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lead hisashi_shinto , once one of japan 's most powerful business figures , was convicted of accepting_bribes today in the first big court case to emerge from a scandal that rocked japan 's political world . hisashi_shinto , once one of japan 's most powerful business figures , was convicted of accepting_bribes today in the first big court case to emerge from a scandal that rocked japan 's political world . in a brief hearing this morning at tokyo 's district court , mr . shinto , the 80 year old former chairman of the nippon_telegraph_and_telephone company , the world 's largest company , was sentenced to two years in prison and fined 170 , 000 for his part in the recruit scandal , the stock and influence_peddling case that shook japan for more than a year . the prison term , however , was suspended because of his age and what the court termed his ''past contribution to the business world . '' mr . shinto was the best known and most powerful member of the japanese establishment indicted in the scandal , which ultimately forced the resignation of noboru_takeshita , the former prime_minister . as the scandal unraveled , it revealed a web of illegal dealings between part of the nation 's business community and the ruling liberal democratic_party , but all the political leaders involved escaped indictment . villain and victim mr . shinto 's conviction marks the beginning of the end of the most embarrassing and far reaching scandal in japan since the lockheed scandal of the mid 1970 's , which involved payments to officals by lockheed to promote sales of its aircraft . so far , virtually none of the political reforms the ruling party promised in the midst of the recruit scandal have been enacted , and with the conviction of mr . shinto it seems increasingly unlikely that many will be . in the japanese press and in conversations among business leaders , mr . shinto , a close ally of former prime_minister yasuhiro_nakasone , has been by turns portrayed as a villain and as a victim of a system rife with corruption . many consider him a scapegoat , sacrificed by political leaders to avoid further disaster for the ruling party . still , mr . shinto 's conviction was a big victory for prosecutors . it marked the first time that a court concluded that shares in a real_estate firm called recruit_cosmos that were sprinkled among prominent business executives , bureaucrats and politicians were intended as bribes . that , legal experts said , should undercut the defenses offered by 10 other defendants now standing trial on related charges , including takao fujinami , mr . nakasone 's former chief_cabinet_secretary , and hiromase ezoe , the former chairman of the recruit corporation , which controlled recruit_cosmos . another politician charged with taking bribes is katsuya ikeda , a former member of the lower_house of the parliament . mr . takeshita 's chief fund_raiser , ihei aoki , who was also implicated , committed_suicide in april 1989 . a titan of industry during his 20 month trial before a three judge panel , mr . shinto denied that the shares , which he received before recruit_cosmos went public and their value soared , were intended as bribes . the court 's rejection of that argument ' 'reminds us that the same excuses were made by those political leaders who cleverly escaped from being brought to justice despite purchases of recruit_cosmos shares by their secretaries or family members , '' said the japan times , a leading english_language daily , in an editorial tonight . the presiding judge in the trial , ken toyota , said today that mr . shinto ''bears heavy responsibility'' for the scandal for accepting shares that were then funneled into two secret political slush funds run by n.t.t. , which runs japan 's domestic telephone_network . mr . shinto was a titan of japanese industry for precisely the reason that he was attractive to recruit he had access to influential politicians and could arrange entree to japan 's clubby business community . it was under his stewardship that n.t.t . was changed from a government owned monopoly to a private firm , a transition that required strong political connections to ward off regulators who wanted to break up the company and new competitors who wanted to compete for its most lucrative businesses . in 1986 , mr . shinto met with mr . ezoe , the former recruit chairman , on several occasions and arranged for n.t.t . to help the small company in two business deals . the first involved getting recruit into the lucrative business of reselling special telephone circuits to businesses . the second involved obtaining for recruit two supercomputers made by an american company , cray_research inc . n.t.t . purchased the supercomputers and resold them to recruit . at the same time , mr . ezoe gave mr . shinto about 10 , 000 recruit_cosmos shares . for months , mr . shinto insisted that he had no knowledge of the transactions and that an assistant had been responsible . but the court concluded today that he had lied and that the shares were used for direct contributions to prominent politicians and to buy tickets to fund_raising parties . the fine is roughly equal to the profits that mr . shinto realized when he sold the recruit_cosmos shares . but the court concluded that he had not used the shares for his own personal gain , a mitigating circumstance that contributed to the suspended jail sentence . in japan , which does not have jury trials , it is normal to announce a verdict and sentencing at the same time . n.t.t . shares falling since mr . shinto 's departure , n.t.t . 's fortunes have been mixed . it has derailed , at least for the time being , a government proposal to break up the company . but its stock price has plummeted . at one point under mr . shinto , it reached 2.5 million yen a share , or 18 , 500 at current exchange_rates . but scandal , slow business and a declining stock_market have taken their toll . the stock closed today at 791 , 000 yen , or 5 , 860 , less than a third of its high . the japanese government has postponed indefinitely its planned sale of additional government held shares in the company , for fear that it would not raise enough money . ''we will make our utmost efforts to restore public trust in response to the court 's ruling , '' masashi kojima , n.t.t . 's president , said today .

bickering this election year between democrats and republicans over a drug benefit for medicare enrollees has been shrill . but senator ron_wyden , democrat of oregon , and representative bill thomas , republican of california , two influential leaders on health_care , announced a set of principles last week that , by blurring the distinction between the parties , might yield compromise . mr . wyden and mr . thomas agreed that any medicare drug benefit should be a universal benefit to which the elderly are legally entitled . that might seem innocuous . but mr . wyden 's efforts will be opposed by democrats who want to head into november with no agreement . mr . thomas will win little applause in the republican caucus for embracing the proposition that what america needs is another federal entitlement . yet mr . thomas was right to declare the principle because the existing medicare entitlement , lacking a drug benefit , is seriously deficient . indeed , mr . thomas points to a republican plan to show that the idea of a universal entitlement is in sync with party policy even if the words rub the wrong way . under the g.o.p . plan , every medicare enrollee would be offered a drug policy whose premiums and other costs would be heavily subsidized or eliminated for low income families . the government would pick up all of an enrollee 's drug costs above a ceiling , say 2 , 000 a year . the white_house plan focuses on subsidizing initial drug outlays , which congressional democrats would amend by adding catastrophic coverage . proposals differ on important details . the white_house , for example , would have the agency that runs medicare negotiate with one benefit company per region to organize coverage for most enrollees . most republicans and some democrats like mr . wyden want a new medicare board to negotiate with competing drug benefit companies . beyond the pros and cons of specific proposals , the wyden thomas agreement serves as a worthy guideline for policy . but the accord 's enduring feature may be that , by showing that serious democrats and republicans can agree on important principles , it dulls the posturing that has so far kept congress from doing anything serious .

san_diego_padres third baseman gary_sheffield was released from jail on a 500 bond after being arrested early yesterday after arguing with a houston police_officer at an all night restaurant . sheffield was charged with the misdemeanor assault of a policeman after the argument about 3 a.m . sheffield spent about 14 hours in jail before being released . ( ap ) sports people baseball.

more than 73 million viewers tuned in to see president_bush 's speech to the nation on monday_night , a figure surpassed in recent years only by the super_bowl telecast and the president 's address after the terrorist attacks in september 2001 . the networks that benefited most were abc and the fox_news_channel . abc was the only broadcast network to pre_empt its entire prime time lineup of entertainment programming and replace it with with a news special devoted to the impending war with iraq . the tactic paid off in the ratings . abc , which has struggled to find an audience for its three dramas on monday nights , almost doubled its audience from the previous week . it also nearly doubled its audience of 18 to 49 year old viewers , the demographic group most coveted by advertisers . the other broadcast networks , all of which fare far better on mondays , resumed entertainment programming shortly after the president finished speaking . for the speech itself , nbc had the largest audience , with 19 . 8 million viewers cbs was second , with 16 . 6 million , and abc had 16 million . the fox_network , which carried coverage by the fox_news_channel , had 6.8 million viewers . for the full night , fox 's audience was 5.7 million viewers , an increase of almost 250 percent from its year to date average . cnn attracted 3.5 million viewers , up 216 percent from its average . msnbc had an audience for the night of 1.2 million , up 190 percent from its average . during the speech , fox_news attracted 7.4 million viewers , while cnn drew 4.6 million viewers and msnbc had 2 million . threats and responses the viewers.

lead ''while these numbers look good , they are not as good as they look . '' l . william_seidman , f . d . i . c . chairman , on the strong third quarter bank earnings . ''while these numbers look good , they are not as good as they look . '' l . william_seidman , f . d . i . c . chairman , on the strong third quarter bank earnings .

in winning the democratic primary on tuesday to succeed edward g . rendell as mayor of philadelphia , john f . street held tightly to his issue oriented message in the face of personal attacks that nearly defeated him . while other candidates in the crowded field used attack advertising in their campaigns , mr . street tried to ignore the barrage and emerged with a slim victory over his most aggressive opponent in the race , marty weinberg . mr . street , 55 , who resigned as city_council president to run for mayor , captured 100 , 902 votes , 35 . 4 percent of the total , to 89 , 041 votes , or 31 . 2 percent , for mr . weinberg , an aide to former mayor frank l . rizzo who was making his first run for elective_office . john white jr . , a former head of the city housing agency and the state welfare department , finished third with 61 , 816 votes for 21 . 7 percent . happy fernandez , a former city_council member and the first woman to run a credible race for mayor of philadelphia , won 17 , 952 votes , 6.3 percent . dwight evans , a state legislator , had 13 , 290 , 4.6 percent , and queena r . bass , a community organizer , had less than 1 percent . fewer then 30 percent of the city 's 980 , 000 registered voters turned out , about the average level of participation for a primary in philadelphia , a city of 1 . 47 million people , about 40 percent black . ''i am enormously pleased about the way i conducted my campaign , '' mr . street said today at a victory lunch with mr . rendell and other city leaders . ''but as the winning candidate , i now have to do what i can to bring the party together , not just for me but for the city of philadelphia . '' much of mr . street 's success on tuesday flowed from his smooth working relationship with mr . rendell , a popular democrat who is barred from seeking a third consecutive four year term . over the years , they worked together closely , pulling the city back from a fiscal abyss in the early 1990 's with programs of economic austerity that led to budget surpluses and urban_renewal throughout many parts of the city . it came as no surprise that mr . rendell gave mr . street , one of four black candidates in the primary , a hearty endorsement . but in the november general_election , mr . street will face a republican opponent who also played a major role in the city 's turnaround , sam katz , who ran unopposed on tuesday . as an expert in municipal finance , mr . katz , 49 , was one of the first consultants mr . rendell sought out to stabilize the city 's finances . mr . katz ran unsuccessfully for mayor in 1991 and for governor of pennsylvania in 1994 , and in a city where registered democrats outnumber republicans by almost 4 to 1 , it might appear that he has a difficult task ahead . but aides said his campaign strategy for the general_election would be to attract republicans and the considerable number of democrats who did not vote for mr . street in the primary , including many black voters . it is a calculation that strategists for mr . katz helped bring about through the unusual decision to inject him into the democratic advertising wars . mr . katz ran commercials that attacked the two democrats he least wanted to face in the fall , mr . weinberg and mr . white . in effect , the aides said , mr . katz preferred a showdown with mr . street , whose political fervor through years as a black community leader most sharply contrasted with his own . to bolster mr . street 's chances in the primary , mr . katz ran advertisements that questioned mr . weinberg 's and mr . white 's credibility and management skills . in addition , mr . katz said in an interview , mr . street 's close relationship with mr . rendell provided him an opening to portray mr . street as a status_quo candidate who is resistant to bolder solutions to the city 's most intractable problems . as examples , mr . katz said , he favors school_vouchers to offer children alternatives to troubled public schools and a faster reduction of the city wage tax as a means to stimulate economic_development . mr . street opposes vouchers and favors a slower reduction of the wage tax . yet to make his case that more drastic measures are necessary , mr . katz pointed out that for all the progress in the rendell street years , the city had lost 150 , 000 residents and 40 , 000 jobs since 1991 . mr . weinberg , meanwhile , focused most of his attacks on mr . street , the campaign front runner who won glowing endorsements from the city 's three leading newspapers the inquirer , the daily news and the tribune , which has a mostly black readership . playing largely to the same middle_class and working_class white voters who supported mayor rizzo , mr . weinberg used television commercials that showed 18 year old images of mr . street shoving a reporter and throwing water in the face of a city_council staff member , mr . weinberg 's way of suggesting to voters that mr . street might be too unstable to lead the city government . other weinberg advertisements cited financial problems mr . street once had , including the two times he filed for personal_bankruptcy . for his part , mr . street did not respond in his commercials until late in the campaign and then only to admonish mr . weinberg for attacking him and injecting an element of race in the campaign . rather , mr . street focused on issues like seeking more state revenue to improve public schools and expanding economic_development as a way to aid some of philadelphia 's neighborhoods , where residents are suffering from substandard housing , joblessness and high crime rates . ''out of working together , philadelphia has become a can do city , and it 's important for us to continue that work , '' said mr . street , who would become the city 's second black mayor , after w . wilson goode , who preceded mr . rendell . ''the first step is to make sure we heal the wounds of the primary . i 'm sure all the candidates will do their fair share to bring the party and the city back together . ''

lead china 's most prominent dissident intellectual , breaking an imposed silence , today assailed harsh political controls on university students and teachers . china 's most prominent dissident intellectual , breaking an imposed silence , today assailed harsh political controls on university students and teachers . the dissident , fang_lizhi , also disparaged the communist_party 's recent calls for liberalized intellectual and literary expression as insincere . in his first interview with a foreign journalist here since he was expelled from the communist_party last year , mr . fang dismissed his promotion last week to ' 'second rank professorship , '' from ''fourth rank , '' as ''propaganda . '' it was not clear whether there would be any repercussions for his interview . student demonstrations professor fang , who is one of china 's most distinguished astrophysicists , was dismissed as vice_president of the university of science and technology in hefei last year after a nationwide tide of pro_democracy student demonstrations that began at his school . communist_party leaders , including the country 's senior leader , deng_xiaoping , accused mr . fang of instigating the protests by encouraging students to speak out on a wide array of political and intellectual concerns . after being stripped of his official position and expelled from the party last year , he went to beijing , where he pursued his research at the china academy of science . party officials prevented him from contacts with virtually all foreigners , especially journalists , until he was permitted to travel to rome last summer to attend a scientific conference . while in rome he gave an interview to the west_german news weekly der_spiegel in which he suggested that marxism had reached the end of its useful life in china . no single name evokes such fervent response on china 's campuses and among intellectuals as that of fang_lizhi . he is widely seen as the most articulate and forthright critic of china 's marxist orthodoxy and the country 's pre_eminent champion of free_speech . appearances must be approved he is permitted to appear in public only with the permission of the highest members of the communist_party . in november , an invitation to speak on cosmology at his old university in hefei , in anhui_province , had to be personally approved by li_peng , one of the five members of the standing committee of the party 's politburo and now acting prime_minister . professor fang derided suggestions that conditions for intellectuals in china have been improving since a major party meeting in october at which many elderly orthodox marxists retired from leadership posts . ''on the surface , there is more tolerance , '' professor fang said . ''but this is not so in reality . '' professor fang was particularly critical of many american and european china specialists who have described recent trends in china as increasingly liberal . ''they 're deceived , '' he said simply . october party congress at the october meeting , a congress of party representatives that gathers every five years , many new , younger faces appeared in the politburo and on the central_committee . many western diplomats and academics have pointed to this as an indication that economic_liberalization coupled with a softer ideological line had triumphed . but mr . fang maintained that it is too early to assess whether real change has occurred . ''the students do n't like the new members , '' he said . ''almost all the new members come from areas that treated student demonstrators harshly li ruihuan from tianjin , jiang_zemin from shanghai . '' ''power is still held by deng and the older generation . zhao is no . 1 in principle . but when they talk about who will talk with gorbachev , it is deng . it is clear who is in charge . '' he was referring to proposals by mikhail s . gorbachev , the soviet leader , to hold a summit meeting with mr . deng , although zhao_ziyang is now the party leader . changes were celebrated when older hard_liners were voted off the central_committee last october , many beijing intellectuals celebrated . but professor fang said that these elderly leaders still exercised tremendous power . ''they may not have a position , but their secretaries and their aides now are in positions of power . these old guys just get on the phone and say , 'do this . ' '' professor fang , who is in his early 50 's , said that the greatest evidence of the continuing influence of hard_liners was the crackdown on students and teachers on college campuses . when he was granted permission to visit the university of science and technology last november , his schedule was rigidly controlled . ''they limited me to a two day visit , '' professor fang said . ''i still have an apartment there and i was kept inside . when i was there , some people said i should speak in the big lecture hall , but the party secretary said no . four lectures at old school so professor fang said that he delivered four lectures in a smaller hall . ''there were 80 security men there , '' said professor fang , his boyish face erupting in laughter . ''the authorities are afraid of my having contact with the students . '' ''there also is a new policy on study abroad . the government wants to reduce the number of students abroad . on the surface they say they want to do this because not many are coming back . in fact , they are afraid of the returning students . they are afraid of what they have learned , of what they will say . '' even in the rather abstruse fields of quantum mechanics and cosmology , professor fang said , china 's ideologues have continued to interfere . marxism and astrophysics ''marxism thinks it has solved all the problems of man , '' he explained . ''two years ago , i wrote an introduction to a translated essay on quantum mechanics by hawking for the magazine 'science . ' hu qiaomu said it could not be published , that it was n't marxist . '' mr . fang referred to stephen w . hawking , a theoretical physicist at cambridge_university who has done pioneering work in cosmology . hu qiaomu is an orthodox ideologue who retired from the politburo last october . ''cosmology is still concerned with the problem of whether the universe is finite or infinite . that question is not solved for us . in marxism , they already have solved this question . in a letter , engels said that the universe must be infinite . so for marxists , it is . '' professor fang disdained suggestions that his academic promotion last week reflected a liberalization in the party 's approach to unorthodox intellectuals . ''it 's just propaganda , '' he said . ''i get 20 yuan more every month , '' a sum equivalent to 5 . 40 . at the moment , he said , he is waiting for permission to spend next year at cambridge doing research . he said that approval would probably have to be granted by mr . zhao himself . mr . fang 's wife , li_shuxian , a physicist who teaches at beijing_university , has been denied permission to do research in rome and has been restricted in her contacts with students . ''i wanted to meet with some students outside class but they would n't let me , '' she explained . ''i put up a paper sign on the wall saying i would meet the students on the side of the road . there were 100 students who showed up . there were 10 security officers watching the whole time . '' professor li shook her head slightly as she talked . ''i 'm not afraid , '' she said . ''we 're not afraid . ''

when silvio_berlusconi campaigned to be italian prime_minister in 2001 , he offered a series of promises about what he would accomplish in the next five years . at the time , it seemed safe . the idea that an italian prime_minister would survive for five years seemed absurd . no italian government since world_war_ii had managed that feat . but mr . berlusconi did . the election this weekend is a few weeks short of the five year anniversary . there were cabinet upheavals and assorted quarrels with coalition partners , but mr . berlusconi , a media baron said to be the country 's richest man , stayed atop the heap . so how did he do it ? he cut taxes , but not by as much as promised , and he presided over an economy that did better than other european_countries in terms of adding jobs , although the increase of a little over a million jobs fell short of the 1.5 million he promised . but italy 's economic_growth was even slower than the disappointing rate shown by many european_countries . as the charts show , italy 's real gross_domestic_product in the final quarter of 2005 was just 1.6 percent above the figure for the second quarter of 2001 , when he won the election . it was well below the average for countries using the euro , which was 5.7 percent . even that growth has come because the government has been willing to run budget_deficits . households are spending for consumption at a rate just 1.7 percent above the rate when mr . berlusconi was elected . but the government consumption number is up 6.9 percent . all this means that italy , on a relative basis , is becoming poorer . in 2000 , its g.d.p . per person was 2 percent higher than the average of all 25 countries now in the european_union . last year it was 2 percent below that average . on that per person basis its economy was 24 percent larger than spain 's in 2000 . now the margin is 15 percent . the slow growth has come as italy has struggled to stay competitive , both within europe and abroad . italy used to periodically regain its competitive position through a sometime violent currency devaluation . but now that it is in the euro_zone , that is impossible . since mr . berlusconi took office , italian inflation has run above that of other european_countries , and he has taken to blaming his opponent this year , romano_prodi , for allowing the country to join the euro at a euro lira exchange_rate that was too high . italian exports have risen , but not as fast as imports , and the current_account surplus that italy enjoyed before the last election has turned into a deficit . mr . prodi , a former italian prime_minister and former president of the european_commission , has ridiculed mr . berlusconi for making new promises after failing to keep promises he made five years ago . but economic news has not dominated the campaign . perhaps the most discussed incident came when mr . berlusconi , angered by what he considered to be hostile questions in a live interview on a state owned television_station , walked out of the studio . at least that indicated that fears that he would dominate all italian media had not yet been realized . off the charts.

