May 23, 1997

Steven Rattner is named deputy chief executive of Lazard Freres & Co, inheriting Felix G Rohatyn's job as firm's lead banker; Rattner is seen as executive most likely to succeed Michel A David-Weill, firm's chief executive and chairman; appointed vice chairmen are Kendrick R Wilson 3d, Damon Mezzacappa, Norman Eig and Herbert W Gullquist; Lazard also names Steven J Golub chief financial officer, and forms management committee of David-Weill, Rattner, four vice chairmen, Golub and Melvin L Heineman, firm's chief administrative officer; photo (L)

Federal officials announce arrest of 20 people, including 11 corrections officers, for allegedly allowing top mobsters to turn new Federal jail in Brooklyn into Mafia social club where they plotted with visiting associates and dined in high style; prosecutors say bribed guards also abetted more sinister behavior, giving inmates access to computers with names of possible informers; ten-month 'Operation Badfellas' began after inmate seeking leniency reported blatant departures from prison routine; Inspector General Michael R Bromwich comments; Federal agents tell of inmates cooking pasta and using microwave oven; scheme allegedly involved two high-ranking mobsters who are not charged: Nicholas Corozzo, reputed successor to John Gotti, and Victor J Orena, head of Colombo faction; guards, including union leader, were allegedly paid $500 a week to arrange 'special visits' to Metropolitan Detention Center in Sunset Park; photo; food smuggled in included chicken cutlets, pasta, olive oil, garlic, vodka and wine (M)

New York City school investigators charge Brooklyn music teacher Michael Williams with sexually abusing 13-year-old female student in his locked classroom last month, and they criticize school's principal, Claude L Winfield, for failing to reassign teacher after learning of allegations; it is second case in week in which officials say that administrators in New York City public school failed to respond promptly in case involving charges of sexual abuse of student; two case prompt Mayor Giuliani to renew his call for police takeover of security at city's schools, move that Chancellor Rudy Crew opposes (M)

Dr Eric Braverman, Somerset County (NJ) physician who promoted alternative medicine on radio until his license was suspended in New Jersey last July, reaches settlement with state to have his license reinstated (S) (New Jersey Daily Briefing)

Russian Pres Boris Yeltsin abruptly dismisses Defense Min Igor N Rodionov and Chief of General Staff Gen Viktor N Samsonov, lambasting them for resisting spending cuts and restructuring of armed forces; invites television cameras to meeting of defense advisers to capture his scathing criticism; Yeltsin also reaffirms his goal of cutting military spending to about 3 percent of GNP by year 2000, from about 5 percent now; move is part of broader shift on economic policy, as reformers push for budget cuts, lower tax burden on industry and tighter controls over energy and transportation monopolies; Boris Y Nemtsov and Anatoly B Chubais, leading reformers, are named to Security Council; hard-liners in Parliament denounce military dismissals; photos; Gen Igor D Sergeyev is named acting Defense Min (S)

US imposes sanctions against two Chinese companies and five Chinese executives, accusing them of knowingly helping Iran make chemical weapons; Sec Madeline Albright says US has no evidence that Chinese Government was involved, but senior Administration official reports that regime has known of activities and American concerns; Albright announces action before Senate subcommittee; Nanjing Chemical Industries Group and its export division, Jiangsu Yongli Chemical Engineering, are now banned from trading with US; Cheong Yee Ltd of Hong Kong, described as middle man company, is also sanctioned (S)

Mohammed Khatami, little-known cleric, has suddenly transformed Iranian presidential election into major test for ruling mullahs, emerging as candidate of millions of discontented Iranians; Khatami is barnstorming across country in campaign bus, attracting jubilant supporters who plaster walls with posters and hand out huge numbers of brochures; photo; mullahs, whose chose four of 238 applicants to run, had assumed that their favorite, Parliament Speaker Ali Akbar Nategh-Nouri, would easily defeat three bland rivals; Iranians instead will cast ballots in most competitive election since 1979 Islamic revolution; Khatami was forced to resign as Minister of Culture and Islamic Guidance in 1992 after conservatives charged he was too permissive and would open country to foreign influences; large numbers of young people, women, intellectuals and technocrats have flocked to his cause (M)

Teen-Agers Light Up Cigars Teen-agers are taking up cigar smoking, the Government said, and public health officials are calling for warning labels. Page A24. Indians Prevail in Tax Fight Facing a standoff with Indians, Governor Pataki says New York won't try to collect some taxes on Indian reservations. Page B1.

Leon Lowenstein Foundation will make $10 million gift to Princeton University, enabling Princeton to establish center specializing in finance and economic public policy; center will be named after Robert A Bendheim, foundation's president (S) (New Jersey Daily Briefing)

Mercenaries, scientists and genetically engineered dinosaurs. Messy but entertaining.

Use of hormone test of pregnant women to determine risk of Down's syndrome, chromosomal birth defect, is in question as result of royalty demands by Dr Mark Bogart, who patented his research in 1989; Bogart's company, Biomedical Patent Management Corp, is now threatening lawsuits unless laboratories pay as much as $9 per test; experts in pre-natal testing are angered, fearing that millions of women may go without screening; legal experts predict court will invalidate patent, but geneticists fear high costs of litigation; Bogart did not, in fact, 'invent' anything, but, rather, took out patent on his observation of relationship between hormone HCG and incidence of Down's syndrome; his photo; graphs explaining test and its costs; Bogart filed application after University of San Diego, where he and colleagues worked, declined to patent discovery; test only came into widespread use after subsequent research established its accuracy as predictor (M)

New Jersey Assembly approves plan to find homes for so-called boarder babies, who languish in hospitals when they no longer need medical care because their parents are unwilling or unable to take care of them; under bill, State Division of Youth and Family Services will try to find people who are interested in becoming foster parents, but also willing to adopt if baby cannot be reunited with its biological parents; NJ has been under Federal court order to cut down on length of time these babies, many of whom are born to drug-addicted or HIV-infected mothers, remain in hospital (S) (New Jersey Daily Briefing)