The Top Stories Of 2002

Elections. Bombs. Corporate corruption. Drought. And, perhaps most of all, Iraq. The last 12 months brought headlines ranging from the frightening to the fatuous. There were killings in tourist resorts in Bali and Kenya--and then there was the revelation that one overpaid CEO had spent $6,000 of his company's money on a gold-and-burgundy floral-patterned shower curtain for his New York apartment.

A SELECTION of some of the top stories of 2002:

INTERNATIONAL AFFAIRS

This time last year, it was Afghanistan all the way. The Taliban had fallen, the remote mountains of Tora Bora were a household name and the burning question was whether Osama bin Laden had survived the pounding assault of American bombs. Eleven months later, intelligence agencies answered that in the affirmative by identifying a voice on an audiotape as belonging to the Al Qaeda leader. But by then another story was dominating the news.

Iraq: Will Washington go to war against Saddam Hussein? The Bush team first seemed set to go it (almost) alone, then managed to convince the United Nations Security Council to agree to a tough resolution on weapons inspections. Conflict, however, came a step closer in December when the administration pronounced that Iraq's 12,000-page report on its weapons activity was less than truthful. If war happens, it's likely to be early in the new year--before the desert becomes too hot for protective gear.

Mideast: Violence ratcheted up to horrible heights as Palestinian suicide bombers claimed growing numbers of victims and Israelis confined Yasir Arafat and clamped down on West Bank cities. Both sides were scheduled to hold elections in January, but Palestinian officials have already warned that they will postpone their poll because of the Israeli occupation.

Civilians Under Fire: From the January abduction and murder of Wall Street Journal reporter Daniel Pearl to the October seizure of Moscow theatergoers, 2002 underscored the vulnerability of noncombatants. Especially alarming: Islamic fundamentalist attacks on the tourist resorts of Bali and Mombasa--and proof that terrorist groups have missiles they are willing to use against civilian airliners.

Afghanistan: Hamid Karzai's interim administration became more permanent and shifted its focus to nation-building. But a spate of assassinations, attempted assassinations and attacks on U.S. troops stationed in the country raised questions about whether the new government can hope to keep the peace between resurgent warlords while fending off Qaeda/Taliban holdouts.

'Axis of Evil': It wasn't just Iraq that was nasty, Bush told the nation in his January State of the Union address that added Iran and North Korea to his list of unsavory governments. Months later, both countries hit the headlines again: North Korea for admitting it was planning to make nukes, and Iran when students turned out to protest against their leaders. Regime change in those countries is hardly imminent, but Tehran may yet have to rescind its death sentence on a professor found guilty of blasphemy.

Latin America: Argentina's economy worsened, and confidence in its political system collapsed; Brazil elected a leftist president and lurched toward its own debt crunch. Venezuela's President Hugo Chavez survived a short coup in April, but by year's end his country was almost paralyzed by a national strike. A tough year for the continent, and its troubles aren't over yet.

U.S. POLITICS

Call it the Year of the President. From his tirades against Saddam Hussein to his aggressive, prestige-risking involvement in the midterm elections, George W. Bush set much of the nation's--and the world's--political agenda during a tumultuous year. And while he may not have won the hearts and minds of many in Europe and the Middle East, U.S. voters continued to give him high ratings at home.

Republicans Rule: In an election scarred by the plane crash death of Democratic Sen. Paul Wellstone, the GOP defied historical midterm trends by scoring significant gains on Nov. 5. Bush's party regained control of the Senate by a one-vote margin and increased its majority in the House. Now their challenge is to deliver.

Civil Liberties? They're Here Somewhere: Washington's fight against terror inevitably encroached into the nation's privacy and personal freedom. While public outrage forced Attorney General John Ashcroft to scale back on his controversial TIPS plan asking service providers to spy on those they served, new homeland-security legislation cleared the way for increased surveillance of online interactions and transactions. And there's still the military's planned Total Information Awareness (TIA) program that would monitor databases for suspicious activities by U.S. residents. Look for more acronyms in 2003.

