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By CompiledRobert Kilborn and Lance Carden / May 18, 1998

The US

Antitrust action was expected today against Microsoft, after talks with government officials broke down over the weekend. Twenty states and the US Justice Department are accusing Microsoft of unfairly driving competitors from the software market. The company says it is giving consumers the best operating systems possible by integrating features like its Explorer Web browser into Windows 98 software.

In advance of debate today over historic tobacco legislation in the Senate, its Finance Committee voted to increase the bill's cigarette tax from $1.10 to $1.50 a pack. The tax increase was to be offered as an amendment to the massive bill drafted by Sen. John McCain (R) of Arizona.

The White House insisted US policy toward China was not influenced by political contributions. The Justice Department has reportedly opened a preliminary inquiry into whether political donations influenced a Clinton decision in 1996 to approve the export of satellite technology to China. Sources familiar with a recent FBI briefing say California businessman Johnny Chung claims he received $300,000 from Chinese aerospace official Liu Chao-ying, an Army lieutenant colonel. Chung pleaded guilty in March to charges he made illegal gifts to Clinton's reelection campaign.

A three-judge panel dismissed an appeal claiming Monica Lewinsky has an immunity deal with independent counsel Kenneth Starr. The ruling did not address the merits of her claim, but simply said appellate review could not take place until after conviction and sentencing. It noted Lewinsky, a target of Starr's probe of President Clinton, "has not been indicted, let alone tried and convicted."

In a book written before his death, convicted felon James McDougal claimed he gave Clinton $2,000-a-month payoffs in the 1980s when Clinton was governor of Arkansas. A Clinton lawyer branded as "scurrilous falsehoods" this and other accusations in the book, "Arkansas Mischief." McDougal, a former business partner of the Clintons, died in prison in March.

US officials were trying to pick up the pieces of stalemated Mideast peace talks. A summit Clinton had hoped to hold today for Israeli and Palestinian leaders was canceled after Israeli Prime Minister Netanyahu refused to accept US proposals for a 13.1 percent pullback from the West Bank as a basis for the talks.

Japan pledged to cut red tape for imports in key economic sectors. US Trade Representative Charlene Barshefsky said the move would open up billions of dollars worth of opportunities for American exporters, but more effort was needed to open up the Japanese economy. The new accord will affect the telecommunications, housing, medical, and financial-services markets.

Efforts to renew the US- Canadian Pacific Salmon Treaty fell short, as negotiators in Portland, Ore., failed to resolve longstanding differences. The treaty has not been renewed since 1992. Interim fishing rules are expected to be adopted before commercial fishing begins again in July.

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