to the sports editor i kept seeing this error in the stories on the olympics ''the united_states hockey team , '' referring to the men 's team . it would seem desirable to make the distinction between the men and the women since the united_states women 's team won gold and did not trash its quarters . elizabeth n . norton manhattan.

germany endured a barrage of negative economic news today in particular , that unemployment soared in december creating a sense of gloom that has not been seen since the country began to climb out of its worst postwar recession more than two years ago . and if the conventional_wisdom is true that as the german economy goes , so goes europe , the reports mean that much of the continent this year will see little growth , rising unemployment , depressed business and consumer activity , and a further falling behind the united_states . the federal labor office reported that unemployment in december posted the greatest one month surge in years , rising to 9.9 percent for all of germany from 9.3 percent in november . more than 211 , 000 people lost their jobs , in part the result of seasonal layoffs of workers . but beyond that , high wages and an overvalued mark have made german exports less competitive , inducing companies to cut back work forces here and open plants abroad , according to labor office officials . factoring out seasonal shifts in joblessness , permanent unemployment increased by almost 70 , 000 in december . so gloomy is the business environment that economists predicted that the country was certain to pass the psychological barrier of 10 percent unemployment early this year , and that more than four million people would soon be out of work . labor minister norbert_blum called the unemployment figures an " alarm signal of the highest urgency , " and called on unions , corporations and government officials to create programs to generate jobs . a central_bank official quickly said that such weak economic statistics could justify a lowering of lending rates later this week . and steven englander , international economist at smith_barney in paris , said " germany is clearly very weak . i think this means that unemployment rates across europe are going to remain very high and they are not going to come down any time this century . " adding to the gloom , the economics ministry reported that manufacturing orders for western germany fell seven tenths of 1 percent in november , a harbinger of further weakness in the economy . a survey of germany 's midsized companies found that 81 percent of them described the economic outlook for 1996 as " bad " or " poor . " and the highly_regarded german_institute_for_economic_research cut in half its forecast for 1996 national growth , to 1 percent from 2 percent , a rate that effectively means economic_stagnation . a year ago , many economists were predicting growth this year of 3 percent . economists at the research institute said the moderate recovery from recession in 1994 and 1995 had been germany 's weakest postwar rebound . so far , a full blown recession is not being predicted either for germany or europe . that is mainly true in the latter case because some countries italy and spain , among them are not as weak as germany , france , switzerland or belgium , and are expected to buoy the european economic region somewhat . but the weak data mean that europe 's biggest problem persistently high levels of unemployment is not about to go away soon . there are now a total of 14 million unemployed , many of them with little prospect of finding anything but minimum_wage jobs . and though generous social_welfare programs are now keeping the unemployed out of poverty , once such funds begin to dry up , european_nations risk a kind of social problem not seen in decades structural poverty and the threat of social_unrest . governments are also hard pressed to find solutions because they are under enormous pressure to reduce their budget_deficits in order to qualify for participation in a common european currency , the first stage of which is to take effect in 1999 . low growth means lower tax revenue and thus bigger budget_deficits at a time when many are calling for relief from high tax burdens . if there is hope among economists , it seems to be in the ability of germany 's central_bank to take center stage and again cut interest rates to stimulate the economy . over the years the central_bank , or bundesbank , has rejected the idea of helping europe as a whole by lowering interest rates , saying that its charter is to look out for germany 's economy and monetary stability . but now , conveniently , at a time when europe needs economic stimulation , germany appears to need it more , providing the bank with an acceptable rationale for helping the entire continent . while some economists have predicted another cut in the discount_rate by march , others say that given the recent weak economic data , that could be moved forward . franz christoph zeitler , a member of the bundesbank 's central council , said the bank might lower one short term rate on wednesday the securities repurchase , or repo , rate . he said that the economic research institute 's forecast had been too pessimistic and that 1996 national growth would be 2 percent . but private economists remained grim . " so far , the labor market has not at all reflected the economic upswing of 1994 , and there is little hope for this year , as well , " said holger fahrinkrug , economist at the union_bank_of_switzerland here . international business.

the players in this complex tale include the man accused of masterminding what may be the biggest bank_fraud in history , a bulldog congressman who seems determined to prove that the president 's top aides engaged in a vast cover up , and a beleaguered president who cannot understand why the issue will not go away . as president_bush 's re election campaign shifts into high gear , it continues to be haunted by the dispute over united_states policy toward iraq before it invaded_kuwait in august 1990 . the invasion led to the persian_gulf_war . under the policy , billions of dollars in american aid was used to try to moderate president saddam_hussein and turn him into a stabilizing force in the middle_east . and the president has acknowledged that this policy failed . three vital questions but in its zeal to influence mr . hussein , did the bush_administration ignore evidence that some of this aid was diverted to iraq 's buildup of weapons ? did it try to delay indictments of high level iraqi officials accused in a united_states bank_fraud ? and did the president 's aides lie to congress in an attempt to conceal the full scope of their failed courtship of iraq ? those are the questions that lie at the heart of the affair . mr . bush accuses congressional democrats of " recklessly " distorting the record for political gain and characterizes his policy as an honest error in judgment . the administration insists that the policy was widely known and generally accepted as a sound one by united_states allies in the middle_east and even by some of the lawmakers who are now leading the criticism . the democrats , however , blame the administration for " coddling " the iraqi leader in advance of his invasion of kuwait , despite mounting evidence that he was building a formidable military machine even after the eight year iran iraq_war ended in 1988 . had the administration paid more heed to that evidence , they say , the gulf_war might never have been necessary . beyond the heated public statements , this much is known in the late 1980 's , under a presidential directive to build closer relations with baghdad , the united_states_government permitted the sale of sophisticated american technology and equipment to iraq , some of which is believed to have been used to build weapons . at the same time , iraq was allowed to become a major participant in the commodity_credit_corporation , through which the united_states_government cosigns bank loans for poor countries that want to buy american farm products . taxpayers may have to pay the financially_strapped iraqis financed some of the food and technology purchases with loans from the tiny atlanta branch of an italian bank , the banca_nazionale_del_lavoro . the iraqis chose this branch , law enforcement officials say , because its officers were willing to take bribes in exchange for making high risk loans . the loans made through the agriculture program , on the other hand , were no risk , as the united_states_government would make good on any that iraq failed to repay . congressional critics have said the united_states taxpayers will ultimately have to repay hundreds of millions of dollars on defaulted loans . the congressional panels that are investigating various facets of the iraq policy have turned up evidence that they say suggests that some of those farm loans may have been channeled into military purchases . some lawmakers also maintain that the government interfered with prosecutors investigating the bribery of the atlanta bank officials and that it tried to conceal from congress the extent of iraq 's purchases of technology . but they have yet to come up with proof of any wrongdoing by public officials . that is why the house_judiciary_committee is eager for a positive reply from attorney_general william p . barr about its request for the appointment of an independent_counsel to investigate the charges . mr . barr must respond to the request by monday . he may either approve or reject it or ask for more time for an investigation of his own before deciding . what follows is a look at which accusations involve possible criminal violations , as opposed to misguided but legal policy issues . these accusations , involving obstruction of justice and lying to congress , would be the focus of any independent investigation . the altered lists changes uncovered at commerce dept . the strongest indication that a crime may have been committed involves alterations made on a commerce_department list of high technology items approved for sale to iraq between 1985 and 1990 . the list was sent in october 1990 to representative doug barnard jr . , democrat of georgia , whose government operations subcommittee was investigating exports to iraq . after mr . barnard received an anonymous tip that the commerce_department had tampered with the list , he asked the department 's inspector general to investigate . the inspector general concluded in a report that both the copy sent to congress and the permanent record had been changed in 68 instances to delete references to military designations . it can be illegal to willfully falsify documents presented to congressional investigators . in one instance , a description of a 1989 license for frequency synthesizers for a military complex north of baghdad that made equipment for missiles and atomic bombs was changed to delete the crucial sentence , " according to our information , the end user is involved in military matters . " the synthesizers were designed to test surveillance radar at the complex , which was a primary target of allied bombers in the gulf_war . in another instance , the inspector general 's report said that the deletion of " military " to describe the sale of 1 billion worth of trucks to iraq was " misleading and unjustified . " senior commerce_department officials have testified to congress that dennis e . kloske , who was then under secretary of commerce , was solely to blame . but mr . kloske , who resigned in april 1991 , told congressional investigators that white_house officials and top aides to former commerce secretary robert a . mosbacher supervised the preparation of the list , although he did not actually accuse his superiors of ordering the changes . the justice_department says that since it is investigating the alterations , there is no need for an independent_counsel . the officials' role lawmakers charge they were misled beyond the commerce_department list , democratic lawmakers are also investigating whether administration officials purposely misled congress about iraq policy , either in public testimony , correspondence or conversations , or by withholding documents . one line of inquiry involves the commodity_credit_corporation program through which iraq made grain purchases . in the fall of 1989 the bush_administration was locked in a heated debate about whether to go forward with 1 billion in new credits for iraq . state_department officials argued that the credits were crucial to improving relations with baghdad . agriculture department officials had reservations but wanted to promote american exports . but both the treasury department and the federal_reserve were concerned about iraq 's ability and willingness to pay back its debts . bowing to white_house foreign_policy concerns , a compromise decision was made to extend the credits in two stages . some lawmakers , like senator patrick j . leahy , the vermont democrat who heads the senate agriculture committee , believe they were misled when they raised questions about the wisdom of the loan_guarantees . for example , in late october 1989 , secretary of state james a . baker 3d telephoned agriculture secretary clayton k . yeutter urging him to go forward with 1 billion in credits on " foreign_policy grounds , " according to an internal state_department memo . but mr . yeutter assured mr . leahy in a letter in february 1990 that foreign_policy considerations did not contribute to the decision making process . other democratic lawmakers charge that the administration conspired to mislead congress by withholding crucial documents . representative henry b . gonzalez , the texas democrat who has taken the lead in the investigations , has said there was a cover up formulated in meetings held at the white_house by lawyers from various government agencies to coordinate answers to congressional demands for documents . he has dubbed the group the " rostow gang " because its chairman was c . nicholas rostow , the legal adviser to the national_security_council and a special assistant to mr . bush . white_house officials call the charge absurd , saying that such coordination is routine . but a senior state_department official said that mr . baker was indeed upset to learn that mr . rostow was trying to control the flow of documents , and ordered edwin d . williamson , the legal adviser who represented the state_department at the meetings , to coordinate with no one except mr . baker . the bank investigation did administration delay indictment ? a third area of concern is whether the bush_administration illegally interfered with the criminal investigation of the atlanta branch of bank lavoro . interfering with a criminal investigation can lead to charges of obstruction of justice . specifically , congress is investigating whether the administration , in an attempt to keep from embarrassing the iraqi government by exposing its role in the matter , delayed for a year the indictment of the man who is accused of being the mastermind of the suspected fraud , christopher p . drogoul . mr . drogoul has acknowledged taking cash and gifts from companies that did business with iraq and benefited from his loans to baghdad . internal documents show that in the months after the bank was raided by the federal_bureau_of_investigation in august 1989 the prosecutors in atlanta were telling other government agencies that they could bring indictments within months . in fact , gail mckenzie , the aggressive prosecutor who has run the investigation from the beginning , had prepared what one official described as a " bare_bones " indictment in january 1990 . but the justice_department did not announce the indictment until late february 1991 , one day after mr . bush announced a cease fire in the gulf_war . documents made public in recent months show that the investigation was the subject of high level discussions in the state_department , with some officials arguing that the case could jeopardize united_states relations with iraq . ms . mckenzie has acknowledged receiving a phone call early on from a white_house aide inquiring about the status of the investigation . the white_house denies exerting any pressure on prosecutors , and the justice_department disputes that the indictment was delayed . in interviews , department officials said that prosecutors exaggerated their ability to try the case early because of pressure from the united_states_attorney in atlanta at the time , robert barr , who was eager to get the prosecution of the biggest bank_fraud case under way before he left office . " the only reason we would ever seek an indictment is if we believed we had the evidence , " said mr . barr , a lawyer who is seeking the republican nomination for the senate in georgia . " whether i or anyone else was leaving the office was irrelevant . " the suspect loans a hint u.s . money paid for iraqi arms beyond the question of interference , some lawmakers have also charged that some of the american farm loans were used by iraq to buy military equipment an explosive charge that would mean that the united_states helped pay for some of the weapons it later went to war to destroy . in a memo seized on by critics of the administration 's policy , a commerce_department official , frank m . lemay , warned that there was evidence suggesting that some of the loans guaranteed by the farm program may have been diverted into weapons purchases . but no investigation has established that that occurred . and bush officials note that because of the federal investigation of the bank , the administration excluded it from the loan credit program in august 1989 . misuse of the loans would not constitute a crime by the government unless it knowingly took part . even so , lawmakers say the administration should have been more alert to the warning signs of iraq 's arms procurement program . chart " what congress wants to know " in the house house banking , finance urban affairs the chairman , henry b . gonzalez of texas , began looking at loans to iraq by the atlanta branch of an italian bank and came across evidence that he said suggested the bank may have misused united_states backed farm loans to help iraq acquire military technology . the committee is also investigating commerce_department licensing of exports of high technology goods to iraq , as well as whether the justice_department tried to delay bringing fraud indictments against the bank , the banca_nazionale_del_lavoro . house judiciary the committee is considering whether to grant a request by representative gonzalez for appointment of a special_prosecutor to investigate whether the bush policy on iraq broke the law . house foreign_affairs subcommittee on international economic policy and trade the subcommittee is looking at what militarily useful equipment was sold by the united_states to iraq , at the bush_administration 's prewar policy toward iraq and at the withholding of information from congress regarding that policy . government operations subcommittee on commerce , consumer and monetary affairs the panel is investigating american exports to iraq . its chairman , doug barnard , obtained a commerce_department list of high technology items approved for sale to iraq between 1985 and 1990 and determined that it had been altered in 68 instances to delete references to military applications . energy subcommittee on oversight and investigations the subcommittee is investigating why the department of energy and the bush_administration did not do more to prevent the buildup of iraq 's nuclear_weapons program . agriculture subcommittee on foreign agriculture the subcommittee wants to determine whether the commodity credit program that guaranteed loans to iraq was part of a scheme to finance iraq 's military buildup and whether that program improperly became an instrument in the bush_administration 's foreign_policy . in the senate agriculture this committee is also looking at the commodity_credit_corporation guarantees and their role in the administration 's foreign_policy . foreign relations senator jesse_helms , supported by some democrats , is holding up the nomination of james p . covey to head a new state_department bureau for south_asia until the department turns over documents relating to mr . covey 's role in prewar iraq policy . select_committee_on_intelligence the committee wants to know what the intelligence agencies knew about links between the banca_nazionale_del_lavoro and the farm credit program , and whether either was involved with iraq 's arms network .

sergei nemchinov had ice bags strapped to his 32 year old body and a big smile spread across his mature , veteran face . ''i 'm not as old as you think , '' nemchinov said , and his performance supported his words . nemchinov , the rangers' checking center , had just played left_wing on the top unit of the russian national team in an exhibition_game against the united_states in joe louis arena . he scored the opening goal and was on ice for three others by his team in a 6 4 victory . the result gave the russians a_4 0 record in exhibitions leading to the world_cup . they play their final tuneup on sunday against canada in calgary . official games begin on monday , with sweden playing germany in stockholm . the russians will open against canada on thursday in vancouver and play the united_states on sept . 2 in madison_square_garden . on friday night , the line of nemchinov , sergei_fedorov and alexander mogilny skated , passed and shot with breathtaking speed and style . fedorov had two goals . second seeded behind canada before the tournament , the russians also appear to be sound in goal with nikolai khabibulin . their biggest uncertainty is on defense . normally a center , nemchinov blended in beautifully with fedorov , the center , and mogilny , the right wing . in anticipating this tournament , many fans hoped for the reunion of fedorov , mogilny and pavel_bure , who excelled as a unit when they were juniors in the soviet_union in the late 1980 's . but coach boris mikahilov tried them as a unit for one game and apparently did n't like what he saw with mogilny on the left side . although nemchinov had n't played with them before friday , he seemed a natural fit alongside the younger superstars . ''i feel very comfortable playing with nemchinov , '' said fedorov , the national_hockey_league 's most valuable player in 1994 with detroit . ''he seems to be in the right place all the time . alex was saying to me after the first period , 'man , this guy is like he has been playing with us all the time . ' he is a great player . '' long a favorite of ranger coaches , nemchinov is called ''sarge'' in new york and is thought to be a stabilizing personality among younger rangers , particularly those from russia . one of those teammates , aleksei_kovalev , scored another of the russian goals friday by blasting a slap_shot past goalie mike_richter , normally his new york teammate . kovalev , a right wing , is playing alongside center aleksei_yashin of ottawa , his friend and teammate from their junior days with dynamo moscow . ''it was a real important game for us to play on a small rink again , '' kovalev said . while training on the wider ice surfaces of europe , the russians sharpened their passing and skating . but all their official cup games are on narrower north_american rinks , a constricted environment more conducive to the bigger , more rugged teams from canada and the united_states . ''they 're bigger and we 're quicker , '' kovalev said of the north americans . ''that 's how we have to play . '' bure ended up on right wing alongside slava kozlov on left_wing and igor larionov at center . on defense , the questions begin with injuries . slava fetisov and darius_kasparaitis both sat friday with minor leg problems . kasparaitis could be valuable because his open ice hip checks keep large , opposing forwards from building momentum with confidence . it is a style used by vladimir konstantinov , russia 's best defenseman , who will miss this tournament with a torn achilles' tendon . another achilles , in the figurative sense , might be sergei zubov , the former ranger defenseman who has been traded to dallas after a year in pittsburgh in which his erratic style displeased the penguin superstar mario_lemieux . zubov played extensively on friday night on the first unit and seemed reckless with the puck , frequently passing to the wrong team in his own end . through his agent , zubov has told dallas management he would rather not play there . if his performance continues to deteriorate as it has over the past two seasons , zubov may soon need to seek a different league as well . should the russians reach the championship round against canada , it will be difficult for them to win the two of three game series . unlike the americans and the canadians , the russians will have no home games . some players have been living in hotels since aug . 1 . of the final seven games of the tournament , five are in canada and most of the referees are from canada . larionov said he fears the referees will allow the obstruction tactics of last spring 's stanley_cup_playoffs . ''grab and hold , and cross checks and no punishment , '' larionov said . ''if they play that style hockey , it 's going to be no fun . '' another challenge , mogilny said , is for the russian players to accept a team concept . ''lots of egos , '' he said of the russian roster . ''lots of superstars . nobody wants to miss a shift . everybody wants to be on the power play . '' fedorov said it wo n't be a problem . ''i left my ego home , '' he said . bure seems fully recovered from the knee injury that ruined his 1995 96 season with vancouver . he said it will be ' 'really strange'' to open the tournament officially in vancouver as a visitor in ' 'my second home . '' he said he is n't concerned that north americans will try to intimidate the russians . ''we can play that style of hockey too , if we want to , '' bure said . ''we 've learned from canadian guys how to play tough . '' bure and his mates got a reminder of their roots when they toured europe and endured some facilities that were beneath north_american standards . in russia , they had to wash their clothes in the showers and hang them up to dry in the locker_room . in germany , there was no heat in a cold locker_room and no dryers for the uniforms . so they dried the perspiration from their uniforms by baking them in the sun of a soccer field . ''we stunk , '' kasparaitis said , referring to body odor , not performance . fedorov said there were difficulties with the russian_federation , which , he said , clings to the methods of the former soviet_union and does n't know how to treat young professionals as ''human beings . '' ''it was awful , '' fedorov said . ''now , we get to the united_states . that 's where the fun begins . '' hockey.