Divided Democrats: Damaged in the midterms and criticized for lacking an alternative vision, Dems sought a more liberal House leader in the form of Nancy Pelosi. But they're going to have to expand their search in the year ahead. Former veep Al Gore's decision not to go for a rematch against Bush means the party must find a new candidate to run for the White House. Current front runner is Mass. Sen. John Kerry, but don't expect it to stay so clearcut in the year ahead.

A Lott on Race: Mississippi Sen. Trent Lott was forced to resign his Senate leadership over his comments that the nation would have been better off if it had elected segregationist presidential candidate Strom Thurmond in 1948. But while the ensuing storm focused on the Republicans' historical track record on the subject, its real relevance may have been propelling race-related issues--like affirmative action--higher up the GOP's domestic agenda.

U.S. BUSINESS

A bad year across the nation. Millions of American workers got pink slips instead of pay raises. Companies that overspent--then tried to cover up their losses with creative accounting--collapsed under the weight of mounting debts and shrinking profits, leaving investors with millions of dollars in losses and a growing distrust of Corporate America. Some of the country's largest corporations crumpled. And corporate scandals made CEOs about as popular with the public as the lawyers who represented them. Will the reforms that resulted make a difference in 2003? Time will tell. Some of the biggest stories:

It's (Still) the Economy, Stupid!: A sluggish economy prompted the dismissal of Treasury Secretary Paul O'Neill and top Bush economic advisor Larry Lindsey--and a sluggish response to corporate misdeeds prompted Securities and Exchange Commission head Harvey Pitt's resignation. Bush quickly brought in a new team: CSX chief John Snow as Treasury secretary; investment firm cofounder William Donaldson as head of the SEC, and former Goldman Sachs cochair Stephen Friedman to replace Lindsey. What to watch now: Bush's economic stimulus plan, expected to be revealed in January.

Bankruptcies Get Bigger: With $103.9 billion in assets, WorldCom laid claim to the dubious title of "biggest bankruptcy filing ever" in 2002. But there were others vying for the top 10. Seven of the 12 biggest bankruptcies ever were filed this year: WorldCom, Global Crossing, Kmart, Adelphia, UAL, Conseco and NTL, according to BankruptcyData.com. Will 2003 set any more records?

Corporate Crime and Culpability: Some CEOs were guilty of ethical errors, others were charged with illegal acts. Either way, culpable corporate executives earned the distrust and disdain of investors this year--not to mention envy at such outrageous perks like those in former GE head Jack Welch's retirement package. Revealed during his divorce proceedings, they included a penthouse, lifetime use of GE jets and on-call chefs. Investors' loss of faith is unlikely to be restored anytime soon.

Wall Street Pays. But Will It Change Its Ways?: New York Attorney General Eliot Spitzer, along with the SEC, led probes this year into allegations that Wall Street analysts published misleading research and awarded IPO shares to investment clients in order to generate more investment-banking business. By the end of the year, the top Wall Street firms had agreed to pay $1 billion in fines and to adopt major changes in the way research is done and shares of new stock offerings are distributed.

Market Madness: Lesson No. 1--Don't put all your eggs into one basket, as the unlucky investors who'd placed their faith and money into companies like WorldCom and Global Crossing discovered. When those businesses went belly-up this year, their stock was nearly worthless. And even the most cautious investors watched their retirement accounts shrink as stock prices slid for most of 2002. The Nasdaq lost nearly half its value before bouncing back to about 1,400 (still 30 percent lower than where it began the year). By year's end all the major indexes had begun to rebound, but jitters over the threat of war could send those arrows plunging downward yet again.

HEALTH

Between the threat of bioterrorism and deadly outbreaks of the West Nile virus, listeria and E. Coli, Americans were feeling pretty vulnerable in 2002. But the most deadly diseases struck those in the Third World: millions were diagnosed with AIDS in Africa and in Asia. And starvation threatened millions more.

Smallpox, Big Threat: The potential use of smallpox as a weapon prompted the government to boost the supply of vaccine for a disease the world declared eradicated some three decades ago. Amid fears that the virus could be used as a bioweapon, several governments debated whether the threat was real enough to warrant reintroducing a vaccine that could have serious--and sometimes deadly--side effects. Israel decided to start giving the inoculations, and at years' end President Bush also announced a plan to vaccinate U.S. soldiers and a core group of emergency health workers. He had the shot, too.

