intermittent blackouts. The eastern third of the country was virtually cut off from the capital and the rest of El Salvador.

The cast was out of gasoline, and when the government sent a convoy of army-escorted fuel tankers to replenish supplies, a guerrilla attack halted it near San Vicente, 25 miles east of San Salvador. Troops Near Hotel Armored cars and troops of the U.S. -trained Atlacatl Battalion, called in from the provinces, patrolled near the Presidente Hotel here where 200 foreign election observers are lodged. An eight-member U.S. team will take part today in watching the vote.

The election will choose a 60-member constituent assembly, which will name a provisional president and create a legal government to replace the current civilian-military junta. The United States, which backs the junta, hopes for a large turnout to show that democracy can work here. The Christian Democrats of President Jose Napoleon Duarte predicted that they will win more than half of the 60 assembly seats. But insiders said that Arena, the Nationalist Republican Alliance led by far rightist Roberto D'Aubuisson. showed last-minute gains.

Four smaller parties, also right-of-cen-ter, oppose the centrist Christian Democrats. It was clear that the rebel attacks and a campaign of intimidation would cut heavily into the vote outside this capital. The guerrillas mounted a campaign that included: A major attack on Usulutan, Please see EL SALVADOR, Page 7 Anti-Poverty Agency: Leaving Barrio Behind East L.A. Community Union's Spending Runs Into Millions and, Now, Official Suspicion By CLAIRE SPIEGEL and ROBERT WELKOS, Times Staff Writers Hunt for Tax Cheats Stirs Criticism By ROBERT L. JACKSON.

Times Staff Writer WASHINGTON -After weeks of trying to sell their Phoenix wholesale meat business, Bill and Gladys Jones were delighted to be sitting at their kitchen table, laying out the books for two well-dressed prospective buyers. And when their visitors suggested that the Acme Meat profits were a bit lean, the Joneses acted quickly. Delving into a file cabinet, a closet and a bedroom dresser drawer, they produced documents showing that the little firm had actually earned far more up to a year in secret, tax-free income than they had ever reported to the government. Their hopes fell a month later, however, when the two men returned. Instead of a sales agreement, the men had a search warrant and badges identifying them as agents of the Internal Revenue Service.

Caught in 'Sting' Operation The Joneses had been caught in a new federal "sting" operation to ferret out tax cheats among the nation's medium-size businesses an operation that promises to expand the already heated controversy over just how far government undercover agents may or should go to catch crooks. Like the FBI's Abscam program, which ignited the present debate over proper investigative methods and tactics, the IRS operation-known as the Business Opportunities Project, or BOP uses federal agents posing as ordinary citizens to gather evidence of illegal activity on the part of unsuspecting individuals. Specifically, agents pose as prospective buyers of medium-size businesses as a way to gain access to company records and to search for evidence of "off the books" profits that were "skimmed" never reported to tax collectors. Millions in Unreported Income With 20 such undercover operations under way, IRS officials expect to find evidence of millions of dollars in unreported income. Their special targets are restaurants, bowling alleys, groceries and other enterprises that generate large amounts of cash and thus find it easy to skim.

Thomas J. Clancy, chief of the IRS criminal investigation division, noted that agents had documented $250,000 in skimmed profits at one restaurant alone. "We're going to get an indictment there," he said. And, coming at a time when federal revenues are falling far short of federal outlays and millions of Americans are feeling hard-pressed by both taxes and the recession, a program for catching those who do not pay their fair share seems cer-Please see Page 16 Georgetown to Meet N. Carolina in Finals North Carolina defeated Houston 68-63 and Georgetown beat Louisville 50-46 Saturday in the NCAA basketball semifinals in New Orleans.

North Carolina and Georgetown will meet for the national championship Monday night. Details in Sports. of Usulutan to pick up wounded. Weather Looks Fine for Space Shuttle Landing By GEORGE ALEXANDER, Times Science Writer HOUSTON-Space Agency officials took less than 15 minutes Saturday to ponder the weather forecasts for the southwestern United States before deciding to bring the spaceship Columbia down Monday, as planned, at the White Sands Missile Range in New Mexico. "The weather looks good at Northrup," Harold Draughon, a flight director at the Mission Operations Control Center here, said of the x-shaped landing strip on the White Sands reservation.