insurgents unleashed a string of fierce attacks across central and northern iraq on thursday that left nearly a dozen iraqis and an american marine dead , while the militant group led by the country 's most wanted guerrilla posted a video on the internet showing the fatal shooting of a candidate from the prime_minister 's slate in sunday 's elections . the killing of the candidate , salem jaafar al kanani , was one of the most direct strikes yet against prime_minister ayad_allawi 's party . mr . kanani appears as no . 150 in a list of candidates led by dr . allawi , according to a web_site aimed at informing overseas iraqi voters . dr . allawi 's slate is expected to perform well on sunday , when millions of iraqis are to vote in the country 's first multiparty elections in decades . but given the large number of competing slates , it was considered unlikely that mr . kanani would have ended up winning one of the new national_assembly 's 275 seats . the video of his killing , with at least three shots to the chest , was posted by the group led by abu_musab_al_zarqawi , the jordanian militant who vowed earlier this week to wage all out war on the process of democracy . the murder of mr . kanani and a spate of attacks on thursday , which included suicide car bombings in the besieged cities of samarra and baquba , appeared intended to sow fear among iraqis as they decide whether to vote on sunday . the marine was killed and four other americans were wounded in combat in babil province , which lies immediately south of the capital , the american military said . american_forces have carried out several offensive sweeps through the area in recent months , but to no avail . in that region , on the main highway running from baghdad south to najaf , which is often controlled by insurgents , members of the iraqi national_guard had set up checkpoints about every three miles on thursday . traffic was sparse , and it was clear that iraqi_security_forces were trying to clamp down on movement as the elections drew closer . but insurgents managed to set off a roadside_bomb near an american convoy in the market town of mahmudiya , killing at least three iraqis and injuring seven others , the associated press reported , citing a local hospital director . the military said an american soldier in tikrit died thursday of accidental gunshot injuries . the videotape of the killing of mr . kanani began with several minutes showing his identification_cards , including one from the titan systems corporation , a company that provides interpreters to the american military . another card showed his membership in the iraqi national accord , dr . allawi 's party . mr . kanani then spoke to the camera . ''i advise all young men not to back the enemy occupiers and ask them to serve the people of their homeland , '' he said . ''i was captured by the mujahedeen . they treated me very well . '' the video then showed mr . kanani lying face up on a floor as an insurgent fired three bullets into his chest . in the other violence on thursday , a suicide car_bomb in samarra exploded near an iraqi_army patrol , killing an iraqi soldier and two civilians , reuters reported , citing an american officer . doctors at a local hospital said four iraqi soldiers and two civilians were wounded . samarra has been the site of some of the toughest fighting in salahuddin_province , a sunni dominated area that served as a strong base of support for saddam_hussein . the first infantry division swept through the city last fall , only to have insurgents regroup weeks later and resume their attacks . of all the cities in the embattled province , samarra is expected to be one of the biggest trouble spots heading into the elections . in baquba , 30 miles northeast of baghdad and also under the watch of the first infantry division , a suicide car_bomb exploded near the governor 's office in the city center , killing a captain in the iraqi national_guard and wounding four others , said col . adnan abdul_rahman , a spokesman for the interior_ministry . insurgents also killed a police_officer from the hamadini tribe in a drive_by_shooting west of the northern city of mosul , in the ash shifa area , police officials said . in mosul , a city of up to three million , insurgents have frightened many of the newly trained iraqi policemen into abandoning their jobs . a bomb went off in the tikrit area on thursday , colonel abdul_rahman said . the associated press reported that the explosion killed one iraqi bystander and narrowly_missed an american military convoy . the a.p . also reported that an iraqi national_guardsman was killed in ramadi when insurgents attacked american and iraqi forces guarding a school to be used as a polling center . marines in ramadi have suffered some of the highest casualty rates of the war , with guerrillas regularly setting off roadside_bombs in the town center and ambushing american convoys on the highway . the conflict in iraq insurgency.

lead chinese students at many colleges and universities across the united_states have signed a petition to their government on behalf of an american educated molecular biologist who was arrested nearly a year ago in shanghai during a crackdown on political_dissent . chinese students at many colleges and universities across the united_states have signed a petition to their government on behalf of an american educated molecular biologist who was arrested nearly a year ago in shanghai during a crackdown on political_dissent . the petition , dated dec . 18 , is addressed to zhao_ziyang , the chinese party leader . it cites recent reports that the prisoner , yang wei , was about to go on trial in shanghai ''on charges of promoting and instigating counterrevolutionary propaganda . '' the charges refer to articles mr . yang had written for the journal ''china spring , '' published in new york city since 1982 by a chinese emigrant physician , wang bingzhang , founder of the chinese alliance for democracy . in addition , mr . yang was accused of joining dr . wang 's organization and of handing out leaflets during student demonstrations for freer speech and democracy in december 1986 . he was arrested at his parents' home last jan . 11 . constitution is cited the petition noted that some signers might not see eye to eye with mr . yang on his politics and that many did not belong to any political organization . nevertheless , it declared , prosecuting mr . yang for joining an organization and expressing ideas were violations of china 's constitution . ''human_rights situation in china , '' the open_letter said , ''is a major concern of many chinese students and scholars abroad and has drawn a lot of attention of the international_community . '' it said mr . yang 's case was entirely political and belied mr . zhao 's recent assertion that there were no political_prisoners in china . detaining mr . yang for 11 months without formal charges or trial was also contrary to the country 's law on criminal_procedure , the signers said . the petition demanded that the detention of mr . yang be explained and that he and his family be given the right to choose their own defense lawers . it further asked that mr . yang be tried in public , and that his rights to a proper defense be fully assured . finally , the petition requested that representatives of chinese students abroad be allowed to attend the trial or testify for mr . yang and that they be guaranteed freedom to return overseas to resume their studies .

for unbridled passion , there 's nothing like the soccer match between roma and lazio this month . by jeff z . klein in america , we take our sports rivalries seriously , as anyone who has been to a yankees red_sox game can tell you . but for pure operatic heat and spectacle and that special sense of menace you get from the sight of riot_police in retreat nothing beats the game on feb . 26 between roma and lazio , a culture war between rome 's two top level soccer teams played out in the monumental setting of the stadio olimpico . road flares , bonfires and huge banners , fans surging over crowd_control barriers and throwing things it 's a perfect maelstrom of danger , passion and fun , often accented by a drifting pall of colored smoke that obscures the field for the game 's first 20 minutes . where the teams are in the standings is utterly beside the point the only thing that matters is beating the other side . when the englishman paul gascoigne scored a late goal that salvaged a draw for lazio in 1992 , he wept on the field for a full two minutes . why ? ''because of what would have happened if we 'd lost , '' he said . fearing his own fans was bad enough three days later he was punched in the street by a group of roma supporting nuns . nuns punching players might seem amusing , but the roma lazio rivalry is anything but . lazio 's most extreme fans adopt the trappings of fascism , including a disturbing amount of racist chanting . ( even a lazio player , paolo di canio , was fined in december for giving a fascist salute . ) roma 's fans , the ultras , style themselves as leftist anti fascists , but they 're every bit as prone to fighting and littering the field with debris in response to perceived injustices . given this overlay of political strife , it 's a good idea to choose your section of the 82 , 000 seat stadium carefully . the curva nord , or north end , is occupied by thousands of the most rabid lazio fans , including the irriducibili , or indomitables . the curva sud is roma 's end , home to just as many ultras . do not make the mistake of wearing the sky blue of lazio in the curva sud or the red of roma in the curva nord . it 's prudent to stay neutral and buy a seat as close to the middle of the field as possible . long before the match starts , each curva will be full , with the fans creating elaborate , synchronized card displays or unfurling enormous banners ( ''you 'll see nothing in the world greater than roma'' ) . if the match comes off without major incident one of the 2004 games was stopped after false rumors of a child 's death led to running battles with the police fans of the winning team will gloat insufferably for months , even years . as you stroll around enjoying the cafes or taking in ancient ruins , you might see splashed on walls all over town the gnomic graffiti that reads , simply , ''5 1 . '' a thousand years from now , some examples of that graffiti might still be visible . every roman knows what 5 1 means . that 's the score roma beat lazio by in march 2002 . in rome , it 's important to have a sense of history . if you go tickets for the feb . 26 roma lazio match at stadio olimpico can be bought through the clubs' web_sites ( www . sslazio . it and www . asromastore . it ) as well as at the stadium and at lottomatica kiosks . hotels two good ones are locanda carmel , via g . mameli 11 , in the historic trastevere district ( hotelcarmel . it , 39 06 580 9921 ) , and fawlty towers , via magenta 39 ( fawltytowers . org , 39 06 445 0374 ) , near the termini rail station . pre and postgame the pub and restaurant accademia 90 , at vicolo della renella 90 , and gauguin caf , via del moro 24 25 . attendance required.

the bank of japan today lowered an important lending rate by three quarters of a point , a day after the government announced a package of measures to stimulate the sagging economy . but the stock_market , reflecting the sagging confidence of the business community , reacted coolly . after falling to a five year low on tuesday , the key nikkei index of 225 stocks was lower again today , off 300 points in the first hour of trading . the central_bank cut its official discount_rate , the benchmark interest rate it charges banks for overnight loans , to 3 . 75 percent from 4.5 percent . the move , which had been expected , was the fourth reduction in the last year . it came as part of the government 's response to predictions that economic_growth in the fiscal year that begins today would be less than 3 percent a recession by japan 's subjective standards . the measures announced on tuesday included a program to provide government loans to stimulate housing construction , capital investment and small business activity . business confidence has eroded with surprising swiftness in recent weeks in response to indications that the economic slowdown is much steeper than had been expected . although data on corporate profits and corporate investment had given ample warning of a slowdown , it was the stock_market 's recent drop through the important 20 , 000 nikkei level that prompted the government to announce measures intended to jump start the economy . japan 's stock_market has now lost more than 50 percent of its value since hitting a record high at the end of 1989 , and there are worries that further heavy losses could set off more severe disruptions in the economy by causing banks and other large investors to suffer huge losses . " this is a positive move and it will probably stabilize the declining level of corporate profits , " said robert alan feldman , an economist here with salomon_brothers ( asia ) , referring to the interest rate cut . " but it 's not going to make people invest yet . " mr . feldman added that some of the stock_market 's disappointment reflected many analysts' interpretation of the central_bank 's move as a signal that it would not take further steps to get the economy rolling again . that means any further stimulation will have to come from government fiscal_policy , an uncertain prospect in a tense political environment . government proposals the government announced tuesday that it would accelerate billions of dollars in public works spending and encourage sagging corporate investment in an attempt to keep the economy from slipping into recession . but many experts here said it would take many more months for the economy to work off what they saw as excessive capital investment . " there was an orgy of investment by manufacturers over the past five years , which was the major stimulus to the economy , " said paul summerville , economist here with jardine_fleming_securities . " the party 's over now and there 's not much the state can do to correct that . it 's going to take some time . " the signs of an economic slowdown after five years of blistering growth have been gathering for more than a month . surveys have shown capital investment sliding , corporate profits dropping , factories falling silent and goods piling up unsold in warehouses because of slack demand . few expect the slowdown to produce large numbers of jobless or serious disclocations for the japanese . in fact , the government announced tuesday that the unemployment rate actually declined last month , to 2 percent from 2.1 percent . but the economy shrank slightly in the fiscal fourth_quarter , and most economists expect it to grow by less than 3 percent in the new fiscal year . mr . feldman , for his part , predicted that the economy would grow by only about 1.5 percent this year , less than half the 3.5 percent target set by the government . in addition to important parliamentary elections this summer , the government is worried that the slowdown could worsen already tense trade relations with the united_states . if japan 's economy continues to cool as the united_states begins its recovery , japan 's trade surplus is likely to soar and increase the pressure in congress to enact protectionist legislation . that prospect has only added to the anxieties of the japanese government . public works budget in the stimulus_package , the government said it would spend about 75 percent of its public works budget in the first half of the fiscal year . power companies and public utilities like nippon_telegraph_and_telephone are being urged to increase their capital spending sharply over the next six months . housing construction is being encouraged . and the government will take measures to make loans available to small and medium size companies , particularly for labor saving investments .

perhaps no minor party has shaped modern day politics in new york as profoundly as the state 's conservative_party , sending a little known candidate to the united_states_senate in 1970 and helping orchestrate the defeat of a democratic star , gov . mario m . cuomo , a generation later . but now , with the steady erosion of its base of power over the last decade , the party faces the grim prospect of going the way of the brooklyn dodgers , the new york herald_tribune and the subway token . in one of the more intriguing plots of the 2006 political season , the conservative_party is at risk of losing its place on the statewide ballot next year , political analysts say , and some republicans are questioning the value of their longtime alliance with conservatives at a time that tensions between the two parties are high . under state law , a party 's candidate for governor must draw at least 50 , 000 votes to ensure that the party has a place on the ballot for the next four years . but political analysts say that it is an open question whether the conservative_party can do that , given its dwindling enrollment , disenchantment within its ranks and infighting among some of its leaders . in the 2002 election for governor , for example , the conservative_party had a remarkably weak showing , drawing 176 , 848 votes , about one fifth of the 827 , 614 votes it collected in 1990 , according to results compiled by the state board of elections . ''party leaders have to be very worried about survival , '' said lee m . miringoff , director of the marist_college institute for public opinion . he recalled the fate of new york 's liberal_party in 2002 , when it lost its place on the ballot after a half century of existence . even if the conservative_party manages to get the 50 , 000 votes it needs to remain on the ballot , it faces the strong possibility that it will tumble to a lower spot on the ballot if it draws a relatively small number of votes on election day 2006 because ballot positions are assigned according to a party 's vote totals in the governor 's race . in 1998 , for example , the conservative_party lost the third line on the ballot , line c , to the upstart independence party and has not been able to recover that coveted position since . the third ballot line is the highest spot for a third party , behind the republicans and democrats , and so is easier for voters to notice than lower ballot lines . ''i have deep concerns about the longevity and future of the conservative_party , '' said richard stack , the chairman of the albany county conservative_party . ''the party might end up on line g . and you know what g stands for ? gone . '' michael r . long , the chairman of the conservative_party , acknowledged a need to rally rank and file conservatives , though he said he did not see the situation as dire as some describe . ''the stakes are high , '' he said . ''but i do n't necessarily fear us going out of business . '' the situation has implications beyond the fate of the conservative_party . in an apparent effort to mobilize their party 's base , leading conservatives in the state are sharply criticizing republicans party leaders , as republicans try to field a slate of politically moderate candidates to compete next year in heavily democratic new york . in particular , republican leaders are championing jeanine f . pirro , the westchester_county district_attorney , to run for the senate and william f . weld , the former massachusetts_governor , to run for governor . but their support for abortion rights and gay_rights has alienated some conservative leaders , who have indicated that they may run their own candidates for governor and for the senate if republicans do not select candidates with more right leaning ideologies . mr . long said he is far more interested in making an ideological statement that would resonate with his party than he is in simply winning . ''we are not just in it to win elections no matter who the candidate is , '' he said . ''we are in it to win elections with like minded conservative candidates . '' if conservatives break with republicans in 2006 , the implications could be significant , political analysts say . minor parties can often provide margins of victory to major party candidates when races are close . that was the case in the 1994 race for governor , when the conservative_party line made the difference in george e . pataki 's victory over mr . cuomo . republicans are outraged at the criticisms being leveled by conservative leaders , including mr . long . many republicans say the conservative_party 's attempt to influence , if not dictate , the republican_party 's political lineup for 2006 is a classic case of the tail trying to wag the dog . one high ranking republican official , who insisted on anonymity because he did not want to inflame tension between the two parties , said that the conservative_party 's political clout had diminished so greatly that republican candidates would be better served with the independence party line instead . ''the republican_party does n't need to be beholden to the conservative_party anymore , '' the official said . several republicans have even asserted that conservative_party leaders would be spiting themselves by running their own candidate for governor and thereby inviting the possibility of failing to get the 50 , 000 votes needed to keep the party 's line on the ballot . but conservatives note that there is evidence that their party is better able to excite its supporters when it picks its own candidate . in 1990 , for example , herbert london , running as a conservative , had nearly as many votes as the republican nominee for governor , pierre rinfret . mr . cuomo , then the governor , was re elected that year with 2.2 million votes on the democratic and liberal lines , to about 865 , 000 for mr . rinfret and 828 , 000 for mr . london . in a sense , the conservative_party has been a victim of its own success since 1994 , when it entered into a pivotal alliance with new york republicans to support mr . pataki . mr . cuomo had 2.4 million votes on the democratic and liberal lines . mr . pataki , who had 2.2 million votes on the republican line , was lifted to victory with the roughly 329 , 000 votes he received on the conservative line . but the republican conservative_coalition that was cemented in 1994 eventually became a source of dismay among conservatives . even as the conservative_party endorsed mr . pataki in his two subsequent re elections , in 1998 and 2002 , he moved to the left ideologically , adopting democratic positions in order to remain politically viable in an increasingly democratic state . today , many conservatives point to the years of support that party leaders provided to mr . pataki as one of the main reasons for disaffection in the party ranks . the party has also lost enrollment in recent years , with 155 , 000 registered members this month , compared with 173 , 905 in november 2000 , according to the board of elections . james brewster , vice chairman of the conservative_party , said one reason the conservative line on the ballot had such a weak showing in 2002 was that the candidate was none other than mr . pataki , who moved toward the middle politically in his later runs for governor . mr . brewster said part of the ''grass roots of the conservative_party did n't go out to vote'' because mr . pataki was at the top of the ticket . ''and if they did go out to vote , they did n't vote for the governor , '' he said . ''they did n't vote for george_pataki because he moved to the left too far . '' mr . brewster said it would be a mistake for the party to endorse another liberal leaning republican . ''we 're not going to energize our base with a weld , '' he said . the party 's circumstances are a far cry from its standing in 1970 , when james buckley was elected to the united_states_senate on the conservative line with more than two million votes . these days , some in conservative circles believe that the party must be open to moderate republican candidates who may differ with conservatives on some matters but who are viable as candidates in a largely democratic state . ''they have to learn to compromise a little bit , '' said mr . stack , the albany conservative chairman , referring to party leaders . ''their refusal to compromise is leading them to select candidates who are unelectable . ''

