Monday, Dec. 19, 1994

The Week December 4-10

By Kathleen Adams, Lina Lofaro, Alice Park, Jeffery C. Rubin, Alain L. Sanders and Sidney Urquhart

NATION

Hubbell Pleads Guilty to Fraud

Former Associate Attorney General Webster Hubbell admitted that, before joining the Clinton Administration, he had overcharged the Federal Government and other legal clients at least $394,000, thanks to inflated fees and fraudulent expenses. Hubbell, one of President Clinton's closest friends and a former law partner of Hillary Rodham Clinton's at the Rose Law Firm in Arkansas, pleaded guilty to two felony counts of mail fraud and tax evasion. Prosecutors said that while Hubbell worked as a private attorney from 1989 to 1992, he submitted more than 400 fake bills to cover personal expenses, including clothing purchases at a Victoria's Secret lingerie shop.

Rubin to Run Treasury

President Clinton accepted the resignation of Treasury Secretary Lloyd Bentsen and nominated former Goldman Sachs investment banker Robert E. Rubin to succeed him. Rubin, who currently wields considerable influence as head of the White House National Economic Council, is expected to be confirmed by the Senate with little trouble.

Elders Sent Packing

Surgeon General Dr. Joycelyn Elders resigned last week at President Clinton's request, eight days after she remarked that schoolchildren should perhaps be taught about masturbation. The White House cited the growing list of areas in which the President and Elders disagree -- from possible legalization of drugs to distribution of condoms in schools -- as the reason for the President's action.

White House Travel Troubles

A federal grand jury indicted Billy R. Dale, former head of the White House travel office, on charges of stealing more than $68,000 in funds paid by news organizations to travel with the President. The grand jury said Dale deposited checks worth more than $54,000 for press corps expense payments into his personal checking account and skimmed $14,000 from the office's petty-cash fund. Dale's lawyer said his client, one of the officials fired 18 months ago + in the Clinton Administration's "Travelgate" flap, would plead not guilty.

Gingrich Elevated, Scolded

Chanting "Newt, Newt," Republicans, as expected, formally ratified Newt Gingrich as their choice for Speaker of the House of Representatives. The Administration's welcome, however, was less than warm, thanks to Gingrich's assertion that one-quarter of the White House staff had used illicit drugs in recent years. Chief of staff Leon Panetta denounced the accusation as "absolutely false" and chastised the accuser: "He's not just an out-of- control radio talk-show host. He's Speaker of the House of Representatives, and he's got to learn to behave as the Speaker of the House of Representatives."

G.O.P. to Cut Caucus Funds

House Republicans announced plans to eliminate funding for 28 "legislative service organizations," otherwise known as caucuses. The groups, which include the Congressional Black Caucus, the Congressional Hispanic Caucus and the House Republican Study Committee, receive taxpayer funding and occupy Capitol Hill offices. Black Caucus chairman Kweisi Mfume called the move "congressional ethnic and philosophical cleansing."

On Tap: Plutonium

The Department of Energy admitted that containers of plutonium stored at nuclear weapons plants around the country could leak their lethal contents. The department added that its inventory of radioactive material "presents significant hazards to workers, the public and environment." The A-bomb ingredients were stored in containers intended only for short-term use because administrators assumed that the weapons-building program, halted in the late 1980s, would quickly resume.

CIA Settles Sex Suit

A female senior spy at the CIA, who said her career was ruined after she reported a colleague for wife beating, settled a sexual discrimination suit against the agency; the government agreed to pay her $410,000.

WORLD

Bosnia: Plans for a Pullout

After a series of humiliating and dangerous confrontations with Serbian forces -- including the kidnapping of peacekeepers as hostages against future NATO air strikes -- United Nations officials began making plans for a partial withdrawal from the embattled Bihac area. However, French Foreign Minister Alain Juppe went considerably further, suggesting the entire U.N. effort in Bosnia was becoming "untenable" and might have to be abandoned. In a pointed reference to American criticism, Juppe cited "governments that want to give us lessons when they have not lifted a little finger to put even one man on the ground." In Washington, President Clinton offered as many as 25,000 ground troops to assist in a general U.N. withdrawal, which is not expected during the winter months.

Conference Not a Total Loss

There was much to disagree about at last week's Budapest meeting of the Conference on Security and Cooperation in Europe. Russian President Boris Yeltsin denounced American efforts to expand nato as a threat to his country. Efforts to produce a formal condemnation of Serbia were also rejected by Russia, with the result that despite urgent calls for an end to the conflict in Bosnia, the summit's final document did not even mention Europe's most burning issue. Indeed the Washington-Moscow dispute over the future of nato and the tensions over Bosnia virtually eclipsed two significant developments: the formal accession of Ukraine, Kazakhstan and Belarus to the Nuclear Nonproliferation Treaty, and a name change, at U.S. insistence, from Conference on Security and Cooperation in Europe to Organization on Security and Cooperation in Europe.

Cuban Refugees Riot

Interned since September and with little hope of repatriation any time soon, Cuban refugees held in four camps outside Panama City hurled bricks and bottles at the U.S. soldiers guarding them. More than 220 Americans were injured and 19 Cubans were hospitalized in the melee. Vice President Al Gore said that the rioting would not bring about any change in U.S. immigration policy but that living conditions in the camps would be re-examined.

Summit of the Americas

Meeting in Florida, the leaders of 34 countries from the Western Hemisphere pledged to create a vast free-trade zone ranging from Alaska to Argentina. "Let me emphasize, none of us underestimates the hard work ahead," President Clinton said. The hemispheric leaders promised to complete negotiations by the year 2005.

John Major's Crusher

British Prime Minister John Major's attempt to put down a rebellion within the ranks of his own Conservative Party backfired when a group of Tory legislators defected to vote against a Conservative proposal for a fuel-tax increase. The rebellion left many observers wondering whether the Major government could survive until the next general election.

Queen Elizabeth, Wildcatter

Oil has been discovered underneath the manicured lawns of Windsor Castle, the weekend retreat of the British royal family. Her Majesty gave permission to sink an exploratory well to test the reserves, which experts say could be worth more than $1 billion. Lest antimonarchists get outraged, any profits would be split by the state and the participating oil company.

Assurances from Arafat

Meeting in Gaza City with Secretary of State Warren Christopher, P.L.O. Chairman Yasser Arafat promised to act against Palestinian extremists bent on derailing the peace process. Arafat essentially acknowledged that security concerns would have to be addressed before Israel could begin withdrawing its troops from the occupied West Bank. Since the peace agreement was signed 14 months ago, 96 Israelis have died in terrorist attacks.

Achille Lauro Recriminations

Survivors of the cruise ship Achille Lauro, which sank off the coast of Somalia earlier , said the Italian liner was unsafe and accused crew members of looting cabins and ignoring the passengers' welfare as they rushed to save themselves. About 500 passengers, most of them elderly, were rescued with only the clothes they were wearing when the ship sank, while 150 crew members came ashore carrying suitcases and duffle bags.

BUSINESS

Orange County Goes Bust

Facing losses of at least $1.5 billion in its investment portfolio, Orange County, California, declared bankruptcy. The announcement followed the resignation of county treasurer Robert Citron, whose high-risk investment strategies triggered the crisis. The greatest municipal bankruptcy in U.S. history, the disaster sent stock and bond prices tumbling.