"Sunday will be better than Monday, but Monday is more than acceptable." The forecast for the landing, now planned for 11:27 a.m. PST Monday, is for scattered clouds at 12,000 and 25,000 feet, with seven miles-plus visibility, Draughon said. Space agency officials expect cross winds of between 10 and 15 knots, allowing Astronauts Jack R. Lousma and C. Gordon Fullerton to demonstrate the spaceplane's ability to take such gusts in stride.

Bouts of Motion Sickness As the 3-million-milc mission began winding down Saturday, it appeared that Lousma, a 46-year-old Marine Corps colonel, and Fuller-ton, a 45-year-old Air Force colonel, had managed to overcome a number of personal and mechanical problems to make a success of this third of four test flights. Both men had fought off bouts of motion sickness in the first several days of the mission, and they had to contend throughout with broken television cameras, inoperative radio transmitters, a balky toilet and foggy windows, among other things. The Columbia is a re-usable spaceplane, but there were times this past week when it seemed more like a very used car. The shuttle apparently will operate without part of its equipment for the rest of the 115-orbit mission. The astronauts can transmit on just one of four S-band radio channels.

But all the problems, which space agency officials dismissed as minor, were largely out of mind Saturday as the two astronauts spent a relatively easy day carrying out a handful of tests of some of the Columbia's systems and conducting additional science experiments. Please see LANDING, Page 21 INDEX The leaders of a federally funded community organization founded to fight poverty in East Los Angeles have crisscrossed the globe on business and tapped the agency for political contributions and money to finance private investments, The Times has found. The East Los Angeles Community Union (TELACU), established 14 years ago to revitalize an eight-square-mile area just east of downtown Los Angeles, has mushroomed with government grants into a $50-million corporate conglomerate. With about $10 million a year in government funds, TELACU has expanded far beyond the barrio. TELACU officials have jetted to Europe, South America and the Mideast in search of business deals, First in a Series and have hosted dignitaries at a fashionable townhouse TELACU owns in Washington, D.C.

Now one of the five largest anti-poverty agencies in the nation, TELACU received millions of federal dollars to set up and operate profit-making subsidiaries, including its own international film distribution company, travel agency, financial institution and leasing company that once owned a modified DC-8 jet. These ventures are part of TELACU Industries which until recently operated out of a lavish office suite decorated with a $10,000 table and a $400 wastebasket. The government has granted TELACU millions of dollars for business ventures and administrative expenses on the theory that TELA-CU's investments would create jobs for barrio residents. Profits would ultimately make the organization self-sufficient and provide capital Regional Turmoil Driving Honduras Closer to U.S. By STANLEY MEISLER, Times Staff Writer TEGUCIGALPA, Honduras-Mountainous little Honduras is growing more and more worried about the turmoil around it in Central America, and that worry is driving it deeper into its traditional dependence on the United States.

This was reflected last week in an editorial in the Tegucigalpa newspaper La Tribuna. Honduras, the newspaper said, is surrounded by "a circle of fire" and has to defend its democracy, sovereignty and territory "within this black panorama of violence and destruction." All three of Honduras' neighbors stir concern. To the southeast, the Sandinista government of Nicaragua is expanding its military forces and, according to the U.S. government, is secretly transporting large quantities of arms across Honduran territory to the leftist rebels in El Salvador. To the southwest, a civil war is enervating El Salvador, and the outcome is far from certain.

To the west, Guatemala is riven by a guerrilla insurrection, interminable killings of leftists and Indians, and, now, a military coup. Out of this concern, I londuras has turned to the United States for even more help than usual. In the most dramatic response, the U.S. military has increased its presence here to about 90 men, most of them members of the U.S. Special Forces training the Honduran armed forces.

These American soldiers the sensitive U.S. Embassy refuses to call them "Green Berets" outnumber the contingent of 55 Amcri-Please see HONDURAS, Page for community improvements and social programs in East Los Angeles. But TELACU has spent most of its venture capital on business deals outside East Los Angeles, in places as far away as the Midwest, the East Coast and Europe. Big profits have not materialized for TELACU, records show. The Times has obtained documents disclosing that: -TELACU officials and former employees have borrowed at least $370,000 from the agency and its subsidiaries, sometimes paying the money back with little or no inter-Please see POVERTY, Page 3 40,000 Viewers White Sands Puts Secrecy Aside for Day By PATT MORRISON, Times Staff Writer WHITE SANDS MISSILE RANGE, N.M.