both companies have french roots , and both plan to go public in 2005 . but the similarities do not end there . both lazard , the financial firm , and lectricit de france , the state owned utility , are going public in large part because their managers concluded that operations could not continue as they were . and both faced substantial internal quarrels over the very idea of selling shares to investors . the good news at lazard , which filed its preliminary prospectus late last week , is that the squabbling insiders have reached a truce . one faction promises to step aside and let the other do as it wishes so long as public investors put up the money needed to buy them out . and if the public does not come up with the money ? then the group that failed to sell the offering promises to go away at the end of 2005 , leaving the company to be run by those who were quite happy to leave if they were paid enough for their stake . at lectricit de france , no such truce has been reached , promising to make the run up to the offering a fascinating one . the company 's unions are bitterly opposed to the idea of partly privatizing a state owned company , even though they have received promises that the workers will not be hurt by the change , along with assurances that the government will retain control . this year , when the french parliament was considering legislation needed to make the share sale possible , the unions staged work actions that caused blackouts in some cities and disruptions in the power supply at lys e palace , home of president jacques_chirac , and at the eiffel_tower . union members ripped the electric meters out of the home of jean_pierre_raffarin , the prime_minister . nonetheless , the legislation passed , and last month the government said it hoped to sell to the public up to 30 percent of the utility , known as edf , for as much as 11 billion_euros ( 14 . 7 billion ) . getting that offering done requires france to mount a somewhat contradictory campaign . on the one hand , the government must persuade the public , and the workers , that something must be done with the company 's huge liabilities , which some think are greater than the value of the assets . pension obligations loom large in those calculations . or , as nicolas_sarkozy , then france 's finance minister and now the head of the governing party and a presumptive presidential_candidate in 2007 put it last month in announcing plans for the public_offering ''the situation of edf is fragile and requires strengthening the company 's capital . '' such arguments are not likely to help in lining up buyers , however . there , the argument presumably will revolve around expectations for growth from operations in countries like germany and italy , as well as in france , and on the possibility of profits from selling stakes in utilities in scandinavia , spain and south_america . the government will have to persuade investors that a partly privatized company will be able to control its costs , while persuading workers that they need not fear the results . it will be interesting to see if the unions again mount protest actions . at lazard , there is no fear of the workers trying to sabotage the offering , but the company is promising prospective_buyers that it will take a cleaver to personnel costs . the prospectus discloses that in 2002 and 2003 , the company paid more to its managing directors basically the people who run the place than it made . and it intends to do the same this year . but next year , things will be different , the company promises . ''following the completion of this offering , we intend to reduce our target level of employee compensation and benefits expense , '' the prospectus states . the managing directors are going along with that for a couple of reasons . first , they will receive a lot of stock in the offering stock that they can eventually sell . second , lazard has lined up nearly every major investment_banking firm to participate in the offering , and has obtained promises from them not to go after lazard employees . lazard traces its roots to 1848 , when the lazard brothers started a dry goods business in new orleans , before moving to san_francisco to cash in on the gold_rush . they opened offices in paris in 1858 and in london in 1870 . in 1880 , a cousin of the brothers , alexander weill , took control of what had become a firm that offered financial_services on both continents . it is a weill descendant , michel david weill , who is now chairman of lazard and who hired bruce wasserstein , the chief executive , to run it . their disputes have become well known , and if the stock offering and a related bond offering succeed , mr . david weill and other partners will depart with 1 . 6 billion , leaving the company to its current management and the public . if the deal does not go through , mr . wasserstein will leave . running a european electric_utility is far removed from counseling companies on strategic moves , lazard 's area of renown . but both companies found themselves with internal problems big liabilities at the utility and out of control compensation costs that could be dealt with if public investors would put up a lot of cash . in 2005 they will be asked to do so . market place.

the yen plummets . japan 's currency sank to a_10 week low against the dollar after japanese finance officials said they favored a weaker currency . in new york , the dollar settled at 118 . 74 yen , up from 114 . 21 on friday .

the next american astronaut in line for a tour aboard the troubled russian space_station mir has been pulled from the mission because she is too small for the russian space walk suits , nasa announced today . the astronaut , comdr . wendy b . lawrence of the navy , had been scheduled to begin a four month stay on the mir in september , but will be replaced by her backup , dr . david a . wolf , because he will be able to act as a backup crew member for planned space walks to repair the damaged station , the agency said . commander lawrence , who has been training for the mir mission for more than a year , is 5 foot 3 , too short to wear the orlan suit used by russian astronauts for space walks . dr . wolf is 5 foot 10 . neither american astronaut had undergone space walk training , and the flight of the shuttle atlantis , tentatively scheduled for sept . 18 , could be delayed for about 10 days to let dr . wolf complete the extra instruction at the gagarin cosmonaut training center outside moscow . officials of the national_aeronautics_and_space_administration and the russian space agency have been discussing options for space walks to repair the mir since a progress cargo craft rammed the station 's spektr research module on june 25 . ''it was jointly agreed by both sides that it would be mutually_beneficial to have all three crew members on the mir qualified for space walks in the event additional assistance is needed from the u.s . astronaut on the station , '' nasa said . today , before announcement of the crew shift , commander lawrence told reporters at russia 's space training center at star city that she had a ''big desire'' to go to the mir and replace her fellow astronaut , michael_foale , who has been aboard the station for three months . but she noted that no final decision had been made on leaving another american aboard the aging mir . frank culbertson , nasa 's shuttle mir program manager , who is traveling in russia , informed commander lawrence of the decision as she was completing her mission training in star city . because of her experience with the mir systems , the agency said , commander lawrence , a veteran of a previous space_shuttle mission , will fly to the mir in september to deliver dr . wolf . dr . wolf , a physician as well as an electrical_engineer , flew on a shuttle mission in 1993 . the mir commander , vasily_tsibliyev , who was controlling the cargo_ship at the time of the collision , said today in star city that the damage would have been far greater if not for his careful steering . ''i was attempting to brake it and cause the craft to go by , '' the associated press quoted him as saying . ''if i had not been doing that , i 'm sure that it would 've hit the station directly . and if it had done so , we would 've either died or been just metal floating in space . '' there has been speculation that either pilot error or an overloaded craft that would not respond properly caused the accident . ''you can always find somebody to blame but the important part is that we have a setup here that was not worked out completely or not perfected , '' the cosmonaut said .

american commanders say iraqi forces are reeling from almost three weeks of air and land attacks , and they are mounting a three pronged army assault on baghdad to try to force a quick end to the war . when the land campaign was first devised , american commanders envisioned a far more deliberate assault . the attack on baghdad was to involve forward operating bases on the periphery of the iraqi capital . careful probes would determine the whereabouts of the iraqi leadership . armed with such intelligence , armored and light_infantry movements would strike at their targets and then quickly withdraw . top commanders cautioned that they intended to be patient and did not plan to rush forces into the heart of a heavily defended city . but that deliberate plan has been put aside in favor or a more audacious approach , officials say , one that seeks to take advantage of the iraqi military 's heightened vulnerabilities but that also presents risk to american_forces . the senior american commanders plotting the offensive say they have concluded that the iraqi command and control is frayed and that saddam_hussein 's security forces are unable to mount an effective urban defense . american generals believe that the thunderous air_strikes against the republican guard outside baghdad and the rapid army and marine advance have caught the government and its defenders off guard . the final proof of that , american official say , was the meager defense iraqi paramilitaries were able to mount when the army 's third infantry division tanks and armored_personnel_carriers drove through the city on saturday . so , following a deep_seated principle , the american military is responding to the indications of enemy weakness with more strength . they are sending more troops and more armor into baghdad from more directions , and they are doing so more quickly than they had anticipated . this is not an occupation , american officials said today . the military says it has no interest in fanning out through the city , taking control of its diverse ethnic neighborhoods . it has neither the forces nor the desire to control and administer a city of 4.5 million . instead , officials say , the campaign is an aggressive effort to tear down what is left of the government and overwhelm its defenders by striking at mr . hussein 's security forces from different sides . there has been much talk in washington about the ' 'shock and awe'' that might result from an air campaign . this is an attempt to induce shock and awe on the ground , as american armor maneuvers near the former power center of the government and tries to narrow the space where the top officials might be hiding . this is how the plan was unfolding tonight . three large task forces from the third infantry division were attacking the city from three directions . the second brigade of the third infantry division , which set the stage for tonight 's action when it punched its way into the center of the city on monday , has stayed there . instead of rushing in and out of the city , the brigade is using mr . hussein 's former government center as a base to strike out at iraqi forces and whatever remnants of the iraqi government it can find . forces from the third brigade , meanwhile , have maneuvered around to the north of the city and are driving south . the first brigade is attacking from yet another direction . at the same time , american_marines are attacking from the east . their attacks are being coordinated with simultaneous attacks within the city by special_operations forces . the idea of coordinating attacks by conventional forces with commando missions has been used in the american attacks to secure the cities in southern iraq and is an outgrowth of the american_experience in afghanistan . the theory is that the combined efforts of army and marine forces , american air power and agile special_operations forces will quickly unhinge the enemy . ''the purpose is to attack the regime , '' an american official said . ''we are not talking about a long term occupation . '' while the american military is vastly superior to the iraqi forces , the united_states forces face some challenges . there is a limited amount of reliable and useful information from american intelligence agents about potential targets in the city . there is the very real risk of allied forces firing on each other in a city that has become an arena for different forces . one such case has already been reported . there is also the fact that the iraqi paramilitary_forces are operating on their home turf . american commanders have warned their forces about ''asymmetric warfare'' like suicide_bombing attacks that are intended to compensate for the americans' superiority on the conventional battlefield . iraq 's forces have taken a beating , but many still continue to resist . the forces still have some rudimentary command and control , officials say , though it is not clear if anyone is in over all charge of the iraqi defenses . the iraqi forces include the fedayeen paramilitary , which appeared to be arrayed against the marines . elements of some republican guard divisions , including command and control units , have also moved into the capital to shield themselves from air attacks and to fight another day . but other forces have been all but wiped out , including iraq 's third special_forces brigade , which made the mistake in recent days of leaving the vicinity of the capital to try to take on the marines . the iraqis still have something of an air defense . before the attack on baghdad , they had not shot down any planes . now , they have downed an a_10 , the air_force aircraft that specializes in close_air_support of friendly troops . to facilitate the attack , american military planners have divided up the city into sectors and sought to identify which ones are occupied by mr . hussein , if he survived the airstrike on monday that was intended to kill him , his sons and his supporters . the relentless high tempo , aggressive american offensive in baghdad contrasts with the approach the british used in basra . drawing on their experience in urban operations in northern_ireland , the british took a far more deliberate approach . their offensive in basra took weeks as the british sought to gradually expand their toehold in basra , forge new allies among the population and cultivate new intelligence contacts . the approach today is also more aggressive than some commanders initially suggested . last month , lt . gen . william s . wallace , the head of v corps , which is spearheading the army attack in baghdad , emphasized that american_forces would be careful not to rush into baghdad and would be sent there only after patient consideration . but now that the operation is happening , it is bigger and faster than expected . general wallace is in charge of the army attacks . his new plan calls for hitting the iraqis with a multidimensional attack and doing so now . the days of probes are gone . the americans seem to have opted for the full court press . a nation at war strategy.

in an era of business deals and fervent consumerism , when the m.b.a . is hot among graduating_seniors , why do more and more of the better college students yearn to join a seemingly outdated club the communist_party ? at beijing_university , the country 's most eminent school , which draws an elite student body from around the country , 10 percent of the 8 , 733 undergraduates are now party members . that proportion is up from 5 percent in 1991 , when the party was in low repute after the violent crackdown on students demonstrating in favor of democracy in tiananmen_square in 1989 . more than 20 percent of the beijing_university students have sought to join , and applications are increasing each year , party officials say . but it is not easy to get into this exclusive club . the numbers of applicants and members are also climbing at other leading universities , the officials say . nationally , the communist_party 's total membership has grown to a historic high of 58 million , up from 48 million in 1989 and 4.5 million back in 1949 , when the people 's republic of china was founded . there are two explanations for the party 's continuing growth . one is offered by wang dang , 20 , a junior at beijing_university who had started his quest for membership while still in high_school in the southern coastal province of zhejiang . bright eyed , brimming with enthusiasm , he said ''this is an outstanding party with an outstanding purpose , to change society for the better . it 's attractive to anyone who is searching for higher ideals in life . '' the other explanation is offered by a longtime party member now in his 60 's , a disaffected ''liberal'' who spoke on condition of anonymity ''people my age joined the party for ideals . now , most of them are joining because they want power and seek personal gain . '' the elder 's view is shared by many students who tend to be openly skeptical of the motives of those who join the party , noting , among other things , that a party card helps graduates from the provinces get jobs that allow them to live in beijing . what is certain is that even today , membership in the all powerful party can bring enormous advantages . for those who seek a career in government , it is indispensable . for the large numbers who will end up working in state owned companies , a party card is required for advancement to senior management positions . even many leading private businessmen join because membership can open doors with government and party officials who control vital information and authority . ''the chinese communist party has become a network of bureaucratic elites , '' said suisheng zhao , a professor of politics at colby college in maine and editor of the journal of contemporary china . young people are joining , he said , because of ''the power of party membership to enhance their career in the bureaucratic system . '' the party itself is less monolithic and demanding of its members than it used to be , noted kenneth lieberthal , a professor of politics and business at the university of michigan , ''and therefore it can actually be attractive for people who want to bring about better governance . '' but he added ''a substantial portion of the most exciting and potentially_lucrative positions in china 's marketizing economy are disproportionately available to those who are party members . the party has become the establishment of the most rapidly growing and perhaps the most rapidly changing country on earth . '' whether a growing share of less than committed cadres will help the party keep its monopoly on political power is also a matter of debate . the party elder said that with so many people falsely claiming to believe , ''it creates an environment of lies , and this will eventually erode the power of the party . '' roderick macfarquhar , an expert on chinese politics at harvard_university , said it was clear that most new members mainly want to further their careers . ''recruits of this type only further adulterate the ideological nature and esprit de corps of the party , and indeed are a symptom of how far that degeneration has already gone , '' he said . but dr . zhao of colby noted that rising party membership reflects the pragmatism prevailing in china today . ''this pragmatism could help the party hold its power as long as it does not worry about ideological correctness or grass roots discipline . '' illustrating the advantages of membership , a woman in her 30 's who did not join the party , and works in the state run broadcast industry , said party members in the radio and television networks get first shot at foreign assignments and covering big stories like the return of hong_kong to china . a capable non member could become a senior editor , she said , but could never reach senior management of the work unit . another woman in her 30 's who joined the party at her first job , with a government company , said her reasons were as much psychological as practical . ''you have to be an outstanding worker , '' the woman said . ''and it is the only thing you can join to get any recognition . '' the party has for years had a public goal of attracting younger and better educated members . in pursuit of that aim hou xuezhong , who is vice director of the organizing department of the beijing_university party committee and also director of the university 's party school , has been one very successful cadre . he took over university wide recruiting in 1991 , when , as he recalled in an interview , ''there was much confusion of minds , so fewer students applied . '' he had previously served in the party committee of the university 's physics department . ( all the academic departments have their own party committees or divisions ) . the party does not just accept anyone , mr . hou said , and it usually takes applicants more than a year and a half of meetings , study of the elusive deng_xiaoping theory , self_criticism , essays , group outings and closely_scrutinized behavior to get in . he rattled off the qualifications ''you have to believe the final state of society will be communism , that 's the most important thing . you have to study hard and work hard . you must believe that the communist_party can lead china toward reform and opening up . you must be willing to follow the party rules the individual must follow the collective , the minority must follow the majority , the lower level must follow the upper level . you must care about the masses , and serve the people . '' mr . hou acknowledged that some applicants had less than pure motives , but he insisted that intense education , and a close watch on the students' behavior among their peers , helped to insure that opportunists were weeded out . the students joining today have only known the party of the deng_xiaoping era of loosening economic controls . they were grade school students in the year of tiananmen_square . the two students introduced by the university as showcase examples of young communists , at least , seem to be bubbling with idealism . mr . wang said he had become an admirer of the party when he witnessed the benefits of economic reforms for his own family . with the opportunity to rent land and pursue rural enterprises , he said , his father and grandfather , longtime farmers , were able to break their bonds to the earth and escape poverty . mr . wang is majoring in international_relations and wants to go to graduate school but is not sure whether he will pursue business , government or academia . the second student , yu huaidong , also a_20 year old junior , is a sociology major from shandong_province , in eastern china . he says he joined because he wants to do something for society and after graduation he hopes to work in poverty stricken areas of central or western china . further explaining his aims , mr . yu cited a saying of confucius ''first you perfect yourself , then you perfect your family , then you perfect society , then you perfect the world . '' asked whether he realized that until recently the party condemned confucian thought , mr . yu said ''i 'm not worried that the communist_party will return to the old times . china was backward , and they were feeling their way . now , after the reforms and opening up , the communist_party knows how to seek the socialist goal . '' asked about 1989 , when many beijing_university students were embroiled in the pro_democracy_demonstrations that were crushed by the communist_party , the two young members shifted uneasily . finally mr . wang said he felt that while many of the students were probably acting out of good intentions , the problem had been with the student leaders , who had hidden objectives and were not truly democratic . ''i believe that the actions of the government were basically correct , '' he said , and without the actions taken , ''we could not have had the progress we have had in the last 10 years . ''

either victory was at hand , or television had rewound news coverage back to the first , optimistic days of the war . a confident george_bush , hand in hand with the first lady , paid tribute to cheering marines at camp_lejeune , n.c. , while on the road to baghdad , soldiers from the advancing third infantry division tossed frisbees at eager iraqi children . good news got even better pfc . jessica_lynch shifted overnight from victim to teenage rambo all the cable news shows ran with a report from the washington_post that the 19 year old p.o.w . had been shot and stabbed yet still kept firing at enemy soldiers . in the hands of television , the story had instantly gelled into a heroic made for tv war movie , ''saving meg ryan . '' later yesterday , her father said she had not been shot or stabbed . despite all the sobering lessons learned over the past week , there were few images of civilian casualties or dead american_soldiers during yesterday 's high . viewers instead saw a quick thinking officer head off a confrontation between iraqis in najaf who feared american_troops were heading for their mosque by ordering his men to kneel . excitement kept building abc_news interrupted ''all my children , '' to break the news that coalition_forces had taken saddam international airport at the edge of baghdad the report later proved to be only partly true , with the coalition taking over the runways , but iraqis still holding the terminals . the unexpectedly fierce_resistance of iraqi soldiers , which had framed coverage of the war until yesterday suddenly turned into unanticipated passivity john mcwethy , the abc pentagon reporter , told peter_jennings that the defense of baghdad 's outskirts ''was much weaker than many anticipated . '' it was not a day to dredge up the risk of suicide bombings or american_soldiers accidentally opening fire on a bus filled with women and children . nor was television in any mood to dwell on the possibility of dangerous urban_warfare still ahead . government officials and reporters noted that there could be more fighting soon , but images on television suggested the war was already won . mike cerre of abc , reported on 2 , 500 iraqi men surrendering to the first marine division , and on cnn , dr . sanjay gupta , the medical correspondent , joined military doctors in an unsuccessful effort to save the life of a wounded iraqi child . ted_koppel , the diffident anchor of abc 's ''nightline , '' resisted the temptation to gush . he reported seeing ' 'modestly enthusiastic onlookers'' as he traveled toward baghdad with the third infantry division . but it was not just television raising the national blood_sugar . perhaps to counter criticism and doleful field reports , the bush_administration also pumped up the volume . president_bush has given several speeches around the country since ordering troops into battle . yesterday , in stark contrast with his solemn , rather stiff presentation in philadelphia on monday , mr . bush felt loose enough to try out a jay_leno like punch_line . ''there 's no finer sight , no finer sight , than to see 12 , 000 united_states_marines and corpsmen , '' the president said , ''unless you happen to be a member of the iraqi republican guard . '' as television screens filled once again with stirring battle images , washington did little to dampen soaring expectations . secretary of defense donald h . rumsfeld has complained rather bitterly about armchair generals second guessing the war plan and ' 'media mood swings'' that inflate small glimpses of combat into full scale war agincourt one day , guernica the next . yesterday , mr . rumsfeld warned of ' 'difficult days ahead , '' but even he could not suppress a little swagger . coalition troops , he said , were ''closer to the center of the iraqi capital than most american commuters are to their downtown offices . '' commentators were careful , however , to warn viewers that fiercer fighting and more casualties could still lie_ahead . even fox_news , which has been the most steadfast cheerleader for the invasion , was wary of overconfidence . but those small doses of realism could not compete with the heady images of victory that poured out on every news channel . and like in the first days of the war , television reporters traveling with the troops got their groove back . bob arnot of msnbc narrated a noisy firefight , telling viewers , ''bullets are literally whizzing over our heads . '' as television competed to deliver viewers the most riveting shots of action , and headlines like ''postwar iraq'' introduced reports about secretary of state colin l . powell 's trip to brussels , viewers could be excused for thinking that peace had already broken out . a nation at war the tv watch.