HRT So Bad: In July, the National Institutes of Health halted its trial of Prempro--the popular hormone-replacement therapy for millions of women going through menopause--citing long-term risk factors like increased risks of heart attack, stroke and breast cancer. But the study did not address HRT's short-term benefits, such as suppression of hot flashes and improved sleep. Nor did it provide any definitive answers on questions like osteoporosis benefits. Within five months, sales of Prempro, the leading combination of estrogen and progestin, plummeted 40 percent and millions of women remain uncertain about what to do next.

AIDS--From Africa to Asia: New reports from the United Nations predicted that AIDS could kill 68 million people worldwide during the next 20 years if prevention and treatment programs were not "drastically expanded." Many of the new cases are expected to appear in China, India and Russia. While AIDS accounts for one in every five deaths among sub-Saharan Africans, Asia faces serious risks in the years ahead.

Only Organic: The U.S. Department of Agriculture began labeling foods according to the National Organic Rule, which specifies to what extent a product is free of pesticides, antibiotics, altered genes, growth hormones or chemical fertilizers. The USDA projected $20 billion in organic food sales by 2005, up from a projected $9.5 billion in 2002, and about $1 billion in 1990. But will it encourage Americans to eat more healthily? Probably not.

Infectious Illnesses: More than 1,000 cruise-ship passengers spent their vacations suffering from a highly contagious stomach bug, the Norwalk-like virus, despite expanded efforts to sanitize the ships. Meanwhile, dozens of meat eaters on land were infected with E. Coli, or strains of listeria--some fatally-- prompting the record-high recall of more than 30 million pounds of beef, turkey and chicken products. And mosquitoes and blood transfusions spread the West Nile virus to 3,852 people in 39 states, killing 241.

CRIME

The headlines varied from Tarot card-dropping assassins to kidnapped kids to sex-abuse cover-ups. All carried their share of tragedy and fear; some were overhyped by media hungry for round-the-clock drama--and many left lingering questions that may or may not be answered in the year ahead.

Test of Faith: Under fire for sexual abuse within their ranks, Catholic higher-ups rolled out a new stance on predatory priests and vowed an end to the problem. But the story won't stop there. Even with the resignation of Boston's embattled Cardinal Bernard Law in December, a torrent of victims is clamoring for reform and retribution. With pending lawsuits threatening to bankrupt the Boston archdiocese and financially cripple some others, the church faces the new year with serious economic woes--not to mention bitter parishioners wary about giving money that might only be used to settle suits.

Cause for Alert: The brazen abduction and murder of California youngsters Danielle van Dam and Samantha Runnion, along with the still-unresolved disappearance of teenager Elizabeth Smart in Salt Lake City, put parents on edge and media coverage into overdrive. The fevered pitch for answers only strengthened calls for a nationwide Amber Alert program--the rapid notice system that would send out bulletins to broadcasters, police and even roadside signs soon after an abduction is reported. This year could see further pressure for other states copying the California model, which proved instrumental in locating two teenage girls who were abducted and raped in July.

To Catch a Killer: Ten people died during the terrifying three-week sniper spree outside Washington D.C. While prosecutors say they are sure about who carried out the attacks, they still can't explain why suspects John Allen Muhammad and John Lee Malvo allegedly shot at strangers and sent cryptic messages to investigators. The future of a national registry for ballistic information that could allow police to trace bullets to the weapons that fired them remains equally unclear, caught in the crossfire between the pro- and anti-gun lobbies.

Justice for All?: Thirteen years after the brutal rape and beating of a woman in Central Park, the five New York teenagers who stunned the country as the face of reckless savagery found themselves the surprise poster boys for wrongful convictions. The five were exonerated after a serial rapist and murderer confessed to the crime and forensic evidence backed up his confession. But while the young men's names were cleared, their wrongful punishment will inevitably add further fuel to the debate over the death penalty in the months ahead.