THE WEEK

By MELISSA AUGUST, CHRISTINE GORMAN, BELINDA LUSCOMBE, JEFFERY C. RUBIN, ALAIN L. SANDERS AND SRIBALA SUBRAMANIAN

NATION

The Simpson Trial

The high drama that has overtaken the O.J. Simpson murder trial played itself out on two stages, both dangerous to the prosecution. Pugilistic defense attorney Barry Scheck forced Los Angeles criminalist Dennis Fung to admit to a series of apparent oversights, slips and errors made in gathering and preserving physical evidence. Meanwhile, Judge Lance Ito summoned ousted juror Jeanette Harris to a special hearing in order to quiz her about her allegations of racial tensions on the jury. Among her complaints: a system of segregated gyms and video-viewing rooms was set up because of disagreements between white and black jurors; she also alleged that whites were given preferential treatment on a shopping trip. All of which could lead to more juror dismissals and even the outside possibility of a mistrial.

Spying on the Spies

The latest fallout from the CIA's Aldrich Ames spy scandal could be a cutback in the privacy rights of national security employees. The Clinton Administration said it was drafting new rules that would let investigators peer more easily into the financial records of the 2 million or more civilian and military personnel with access to classified information, and also require those with top security clearances to file regular financial disclosure statements. This is in response to the CIA's failure to detect Ames' extravagant spending of his Soviet-supplied supplemental income.

Campaign '96

Senate majority leader Bob Dole, the current Republican front runner, made it official and formally declared he is a candidate for President. He was followed into the ring by one of the G.O.P.'s darker horses: California Congressman Bob Dornan, an ultra-conservative firebrand. Dornan becomes the seventh Republican to enter the race.

Lab in the Dock

Wisconsin authorities filed a rare criminal case against a medical laboratory. Prosecutors charged Chem-Bio Corp. with reckless homicide, accusing the firm of lapses that allegedly led it to misread the Pap smears of two women who subsequently died of cervical cancer. The lab, which faces a maximum $20,000 fine, said it would fight the charges.

The Citadel Rebuked Again

A federal appeals court handed Shannon Faulkner another victory in her fight to be admitted as a cadet at South Carolina's Citadel. Ruling that keeping Faulkner out violates equal-protection guarantees, the court ordered the school to let her in or come up with an alternative plan.

Steinmetz Scholars Scandal

It seemed too good to be true last month when students from Chicago's working-class Steinmetz High School won a prestigious state academic competition with unprecedentedly high scores. And it was too good to be true: the city's board of education announced last week that several students had admitted cheating with a stolen test copy-and that one had even impersonated and served as a judge.

A Less than Perfect Pilot

In an unsettling report, the National Transportation Safety Board said the pilot of an American Eagle plane who died along with 14 others in a North Carolina crash last December had received low training marks and was recommended for dismissal from another airline.

WORLD

Japan on Alert

A prophecy that disaster would strike Tokyo over the weekend, made about a month ago by Japanese cult leader Shoko Asahara, had police throughout the country on emergency alert. The cult's headquarters and various communes were raided, and security was tightened in the capital. Hospitals, fearing a repeat of last month's subway gas poisonings, which many suspect the cult is responsible for, stocked up on nerve-gas antidote.

Arafat Gets Tough

The shaky Middle East peace process was once again jolted by violence. One American student and seven Israeli soldiers were killed in two suicide car bombings in the Gaza Strip. Two Palestinian militant groups, Hamas and Islamic Jihad, claimed responsibility for the killings. Yasser Arafat's fledgling quasi government took its strongest action to date against the extremists, arresting some 300 supporters and handing down two sentences of 15 years and one of life imprisonment to three Islamic Jihad militants.

The Money or the F-16s

Responding to a fervent plea by Pakistani Prime Minister Benazir Bhutto, President Clinton promised to try to find a way to compensate her country for more than $1 billion in military equipment Pakistan has already paid for but the U.S. has not delivered. Aid to Pakistan was suspended by Congress in 1990, when the country was found to be stockpiling materials that could be used to make nuclear weapons.

Saddam Says No

Iraq's ruling Revolutionary Command Council vehemently rejected a United Nations offer that would have eased the sanctions against the country so that it could sell $2 billion of oil over six months to buy medicine, food and other essentials. The offer, approved unanimously by the Security Council, stipulated that Iraq hand over at least 43% of the proceeds from the sale of oil to victims of its invasion of Kuwait and to breakaway Kurdish regions.

Fujimori Wins

Alberto Fujimori won his second five-year term with a thumping 64% majority in Peru's presidential elections. Despite his ironhanded policies, Peruvians were won over by his success in curbing inflation and his virtual liquidation of the terrorist group Shining Path. His nearest rival, former U.N. Secretary-General Javier Parez de Cuallar, conceded defeat but called on Fujimori to shore up democracy by instituting "clear rules.''

Smoking Gun?

At a time when Western governments are promoting Serbian President Slobodan Milosevic as a peacemaker, a man claiming to be a former agent of the Serbian secret police has come forward with documents that could incriminate Milosevic as a war criminal. As reported in the New York Times, a letter sent to Bosnian Serbs by the Interior Ministry in Belgrade seems to contain instructions on how to run a concentration camp - contradicting Milosevic's claim that the Serb militias terrorizing Bosnian Muslims have acted independently. A senior Serb official questioned the authenticity of the documents and claimed the whistle-blower was never even a member of the intelligence services.

Unusual Punishment

While Milosevic remains outside the law's reach, last week another political leader was asked to pay for his misdeeds, literally. A federal judge in Boston fined former Guatemalan General and Defense Minister Hactor Gramajo $47.5 million and ordered him to pay the money to an American nun and eight Guatemalans who were terrorized by the Guatemalan army. Gramajo, a conservative candidate for President, responded, saying, "Forty-seven million dollars? I don't have 47 million centavos!"

Winnie Checkmated

Winnie Mandela appeared to win a fleeting victory in the latest skirmish with her husband when she was reinstated to her former post of Deputy Minister of Arts, Culture, Science and Technology. Her threat to sue the government for dismissing her without proper notice forced Nelson Mandela to rehire her temporarily. But two days later, Mandela fired her again, this time with proper notice.

BUSINESS

A New LBO King

Like a corporate raider from the '80s, investor Kirk Kerkorian swooped down on Chrysler and made an unsolicited offer of $23 billion for the automaker in what could become the second biggest leveraged buyout since the sale of RJR Nabisco. Joining him in the bid was former Chrysler chairman Lee Iacocca, who reluctantly retired two years ago. Kerkorian and Iacocca both claim their offer is nothing more than an attempt to restore value to the stock price of a company that has engineered one of the most remarkable comebacks in recent years.

Dollar Therapy

With the plunging U.S. dollar threatening to throw Japan's economy into another recession, the Japanese government introduced an emergency plan to halt the fall of the U.S. currency against the yen. Japan's central bank cut the official discount rate (the rate at which it lends money to other banks) by three-quarters of a percentage point to a record low of 1%. The measures are aimed at encouraging consumer spending and reducing Japan's huge trade surplus, which is believed to be the leading cause for the dollar's fall.