This is a place where momentous events happen, and it is used to keeping its secrets about them. For almost 40 years, things have come out of the searing sky here, things with names like Stinger and Copperhead and Tomahawk, things that gouge great holes in the alkaline sand, things that test the technology of destruction. It has not been dificult to conceal these rocket tests in a top-secret desert the size of Connecticut and Rhode Island combined. But now, briefly, the secrecy will be put aside, because what will be coming out of the sky Monday is something different the space shuttle Columbia, a recyclable instrument of progress. After the public enthusiasm attending the Columbia's first two landings at California's Edwards Air Force Base, the prospect of an off-limits return to earth disappointed space fans.

So White Sands reluctantly reversed its pointed non-invitation to Monday's landing, and agreed to open a mile-square area cast of the Northrup Strip runway. But it has not been easy for White Please see SANDS, Page 25 THE WEATHER National Weather Service forecast: Mostly cloudy and cooler today with rain likely by this afternoon and showers and thunderstorms by tonight and Monday. Highs today and Monday in the low 60sj overnight lows in the mid-50s. High Saturday, 69; low, 57. High March 27 last year, 71; low, 50.

Record high March 27, 88 in 1969; record low 37 in 1884. Complete weather details and smog forecast In Part II, Page fl. West Bank Annexation by Israel Near, Jordan Fears By J. MICHAEL KENNEDY, Times Staff Writer Born-Again Genera Prophecy Comes True for New Leader in Guatemala By JUAN M. VASQUEZ, Times Stall Writer AMMAN, Jordan Officials here are convinced that Israel is trying to eliminate Jordanian influence in the occupied West Bank as a step toward annexation of the area.

They say that the current round of turmoil in the area, which was a part of Jordan until Israel occupied it in the Arab-Israeli war of 1967, is the "last link" in the chain leading to annexation. They cite as evidence Israel's steppcd-up campaign to force out the leaders of West Bank town councils who were elected in 1976 and are for the most part supporters of the Palestine Liberation Organization. Key to the Israeli campaign, as the Jordanians see it, are the so-called village leagues, set up by the Israelis as a political counterweight to the elected town governments. In a move to discourage membership in these leagues, Jordan an nounced recently that West Bank residents who continue to support the leagues will be charged with treason. In Israel, the leagues are described as conduits for Israeli support to Arab farmers, but in Jordan they are seen as funnels for aid to people handpicked by the Israelis to undercut support for the PLO cause.

Further, Jordanian officials fear that the leagues are intended ultimately to supplant the elected councils in any negotiations on Palestinian autonomy. Israeli Prime Minister Menachem Begin's government has made no secret of its ultimate objective of making the West Bank and the Gaza Strip permanent parts of Israel, preferably after establishing a form of autonomy that would avoid giving the West Bank Arabs a vote in Israeli elections. Please see ISRAEL, Page 28 Ahby Part II MPPRO Page 8 Art CAIMNDAR 90 Astrology VI VII 12 Aucllons II Ml: I RO 2-3. Books ll(X)K RIVIIW Bridge IIOMI: .12 Chess II MPPRO i Classified ci.assipipd Crossword ll(X)K RI VII II Drama CAIMNDAR 54 Editorials IV OPINION 4 111ms CAIMNDAR 29 Home Design IIOMP IwalNews II MPPRO 1-8 Markets IUISINPSS 7-18 Music CAIMNDAR 6.1,72 Radio CAIMNDAR 86 Real Kstate VII RIAL I SI All Restaurants CAIMNDAR 95 Sports III SPORfS Television I I IMPS Tours, Travel VIII I RAVI I. Weather, Deaths II Ml: PRO 6 GUATEMALA CITY The elders of the Christian Church of the Word say that six years ago they received a divine prophecy that one day "we would be sitting with rulers and kings and counseling heads of state." At the time, the church consisted of a handful of people working out of a revival tent along a Guatemalan highway, It didn't even have a name.

Now church ciders helicve that the prophecy has come true. One of the church's members, Gen. Efrain Rios Monti, was asked on Tuesday to come out of retirement and assume the leadership of Guatemala's new military government, a job he says he took in the belief that a prophecy was being fulfilled. Rios, apparently without having taken part in the coup plotting, was given power by the junior army officers who overthrew President Fernando Romeo Lucas Garcia. The answer to the question of how he will exercise his power may lie in his own enigmatic character and in his zealous belief in his new religious faith.

The deposed regime left a legacy of social disarray, political violence and near-disaster in the economy. Its citizens and U.S. policy -makers were worried about the prospect of another El Salvador in the making. Please see GUATEMALA, Pnge 8.