French, Dutch Reject

European Constitution

French voters last Sunday derailed plans to further erase Europe's political and economic barriers, decisively rejecting a proposed European Constitution.

Three days later, voters in the Netherlands voted no by an even wider margin.

The defeats left European leaders scrambling for ways to salvage the document, written in hopes of streamlining decision making and giving the Brussels-based European Union a new say on a wide variety of issues.

In France, about 56 percent voted against the constitution, and voter turnout was high. Opposition leaders harnessed widespread disenchantment over issues including the unpopularity of President Jacques Chirac, the weakness of the French economy and fears that the country would lose its clout to a strengthened European central government.

In the Netherlands, about 62 percent voted no. Like the French, many Dutch voters said in interviews that they were concerned that the E.U. had grown too fast in recent years.

-- Craig Whitlock

Andersen's Conviction

In Enron Case Reversed

The Supreme Court overturned the 2002 criminal conviction of Enron Corp.'s accounting firm, nullifying one of the government's biggest victories in the corporate scandals that climaxed the bull market of the 1990s.

The court ruled unanimously that the Houston jury that found Arthur Andersen LLP guilty of obstruction of justice was given overly broad instructions by the federal judge who presided at the trial.

As a result of the faulty instructions, the justices ruled, the firm was convicted without proof that its shredding of documents was deliberately intended to undermine a looming Securities and Exchange Commission inquiry in fall 2001. U.S. District Judge Melinda Harmon should have instructed the jury that the law required the government to prove that Andersen knew it was breaking the law, the court ruled.

Legal analysts said the decision was a major setback to the Justice Department's corporate crime prosecutions.

-- Charles Lane

SEC Chief to Leave;

Successor Is Named

Securities and Exchange Commission Chairman William H. Donaldson said he will resign at the end of the month, and President Bush nominated Rep. Christopher Cox (R-Calif.) to replace him.

Donaldson's 21/2-year tenure was the SEC's most active period since its founding at the end of the Great Depression. The Bush administration tapped Donaldson, 74, to help clean up the securities industry after Wall Street trading abuses and scandals at Enron Corp. and WorldCom Inc. shook the stock market and the confidence of investors.

President Bush said he gave Cox "a clear mission" -- "to continue to strengthen the public trust in our markets so the American economy can continue to grow and create jobs." Cox, who has been in Congress for 16 years, formerly worked as a corporate finance lawyer.

-- Carrie Johnson

and Albert B. Crenshaw

Russian Oil Tycoon

Gets 9 Years for Fraud

Russian oil tycoon Mikhail Khodorkovsky was sentenced to nine years in prison on fraud, embezzlement and tax-evasion charges after a 10-month trial shadowed by claims that the Kremlin orchestrated the case to crush a potentially dangerous political opponent.

The guilty verdict against the man who was once Russia's richest citizen drew new criticism here and abroad as evidence that the rule of law has yet to take root in the post-communist state.

"Here, you're innocent until proven guilty," President Bush said, "and it appeared to us, at least people in my administration, that it looked like he had been judged guilty prior to having a fair trial." Bush said he had expressed his concern to President Vladimir Putin.

The prosecution has been popular with the Russian public: Many people believe that the wealth of Khodorkovsky and other business magnates was stolen in shady deals involving the sell-off of state industries in the 1990s after the collapse of the Soviet Union. Human rights groups and many business leaders say the case highlights the arbitrary exercise of power in Putin's Russia, pointing out that many of the transactions at the heart of the case had been organized and approved at the time by the Russian government.

-- Peter Finn

Anti-Syrian Journalist

Killed in Lebanon

A Lebanese journalist who championed a years-long crusade against Syrian influence in Lebanon through his writing and activism was assassinated Thursday by a bomb placed in his car near his home in Beirut. The attack, which his supporters and some Lebanese politicians blamed on Syria and its lingering presence here, elicited cries of outrage throughout the country.

Samir Kassir, 45, was the most prominent Lebanese figure killed since Rafiq Hariri, a former prime minister, died in a bombing on Feb. 14. Hariri's slaying unleashed protests in downtown Beirut that ultimately led to the end of the 29-year Syrian military presence in the country.

Kassir, a columnist for Lebanon's leading daily newspaper, an-Nahar, helped shape the message of the spring protests, dubbed the Cedar Revolution.

Bowing to international pressure, Syria withdrew its troops in April, but it maintains influence in the small Mediterranean country, particularly with the intelligence services and political allies, including President Emile Lahoud.

-- Anthony Shadid and Nora Boustany

Trade Battles Flare

With China and Europe

Two major U.S. trade disputes erupted -- one involving Chinese textiles and the other concerning subsidies to Boeing Co. and the European consortium Airbus.

China threatened to take the United States to a dispute proceeding at the World Trade Organization if the Bush administration persists in restricting the import of Chinese-made textiles.

China also rescinded tariffs on its own textile exports, saying it will do nothing to limit its shipments as it offered to do last month as long as the United States and Europe impose restrictions.

But in a visit to Beijing on Thursday, Commerce Secretary Carlos Gutierrez signaled the possibility of a compromise on the restrictions the Bush administration imposed on Chinese textiles.

The United States and the European Union are headed back to high-stakes international litigation over subsidies to Boeing and Airbus, after talks aimed at settling the dispute broke down.

U.S. Trade Representative Rob Portman issued a statement Monday announcing Washington's intention to press ahead with a case against the E.U. at the World Trade Organization. The U.S. case alleges that European governments illegally subsidize Airbus.

The E.U. indicated that it is prepared to restart its own WTO case against Boeing, which alleges that the Chicago-based aircraft maker also benefits from illegal subsidies, including some provided indirectly through military contracts.

-- Peter S. Goodman

and Paul Blustein