THE WEEK
By KATHLEEN ADAMS, NICK CATOGGIO, MICHAEL D. LEMONICK, MICHAEL QUINN, JEFFERY C. RUBIN, ALAIN L. SANDERS AND DOUGLAS WALLER
NATION
EMERGING FROM WAR'S SHADOW
Saying the time had come to "bind up our own wounds," President Clinton extended full diplomatic relations to Vietnam on the unanimous recommendation of his top advisers and with the backing of key legislators, including Republican Senator John McCain, a Vietnam War veteran and former POW. Normalization, said Clinton, would further U.S. diplomatic and economic interests and facilitate an accounting of Americans still missing in action. The American Legion, mia groups and many Republicans, among them Senate majority leader Bob Dole, protested.
AT THE END, BASELESS
President Clinton approved the latest round of 105 military-base closures and consolidations recommended by a special independent commission. Included were the controversial shutdowns of McClellan Air Force Base in California and Kelly Air Force Base in Texas. Clinton angrily blasted the commission but didn't send the package of cuts back with suggested changes, as the law allows him to do. Aides said a deal to privatize jobs at McClellan and Kelly had been struck to minimize the economic impact in those areas.
THE FBI TAKES A HIT
Director Louis Freeh removed his close friend and aide, Larry Potts, from the FBI's No. 2 post after concluding that Potts' effectiveness was undermined by the continuing controversy over his role in a bloody 1992 standoff with white separatist Randy Weaver in Idaho. At issue is whether Potts approved a much criticized shoot-on-sight order. The removal came just as the House is to start hearings on another operation Potts helped manage: the assault on the Branch Davidians in Waco, Texas.
SIMPSON'S DEFENSE BEGINS
Attorneys for O.J. Simpson began an aggressive defense with a string of family witnesses who recounted how upset and shocked the football hero was when he learned his ex-wife had been murdered. But a neighborhood witness testified that he saw a white sport vehicle -- possibly Simpson's Bronco-speed away from the crime scene (though somewhat later than fits the prosecution's time scenario). In another defense setback, the judge refused to allow testimony suggesting that drug hit men were the killers, ruling that the theory was "highly speculative."
COMPETENT BUT SUICIDAL
A jury was chosen for the trial of Susan Smith, the South Carolina mother accused of drowning her two sons in a car last year. The judge in the case found her competent to stand trial, following the recommendation of a state psychiatrist, despite the expert's opinion that Smith is suicidal and could try to sabotage her defense if she takes the stand. The prosecution seeks the death penalty and has reportedly denied a defense offer of 30 years in prison.
THE ROSENBERGS RESURFACE
The National Security Agency unwrapped one of its oldest secrets -- Project Venona, a World War II code-breaking effort that cracked Soviet cables and revealed the existence of an extensive spy network in the U.S. to steal classified nuclear information. Among the members of the Soviet ring apparently identified in the cables: Julius and Ethel Rosenberg, whose execution for espionage in 1953 has been the subject of endless investigation and debate.
WORLD
NOWHERE SAFE
Bosnian Serbs overwhelmed U.N. peacekeepers protecting the Bosnian "safe area" of Srebrenica, seizing the territory, taking military-age men prisoner and turning thousands of women, children and elderly into refugees. As Bosnian Serb radio exulted, displaced Muslims told of hangings, shootings and rapes. At week's end Serb forces began attacking another U.N. safe area, Zepa, vowing that it too would quickly be cleared of Muslims.
DEATH IN THE MORNING
An American on his first trip abroad was gored to death during the running of the bulls in Pamplona, Spain, made famous by Ernest Hemingway's The Sun Also Rises. Matthew Tassio, 22, of Glen Ellyn, Illinois, was knocked to the ground by one of the galloping bulls during the frenzied 825-yd. dash from corral to bullring. He was the 13th person fatally gored since 1924.
TAKE THE BOMBS AWAY!
Thousands of protesters in Australia, Britain, Fiji, Germany, Hong Kong and New Zealand demonstrated against France's decision last September to resume testing of nuclear weapons in Polynesia. The protests followed the storming of the Greenpeace ship Rainbow Warrior II by French commandos near the island of Mururoa.
LIFE OUT OF THE RUBBLE
Rescuers pulled three more survivors from the ruins of a South Korean department store that collapsed June 29 even as Seoul officials announced as many as 650 may have perished in the disaster.
BUSINESS
WINDOWS OF OPPORTUNITY
The furor over Microsoft Corp.'s upcoming Windows 95 software hit critical mass Friday, when the software giant reached the program's final "golden master" stage and sent the finished copy out for production. The news came days after the Justice Department detailed potential antitrust arguments against Microsoft for packaging its new online software with the release. No decision has been made to take action against Windows 95, which goes on sale Aug. 24.
HITTING WHERE IT HURTS
Amid deteriorating U.S.-China relations, Chrysler and Ford were passed over for a $1 billion joint-venture contract with Chinese manufacturers to produce minivans (Germany's Mercedes-Benz won the bid). The Los Angeles Times later reported that a Boeing Co. executive was warned by Chinese officials that relations between the U.S. and Taiwan threaten American interests in China.
BREAKING THE (SMALL) BANK
Merger mania continued to sweep the nation's banks as First Chicago Corp. struck a $5.3 billion pact with NBD Bancorp to create a Midwestern behemoth owning $120 billion in assets and the nation's fourth largest credit-card business. Days earlier, PNC Bank Corp. shored up its power in New Jersey by acquiring Midlantic Corp. in a $2.84 billion stock swap; the new company will boast assets of $79 billion. First Union Corp. merged with First Fidelity Bancorp for $5.4 billion three weeks ago in the biggest bank deal ever.
MCA'S NEW TALENT
Seagram CEO Edgar Bronfman Jr. didn't have to look far after Creative Artists Agency chairman Michael Ovitz turned down offers to head MCA. Bronfman announced last week that CAA president and co-founder Ron Meyer will replace Sidney Sheinberg as president of the Seagram-owned entertainment giant on Aug. 1. MCA chairman Lew Wasserman will graduate to chairman emeritus as Bronfman recruits his successor.
MORNING NAFTA
The North American Free Trade Agreement faltered for the first time last week when United Parcel Service canceled all ground service in Mexico as of July 31. The delivery giant cited "burdensome" Mexican customs inspections of all UPS packages and an inability to obtain permits for 18-wheel rigs.
FREEDOM '95
George Michael's long legal battle with Sony wound up when Sony Music agreed to end the pop singer's self-declared "professional slavery" by releasing him from his contract. He celebrated by immediately signing recording deals with DreamWorks SKG and Virgin Records.
SPORTS
GRAF AND CORRUPTION?
German tax authorities are investigating Wimbledon champion Steffi Graf after seizing documents at her family home in Bruhl on May 23. Graf's lawyers issued a statement claiming that investigators are ignorant of "important circumstances" regarding her tax situation, and said "all the assessed taxes ... have been paid.'' Graf is worth an estimated $70 million. Meanwhile, Graf faces an athletic challenge from Monica Seles, who announced she is returning to tennis and will compete in the U.S. Open next month.
SCIENCE
NEXT STOP, JUPITER
After six years in transit, the Galileo space probe has entered the 50 million-mile last leg of its journey to Jupiter. The spacecraft split in two last week; in early December, one piece will plunge into the planet's colorful clouds to analyze the dense, noxious atmosphere. The other part will make a photographic tour of Jupiter's moons and serve
--By Kathleen Adams, Nick Catoggio, Michael D. Lemonick, Michael Quinn, Jeffery C. Rubin, Alain L. Sanders and Douglas Waller