The Week February 6-12

By Christopher John Farley, Wendy King, Jeffery C. Rubin, Alain L. Sanders, Anastasia Toufexis, Sidney Urquhart

NATION

U.S.-Japan Trade Talks Fail

President Clinton and Japanese Prime Minister Morihiro Hosokawa, meeting in Washington, failed to reach an agreement on trade. The Administration had sought "objective standards" by which the opening of the Japanese market to U.S. companies could be measured. But Hosokawa said Clinton's request would lead to "managed trade." Clinton conceded, "I have no idea what will happen from here on in. This is a serious problem."

Clinton Releases Tight Budget

President Clinton sent a proposed $1.5 trillion budget to Congress that forecasts a deficit of $176 billion. Severely restricted by congressionally mandated limits, the budget increases just 2.3%, and only 36% of the total is discretionary spending. That brings government spending, as a percentage of the national economy, to its lowest level since 1979. Prominently absent: the cost of Clinton's health-care plan.

U.S. and Aristide Bicker

After four Haitian refugees were found drowned off the coast of Florida, ousted Haitian President Jean-Bertrand Aristide denounced the U.S. policy of forcing Haitian boat people to return to their country, calling the policy a "floating Berlin Wall."

Tailhook: It's Over

A Navy judge dismissed the final three cases arising out of the Tailhook scandal, claiming that they had been tainted by the actions of Admiral Frank B. Kelso II, Chief of Naval Operations; a fourth case was dismissed because of insufficient evidence. Kelso, the judge said, witnessed debauched behavior at the 1991 Tailhook convention and then tried to cover up his knowledge of the affair. Kelso denies being aware of any improprieties.

Hutchison Cleared

Texas Senator Kay Bailey Hutchison was cleared of ethics charges after the judge refused to rule before the trial on the admissibility of evidence seized in a raid of the state treasury offices. Faced with the judge's decision, the prosecutors declined to go ahead with their case.

Tonya Scores

The U.S. Olympic Committee struck a deal that allows Tonya Harding to compete in the Winter Games. In exchange, she will drop a $25 million lawsuit. However, Harding could still be disciplined after the Games in connection with the attack on Nancy Kerrigan.

Smoking Ban Wins Support

The Clinton Administration announced its support for legislation that would ban smoking in all buildings open to the public -- including bars, stores and offices. Residences are excluded.

Talbott Grilled by Senate

President Clinton's nominee for Deputy Secretary of State, Strobe Talbott, underwent semitough questioning by the Senate Foreign Relations Committee about several articles critical of Israel that he wrote during his 22-year career at Time magazine. Explaining that he had changed his views on "many" subjects, Talbott said, "I have always believed that a strong Israel is in America's interest."

The Plague Goes On

On top of the fires and earthquake, the beleaguered citizens of Malibu had to endure mudslides caused by two days of heavy rains in Southern California.

Winter Asserts Its Power

Snow and freezing rain disrupted lives in large areas of the eastern U.S. In Washington much of the Federal Government was closed on Friday, and in New York City, which got more than a foot of snow, the stock exchange closed early.

Term-Limit Law Struck Down

A federal judge in Seattle ruled unconstitutional a Washington state law limiting the number of times that congressional members can have their names on a ballot (a de facto term-limit law). The case will probably be appealed to the Supreme Court; 14 other states have term-limit laws.

Courtroom Roundup

In New York City the prosecution rested its case in the conspiracy trial of four defendants charged with bombing the World Trade Center; the defense team is expected to complete its presentation within days. Meanwhile, in Santa Barbara, California, the grand jury in the child-molestation investigation of Michael Jackson heard testimony from its first witnesses, including actor Marlon Brando's son Miko, who has worked as a Jackson bodyguard.

New Rules Proposed for Pilots

Prompted by a crash that killed 18 people in Minnesota last December, the Federal Aviation Administration proposed that pilots of commuter planes with 10 or more seats be required to undergo the same safety training as pilots for airliners. The rules would take effect in about 18 months.

WORLD

This Time, We Mean Business

Withdraw your guns or face our bombs. That was the essence of NATO's message to Bosnian Serbs, issued after a tense 14-hour meeting at NATO headquarters in Brussels. The ultimatum gave Serbian forces 10 days to pull back the mortars and heavy guns they have used to encircle Sarajevo for the past 22 months. The deadline: next Monday. By week's end a tentative cease-fire appeared to be holding.

