American Notes

ADMINISTRATION Doc Bowen's New Patient

This week's trick question: Name an affable, conservative former Governor with a reputation for cutting taxes. No, not Ronald Reagan, but Reagan's choice for Secretary of Health and Human Services, Otis ("Doc") Bowen. As two-term Governor of Indiana from 1973 to 1981, the diminutive (5 ft. 5 in.) Bowen, 67, maintained the gentle demeanor of a country doctor while running the state in the "less government is more" tradition, cutting taxes and leaving Indiana with some of the paltriest welfare benefits in the U.S. Reagan appointed him to replace HHS Secretary Margaret Heckler, who was pushed out to become Ambassador to Ireland.

The easygoing former family practitioner is expected to be more of a team player than Heckler, whose clashes with White House insiders, mainly Chief of Staff Donald Regan, led to her downfall. Bowen served as chairman of the Advisory Council on Social Security, which helped rescue the foundering system in 1984. He promised last week to perform his new job "with as much efficiency and compassion as I can." Expect him also to attempt to hold the line on the gargantuan ($327.8 billion) HHS budget. ARMED FORCES Dollar Wars Over Star Wars

Even a Prime Minister can become a Washington lobbyist when a big military contract is at stake. But despite a personal appeal from Prime Minister Margaret Thatcher to President Reagan, the U.S. Army last week chose a U.S.-French consortium to supply it with a sophisticated, $4.3 billion field-radio system. In one of the largest U.S. military contracts ever awarded for a foreign-designed system, the Army picked RITA, a joint venture by France's Thomson-CSF and GTE of Stamford, Conn., and turned down a competitive system offered by the British-American combine of Plessey Co. and Rockwell International.

Thatcher had sent a private telex to the White House last August invoking Britain's "special relationship" with the U.S. and reminding the President that Britain supported the American defense buildup "in every way." Some observers took this to refer to Britain's endorsement of the Strategic Defense Initiative, which France has refused to back. But the French obviously believe in dollar wars: the Thomson and GTE bid was a whopping $3.1 billion less than Plessey-Rockwell's. SPYING Painful Stalemate

The announcement was agonizing to the prosecution and defense alike. After a three-month trial, 14 days in seclusion and 71 hours of deliberation, a federal court jury in Los Angeles reported last week that it was "hopelessly deadlocked" in the case of Richard Miller, the first FBI agent ever to be charged with espionage. Judge David Kenyon was forced to declare a mistrial. "We have done our best," wrote the jury. "Our decisions are based on strong convictions that cannot be resolved."

Although he had admitted passing a classified FBI manual to his blond KGB lover Svetlana Ogorodnikova in exchange for promises of $65,000 and a $675 trench coat, the defense insisted that Miller was trying to infiltrate a Soviet spy ring. One of the two jurors who voted against the conviction on three major counts of espionage later told the Los Angeles Herald Examiner that he felt the confession had been coerced. "He was browbeaten and swayed by the [FBI] interrogation," said the dissenting juror. "He would have signed anything put in front of him." Undeterred, prosecuting U.S. Attorney Robert Bonner said he would request a date for a retrial. DISASTERS Swamping the Capital

The rising water forced the National Park Service to close the Washington, Jefferson and Lincoln monuments, and K Street in historic Georgetown was awash, as a giant low-pressure system moved up the Atlantic Seaboard last week, unloading ten to twelve inches of rain into the James, Potomac and Roanoke river basins. But while Washington was getting its feet wet, parts of Virginia, West Virginia and Maryland were devastated.

At least 44 people died in the flooded tri-state area (22 in West Virginia, 21 in Virginia and one in Maryland), and scores were reported missing. Thousands of homes were destroyed, drinking water systems became fouled, and interstate highway bridges were closed. Property damage in the Virginias alone is expected to exceed half a billion dollars. "You could see the loss in people's eyes and hear it in people's voices," said a West Virginia ambulance worker. Governors Charles S. Robb of Virginia and Arch Moore of West Virginia called out their National Guards to discourage looting and to aid in rescue and cleanup efforts. President Reagan later declared that large portions of two states, West Virginia and Virginia, were disaster areas. CALIFORNIA The Illegal Millionaire

When Jose Caballero's number came up a winner in California's $2 million Big Spin wheel-of-fortune lottery in Hollywood last week, the East San Jose furniture-store worker provided state officials with two pieces of identification: a driver's license and a relative's immigration card. Caballero, 24, a native of Apatzingan in Mexico's Michoacan state, it turned out, is an illegal immigrant--a fact quickly picked up by local papers and federal officials. "He embarrassed the immigration service," said Arthur Shanks, the agency's deputy district director.

Two days later, the winner received his first $70,000 check and a visit from two Immigration and Naturalization Service agents. He was arrested and later freed on $5,000 bond after the INS informed him that it would shortly begin deportation proceedings. If deported, Caballero is still entitled to his winnings. Nevertheless, he wants to stay in San Jose and keep working. "All the time I came here with the illusion of making a lot of money," he said. "I want to make more." Another consideration: since he is not a permanent U.S. resident, Uncle Sam will keep 30% rather than the usual 20% of the loot.