Reuters Hourly News Summary
     Members of Congress are set to launch a pre-emptive strike in
 a trans-Atlantic fight over the merger of Boeing and McDonnell
 Douglas. Rep. Jack Metcalf says more than 100 lawmakers have signed
 a letter to the head of the European Commission condemning any
 interference with the merger. The Washington state Republican plans
 to introduce a resolution today supporting the letter. The EU is
 expected to block the merger at a meeting tomorrow because of con-
 cerns over competition.
 05:44 07-22-97
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 Three arrested and charged with trying to sell helicopters to Iraq
     WEST PALM BEACH, Fla. (July 21, 1997 11:27 p.m. EDT) - A retired
 Army colonel and two other men were charged Monday with trying to
 sell military helicopters adapted for spraying chemicals to Iraq.
     Customs Service agents said they did not know if Iraq intended
 to use the Bell OH-58A helicopters for chemical warfare.
     "Military helicopters only have one use and that is a military
 use," said Ken Prager, head of the Customs Service in Miami. "You
 draw your own conclusions."
     Iraq has been under a U.N. trade embargo since the 1991 Persian
 Gulf War, and U.N. weapons monitors are responsible for dismantling
 Iraqi programs to build long-range missiles and chemical, biological
 and nuclear weapons.
     The 34 helicopters valued at about $12.5 million were at a ware-
 house in Canada. They were still fitted with gun mounts and missile
 firing mechanisms, Prager said. And they had recently been adapted
 for "spraying pesticides."
     "We were led to believe that the Iraqis had ordered 16 of these
 helicopters to be equipped with pesticide spraying capabilities,"
 he said.
     Retired Army Col. Robert Fairchild, 53, of Little Rock, Ark.,
 and Donald Proven, 56, a former Marine from Chicago, were arraigned
 Monday on Arms Export Control Act and conspiracy charges. After an
 innocent plea was entered, bond was set at $125,000 each.
     George Finlay, 47, who owned the helicopters, was arrested on
 similar charges Saturday by the Royal Canadian Mounted Police in
 Bloomfield, Canada. He was in custody in Canada and the helicopters
 were seized.
     The other men were arrested Friday in Jupiter, Fla., in a hotel
 where they met with Customs Service agents acting as buyers.  The
 agents believe they were bidding against another buyer who intended
 to ship the helicopters to Iraq.
     According to an affidavit, the trio had set up a front company
 in the Philippines to pose as the buyer and get permission to ship
 the helicopters out of Canada.
     The U.S.-made helicopters were originally sold to Canada and
 were properly sold to Finlay, the Customs Service said. Federal laws
 require State Department approval of any resale of military equip-
 ment sold to friendly countries.
     Fairchild claimed he had "well placed Army officials" in the
 Philippines who would help secure the State Department permission
 to ship the helicopters to the Philippines, the affidavit said.
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              Production rush cited in Boeing results
     SEATTLE -- Boeing Co.'s profits fell 15 percent in the second
 quarter, the company said, adding that its rush to increase jet
 production is causing parts shortages and higher overtime costs.
     The results for the quarter ended June 30, the last before Boe-
 ing's planned merger with McDonnell Douglas, showed profits of $399
 million or 55 cents a share, compared with $468 million or 68 cents
 a share in 1996. Last year's second quarter was inflated by a $116
 million gain for the settlement of some defense and space contracts.
     Boeing's results were short of analysts expectations by about a
 nickel per share.
     Boeing is increasing its commercial jet production to meet air-
 line demand. It produces 30 jets a month, up from 22 1/2 a month at
 the start of the year. A year from now, it plans to be producing a
 record 43 each month.
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     Blue Angels jets flew in formation over the USS Constitution as
 the 200-year-old Navy warship sails off the coast of Massachusetts.
 It was the ship's first voyage using its own sails in 116 years,
 following a 3 1/2 year reconstruction.
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 Knoxville News Sentinel 22 July 1997
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