DATE: Saturday, March 29, 1997              TAG: 9703290388

SECTION: LOCAL                   PAGE: B5   EDITION: FINAL 

TYPE: Briefs 

                                            LENGTH:   71 lines

VIRGINIA

CENTRAL

Trip to New York

won't help Gilmore's

campaign, Allen says

RICHMOND - Gov. George F. Allen says a fund-raising trip by Attorney General James S. Gilmore III to Philip Morris' corporate headquarters on a company plane won't help Gilmore's campaign for governor.

Allen called Gilmore's trip to New York last week ``a distraction'' and hinted that his fellow Republican might do well to step down as attorney general and concentrate on his campaign.

``That's the sort of thing that I strongly suspect Jim Gilmore will be looking at as he faces one of the decisions he'll be making in the future,'' Allen said during his monthly radio program Thursday.

But an Allen spokeswoman said Friday the governor was not trying to influence Gilmore to step down.

Gilmore, appearing in Norfolk on Friday, said he would ``take a look at all of the issues and what's in the best interests of the people of the commonwealth'' before deciding whether to continue as attorney general.

Gilmore raised $50,000 on the trip, including $20,000 from Philip Morris.

The governor also blasted Democrats for using Gilmore's trip to make ``a big to-do about nothing.''

Federal retirees will get

$62.6 million under deal

RICHMOND - Checks totaling $62.6 million will be mailed Monday to federal retirees participating in a settlement with the state, which illegally taxed their pensions.

The Virginia Department of Taxation said the 71,512 checks are the third of five annual payments to retirees.

Virginia was one of 23 states affected by a 1988 U.S. Supreme Court ruling in a Michigan case that states could not tax federal retirees while exempting state and local government pensions.

The General Assembly changed Virginia's policy immediately after the ruling, but federal retirees sued for refunds of taxes paid since 1985. About 154,000 retirees agreed to a settlement paying them $308 million, about 76 percent of what they were owed.

Since March 1995, 321,562 checks with a total value of about $188 million will have been mailed to the retirees. The final checks will be mailed March 31, 1999. SOUTHWEST

Two VA medical officials

reassigned during probe

SALEM - Two administrators at the Veterans Affairs Medical Center in Salem have been temporarily reassigned after both men filed complaints about administrative issues, officials said.

Dr. Leroy Gross, director of the regional Veterans Integrated Service Network Center that oversees the Salem hospital, ordered an investigation this month after hearing separately from director John Presley and associate director William Delamater.

Gross said the complaints don't involve patient care, but called them ``severe.''

Presley had placed Delamater on administrative leave in February for unspecified reasons. After conducting a preliminary survey of the hospital staff, Gross also placed Presley on forced leave. Presley was reassigned to regional service center in Atlanta and Delamater to Nashville during MEMO: from wire reports KEYWORDS: VIRGINIA FEDERAL RETIREES SETTLEMENT LAWSUIT

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