the department of defense has identified 1 , 321 american service members who have died since the start of the iraq_war . it confirmed the deaths of the following americans yesterday lehto , jason a. , 31 , staff sgt . , marine_corps_reserve mount clemens , mich . marine wing support group 47 , fourth marine aircraft wing . rivera serrano , jose a. , 26 , specialist , army mayag ez , p.r. second battalion , fifth cavalry .

the drive for new and expanded convention centers stretches from new york to san_diego . in the last two years , high point , n.c. , built a showplace hall with 450 , 000 square_feet of exhibition space , while grand_forks , n.d. , erected the alerus center , with 123 , 000 square_feet . anaheim , calif . charleston , w . va . columbus , ohio san_antonio seattle portland , ore . and eight other cities expanded their halls by a combined total of 4.5 million square_feet . that round of the intercity convention_center building competition brought the grand total to about 59 . 7 million square_feet at 347 sites , tradeshow week says . much more is on the way . boston is building an 800 million hall on a prime piece of land in south boston as the centerpiece of an urban redevelopment project . not to be outdone , washington is building a center with 725 , 000 square_feet of exhibition space , 209 , 000 more than boston . the world expo center in kissimmee , fla . , will have 2 million square_feet when completed in 2004 . three dozen other cities are planning convention centers or awaiting financing . that includes amarillo and houston , tex . fort_myers and lakeland , fla . new orleans philadelphia san_jose , calif . des_moines and virginia_beach . in new york , the hotel industry has long sought an expansion of the jacob k . javits_convention_center , which has 814 , 400 square_feet . the javits captures 6 to 8 percent of the market for the 200 largest shows in the industry , compared with 22 . 4 percent for las_vegas and 16 percent for chicago . after years of squabbling between the city and the state , both mayor michael r . bloomberg and gov . george e . pataki now agree on the importance of expanding the javits . the only problem is where the money will come from , given the state 's and the city 's fiscal constraints . charles v . bagli commercial real_estate.

iraqi political leaders stepped up efforts to persuade the world that they were tackling the country 's thorniest problems on wednesday , highlighting crackdowns on militias , pressing for more rapid arming of iraqi troops , and underlining progress on a national oil law and new examples of reconciliation with former baathists . the flurry of activity on the part of the shiite led government came after weeks of punishing criticism from western and middle_eastern leaders , who have focused on everything from the government 's botched execution of saddam_hussein to mounting chaos in baghdad . prime_minister_nuri_kamal_al_maliki seemed to have taken as a challenge president_bush 's assessment that the iraqi government had ''fumbled'' saddam_hussein 's hanging . during an hourlong meeting with several foreign journalists on wednesday , he suggested that mr . bush had been pushed to express disapproval by public opinion . ''i would like to correct president_bush that saddam , that person , was not subjected to any act of revenge , any physical attack , '' he said on a tape of the interview made available to the new york times . ''but it was a judicial process that ended with him executed or sentenced to death according to iraqi law that sentences such criminals to death . '' ''i know president_bush and i know him as a strong person that does not get affected by the media pressure , '' mr . maliki continued . ''but it seems that the pressure has gone to a great extent that led to the president giving this statement . '' he went on to assert that iraq ''is not witnessing a war of ethnic or sectarian cleansing'' because sunnis and shiites were still meeting and trying ''to salvage iraq , '' and he rejected the idea that his government tolerated militia infiltration of iraq 's security forces , saying it had been detaining shiite_militiamen . and he made a counterjab at the united_states , saying that the failure to fully equip iraqi troops had damaged efforts to bring peace to the country , and if the united_states speeded up the process of giving iraqi troops equipment and weapons , the need for american_troops could be significantly reduced within three to six months . prime_minister maliki also anticipated an increase in the budget this year . and he emphasized that the new security plan , including the addition of 20 , 000 plus american_troops , was set to start in coming weeks . he said it would be directed by iraqis a contention that has been greeted by some american military officials with skepticism . other iraqi officials , meanwhile , scrambled to show that they were making progress . ahmad_chalabi , the former exile who helped the united_states build the case for invading iraq and who heads a committee on de baathification , appeared at a rare outdoor news conference in the green_zone to announce that more than 700 baathists had returned to their old government jobs . smiling behind a bank of television microphones as bombs and gunfire interrupted his speech , mr . chalabi , who had advocated a strong de baathification effort , said the government 's roster of rehired workers would continue to grow . falah shanshel , one of about 30 lawmakers affiliated with the renegade shiite_cleric_moktada_al_sadr , said the sadr bloc would end its boycott of parliament in the next few days . in iraqi_kurdistan , anwar dolani , the military leader who oversees one of the brigades slated for the new baghdad effort , said the last of his troops had left for the capital . there were also hints of progress on one of the white_house 's most challenging legislative demands a new national oil law . barham_salih , a deputy prime_minister who heads iraq 's oil committee , said that a final draft of the law , expected for more than a month , could reach parliament as early as next week . ''we are finalizing the draft , and we have the lawyers going over it to make sure it is intact and consistent , '' he said . but he declined to outline many of the latest draft 's details , suggesting that negotiations may still be incomplete . asim jihad , a spokesman for the iraqi oil ministry , said wednesday that the new law included provisions for centralized oversight of contracts with foreign energy companies by a council of appointees from several ministries and the prime_minister 's office . if so , that would be a defeat for the kurds on their longstanding demand for regional control , but it was unclear whether they had found another way to exert their authority . mr . salih , a kurd , said only that the law ''would have some surprises . '' violence continued in baghdad . for the second day in a row , a car_bomb exploded in sadr_city , killing at least 11 people . the united_states military also said two american_soldiers had died in anbar_province , one on wednesday , another on monday . in washington , the national democratic institute , a nonprofit democracy building group , reported that an american employee and three of her bodyguards from croatia , hungary and iraq were killed wednesday when their three vehicle convoy was attacked in baghdad . the group released no names , saying it was ' 'making contact with the families affected . '' the struggle for iraq.

in the era of welfare downsizing , any steep drop in public assistance has become a politician 's signal to boast . in new york city the welfare_rolls listed 797 , 000 recipients last month compared with 1 . 16 million almost three years ago , and in his travels around the country , mayor rudolph_giuliani likes to trumpet the welfare successes as part of his larger portrait of a safer , cleaner , tamer new york . at some point , he often talks about the workfare program that has required about 200 , 000 people over the past three years to clean the streets or help with the city 's other menial tasks so they can continue to receive their monthly welfare support . the workfare program , as the mayor proclaimed earlier this year , is ''probably the best thing we 've done'' for the city 's needy . there is no question that workfare is an approach with political appeal to voters . by promising an end to freeloading , it also helps sustain support for assisting the truly needy . but a times series earlier this week also raises a warning that new york 's workfare may fall short of its reviews in ways that need to be attended to . the series questioned whether today 's 34 , 000 workfare employees were in fact replacing city workers , thus creating a churning competition for jobs at the bottom of the ladder . rules for workfare are often enforced so rigidly that earning a check becomes a difficult task . the articles lamented the lack of adequate child_care , a crucial part of any shift to the workplace for many women now on welfare . over all , the series eroded the idea that workfare offers an easy transition from welfare to a permanent job . at present , the city 's program concentrates on a strict contract welfare checks in return for menial labor . for some of those on workfare , of course , such lowly tasks may be the best they can ever manage . but for others , picking up leaves in one case , leaves already gathered in a bag and then re scattered by a supervisor to fill the time allotted is the definition of a dead end . the mayor and his aides have said that workfare provides a work record that is a more effective step toward employability than training at this stage . resumes provide evidence that a welfare recipient can show up in time for work , they explain . the administration promises a new program that is supposed to serve the twin goals of getting work out of more welfare_recipients while moving others toward private employment . such changes are worth exploring , but there are still many questions about what has happened to those who have left welfare details the giuliani administration has been reluctant to provide . they would be mistaken to hide from the fact that even with the promising start on welfare_reform , there are some very old problems that still need solving .

american_airlines bought 10 million worth of canadian routes and other assets from eastern_airlines . eastern sold its route authority for new york newark and montreal ottawa along with 10 gates at la_guardia airport in new york . the deal also includes gates at montreal 's dorval airport and at orlando , fla . , nashville and hartford . the transaction is subject to approval by the government and the bankruptcy court . eastern has been in bankruptcy reorganization since march 1989 . the sale will leave eastern with miami toronto and tampa toronto as its only canadian service . company news.

canada 's unemployment rate fell three tenths of a percentage point to 7.5 percent in september , the lowest level in more than nine years . the number of new jobs created 63 , 800 was more than had been added over the previous six months and twice what economists had expected . manufacturing accounted for more than a third of the new jobs . the strong jobs report was the latest signal that canada 's economy is heating up , which may lead the bank of canada to raise interest rates before year 's end . timothy_pritchard_world_business_briefing_americas.

the acute angle on a corner of the lot on upper broadway on which a_20 story condo is rising dictated a form that has its designers reaching for a word not often heard in architects' offices a prow . ''that prow has become the major focus of the site , '' said randolph gerner , a principal at gerner kronick valcarcel , the project architect , who said a prow came to mind after he sized up the angle ( 64 degrees 8 seconds ) formed by the southeast corner at broadway and 107th street . the 56 million condominium on the former site of the olympia movie_theater is to have 64 apartments and retail space . foundation work on the building , to be called the opus , is under way , with completion set for january . a sales office already opened a block north has six contracts out . apartments leading to balconies with glass balustrades overlooking straus park are priced at 1 . 455 million to 2 . 9 million . two bedroom units of 1 , 219 square_feet are 850 , 000 to 1 . 1 million 1 , 800 square_foot three bedrooms are up to 1 . 7 million . the developers oriented the opus ''as a family building and took inspiration from the classic six and seven with flexible rooms , '' said veronica w . hackett , co founder of the clarett group , which is jointly developing the site with prudential real_estate investors . at the third level , a 40 inch high bronze frieze by the sculptor ed mcgowin will have abstract figures symbolic of upper west siders in the arts , as well as a clock . rosalie r . radomsky postings.

the phone call that changed peter hartz 's life came on a winter morning in 2002 , as he was speeding to a board meeting at the german carmaker audi . the caller was gerhard schrrated pg 13der , the chancellor of germany , and he got right to the point he was about to announce the formation of a blue ribbon commission to devise a radical overhaul of the country 's sclerotic economy . and he intended to name his old friend mr . hartz as its chairman . ''he did n't ask if i wanted the job , '' mr . hartz said in an interview at volkswagen 's headquarters here . ''when the chancellor asks a citizen to do something for germany , one ca n't say no . '' what followed was six months of 18 hour days , as mr . hartz and his fellow commissioners scoured the world for economic reforms that could be adapted to germany . his goal was simple but audacious to cut the number of jobless in germany by half within three years . to shake loose the country 's hidebound labor market , mr . hartz went after its rigid work rules , implacable labor_unions and , most controversially , its generous unemployment_compensation , which makes life on the dole a reasonable alternative for millions of germans . becoming synonymous with far reaching , often unpopular , reforms turned mr . hartz , 63 , into a lightning_rod . tens of thousands of germans in the depressed eastern part of the country took to the streets to protest , saying the hartz measures would plunge them into poverty . mr . hartz , a burly man with a genial but formal manner , was unnerved to see his name splashed across angry placards . ''i was concerned about my family , '' he said haltingly . ''i myself was somewhat calmer because i have a clear conscience . but the impact on my family , that concerned me a lot . '' in january , the german_government will put the last of the hartz proposals one that reduces unemployment_benefits into law . back in his day job at volkswagen , where he is the director of human_resources , mr . hartz reflected on playing the title role in this economic transformation . ''i acted out of conviction , '' he said . ''i believe we can solve these problems , so i was fascinated to take them on . '' yet critics say the german_government and the unions watered down the most radical remedies proposed by the hartz commission . there are now 4.2 million people out of work in germany , 100 , 000 more than when the hartz reforms were submitted with great fanfare in berlin . ''it was a big mistake to promise the speed and the size of the unemployment reductions , '' said klaus f . zimmermann , president of the german_institute_for_economic_research in berlin . still , he added , ''mr . hartz played a major role in bringing the reform debate in germany to a critical point . '' mr . hartz said he would not render a public verdict before the commission issues a review of the government 's implementation next summer . but he hinted at his frustration with the political compromises . ''not everything that says hartz on it has hartz in it , '' he said . if being a change agent for the german economy was not enough , mr . hartz also led volkswagen 's recent negotiations with its labor_union . those talks , which yielded a 28 month wage freeze in return for the company 's guarantee of job_security , were viewed as a critical test of whether german industry could keep its edge in a relentlessly competitive global market . by heading off a strike , mr . hartz preserved volkswagen 's culture of consensus between workers and management . critics question whether vw can afford its promise to safeguard jobs in germany , given the disparity in costs with neighboring countries like poland and hungary . but mr . hartz said the contract was a breakthrough for volkswagen . it will help fulfill its goal of reducing labor costs by nearly a third over the next six years . and it prodded the union , ig_metall , to accept the idea that preserving jobs is more important than extracting wage_increases . ''we were at a crossroads , '' he said . ''the question was whether germany will maintain its place as a global player with german roots , or whether it will become impossible to stay in germany . '' mr . hartz 's high visibility is unheard of here for someone who has never run a company , let alone spent his career in the normally obscure personnel department . a native of the industrial saar region , near the german french border , he is one of three sons of a steelworker . his father was sidelined by illness , and mr . hartz grew up poor , struggling to put himself through high_school and university , studying nights . he rose to become the head of personnel at a steel mill , and was forced to lay off 2 , 500 workers during the industry 's downturn in the 1980 's . mr . hartz 's work there attracted the attention of ferdinand piech , who had just taken over volkswagen and was facing similar problems with a bloated work force . mr . hartz agreed to join vw in 1993 , but told mr . piech that he did not have the stomach for another mass layoff . later that year , he negotiated his first landmark agreement with ig_metall , which shortened the workweek at volkswagen to four days lowering costs and saving 30 , 000 jobs . that deal was a political blessing for the prime_minister of volkswagen 's home state , lower_saxony , who faced a tough campaign for re election the following year . his name was gerhard schrrated pg 13der . lower_saxony owns nearly 20 percent of volkswagen 's shares , and mr . schrrated pg 13der had a seat on the board . he and mr . hartz became close , talking often about how to bring down germany 's stubborn unemployment . in 1998 , mr . hartz found a first laboratory for his ideas in the city of wolfsburg , which had been founded 60 years earlier by the nazis to turn out europe 's first mass produced car . hurt by its dependence on volkswagen , wolfsburg had an unemployment rate of 18 . 5 percent . mr . hartz pledged to help wolfsburg cut its jobless_rate in half , and volkswagen set about luring auto_parts suppliers and other businesses to help diversify its commercial base . this year , he noted proudly , wolfsburg 's unemployment rate is 7.3 percent below the national average . that registered with mr . schrrated pg 13der , who had been elected chancellor in 1998 on a pro growth agenda . he declared that if he did not cut the number of jobless to below 3.5 million , he did not deserve a second term . in his campaign for re election in 2002 , mr . schrrated pg 13der endorsed the proposals of the hartz commission . some like regulations that make it easier for unemployed people to take odd jobs , or for people to register as freelancers are already in force , and have been successful . others like a proposal for companies to hire unemployed people as temporary workers have fallen short , in part because germany 's torpid economy has not generated enough jobs . the government saved the hardest steps for last . the so called hartz_iv measures , which take effect in january , are intended to force the chronically unemployed back into the labor force . rather than drawing long term unemployment_compensation , which can be up to 60 percent of a recipient 's original salary , they would receive only basic welfare after 12 months out of work . in western germany , this amounts to 345 euros ( 455 ) a month , plus extra money to help pay for rent and utilities . in the east , where living costs are lower , it amounts to 331 euros ( 436 ) a month . protesters marched every monday for weeks to press the government to rescind the rules . but chancellor schrrated pg 13der stood firm , and economists say these will be the most important measures in the whole package . not that it has won mr . hartz many friends . in a poll by the stern newsmagazine last september , 22 percent of germans said they viewed him positively , while 43 percent viewed him negatively . twenty percent were neutral . in eastern_germany , he is even less popular . despite all the complaints , mr . hartz is convinced that germans have embraced the need for change . ''germany has woken up , and now it depends on the speed , '' he said , adding that ''because the other economies we compete with are n't sleeping , '' germany must move quickly . ''when you see how the 10 new members of the european_union are going to develop , '' he said , his voice trailing off .

elena collongues popova worked for years in silence , as the financial architect of parts of the early empire built by mikhail b . khodorkovsky , who controls yukos , the giant russian oil company . but she has since turned on mr . khodorkovsky , russia 's richest man , after french tax police fined her roughly 15 million over actions she said she undertook on behalf of his early business dealings . mr . khodorkovsky , 40 , was arrested in russia in october and is now in jail awaiting trial on charges of tax_evasion , fraud and embezzlement . the case is widely viewed as a political crackdown by president vladimir v . putin on a billionaire whose political ambitions rankled the kremlin . ms . popova says she is telling the russian authorities what she knows to assist their investigation into the ways mr . khodorkovsky amassed his fortune . ms . popova says that she has never met him and that her role in his business was a bit part , as a midlevel financial administrator she never had the complete picture of mr . khodorkovsky 's business empire . but she can speak with authority , she says , about a very relevant part of it offshore companies that were set up to hold yukos shares , seemingly for owners independent of mr . khodorkovsky and his associates . in fact , she said in an interview in november that the ''client'' was her . she said that yukos and bank menatep , mr . khodorkovsky 's original vehicle for acquiring and running former soviet_state assets , used offshore companies ''to minimize taxes and spread the shares around to avoid problems with the antimonopoly committee in russia . '' she added ''they wanted it to look like these were n't owned by a single person , but really they were . '' ms . popova , 50 , said that from 1996 to 2000 , when russia 's rough and tumble transition to capitalism was in full swing , she worked for alexei golubovich , who was then finance director of bank menatep . fortunes were built in those years by buying plants and factories from the state for pennies on the dollar and either stripping them or revamping them into successful businesses mr . khodorkovsky assembled a cluster of former state oil properties into what is now yukos . bank menatep itself collapsed when russia defaulted on debts in 1998 and the value of the ruble crashed , but a successor holding_company , group menatep , now holds a variety of businesses along with mr . khodorkovsky 's stake in yukos , russia 's biggest oil company . ms . popova acknowledges that she has a financial motive for coming forward with her story the millions of dollars that french authorities say she personally owes in connection with the offshore companies . she says that throughout the transactions involved , she was acting on behalf of her boss , mr . golubovich , and that yukos and menatep are responsible for the french taxes . but they have refused to pay , she said . ''it 's very difficult to understand why they did n't want to pay it 's not logical , '' she said in the interview , in the modest apartment in the chic neuilly sur seine district of paris that she shares with her boyfriend , roger kinsbourg , and his son . ''i told them they needed to pay'' the french taxes , she said . ''otherwise , it was tax_evasion . why they did n't pay , i do n't know . it was stupid . '' there is no easy way to corroborate ms . popova 's account or to verify the provenance of the documents she offered to support them . but there is a public record of her role at the offshore holding_companies . she was named as a defendant in a highly_publicized lawsuit by an american investor , kenneth dart , against mr . khodorkovsky and yukos . in the suit , she is listed as a director of wilk enterprises , which mr . dart contended was used to dilute shares of three smaller oil companies . many of the documents ms . popova said she had provided to russia 's ministry of internal affairs appear to describe transactions in yukos stock processed on behalf of mr . golubovich 's brokerage_firm , russian investors , and they bear her signature . a spokeswoman for the ministry declined to comment on ms . popova or say whether it had received documents from her related to mr . khodorkovsky 's case . a spokesman for menatep in moscow acknowledged that ms . popova worked on financial matters involving bank menatep , but dismissed her claims of wrongdoing by the company . ''i believe that frankly she is trying to use the situation around yukos to solve her own problems with french tax police , '' the spokesman said . referring to mr . golubovich and his firm , the spokesman said , ''i do n't know what relationships she had in the past with shareholders'' of menatep . it is doubtful whether ms . popova would have surfaced or shared her account of her business dealings publicly if she had not been faced with a ruinous tax bill and the threat of a prison sentence herself . ms . popova said had been asked by the russian authorities to return to the country to testify , but was afraid to go . ms . popova said she had been recruited by mr . golubovich for his firm when they met at a party in st . tropez . she became friendly with him and his wife , and they often vacationed together , she said . now , she said , she is suing mr . golubovich in switzerland . efforts to reach mr . golubovich through intermediaries for comment were not successful . ms . popova was born in russia and became a french citizen after marrying a french diplomat they later divorced . ms . popova , who moved to paris a decade ago , said her french citizenship made her the perfect resident executor for russian offshore companies . it was common , she said , for russian business owners to arrange to sell their products to offshore shell companies at low prices and then have the shell companies resell them at market prices , keeping the profits beyond the russian tax authorities' reach . ''everybody did it , '' she said .

