THE WEEK DECEMBER 19-25

By Melissa August, C.J. Farley, Christine Gorman, Sophfronia Scott Gregory, Michael Quinn, Jeffery Rubin, Alain Sanders and David Seideman

NATION

Clinton and the S&L Further questions surrounding the suicide last summer of deputy White House counsel Vincent Foster arose when it was disclosed that files containing information about the First Family's personal finances had been removed from his office before investigators had a chance to see them. The files contained documents related to the Clintons' investment in Whitewater Development Corp., a real estate company connected to a failed Arkansas savings and loan that is under investigation by the Justice Department. Senate Republican leader Bob Dole said the Senate Banking Committee should examine the S&L in question and its link to the Clintons. At week's end, the President instructed his personal attorney to hand the files over to the Justice Department.

Clinton and the Troopers Two Arkansas state troopers revived rumors about Clinton's pre-presidential private life by claiming they helped the then Governor carry on extramarital affairs when they served on his security detail in Little Rock. A third trooper swore in an affidavit that neither he nor his colleagues were offered federal jobs by Clinton in return for their silence, despite the claims of the two troopers. In an interview, the third trooper did say he and Clinton had discussed a job for one of the two troopers. White House aides, Hillary Rodham Clinton and the President all dismissed the allegations.

Inman's Zoe Baird Problem Still another problem for the Clinton Administration last week was the public admission that Defense Secretary-nominee Bobby Ray Inman failed to pay Social % Security taxes for his housekeeper. He made the $6,000 payment covering seven years of delinquency after being offered the Cabinet post.

And As for Rosty's Scandal House Ways and Means Committee Chairman Dan Rostenkowski was beset with new questions about alleged improper financial dealings. The Chicago Sun-Times reported that the Democrat's payroll included ghost employees who either did not work for him or had not done so in years. The wife of a Chicago alderman, for instance, reportedly received a salary for five years after quitting her job in 1987. Rostenkowski is already under investigation by a federal grand jury for allegedly trading free stamps for cash at the House Post Office and allegedly using campaign funds and his office account for cars and to rent space in a building owned by his family.

New Rules for Military Gays The guidelines that officially put into place the Pentagon's ''Don't ask, don't tell, don't pursue'' policy pertaining to gays in the military were announced. The rules will allow gay or lesbian soldiers to serve in the armed forces but only if they are not engaging in homosexual sex. Under the policy, a soldier seen at a gay bar, for example, would not be subject to investigation, but a soldier seen holding hands with a person of the same sex might be. Gay-rights activists argued that the regulations are so vague that officers will be able to enforce them in whatever way they see fit. The constitutionality of the policy is also in question, and outgoing Defense Secretary Les Aspin has said, ''We fully expect lawsuits on this.''

Pentagon Christmas Bonus Stepping in to defuse a high-level budget dispute, President Clinton decided to grant the Pentagon an extra $10 billion over the next five years. The funds will cover pay raises and quiet those in Congress who felt the President had cut the military budget too deeply.

Shali in Somalia Chairman of the Joint Chiefs of Staff General John Shalikashvili went to Somalia last week to firm up plans for the March 31 withdrawal of U.S. troops. Germany and Italy confirmed that they will also pull out their peacekeepers when the Americans do.

Ickes Joins White House Team Clinton named Harold Ickes, a New York labor lawyer and son of F.D.R.'s Secretary of the Interior, as his deputy chief of staff. Ickes will use his expertise as a tough political dealmaker to coordinate efforts to pass the President's health-care reform plan.

New Crime-Fighting Measures In two separate White House ceremonies President Clinton took steps to combat crime. First, the President awarded $50 million in grants to communities for the hiring of police officers. These were the first grants in a $150 million program and will help cities hire 100,000 new officers. Clinton also signed the National Child Protection Act, which creates a data base of all indictments and convictions for child abuse, sex offenses, violent crimes and felony drug charges. The information will be available for background checking to those hiring child-care workers.

Human Radiation Experiments The Department of Energy said last week that 750 poor women who went to Vanderbilt University for free prenatal care in the 1940s were fed radioactive pills as part of a government experiment to study the absorption of iron among pregnant women. The tests are blamed for the cancer deaths of at least three children born to these women. It is not yet known whether the subjects were told what was in the pills.

Archdiocese May Go Bankrupt Unless it is helped by faithful parishioners, the Catholic Archdiocese of Santa Fe, New Mexico, may have to file for bankruptcy. The archdiocese is burdened by heavy legal fees resulting from dozens of sexual-molestation accusations brought against its priests. Victims are demanding settlements that total nearly $50 million.

Jackson Speaks In a carefully staged four-minute live television address from his Neverland Valley Ranch in California, Michael Jackson came out of seclusion to declare that he is ''totally innocent'' of the ''disgusting'' child-molestation allegations that have been leveled against him and that he has been manipulated by the ''terrible mass media.'' Fighting back tears, he revealed that police, armed with a search warrant, last week photographed his genitals and buttocks in what he called ''the most humiliating ordeal of my life.''