Trouble in South Africa

During a week in which Nelson Mandela registered his African National Congress to participate in South Africa's first-ever all-race elections, several parties decided to boycott the vote. The Freedom Alliance, an umbrella group of black and conservative white organizations, all of whom are demanding autonomous regions of their own in the new South Africa, failed to register in time to participate in the April balloting. At least 14 parties will compete in the election.

Waiting Game

When Israel and the P.L.O. first signed their in-principle peace agreement in September, the details of its first stage, self-rule in the Gaza Strip and Jericho, were supposed to take just one month to negotiate. Last week Israeli Foreign Minister Shimon Peres and P.L.O. Chairman Yasser Arafat signed a partial deal in Cairo that resolved several disagreements but left unresolved such important issues as economic relations and the exact size of the Jericho enclave.

Agony in Sudan

After more than 10 years of civil war, hundreds of thousands of Sudanese are now facing severe drought and renewed fighting as mainly Christian rebels from the southern portion of the country battle offensives from the Islamic fundamentalist government in the North. Last week a report submitted to the U.N. cataloged cases in which both government and rebel forces have massacred civilians, tortured prisoners and kidnapped children for use as slaves or soldiers.

Anger in Warsaw

To express their fury at declining living standards, some 30,000 Polish workers from around the country converged on Warsaw and marched through sleet and snow in one of the largest demonstrations the country has seen since the fall of communism.

U.S. Recognizes Macedonia

Despite Greek objections, the U.S. recognized the former Yugoslav republic of Macedonia as an independent state. Greece fears that the new republic may lay claim to part of the contiguous Greek province of Macedonia.

Finnish Line

In Finland's first direct presidential elections since the country gained independence from Russia in 1917, a former U.N. mediator has won the presidency. Martti Ahtisaari, 56, owes his ballotbox victory primarily to promises to battle recession. Now in its third year, Finland's present economic slump is its worst in 60 years.

BUSINESS

Sculley Sues, and Gets Sued

John Sculley, former chairman of Apple Computer, abruptly left his new job as head of Spectrum Information Technologies, charging Spectrum's chairman Peter Caserta with fraud. Sculley's $10 million lawsuit claims Caserta failed to mention anything to him about an ongoing sec investigation. In turn, Spectra has brought a $300 million countersuit against Sculley for breach of contract.

Two Software Giants Merge

Electronic Arts, a leading producer of games for personal computers and video- game machines, announced it will acquire Broderbund Software in a $400 million stock swap. Broderbund, specializing in educational software, made its name with the phenomenally popular Where in the World Is Carmen Sandiego?

Airwave Auction

The Clinton Administration will permit commercial users to take over a large chunk of the radio band that is now controlled by the Pentagon and other federal agencies. The auctioning of 200 megahertz worth of airspace will take 10 years to complete and could raise as much as $7 billion in revenue for the government.

THE ARTS & MEDIA

The Boot

Kathleen Battle, the famously temperamental soprano, was summarily fired by New York's Metropolitan Opera. Reason: "unprofessional actions" during rehearsals for Donizetti's La Fille du Regiment. Battle said she was "saddened" by the decision.

Found and Lost

Undercover police posing as art buyers recovered the 16th century painting by the Italian Renaissance master Raphael known both as The Madonna with Child and Lamb and The Madonna of the Hay. The canvas, never publicly exhibited, disappeared in the early 1880s. After agreeing to pay $24 million for it, the police reportedly detained five businessmen and art dealers. But just as the art world got one masterpiece back, it lost another. Edvard Munch's painting The Scream was stolen from the National Art Museum in Oslo. It had been on display as part of a Munch exhibition in conjunction with the Lillehammer Olympics.

Oscars for Oskar (Schindler)?

Steven Spielberg, Hollywood's perennial also-ran on Academy Award night, may finally win the big prize: his movie, the acclaimed Schindler's List, got 12 nominations, including Best Picture and Best Director. Other contenders for Best Picture: The Fugitive, In the Name of the Father, The Piano and The Remains of the Day. Two actresses were double-listed: Emma Thompson (as Best Actress for Remains of the Day and Supporting Actress for In the Name of the Father) and Holly Hunter (Best Actress for The Piano, Supporting Actress for The Firm).