confirming that it remains in the grip of a recession , hong_kong said its gross_domestic_product had shrunk 3.5 percent in the first quarter . weak consumer demand and a 5 percent decline in exports hobbled the economy . but officials pointed to a few rays of light , including a modest rebound in tourism and the residential property market . hong_kong 's government is sticking to an earlier forecast not shared by private economists that it will eke out growth of five tenths of a percent for the year . mark_landler ( nyt ) world business briefing asia.

the senate banking committee today approved the clinton_administration 's program for spurring lending in poor communities , adding provisions to make borrowing by small businesses easier and to protect consumers from exploitation by home_equity lenders . some republicans expressed doubts over the plan , pushed by the clinton_administration to fulfill a campaign promise to provide seed_money for unconventional lenders that make loans in poor communities where regular bankers are reluctant to lend . but they went along with the plan in part because it also included provisions drafted by senator alfonse m . d'amato of new york , the panel 's ranking republican , to help create a secondary_market in which loans to small businesses could be bundled and resold . reaction from consumer groups consumer groups said the provisions to discourage home_equity lending abuses were a step in the right direction , although such provisions had been watered down somewhat . the package was approved nearly unanimously , over the sole dissent of senator phil_gramm , a texas republican , who said its loan subsidies and usury limits represented a financial philosophy that had been " rejected all over the world except in north_korea and cuba . " at the heart of the package is the clinton_administration 's proposal to spend 382 million over four years to promote the formation and expansion of community development financial_institutions geared toward lending in low income areas . the most debated aspect of the program was whether to allow regular banks to qualify for federal capital grants of up to 5 million that would be handed out to financial_institutions specializing in community development , like community development loan funds and credit_unions . clinton proposal the clinton_administration , in its proposal , had ruled out letting regular banks qualify for the subsidies through their specialized community development subsidiaries , which some banks use to make loans to poor borrowers . such loans help banks comply with terms of the community_reinvestment_act , a longstanding obligation . the bill approved today would allow community development subsidiaries partly owned by regular banks or savings and loans to qualify for the subsidies , as long as no one company owns more than 25 percent of a single community development institution . the question of letting ordinary banks participate directly in the program will arise again in the house , which has yet to draft its own version of the bill . one house plan representative floyd h . flake , a queens democrat , and representative tom_ridge , a pennsylvania republican , are pushing a plan that would expand the program further by reducing the deposit_insurance premiums paid by banks if they expand their community development lending . this approach is permitted under existing law , but money has never been made available to offset the premiums . other members of the house banking committee , however , have opposed that approach and have favored the administration 's original bill , which allows the subsidies only for banks whose primary purpose is lending in distressed communities . the senate bill 's provisions to expand small business lending are viewed as a major change in existing law that may have far reaching consequences . the idea is that banks will more willingly lend to small businesses if they can then sell the loans to other investors , who would buy interests in packages of loans in much the same way that home mortgages are currently bundled and resold . removing regulations the approach conceived by senator d'amato accomplishes this by removing regulatory obstacles , not by setting up any new quasi government_agency like those that sponsor secondary markets in mortgages and other financial_instruments . the provisions cracking down on abuses in home_equity lending are a response to hearings in which lawmakers were told of lenders making credit available at extremely high interest rates or with other onerous expenses , using a borrower 's home as equity . when the borrower could not repay the loans , the lenders would foreclose on the property . the bill would apply to loans charging interest rates of more than 10 percentage_points above treasury interest rates for securities of comparable maturity , or with initial points and fees of more than 400 or 8 percent of the loan 's value , whichever is greater . in such cases , lenders would have to provide special disclosures making clear the risks to the borrowers , disclosing the monthly costs and other loan features at least three days before the loan was completed . but consumer groups said these provisions did not go far enough , especially since they did not apply to home_equity lines of credit , in which the loan is not necessarily provided in a lump_sum but can be borrowed in pieces up to a fixed limit .

new york city 's bid to attract a world competition with thousands of athletes from more than 100 countries competing at stadiums , parks and other venues across the city and in nearby suburbs has succeeded , an international sports federation said yesterday . it is not the olympics . instead , after what has been a quiet campaign , carried out by city hall , the police and firefighters , the organizers of the world police and fire games said they had selected new york for their 2011 games . the event would be timed to be held right before the 10th anniversary of 9 11 . ''the new york games have the potential of being the biggest we have ever held , '' said ed hitchcock , chairman of the world police and fire games federation , which convened this week in quebec_city , canada , with 10 , 000 firefighters and law enforcement officials . although the group 's announcement was scheduled for thursday , mr . hitchcock said in a telephone interview that new york had been picked over orlando , its only rival . among city officials , the decision did little to lessen the suspense over next week 's decision by the international_olympic_committee on the city 's bid for the 2012 olympics . but it was nonetheless cheered by mayor michael r . bloomberg . ''we are delighted , '' he said in a prepared statement last night . ''sept . 11 resonated in the hearts and minds of emergency_service personnel through the world , and there is no better place for these men and women to come together in the spirit of solidarity , '' he said . first held in california in 1985 , the world police and fire games have been staged every two years in cities as different as indianapolis , stockholm and melbourne , australia . the games are open to police officers , firefighters , correction officers and customs agents , who compete in more than 60 events that range from team sports , like ice_hockey and soccer , to events tailored to the skills of emergency personnel , like pulling a fire hose on a cart , hitching it to a hydrant , and spraying water with precision . kenneth j . podziba , new york city 's sports commissioner , said the city 's bid for the 2011 games had been made by a delegation that included two people on his staff , two representatives of nyc company , the tourism organization , and three current or retired members of the police and fire departments . mr . hitchcock said his group based its selection on a presentation made by the new york city delegation in quebec_city on saturday . among other factors , he said , the delegation had promised to raise 750 , 000 , the minimum local support that the federation requires from private sponsors . but the costs of the event seemed certain to be higher . mr . podziba said the city did not plan to spend any public money but would make its parks and sports facilities available . ''whether it will be 750 , 000 or 2 million , i do n't know , '' he said . ''the organizing_committee will be responsible for raising money from corporate sponsors , and i do n't believe there will be a problem . ''

as florida was cleaning up yesterday from its fourth hurricane in six weeks , insurance executives and analysts said they expected the cost of coverage to rise sharply for millions of homes and businesses in the state . with the industry expecting to have to pay roughly 20 billion in claims from the storms , the analysts and executives said premiums could jump 15 percent to 30 percent when policies are renewed , compared with an average of perhaps 3 percent for the rest of the country . ''the insurance_companies have got to take price increases where they have losses , '' said christopher winans , an analyst for lehman_brothers . ''so there 's no doubt about it , if you want to live in florida you 're going to have to pay higher premiums . the companies have got to replenish lost capital . '' robert p . hartwig , the chief economist for the insurance information institute , a trade group in new york , estimates that the industry will probably receive two million claims from the four storms , including hurricane jeanne , which hit over the weekend . some analysts say the total damage could be more than 50 billion . some damage will be covered by federal flood_insurance , but for many of the losses there is simply no insurance , placing a burden on homeowners and the state 's economy . but florida , a pivotal state in this year 's election , is expected to receive abundant federal assistance . ''people will definitely feel'' the price increases , mr . winans said , but he and others said the jolt would be far less than that from hurricane_andrew , which set a record for insured losses in florida 12 years ago . in today 's dollars those losses were about equivalent to the 20 billion racked up by the latest four storms . ''after hurricane_andrew rates went up 100 percent statewide and 300 percent in southeast florida , '' said sam miller , the executive vice_president of the florida insurance council , a trade group in tallahassee . ''there will be increases . but you 're not going to see the massive rate increases that we had after hurricane_andrew . '' the increases for more than six million homes and businesses will have to be negotiated with state regulators , and the industry executives said the amounts would probably be apportioned along the unusual paths of the storms . until now the insurance_companies and weather experts had expected the heaviest damage from any storm to be in southeast florida places like the florida keys , miami and fort_lauderdale . and insurance rates for those areas were raised the most in the past . but the latest hurricanes inflicted more damage on southwest and central_florida as well as the panhandle , including pensacola . these areas will probably see the greatest price increases now , analysts said . ''we may decide that we 're not charging enough in southwestern florida , '' mr . miller said , ''whereas we might think we 're fine on the southeast coast . '' another result , mr . hartwig said , may be that insurers like allstate and state_farm , the leaders in florida , will decide that they will no longer provide hurricane coverage in the places hardest hit and may seek to shift responsibility to an insurance organization created by florida to provide minimal coverage for hurricanes . when the latest hurricanes struck florida , most homes covered by the special organization , the citizens property insurance corporation , were along the coasts , many around miami and fort_lauderdale . part of the premium increase is expected to come in the form of an assessment of 5 percent to 10 percent on every home_insurance policyholder in the state by the citizens property insurance corporation . susanne k . murphy , the corporate counsel for citizens , said in an interview that she did not know whether an assessment would be necessary . at the end of june , however , citizens had 1 . 1 billion in cash available to pay claims , mr . hartwig said . ms . murphy said citizens was facing estimated claims of 1 . 29 billion from the first three hurricanes and had no estimate of costs for the fourth . mr . hartwig said , ''i think it 's fairly certain that citizens will need to institute an assessment . '' in addition to raising prices after hurricane_andrew , the insurance_companies were able to get approval from regulators for deductibles as high as 2 percent to 5 percent for hurricane damage . they also benefited from being able to shed coverage in the riskiest areas and from the creation of a state catastrophe fund that pays 90 percent of an insurer 's losses after costs to the industry for a hurricane have exceeded 4 . 5 billion . that 4 . 5 billion has become , in effect , the industry 's hurricane deductible . but it was designed with a_20 billion hurricane like andrew in mind in the hope that the bulk of the losses would be borne by the catastrophe fund . for each hurricane , however , there is a new deductible . this year , the insurers are facing four deductibles , which could run to 18 billion or so , giving them much higher losses than anticipated and partly explaining why significant price increases are almost a certainty for florida homeowners .

many of the 17 soldiers who died when two black hawks helicopters collided on saturday had worked in iraq for nearly nine months , but two men had just arrived there , fresh from flight training school together . second lt . jeremy l . wolfe , 27 , graduated from the army 's pilot training school in fort rucker , ala . , then left for iraq the first week of october . chief_warrant_officer erik c . kesterson , 29 , was deployed the last week of october . ''he had always wanted to fly , and he had just gotten there , '' clayton c . kesterson , of independence , ore . , said of his son . ''he was very pumped up . he was ready . '' the younger mr . kesterson was there only long enough to send his family a half sentence e mail message he had arrived ''in the sand , '' he wrote . for the soldiers who learned to fly alongside lieutenant wolfe and mr . kesterson in the past year , their deaths came painfully close . ''there 's a lot of things going on in my mind , and in the minds of others of us right now , '' said warrant_officer conor whitehead , who learned to fly beside both men and had roomed with lieutenant wolfe , of menominee , wis . ''it can happen to anyone , but it sends a real message home when it happens to them . with all these different crashes , it 's bad . but it 's still a much needed job . '' as pentagon officials continued on monday to investigate the collision near mosul , few details were certain , including what caused the two copters to come together and which soldiers were flying them . generally , two soldiers are responsible for co piloting each black hawk . here at fort_campbell , where many of the 17 had been based and where four others were killed in another black hawk incident slightly more than a week ago , officials and chaplains spent another gray day delivering grim news to families . more than 20 , 000 soldiers from this base have been deployed , and the mounting death toll has left an unsettled feeling over the nearby towns , whose identities and economies are anchored by the proud home of the 101st_airborne_division . maj . gen . david h . petraeus , who commands the division , issued a statement from iraq , saying , ''the losses we suffered are almost beyond comprehension . '' general petraeus added ''the losses will not , however , cause us to falter or fail . to the contrary , these losses will lead us to redouble our efforts and drive on . '' still , the notion of more of driving on , even through loss has left some families here exhausted . most of the soldiers from this base have been in iraq since february or march , and a return date had been announced for this group only recently february or march of next year . that set off a wave of calls home , a chance , at last , to savor the notion of what would come after iraq . to the families of those killed on saturday , march is now just a taunt . some among the 17 dead had already made plans for career changes , returns to school , for birthday celebrations at home . in a phone call a few weeks ago , sgt . michael d . acklin ii , 25 , of louisville , ky . , told his father when he would be home , and both had ideas . michael acklin sr . promised a big homecoming cookout sergeant acklin confided that , after five years in the service , he was now ready to settle down , his father recalled , and look for ''the woman of his dreams . '' specialist eugene a . uhl iii , 21 , of amherst , wis . , had already found his . they were to marry in june , then move somewhere warm , his mother , joan uhl , said . then , he said , he wanted to have children , and not stop until he had a boy . he had a name in mind , he told his mother eugene uhl iv . specialist william d . dusenbery , 30 , of fairview heights , ill . , had pondered traveling with his girlfriend , jessica wheat . she said they had discussed visiting castles in england and beaches in greece someday . but , first , ms . wheat said they would mostly want to get reacquainted . pfc . sheldon r . hawk eagle , 21 , of grand_forks , n.d. , called his aunt , bernadine hawk eagle , at the end of october and told her the good news he should be home in february . ''i told him 'i was thinking of you , praying for the day you 'll come back , ' '' ms . hawk eagle recalled . private hawk eagle 's parents had both died years earlier , ms . hawk eagle said , so he and his sister had spent much of their youths at her home at eagle butte , s.d. , on the cheyenne river sioux reservation . in their last phone call , ms . hawk eagle told her nephew she and their family had a special name planned for him now . ''we were going to call him brave eagle . it comes from his great grandfather , '' she said . ''now we 'll have to give him the name at the wake . '' though mr . kesterson had only been gone to iraq for a few weeks , his father already had plans for his return . the pair would go flying , in one of the world_war i fighter replica planes they were building . mr . kesterson had not been flying for the army long but had been around plenty of copters . years earlier , he served in the marine_corps as a helicopter gunner . there had been a crash one year , too . the huey he was on went down on a training exercise on sept . 12 , 2000 , in california . mr . kesterson helped pull his colleagues to safety , his father said . ''he told me afterwards that he had been scared to death , '' the father said . on saturday , clayton kesterson said , he knew something was wrong long before military officials came to his house . after the california crash , the younger mr . kesterson always called when a helicopter went down somewhere , just to tell his parents before they saw anything on television that it was not him . no call came saturday . the struggle for iraq the casualties.

lead new york city , whether melting_pot or mosaic , has now conferred its collective respect on another branch of the american family . by electing david_dinkins as mayor , new york has released a wave of pride in its citizens of african_american heritage and a sense of unity among the many white voters who rallied to his cause . new york city , whether melting_pot or mosaic , has now conferred its collective respect on another branch of the american family . by electing david_dinkins as mayor , new york has released a wave of pride in its citizens of african_american heritage and a sense of unity among the many white voters who rallied to his cause . his triumph is not as black new york 's first mayor , or as new york 's first black mayor but as new york 's mayor . the 62 year old manhattan borough_president won after a disappointing , sometimes ugly campaign . he hid behind generalities while rudolph_giuliani relentlessly spotlighted his weaknesses . mr . dinkins is a product of the regular democratic organization , a man of modest accomplishment who has fumbled more than once . he 's handled his personal finances carelessly . his indecision and ambiguity are jarring to a public accustomed to the outspoken mayor edward koch . but voters saw something else in mr . dinkins a genuine concern for new york , an understanding of its people that 's welcome in a city afflicted by racial tensions and a growing underclass . an impressive one third of whites voted for him . mr . dinkins 's victory wins for blacks the same sense of participation felt successively by irish , italian and jewish new yorkers as their sons ascended to city hall . jan . 1 , when he takes the oath of office , will , like this election day , be an occasion for rare celebration . but there are limits to the power of ethnic pride and civic joy . neither will get new yorkers through the difficult times immediately ahead . for one thing , the government must adjust to the new charter . and mr . dinkins will have to persuade the public to adjust to fiscal sacrifice the city is about to confront a budget_deficit of up to 1 billion . the problems are large and long range . debt service for roads , housing and prisons is expected to grow 84 percent by 1993 , foster_care costs by 93 percent . mayor dinkins will have to tax more , spend less and make government more productive . there are no other responsible options . he has to send strong signals early that his administration , with its liberal cast , wo n't revert to the easy spending that brought crisis in the mid 1970 's . business executives wondering whether to relocate will be watching . rating agencies responsible for the city 's credit standing will be watching . mr . dinkins can quiet their misgivings quickly by making strong appointments , producing a tough financial plan and negotiating austere contracts with the municipal unions that supported him so heavily . the only choice will be where to cut , and which taxes to raise . he did n't talk much about such unpleasant matters during the campaign candidates rarely do . but he has come far indeed since his hapless performance during the first big candidate forum in march . he was shaky , uninformed and testy . contrast that with his command of the two debates last weekend . if he can grow as much in office , he 'll do honor to the title he has now earned the 106th mayor of new york .

lead rallies were held across the united_states yesterday in support of china 's battered pro_democracy movement . rallies were held across the united_states yesterday in support of china 's battered pro_democracy movement . about 1 , 500 people gathered in downtown chicago , where sasa lu , a chinese_american student from northwestern_university , promised the victims of the army assault on tiananmen_square , ''we will show your younger brothers and sisters where you have fallen . '' church bells throughout the city rang after a moment of silence at the rally . on campuses across the country , students facing final examinations took time out to remember their slain peers in beijing . in the los_angeles area , hispanic students helped asian_americans organize an afternoon march , and friends of a student missing in china circulated petitions . chinese students at princeton_university in new jersey held a memorial service . at the university of california at san_diego , about 150 chinese and american students sang peace anthems at a mournful noon gathering . at the university of pittsburgh , students opened an exhibit tracking the pro_democracy movement in china . turmoil in china.