WORLD

I.R.A. Negotiates Negotiations Gerry Adams, leader of the Irish Republican Army's political wing, called for ''direct and unconditional dialogue'' on Northern Ireland, but Prime Ministers John Major of Britain and Albert Reynolds of Ireland said their offer to include the I.R.A. in bargaining sessions only if it renounces violence is nonnegotiable. Adams also called for the release of ''political prisoners'' -- hundreds of captured I.R.A. gunmen and bombers held in British prisons -- but British officials have ruled out any amnesty for them. I.R.A. guerrillas, meanwhile, disrupted London's commuter railway system with bomb threats and set off explosives in London, Belfast and Londonderry, injuring six people.

Yeltsin Reforms Reformism Russian President Boris Yeltsin, responding to the unexpectedly strong showing by Vladimir Zhirinovsky's ultra-nationalists in parliamentary elections, acknowledged that two years of proto-capitalism had created hardships and said his government would do more to help the poor and unemployed. However, Yeltsin also announced that First Deputy Prime Minister Yegor Gaidar, chief architect of the free-market reforms, would remain in office and that ''the course he is following will continue.'' Yeltsin replaced the Security Ministry, successor to the KGB, by a streamlined counterintelligence agency, denouncing it as ''the last bulwark of Soviet totalitarianism.''

Ukraine Defuses a Few Nukes The world's third largest nuclear power, Ukraine, announced it had removed the warheads from 17 of its SS-24 ballistic missiles inherited from the Soviet Union and aimed at North America. Despite the goodwill gesture, Ukraine officials are still negotiating with Russia and the U.S. over the final disposition of the country's 1,600-warhead arsenal.

Milosevic Retains Power Serbian President Slobodan Milosevic, a chief architect of the Serbs' war of expansion in Bosnia, retained control of the government as his Socialist Party increased its representation from 101 to 123 seats in the 250-seat legislature. Whether the Socialists form a minority or a coalition government, President Milosevic will remain in control.

South Africa Onward, Upward In its last significant act as a white-dominated body, South Africa's Parliament approved a constitution granting equal rights -- including the right to vote -- to all citizens for the first time. The document will come into force as soon as it is signed by President F.W. de Klerk. A pair of last- minute efforts to include racialist provisions in the constitution -- one by right-wing white groups to create a separate ''white homeland'' and another by black parties to preserve the special powers of blacks in autonomous areas created by apartheid -- failed.

Castro Daughter Flees to U.S. Using a wig and a fake Spanish passport, Fidel Castro's illegitimate daughter slipped out of Cuba aboard a tourist flight to Spain. She then flew to Atlanta, where she was granted political asylum. Alina Fernandez Revuelta, 37, who has denounced her father as a ''tyrant,'' said she hopes her 16-year-old daughter will be allowed to join her in the U.S.

BUSINESS

Fickle Paramount In a dramatic turnaround, prompted by a stinging defeat in the Delaware courts two weeks before, Paramount's board recommended its shareholders accept the hostile buyout offer of Barry Diller's qvc Network. The board decision, which stockholders will now consider, is a hard blow for Paramount chairman Martin Davis, who had sought to negotiate a friendly but $500 million-less-generous takeover by Viacom. In its final bid, qvc added a mere $100 million in cash to the $10 billion-plus offer it had already made. Viacom may still increase its own offer.

Happy New Year The Paris-based Organization for Economic Cooperation and Development predicted a sluggish rate of growth in 1994 for the G-7 leading industrialized countries. The exception? North America, where the group foresees a 3.1% increase in gross domestic product for the U.S. and a 3.7% rise for Canada. Meanwhile, the U.S. Commerce Department said the U.S. economy grew at a 2.9% annual rate during the third quarter.

Colder Pizza Responding to a nearly $79 million jury award to a woman struck and injured by a Domino's Pizza driver, the company announced it would abandon its very successful marketing ploy and no longer promise to deliver its pizzas within 30 minutes.

No Handguns at Wal-Mart Starting in February, Wal-Mart will stop selling handguns at its stores, though will still offer them through catalogs and continue selling shotguns and rifles in stores. ''The mood of the country is changing,'' said a spokesman.

SCIENCE

Fossil Find Paleontologists have believed for a long time that the first amphibians to crawl on land became extinct 190 million years ago. But scientists in Australia announced that they have uncovered the jawbone of a labyrinthodont, forerunner of the land dinosaurs, that was alive and well as recently as 110 million years ago. Apparently the unique climate and relative isolation of the continent helped to protect the ancient order from its predators.

THE ARTS & MEDIA

CBS Shutout NBC snatched up the last available National Football League television package, retaining its rights to broadcast American Football Conference games for four more seasons and shutting out CBS from an N.F.L. deal for the first time since the mid-1950s. CBS, which had previously lost its National Football Conference contract to upstart Fox, will now field a severely shriveled sports lineup featuring NCAA basketball and the 1994 Winter Olympics.

Cultural Anti-Imperialism In the wake of the failure of GATT negotiations to resolve differences between the U.S. and Europe over entertainment exports, Spain imposed additional restrictions on American movies, and France approved a law requiring radio stations to play French music at least 40% of the time, starting in 1996.