By Michelle Roberts, Staff Reporter

Federal authorities are expected to open a criminal investigation into the alleged misuse of up to $1 million in state money
earmarked for low-income students at Clemente High School, sources have told the Chicago Sun-Times.

A special state legislative panel will continue public hearings today to determine whether the funds were diverted to the political
arm of a Puerto Rican terrorist group.

After the hearings conclude, the U.S. attorney's office will launch its own investigation, sources say.

The state began its investigation last year after articles in the Chicago Sun-Times told how Chapter 1 funds were used by
Clemente officials to underwrite fund-raisers and political events to free more than a dozen convicted Puerto Rican
independence movement terrorists.

U.S. attorney's spokesman Randall Samborn said he ``could not confirm nor deny the existence of an investigation.''

But federal sources have confirmed that the FBI has long tracked political activity and the alleged involvement of FALN
sympathizers at Clemente, 1147 N. Western, and that an investigation is continuing. FALN is a terrorist group devoted to
ending Puerto Rico's U.S. commonwealth status.

Cook County state's attorney spokesman Bob Benjamin would not comment on whether the office would begin its own
investigation.

Today's testimony will include several Illinois State Police investigators who spent the last year interviewing witnesses and
reviewing the school's financial records, sources said.

State Police also examined political literature produced by the Movimiento de Liberacion Nacional Puertorriqueño--or
MLN--that outlined the group's plans to control Clemente High School by selecting the principal and getting its own candidates

elected to the local school council, which controls Chapter 1 funds, sources said.

According to federal law enforcement officials, the MLN is the above-ground organization of the FALN, which is responsible
for five deaths and many injuries in dozens of bombings in Chicago and New York since the mid-1970s.

During two hearings last month, the panel heard witnesses testify that Jose E. Lopez, who heads the MLN, ran Clemente
behind the scenes. Lopez's brother, Oscar Lopez-Rivera, is a convicted FALN member serving 70 years in federal prison for
armed robbery and seditious conspiracy.

Jose E. Lopez has denied any wrongdoing, saying the proceedings are a throwback to the McCarthy era.

A hearing is also scheduled for May 4.