as construction work begins on 9 metrotech south , a 670 , 000 square_foot building that will house 1 , 300 employees of empire blue cross and blue shield , planning is under way to lay the zoning and other groundwork for other development in downtown_brooklyn . while the new building will complete development of the 16 acre metrotech complex , its developer and others active in the borough think brooklyn could become increasingly attractive to companies that are expanding or that want to spread out their work forces for increased security in the wake of the sept . 11 attacks , while still remaining in the city . to help make this happen , efforts are under way to revise the zoning for certain parts of the downtown area to permit the construction of buildings both office towers and housing larger than zoning now permits . the designated sites include four blocks along livingston street between smith street and flatbush_avenue , several blocks on both sides of willoughby street near flatbush_avenue and several blocks on the east side of flatbush_avenue closer to the brooklyn_bridge . others are working to add amenities by upgrading or expanding two existing malls . work is to begin next month above the long_island_rail_road 's brooklyn terminus on the four story , 400 , 000 square_foot atlantic terminal mall , almost half of which is to be occupied by a target department_store . the project includes foundation work for an eventual office tower , and city and metropolitan_transportation_authority crews have been preparing the site for construction . some customers for the malls are expected to come from the area 's student population , which will take on a more 24 hour character with the opening of a new dormitory this fall , with another one , at a different school , also being planned . further in the future with the other demands on city and state coffers raising questions about timing are ambitious plans for developing a park along the waterfront below brooklyn_heights and , in the area around the brooklyn_academy_of_music , expanding cultural facilities while adding housing and office space . since many of these projects are dependent on city money , they are likely to be delayed by the current budget pressures . but backers say the preliminary work is necessary to prepare the area so that developers will be able to move quickly when demand is felt from companies that are expanding or are relocating some of their offices . ''downtown_brooklyn has got to be ready to go in the next up cycle , '' said james whelan , director of the downtown_brooklyn council . the council is asking city planners to increase zoning in the designated locations to permit the development of 12 million square_feet of space 9 million commercial and 3 million residential . he said residential construction was an important part of the plan to create what he terms ''a true downtown . '' he added , ''we need to have people here after 5 30 in the afternoon . '' one criticism of metrotech has been that while thousands of people work there during the day , most leave for homes elsewhere in the city or in the suburbs after office hours , leaving the streets empty and lifeless . similarly , educational institutions in downtown_brooklyn are trying to turn at least a small number of the estimated 30 , 000 students who flood into the area each day into residents . as part of a 100 million renovation and expansion of its brooklyn campus , polytechnic_university has built its first dormitory , a 400 bed facility that is scheduled to open in the fall . brooklyn law school has announced plans to build its first dormitory as well , with 350 beds , at the northwest corner of boerum place and state street . having a larger 24 hour population should attract retailers and make the neighborhood more attractive to companies looking for office space , mr . whelan said . ''we serve midtown and lower_manhattan , and we compete with the new jersey waterfront , '' he said . also among potential competitors is long_island_city , queens , where a_37 block area was rezoned for greater density last year , although no projects are yet under way . while planners and developers agree that new commercial projects will most likely wait for the next economic upturn , the development of 9 metrotech south is an indication of how fast things can happen when a site is ready to go and there is a client in need . before sept . 11 , the forest_city ratner companies , the developer of metrotech , did not have an anchor tenant for the site , at the northwest corner of myrtle avenue and flatbush_avenue extension , and had no plans to build . then , ''the deal was done in two months , '' said bruce c . ratner , the company 's president , of the decision by empire blue cross and blue shield to sign a lease for 322 , 220 square_feet , or about one half the 19 story building . because the company 's employees are currently scattered in different locations , construction is proceeding urgently . ''we are working double shifts and should have the building ready in 18 months , rather than the 24 to 30 months it would usually take , '' he said . mr . ratner said events of sept . 11 appeared to have changed corporate attitudes toward brooklyn . in the past , financial_services companies placed back office operations in the borough because the rents were lower , while keeping their headquarters in manhattan . now , he said , there is interest in moving whole entities to brooklyn , which is , among other things , on a different power grid than manhattan . ''prior to this , downtown_brooklyn was strictly a low cost alternative , '' he said . ''now companies that are interested in spreading out their space are interested in brooklyn for reasons not based solely on costs . '' dr . george bugliarello , the chancellor of polytechnic and also the conceptual father of metrotech , said sept . 11 might lead corporate executives , city officials and developers to question the value of concentrating businesses in manhattan . ''in medieval times cities were a place of protection , '' he said . ''now cities are hostages , and we have to rethink the distribution of activity . '' but he said it would be difficult to replicate metrotech , because few developers are willing to take on a 1 billion project that takes 15 years to plan and build . in addition to the developers of office and academic projects , retail developers are paying increasing attention to downtown_brooklyn . joseph j . sitt , the principal owner of thor equities , a real_estate investment company , has purchased the somewhat threadbare albee square mall , between flatbush_avenue and fulton and gold streets , and plans to transform it into an upscale shopping_center called the gallery at fulton_street . mr . sitt , who developed the ashley stewart retail clothing chain , aimed at urban women , into a business with annual sales of more than 300 million , said there is money to be made in urban locations as well as suburban malls . he said the first task is to fix the leaky roof of the three story mall , but then he plans to improve the appearance of the entire building . ''i 'm going to rip out the linoleum floors and replace them with granite , '' he said . he said that in the late 1990 's companies he calls ''white bread retailers'' discovered the urban market , increasing competition for ashley stewart , and mr . sitt sold his interest in the company . he said he decided to buy real_estate in urban_areas to present a variety of retail concepts . the mall has toys ''r'' us as one anchor , and mr . sitt said he was hoping to attract a department_store as another anchor . he said the plan is to create the same shopping experience as in top quality suburban areas . ''we are going to take the finest quality mall in white , suburban areas and bring it to downtown_brooklyn , '' he said . the site includes a five story parking_garage that thor equities owns and is in one of the areas designated for increased zoning . mr . sitt said he is prepared to demolish the existing structure and build a 900 , 000 square_foot building if a tenant signs a lease without waiting for the zoning to change . he said he would build it in such a way that it could be expanded if the zoning is changed to allow 2.5 million square_feet of development . included in that figure would be another building over the retail space . more immediate retail development plans are about to be executed by forest_city ratner on a 3 . 6 acre site bounded by atlantic and flatbush avenues , hanson place and fort_greene place . the mall , to be called atlantic terminal , is to sit atop the long_island_rail_road terminal , which is connected to 10 subway lines . forest_city ratner officials say 50 million subway , commuter_rail and bus passengers pass by the location each year . the 400 , 000 square_foot , four story atlantic terminal will be adjacent to the atlantic center retail mall , which opened in 1996 . atlantic terminal is the third and final phase of the project , which also includes 417 units of owner occupied affordable_housing and a public park . the anchor store for atlantic terminal will be a 194 , 000 square_foot target discount department_store . other retailers that have signed leases at the project include payless shoesource , rockaway bedding , daffy 's and avenue , a women 's clothing store . these stores will join macy 's , pathmark , old navy and circuit city , which are already in operation at atlantic center . work on atlantic terminal is scheduled to begin next month , with completion scheduled for march 2004 . mr . ratner said an office building could be built on top of the retail space at atlantic terminal and center if demand warrants . closer to fort greene park , the bam local development corporation is seeking to establish a residential and cultural district on land that is now used mostly for surface parking_lots . the district would be anchored by the brooklyn_academy_of_music , hence the name . ''our goal is to develop a mixed use , multicultural arts district by using underused city owned property , '' said jeanne lutfy , president of the development group . ( harvey lichtenstein , the former president of the music academy , is chairman . ) she said the plan is to develop low cost housing along with cultural , meeting and rehearsal spaces so there will be people on the streets day and night . she said the city had earmarked 80 million in its capital budget , with additional financing expected from the state and programs intended to promote the development of affordable_housing . one of the group 's first projects is the renovation of 80 hanson place , a 30 , 000 square_foot state owned building that had stood vacant for 10 years . the development corporation will renovate the building as offices and meeting spaces for small nonprofit arts groups , with the work scheduled to start in march and to be completed by the end of the year . part of the financing is coming from the city and the remainder from a 1 million grant from the state . already in the area is the mark morris dance center , which opened last fall in a long vacant space after a_7 million renovation . the center includes a permanent home for the mark morris dance group along with space for dance classes for the public and dance rehearsal space for rent to outside groups . ms . lutfy said the next project is the development of the so called east site with the ubiquitous mr . ratner , who controls the property . she said that it would be a mix of about 50 , 000 square_feet of cultural space and 100 , 000 square_feet of housing and that construction should begin early in 2003 and be complete by the end of the year . city funding is to pay for the cultural part , and existing housing programs are expected to be tapped to aid the residential component . plans for the other parcels of land are further in the future , she said , particularly the west site , which is entirely in private hands . while plans for the cultural district develop , another local development corporation is seeking to develop a public park along the east_river waterfront . it is to run from the footing of the manhattan bridge past the developing dumbo neighborhood past the brooklyn_bridge and south onto piers little used by their owner , the port_authority of new york and new jersey . the park would cover 67 acres of land stretching from jay street in the north to atlantic avenue in the south . the park would include some commercial development , including a hotel and conference center . but officials of the brooklyn bridge park development corporation say 80 percent of the park will be open space in an area of the city with little of it . like many waterfront areas of new york , the industrial docks near the fulton_ferry landing were made obsolete by the emergence of containerized shipping and the development of container ports in new jersey . joanne witty , the president of the development corporation , said the park would emerge ''as the industrial glacier recedes from the waterfront . '' ms . witty said the park has an 85 million commitment from the state through the port_authority , which is treating the pilings supporting the docks to prevent further damage from marine pests , and 65 million from the city . she said she thought the state commitment was solid , but admitted that the city funds have to be appropriated on a yearly basis . ''the park can be seen as economic_development that provides jobs and improves the attractiveness of the harbor , '' ms . witty said . ferry_service is expected to resume this summer between the fulton landing and various points in manhattan . the 90 passenger boats are to be operated by new york water taxi . retail and leasing activity have been increasing in the dumbo area , said jed d . walentas , an executive of the two trees management company , which owns and manages most of the buildings in the area . he said williams sonoma , a housewares and cookware company , is building two separate design studios on the eighth and ninth floors of the building at 55 washington street , and abc carpet has been holding warehouse sales in 40 , 000 square_feet of space at 20 jay street while negotiating for a permanent location . he said his company is also prebuilding small office spaces in the 2 , 000 to 4 , 000 square_foot range for design , architectural and consulting companies at the rate of ''about a dozen a month . '' also in dumbo , jeffrey m . brown associates is planning a mixed_use_development on what is now a surface parking_lot on jay street between front and york streets . the proposed development , called light bridges at 100 jay street , would include retail stores and office space in the base of the building and two residential towers connected by a light bridge . since the site slopes 17 feet downward toward the east_river , the building incorporates an unusual design . ''we are going to have one and one half levels of retail with about 24 , 000 to 30 , 000 square_feet of space and one and a half levels of parking for 250 to 260 cars , '' mr . brown said . five levels of office space would be on top of the retail space and rise to the level of the deck of the manhattan bridge . the residential towers would be built above the commercial space . regarding the proposed zoning change , mr . whelan said his group had worked with city planners and the economic_development commission , and he expressed confidence that the floor_area_ratio a measure of construction density of 3.5 along livingston street and 6.5 along willoughby street would be increased to the 12 that has been approved for the commercial district in long_island_city . he said many of the brooklyn sites included in the proposal had been identified in previous studies as suitable for development . he said the large sites available on willoughby street would make it logical for commercial development , while the livingston street properties would be suitable for residential development because of their proximity to the boerum_hill residential neighborhood . mr . whelan said the proposal still faced an environmental and land use review before being submitted to the city 's planning commission . as with all zoning changes , approval by the city_council is needed as well . he said he expected the process to be completed by the end of 2003 . a spokesman for marty markowitz , the new brooklyn borough_president , said mr . markowitz ''cautiously supports'' the change as long as emphasis is placed on public transportation to avoid having larger buildings add to passenger vehicle traffic . developers say that while the proposed zoning change will not be enough by itself to spur development , it is an essential prerequisite . ''nothing will happen unless there is an up zone , '' said jane marshall , a vice_president of forest_city ratner and project manager for atlantic terminal and 330 jay street , which is being built to house the kings_county family_court and part of the new york supreme_court . ''you need to have the density to encourage development . '' joshua l . muss , who is seeking to build a 280 room addition to his highly successful marriott_hotel in downtown_brooklyn , said the city needs to encourage development in the boroughs because the process is so drawn out that it discourages most builders . ''we need to focus now on getting sites ready so we can act quickly when companies are ready'' to sign leases , mr . muss said . ''to do that , we need the support of the city and community groups . ''

on being told they were going to see ''dr . cat , '' some young patients would enter his office and question his pedigree . ''are you really a cat ? '' they would ask , or ''do you meow ? '' if it meant calming down an anxious child , the pediatrician would meow . sometimes he would conduct an examination on a stuffed animal or doll , gently showing a child what to expect . more often , he just spoke to them quietly . after a practice that spanned nearly 40 years , dr . ben s . caterinicchio ''dr . cat'' to thousands of children and their parents is retiring . he has seen major changes in the practice of medicine , in the relationships between doctor and patients , and even in the development of children themselves . known as the doctor who walked to work , his tall , slim figure loping down route 133 was a familiar sight in mount_kisco , where he maintained his practice . though he was known by his patients for his devotion he used to sleep in his office when he was on call , and until last year still made the occasional house call dr . caterinicchio , 71 , said it was only toward the latter part of his career that he decided he had chosen the right profession . ''it 's in the last 10 to 15 years that i understood that i 've done the right thing , and i 'm really happy with this , '' he said . ''i always had the suspicion in the back of my mind that i was n't geared to do this . in order to surmount the feeling that i was n't doing what i was really passionate about , i had to do better . i had to try to be the best . '' his real passion was movies , he said . dr . caterinicchio owns more than 200 films on laser disks and estimates he has seen ''sunset boulevard'' at least 50 times . it was a sense of duty toward his parents , immigrants from sicily who passed through ellis_island , he said , that kept him focused on medicine , a profession they respected . his father , a laborer , and his mother , a seamstress , thought it would be a fine thing to have a doctor in the family , he said . dr . caterinicchio arrived in 1964 at the mount_kisco medical group , which then had roughly 14 doctors . ( today it has nearly 90 . ) the group originally practiced in a small house dr . caterinicchio was the fifth pediatrician to join the practice . back then , he said , one rarely saw cars on the saw mill parkway , north of hawthorne . the sprawling complex that now houses the medical group was all woods at the time , he said . he kept the family car at the office for house calls , he said , and at first often got helplessly lost in northern westchester on his way to his patients' homes . sometimes , his wife , gladys , went along to help navigate . he was paid an additional 50 cents per house call . seeing families at home , he said , fostered an intimacy between doctor and patient that has diminished over the last decades . the early years of his practice were a struggle , emotionally and financially , he said . he graduated fifth in his class from new york medical college and went to johns_hopkins_university for his internship . newly married , he was paid 360 a month , and his parents sent care packages of hams and salamis to help the young couple get by . a residency at cornell_university was followed by a two year stint in the army . now retired , mrs . caterinicchio taught french in high_school . when they moved to mount kisco , the caterinicchios had two children . it took time to build his practice , dr . caterinicchio said . but eventually he saw so many children that when the mount_kisco medical group announced dr . caterinicchio 's retirement last december , it sent letters to 4 , 000 families . as for the caterinicchios' own children , a son , ben , works in computer graphics in los_angeles , and their daughter , maria , works in personnel at i.b.m . in white_plains . watching families develop and interact was a joy , he said . ''i love to see the child from the newborn period on , and see how the parents' world evolves around the child and watch them delight in this child 's development , '' he said . ''being able to help them when that child is sick or has a problem , and getting their trust , that is such a privilege . '' he found he was good at calming anxious children , and when that failed , he would listen to chests between sobs and peer into throats between screams . as the years passed , he developed an avuncular feeling toward many of his patients , and was delighted when children sent him pictures , invited him to birthday parties , and eventually to bar or bat mitzvahs and weddings . particularly gratifying , he said , were former patients who returned with their own children . david russell , of brewster , said that dr . caterinicchio had been both his and his wife 's pediatrician . when their first son , duncan , was born , taking him to dr . caterinicchio felt like a visit to a relative , mr . russell said . ''dr . cat was always so comfortable to be around , '' he said . ''even as a little kid i was never afraid to go to the doctor , and i think my kids feel the same way . he just makes kids feel good . he still talks to me quietly , too , and he still keeps me calm . '' children and parents have changed over the decades , dr . caterinicchio said . children are maturing earlier physically and have become more savvy about social issues . he said he sees more sexual promiscuity and drug use among pediatric patients than he did earlier in his career . parents , he said , are generally more anxious . parents have become more knowledgeable about health issues , which is a positive development , he said , but some have a ''consumerist attitude'' toward doctors . ''it felt as if , 'hey , i 'm paying for you the same way as i 'm paying for the plumber , and i want it done this way and i want it to turn out right , ''' dr . caterinicchio said . advances in medicine have rendered diseases that were once potentially_fatal now easily treatable , dr . caterinicchio said . but at the same time , technological_advances have changed the doctor patient relationship because , often ''you 're simply the person who 's ordering the tests , '' he said . compounding the loss of intimacy is the volume of patients , he said . early in his practice , dr . caterinicchio saw about 10 children a day . even after he curtailed his practice in his later years , he said , he was seeing an average of 35 patients daily . dr . caterinicchio said that he did n't feel ready to retire , but that his contract mandated that he do so . he hopes to volunteer at a medical clinic , and of course to spend more time at the movies . he watches his all time favorite , ''gone with the wind'' at least once a year , belongs to several film clubs , and is the host of weekly ''classic nights'' at his home . ultimately , dr . caterinicchio said , he was immensely moved by the letters he received since he announced his retirement and has finally come to believe he made the right career choice . ''it took me quite a while to realize that this was the right thing to do , '' he said , ''and all i can say is that i hope i 've done the best i was able to do for everyone . '' in person.

