The Week January 2-8

By Christopher John Farley, Sophfronia Scott Gregory, Michael Quinn, Jeffrey Ressner, Jeffery C. Rubin, Alain L. Sanders, Sidney Urquhart

NATION

Whitewater Rapids

The White House revealed that the Justice Department had subpoenaed files belonging to the President and Hillary Clinton that pertain to their investment in the Whitewater Development Corp. in Arkansas. The Clintons had already agreed to hand over the papers; the effect of the subpoena -- which the Administration said it requested -- will be to make it a federal crime for anyone to divulge any information contained in the files. Five boxes of papers have been given to the Justice Department, with more to come in the next two or three weeks. The delay, said the White House, was because of the need to "catalogue" the papers. Attorney General Janet Reno said she might seek a court-appointed special prosecutor to pursue the case if a new special- prosecutor bill passes in Congress.

Presidential Trip

After attending his mother's funeral in Arkansas, President Clinton proceeded with his first major European tour since taking office. He will attend a NATO summit meeting in Brussels during which he is expected to defend his plan that permits only very limited association with NATO for former Soviet-bloc countries. Clinton will also visit Moscow, where he will encourage Russian President Boris Yeltsin to carry on with his economic reforms but be more mindful of those who are suffering under them.

Condoms on the Air

The Department of Health and Human Services unveiled a series of television and radio ads that are intended to encourage teenagers to use condoms or practice abstinence.

Disincentivizing Gun Dealing

Treasury Secretary Lloyd Bentsen presented a plan that would raise the fee for a gun dealer's license from $66 to $600 (just last year the fee was only $10). Bentsen says he hopes the increase would prevent 70% of license renewals. The proposal would also tighten regulations for gun dealers who fail to keep proper records of their sales.

Packwood Fights Back

Oregon Senator Bob Packwood claimed that one of the women accusing him of sexual misconduct had later kissed him on her own several times and had asked to borrow money. Gena Hutton, a former Packwood campaign coordinator, denied the Senator's account. Packwood made his first visit to Oregon in four months; at various appearances and speeches, he was taunted by demonstrators calling for his resignation.

Skater Attacked

An unidentified man attacked U.S. figure skater Nancy Kerrigan -- a contender for an Olympic gold medal -- as she practiced for the U.S. championships in Detroit. The assailant struck Kerrigan in the knee with a club and fled. The attack was reminiscent of the stabbing of tennis star Monica Seles in Germany last year. Kerrigan has withdrawn from the nationals but may yet compete in the Olympic Games next month, if the U.S. Figure Skating Association decides to offer her a place on the team.

WORLD

Mexico's New Year's Rebellion

Nearly 100 people were killed in fighting as peasant rebels seized four towns in the southern Mexican state of Chiapas on New Year's Day. Announcing that their struggle was "for work, land, housing, food, health care, education, independence, freedom, democracy, justice and peace," the Zapatista Army of National Liberation, composed largely of Indian descendants of the Maya, declared war on the government of President Carlos Salinas. Mexican armed forces used tanks, planes, rockets and helicopter gunships to drive the guerrillas -- estimated to number as many as 1,500 -- into heavily forested mountain areas near the Guatemalan border.

North Korea Nuke Deal

U.S. officials announced that they had reached "an agreement in principle" with North Korea to allow that country's seven declared nuclear facilities to be visited once by international inspectors. Two possible nuclear sites that the North Koreans have not acknowledged are not included in the agreement.

Bosnia's Deadly "Truce"

During the 12-day holiday "truce" across Bosnia, 106 people were killed and 407 wounded, according to Bosnian radio reports. Since peace talks were broken off in Brussels on Dec. 23, the Serbs have intensified their artillery attacks on Sarajevo; in a single day last week, they fired 1,353 shells on the besieged capital, the heaviest bombardment in months. Peace talks are scheduled to resume next week in Geneva.

Two Fed Up over Bosnia

Citing frustration with the United Nations' continued inability to halt the massacre in Bosnia, the head of the 10,000-troop U.N. peacekeeping force there resigned his commission. Lieut. General Francis Briquemont of Belgium said, "There is a fantastic gap between all these Security Council resolutions, the will to execute those resolutions and the means available to commanders in the field." Meanwhile, Warren Zimmerman, the last U.S. ambassador to Yugoslavia before it disintegrated, resigned from the State Department in disagreement with U.S. policy toward Bosnia.

Middle East Talks Back On

Israel and the P.L.O. agreed to resume negotiations that had been halted for a week after a dispute over the outcome of their previous talks. The two sides will meet again in Egypt this week to try to resolve key issues that have long frustrated them: control of border passages to the Gaza Strip and the West Bank near the town of Jericho and the size of the Palestinian enclave in Jericho.

Australian Bush Fires

The worst wildfires in a half-century raged across southeastern Australia, killing three people and burning 740,000 acres of brush and forest. Police suspect that many of the more than 100 fires were deliberately set.

BUSINESS

The Paramount Saga

Hours before a deadline to make another bid for Paramount Communications, Viacom, Paramount's preferred suitor, announced an agreement to merge with video-rental giant Blockbuster Entertainment. This combination will provide Viacom with the financing needed to counter QVC Network's hostile bid for Paramount.Viacom's new nearly $10 billion offer, though valued at slightly less than QVC's, raises the cash portion of the Viacom bid to $6.4 billion, about $700 million more than the cash in QVC's offer -- which QVC is free to increase.

Federated Seeks Macy

Federated Department Stores (which owns Bloomingdale's, Abraham & Straus and , Burdines) bought a major interest in R.H. Macy & Co. (which owns Macy's, Bullock's and I. Magnin) in an attempt to create a department-store chain that would be the nation's largest. For $450 million, Federated purchased half of the Macy secured loans owned by the Prudential Insurance Co. with an option to buy the remaining half. Macy is in bankruptcy, and Federated hopes to convert the debt holdings into control of Macy by crafting a yet undisclosed reorganization plan. Macy is cool to the idea, and other retailers may be ready to offer competing bids.

MCI Bypasses Local Bells

MCI Communications announced a $2 billion plan to connect corporate customers in 20 of the nation's biggest cities to its long-distance network directly -- bypassing the local Bell telephone companies and avoiding the access charges, now totaling $5 billion a year, that MCI pays them for their linkup. The move intensified calls in Washington for reduced regulation of the telecommunications industry.

SCIENCE

Harvesting Fetal Ovaries

An Edinburgh researcher sparked an international ethical debate with his suggestion that women who cannot provide viable eggs of their own might be able to become pregnant with ovaries transplanted from aborted female fetuses. At 10 weeks, a female fetus has made all the eggs she will carry as a woman. Dr. Roger Gosden reported that he has used the technique successfully in mice and that the possibility of an experiment in humans is just a few years away.

What Killed Mars Observer?

No one will ever know for sure why the billion-dollar Mars Observer spacecraft permanently lost contact with NASA last August, just before it was to begin its surface-mapping mission. But an investigative panel has concluded that the problem was most likely a fuel leak and not, as first suspected, a faulty transistor. According to the theory, as the probe's fuel tanks were being pressurized for a final maneuver, the fuel ignited prematurely, blowing a hole in Observer and throwing it into an uncontrollable spin.