european stock markets fell sharply and the weaker currencies plunged in value again today after investors apparently decided there was little chance that europe could pull out of its economic turmoil anytime soon . the heavy selling of stocks and the continued decline in the value of the british_pound , the italian_lira and other currencies was in part a delayed reaction to the german central_bank 's decision on friday not to cut interest rates . economists say lower rates in germany are essential to improving europe 's economic prospects . but analysts said investors also seemed unnerved by the lack of any coordinated economic policy in europe after the currency_crisis of last month . and they said the markets were likely to remain volatile at least until friday , when the heads of the 12 european_community nations meet in birmingham , england , to plot their strategy for putting the unification process back on track . grimness and uncertainty " all in all the markets are looking at grim prospects and very high levels of uncertainty , " said giorgio radaelli , an international economist at lehman_brothers international in london . in london , the financial_times stock_exchange index of 100 leading shares fell 103 . 4 points , or 4.1 percent , to 2 , 446 . 3 . in paris , the cac 40 index fell 72 . 3 points , or 4.3 percent , to 1 , 611 . 04 . in frankfurt , the dax 30 index closed at 1 , 424 . 4 , down 53 . 64 points , or 3.6 percent . in the currency markets , the pound fell sharply against the german_mark , which continues to grow stronger because of the bundesbank 's decision to keep interest rates high . after trading as low as 2 . 369 marks , an all time low , the pound rebounded somewhat later in the day , and closed in europe at 2 . 391 marks . the pound has lost nearly 20 percent of its value since britain pulled out of the european system of fixed exchange_rates last month . some action by spain spain , which was forced to devalue the peseta during last month 's turmoil , said today that it was removing some of the capital controls it had imposed in an effort to stop speculative selling of the currency . but the spanish government pointedly did not raise interest rates to defend the currency as it edged down in value today , and analysts said it was increasingly possible that spain would be forced to accept another devaluation of the peseta within the exchange_rate_mechanism . the italian_lira also slid in value , but the french_franc , which weathered intense selling pressure over the last several weeks with help from the bundesbank , held fairly steady . " to take the volatility out of the markets , you 're going to have to have confirmation from the bundesbank that they 're cutting interest rates , " said richard m . young , the director of european investment_strategy for merrill_lynch in london . mr . young said he did not expect that to happen before the end of the year . in germany , the stock_market has been depressed by a weakening domestic economy , by the negative effect of a strong mark on german exporters and by the bundesbank 's continued desire to choke off inflation even at the expense of economic_growth . with german rates remaining high , france has been forced to keep its interest rates up , creating considerable unease about the economy and a weeks long selloff in stocks . in britain , investors are feeling the full effects of the nation 's decision to withdraw from the european monetary system . freed from the need to keep the pound stable against the mark , britain cut its benchmark lending rate by one point last month , to 9 percent . but the lower rates have caused investors to sell pounds and buy higher yielding currencies like the mark , precipitating the almost unchecked plunge in sterling 's value . now the pound has sunk so low that the cost of imports will rise significantly , creating the danger of higher inflation . so politicians are talking openly about the possibility that prime_minister john_major and norman lamont , the chancellor of the exchequer , might have to raise rates this week to stop the erosion of the pound , dealing a blow to growth prospects for the feeble british economy and to the political prospects for their governing conservative_party . mr . lamont is scheduled to lay out the government 's new economic policy in a speech to the annual conservative_party conference later in the week .

when anti american demonstrations erupted in chinese cities 10 days ago , executives at several united_states companies went into crisis mode and evacuated employees . in beijing and shanghai , some americans felt trapped inside their homes , fearful that angry students could turn into unruly mobs . as scary as the demonstrations looked , calm returned in a few days , and there was little violence . despite official and popular anger aroused by the accidental bombing of the chinese embassy in belgrade by united_states aircraft under nato auspices , no americans were seriously injured . and though some companies have postponed advertising plans or delayed executive visits , the palpable impact on american business here has been moderate . chinese officials have sought to reassure executives that their operations are safe and that economic_reform policies will continue . yet the true damage may not be physical as much as psychological . the long term effects of china 's recent surge of nationalist emotion trouble many american businessmen . it may be too early to tell exactly how the business environment will be affected , but the politically radical language that has dominated china 's official media an indicator of internal political struggle signals a slowing of some reforms and greater uncertainty . ''the same guys who are telling us everything is o.k . are going out and encouraging students to take to the streets , '' said the chief representative of a multinational corporation , who works in beijing . ''how much confidence does that give you ? '' communist_party politics still dominate policy making in beijing , where decisions are highly secretive and nationalism is an unwieldy trump card . yet market economics have become steadily more entwined in chinese politics over the years , and today , foreign investment is a major concern because it has proved a critical ingredient in the nation 's locomotive like economic_growth over the last decade . foreign investment is falling this year , principally because asian neighbors hurt by the regional economic crisis have scaled back operations . chinese officials are concerned that too sharp a drop could affect china 's growth rate , with a target of 7 percent his year , slightly lower than the 7.8 percent last year . china 's foreign trade ministry announced today that foreign_direct_investment fell 12 . 6 percent in the first four months of the year to 10 . 24 billion , compared with the similar period of 1998 . over all , foreign investment is expected to fall to about 30 billion this year from 45 . 6 billion in 1998 . american enthusiasm for investing in china has gone in cycles , with waves of interest inevitably followed by cycles of disillusionment . the almost immeasurable size of china 's market , and the romance of an exotic culture , has sometimes obscured the perennial problems of corruption , interference by local officials and unenforceable laws . ''it 's a bit scary , '' said benny chiu , a china research analyst for hsbc in hong_kong , referring to the recent unrest . ''but once everything calms down , other problems look much more serious . '' some american business executives are eager to counter what they feel was an exaggerated depiction of recent events . ''there has been a limited impact , '' said john sullivan , vice chairman of the american chamber of commerce in beijing . ''a handful of companies suspended operations for a day or so , but that was it . '' mr . sullivan complained that television coverage of the demonstrations in beijing created the impression that the whole city was under siege , while the rock throwing was actually limited to the diplomatic quarter in one section of town , and had only a moderately negative effect on business . two kentucky_fried_chicken restaurants in the southern city of changsha were wrecked , but 308 other kfc outlets in 70 cities around china were undamaged . united_airlines , the ual corporation unit , suffered a wave of cancellations by scared tourists , as did many hotels , although several reported recovering bookings this week . in shanghai , senior officials met with foreign investors early last week to try to ease concerns . mayor xu kuangdi traveled to general_motors' 1 . 5 billion plant where buicks are assembled , while a vice mayor met with several representatives of leading american banks . ''shanghai will continue to welcome foreigners to make investment in this city , '' said xia zhongguan , a senior official at the shanghai foreign investment commission . ''politics should be separated from business and trade . the bombing is one thing foreign investment is another . '' despite the efforts of mr . xia and others to be reassuring , as an american lawyer in shanghai noted , it is precisely because some aspects of china remain so politicized that officials are talking about the need to separate politics from business . ''this is clearly being played as a political card by some factions in the leadership , '' the lawyer said . ''it has economic , political and psychological effects that are hard to measure . this kind of campaign has n't happened here in 25 years . '' several executives said it was not physical danger that concerned them , but the unknowns created by a politically volatile landscape . in a country where courts , every level of official policy and even nongovernmental_organizations can be affected by a shift in political mood , little is certain . many business people said they were surprised by student calls for boycotts of american goods . but virtually no such boycotts materialized in an organized way , perhaps in part because american goods are most popular among young people here . tony chen , director of public affairs for tricon global restaurants ltd . , which operates 310 kentucky_fried_chicken and 40 pizza_hut restaurants in china , said that efforts to organize boycotts fell flat in part because local kfc managers told demonstrators that 95 percent of their food was locally produced . altogether , kfc employs more than 23 , 000 people throughout china . mr . chen said sales were down about 10 to 15 percent last week , but were expected to be back to normal this week . ''over all , the impact was marginal , '' mr . chen said , adding that plans are proceeding to open several dozen more outlets this year , expanding kfc 's presence in china to 96 cities from 70 . in an unexpected turn , mr . chen also said , officials of many cities became more available to kentucky_fried_chicken employees than they are normally , apparently because they were ordered to do so by the central government . ordinarily , many businessmen complain , local officials in chinese cities are notoriously inaccessible . ''in a couple of cities , they told us not to hesitate to contact them , '' mr . chen said . ''that has never happened before . '' international business.

all those games , all that experience , led to that moment this afternoon when kristine_lilly was in exactly the right place at the right time . ''that 's my spot , '' she said . she has played more international soccer games , 186 , than anybody else in history , male or female . sometimes she can perform by rote the lessons of all the practices . in the 10th minute of sudden death , with the women 's world_cup at stake , this most quiet of the old guard was poised on the american goal line . she was protecting the near side on a kick from china 's left corner . ''we practice this on all corner_kicks , '' lilly said after the united_states had squeezed out a victory by 5 4 on penalty_kicks after a scoreless tie . lilly had saved the game with her feet , her brain and the hard shell of her forehead . liu ying 's corner_kick roared from lilly 's right to her left , and she made a practiced sidestep , slightly to the left , narrowing the goal mouth for the temporarily besieged briana_scurry . ''she was doing her job , nothing more , nothing less , '' her teammate brandi_chastain said . lilly agreed . the ball was headed by fan yunjie . four years of waiting were hanging in the balance . the modest defender , known to her teammates as lil , was standing exactly where the playbook said she should have been . ''i shift with the ball , '' lilly said . ''that 's exactly what i was doing . '' lilly cleared the ball by barely moving her head , and chastain booted it out of danger . later lilly would make the third penalty_kick , putting the americans ahead . and after a game without a real goal , she would be named its most valuable player . had she ever saved a goal on the line like that ? ''maybe three times , '' lilly said calmly . then after deliberating a moment , she said , ''but not in a world_cup final . '' lilly said she did not realize immediately that she had saved the game or the tournament . she sat on a folding chair , talking to reporters , with katelyn rose fawcett , age 5 , the daughter of joy_fawcett , snuggling on her lap . these americans are nothing if not close . ''it 's like a second family , '' lilly said before the tournament began . ''female sports are different . you do a lot better when you care about each other . we are nurturing people , caring people . i 'm glad to have my friends out there . it goes a little bit deeper than just sports . we all want to see each other happy . '' she has been with many of these players through world_cups in 1991 and 1995 . before all of them , there was michelle_akers , who gained her 147th cap , or international game , today . ''michelle was awesome , '' lilly said . other longtime players are mia_hamm with 179 caps , julie_foudy with 161 , carla_overbeck with 150 , fawcett with 148 , tisha venturini with 125 , tiffeny_milbrett with 118 , chastain with 101 and scurry , the goalkeeper , with 96 . the players had not verbalized about the future until 10 minutes before taking the field today when sara whelan , one of the younger players , blurted , ''this is the last game . '' they began to see the long range implications of this game . ''the olympic roster is smaller , so we wo n't have the same people , '' scurry said . now they are world champions on their own turf . ''this is something that will go down in our hearts forever , '' lilly said . ''we 've accomplished our goals . all the other stuff will take care of itself . i do n't think we can ever sustain crowds like this , but maybe instead of 15 , 000 we can get 25 , 000 . '' they may never again play in front of 90 , 185 fans for a world_cup championship . but they will remember this day and the moment when the player with the most caps in the history of soccer slid over a step , when lil just did her job , and saved the tournament . soccer women's_world_cup.

dances for wave_hill wave_hill 249th street and independence avenue riverdale , bronx saturday , sunday , aug . 1 and 2 with its meadows , greenhouses and hilltop views of the hudson_river , wave_hill is a spectacle in itself . on saturday afternoon this beautiful city owned garden served as a backdrop for works by three choreographers . the presentation was the first in a series of programs offered under the auspices of dancing in the streets . each choreographer used a different area of the park and emphasized a different aspect of the space . sham mosher turned a grove of trees into a mysterious wilderness in " symbiosis . " as he burst his way out of a mound of peat moss , he appeared to be a forest animal . he hunched himself up , loped about , sniffed the air around him and crawled through the foliage , often letting it serve as camouflage . no other creature was visible . nevertheless , the solo conjured up a whole realm of mighty , and possibly dangerous , presences far removed from 20th_century human society . the eeriness was enhanced by the accompaniment provided by adam plack , who chanted , moaned , beat sticks together and played the didjeridoo , an australian aboriginal wind instrument made from a hollow tree branch . the other presentations celebrated wave_hill as a trimmed and cultivated pleasure grounds . marta renzi staged " the wedding dance " in the shade of some large trees , and her festivity was a reminder that weddings are often held in gardens . these party guests all of them members of ms . renzi 's project company were of various ages , and they danced to chipper music by steve elson played by an ensemble under his direction . the choreography was suitably jolly . yet the work would have gained in warmth as well as wit if ms . renzi had given her partygoers more distinctive personalities . this was a wedding attended by character types rather than individuals . martha bowers , who directs a group called dance theater etcetera , blurred the distinctions between art and reality in " root and branch . " the men and little boys who performed this piece to a taped collage were fathers and sons in real life . what they did on the lawn that served as the setting was what many dads and lads do on summer afternoons . they sprawled on the grass , tossed balls and frisbees back and forth and played games . these ordinary activities gradually became more choreographically complex . ensemble movements resembled square_dance patterns . there were feats of balance . and the conclusion was a happy hullabaloo in which the performers pelted one another with water filled balloons . " root and branch " was both a charming display of parental and filial affection and a tribute to parks as social centers . dancing in the streets will offer presentations by other choreographers during the series .

canada 's exports shrank 4.7 percent in january , largely as a result of a decline in shipments of motor_vehicles and parts to the united_states , statistics_canada reported . with imports also falling , the over all trade surplus dipped fractionally to 5.2 billion_canadian_dollars ( 3 . 93 billion ) . the decline in exports was the biggest in nine months , leading some analysts to forecast that the bank of canada will lower interest rates next month for the third time this year as a way of putting a brake on the strong canadian_dollar and making exports more competitive . bernard_simon ( nyt )

the story of michael r . bloomberg , secret agent , is expected to play out in federal court in manhattan today when the mayor testifies about how , in 2000 before he became mayor , he helped officials build a case against a man who prosecutors say tried to extort money from mr . bloomberg 's media company . federal prosecutors say the man , oleg zezev , and an associate , both from kazakhstan , conspired in the scheme . they accuse mr . zezev of sending threatening e mail messages to mr . bloomberg in which mr . zezev said he had infiltrated mr . bloomberg 's company 's computer system and wanted 200 , 000 . the jury got a vivid preview yesterday of mr . bloomberg 's cloak and dagger role when prosecutors played a videotape of mr . bloomberg meeting with the two men in a london hotel . the meeting was secretly recorded by the authorities on a hidden camera . ''i flew here because of your e mails to me , '' mr . bloomberg says on the tape , ' 'saying that if we did n't cooperate with you , you would damage us . '' ''that 's not the way i normally do business , '' mr . bloomberg continues , a transcript shows . ''people look me in the eye , and they try to solicit our business , without any threats . '' last week , a federal_prosecutor , robert r . strang , told the jury that because the black and white videotape was made with a hidden camera , ''there 's no close ups . '' ''nobody should expect a hollywood movie , '' he said . ''and because this is a real undercover meeting , people interrupt each other , and sometimes they talk at the same time . '' he said the tape shows that mr . bloomberg went to the london meeting because he felt he was being extorted . ''he believes he has no choice , '' mr . strang said . mr . zezev , whose name has also been spelled zezov in court documents , and the other defendant , igor yarimaka , who will be tried separately , have both pleaded not guilty . mr . zezev 's lawyer , robert m . baum , said after the trial session that his client was not an extortionist . ''mr . zezev found a bug in the system and tried to alert bloomberg about it , '' mr . baum said . he said his client wanted to ' 'demonstrate his competence , '' in order to be hired by mr . bloomberg . in his opening statement last week , mr . baum said his client wrote to mr . bloomberg ''because he was proud of his discovery , and frightened that it would cause a security problem for bloomberg , one that could affect bloomberg 's global operation . '' on the tape , mr . bloomberg appears at the beginning , and then leaves the rest of the meeting to a top aide , thomas secunda , a founding partner of his company , bloomberg_l.p . mr . baum noted yesterday that parts of the transcript bolster his client 's contention . at one point , mr . zezev , speaking through a translator , tells mr . secunda says that if his information about bloomberg 's security problem is not satisfactory , ''you do n't have to pay the money . '' but mr . bloomberg makes clear repeatedly on the tape that he believes his company is being extorted . he says he flew overnight to attend the meeting because the e mail messages said that if he did not cooperate , the men would ' 'do something that hurt our company , '' the transcript shows . ''i do n't think that we have any choice , '' mr . bloomberg says at another point . ''you are , we would use the term , extorting money from us . that if we do n't cooperate you will try to damage our company and all our employees' careers . '' a spokesman for the mayor declined to comment yesterday .

a bleak top secret report by the central_intelligence_agency suggests that the situation in iraq is approaching a crucial turning point , with ordinary iraqis losing faith in american led occupation forces and in the united_states appointed iraqi_governing_council . the report , sent to washington on monday by the c.i.a . 's baghdad station chief , suggests that the situation is creating a more fertile environment for the anti american insurgency . officials said the report was adding to the sense of urgency behind the administration 's reappraisal of its policies in iraq . the officials said that the report , dated nov . 10 , had been explicitly endorsed by l . paul_bremer iii , the top american official in iraq , and that the warnings it spelled out had been a factor behind mr . bremer 's abrupt return to washington for consultations this week . the c.i.a . and the white_house refused even to confirm the existence of the report , which was first disclosed by the philadelphia_inquirer . but government officials outside those agencies said its conclusions were among the darkest intelligence assessments distributed since the american led invasion of iraq in march . ''it says that this is an insurgency , and that it is gaining strength because iraqis have no confidence that there is anyone on the horizon who is going to stick around in iraq as a real alternative to the former regime , '' one american official said . the latest c.i.a . report follows earlier intelligence assessments that warned american commanders in iraq of increasing resentment among ordinary iraqis . the picture those reports presented was very different from the public view presented by administration officials . in particular , defense secretary donald h . rumsfeld has repeatedly spoken of the opponents of the american led occupation as ' 'dead enders , foreign terrorists and criminal_gangs . '' but the nov . 10 situation report was described by the officials as reflecting a more formal assessment . they said mr . bremer 's unusual endorsement was intended to give the document added credibility . a second american official said the grim conclusions were based in part on a classified opinion_poll conducted by the state_department 's intelligence branch , which found that a majority of iraqis now regard american_troops as occupiers rather than liberators . the concern has been reinforced , another official said , by an increasing consensus among intelligence analysts that appointed iraqi leaders do not appear to be capable of carrying out the task of governing or working toward elections . ''the trend lines are in the wrong direction , '' a third government official said . ''i have n't seen anything in any of the intelligence reports that offers a hard and fast recipe for how to turn things around . '' the officials would speak about the report only on condition of anonymity , and all refused to quote directly from the document because of its classified nature . they said they had been briefed about its findings , and were discussing them publicly because they believed the warnings should have wider circulation inside and outside government . among other concerns raised by the c.i.a . report , the officials said , was the danger that iraqi shiite_muslims , who represent a majority of the country 's population , could soon join minority sunni muslims in carrying out armed attacks against american_forces . the report also described what it portrayed as major obstacles to efforts by the united_states and american led iraqi forces to halt a small but steady infiltration of foreign_fighters from syria and iran . the struggle for iraq intelligence.

lead emperor_hirohito became seriously ill late monday_night , and millions of japanese stayed up until the early hours of the morning watching television as the imperial palace here bustled with activity and speculation . emperor_hirohito became seriously ill late monday_night , and millions of japanese stayed up until the early hours of the morning watching television as the imperial palace here bustled with activity and speculation . the imperial_household_agency , which runs the palace and directs every public action of the royal family , gave few details about the 87 year old emperor 's condition . but a spokesman for the agency said at a terse 3 a.m . news conference that hirohito vomited blood late monday evening and required a transfusion . the only other details he gave were that the emperor 's condition was stable , and that his pulse rate ranged between 90 and 100 beats per minute . since the emperor underwent intestinal surgery last september , there have been widespread rumors that his health is far worse than the imperial_household_agency has publicly acknowledged . so as word of his illness spread monday_night , television crews converged on the palace . at news conference this morning , iwao miyao , the vice grand steward of the imperial_household_agency , said the emperor received 800 cubic centimeters of blood in a three and a half hour transfusion . he said doctors believed that the blood vomited by the emperor came from the upper digestive organs . mr . miyao said that the emperor was conscious , and that crown_prince akihito and princess michiko visited the palace twice today . at a news conference this afternoon , mr . miyao said an additional 200 cubic centimeters of blood had been administered , and that the emperor continued to be fed intravenously . he added that the emperor 's temperature had dropped to near normal levels , and that the monarch was able to speak with visitors ''in a firm voice . '' the emperor 's sickness came after several days of concern that his condition was worsening . on sunday , the emperor canceled a scheduled appearance at a sumo wrestling match . doctors said on monday , before the emperor fell more seriously ill , that they suspected an inflammation of his pancreas had led to an infection . they were treating him with antibiotics . the emperor plays no official political role , though he is described in the constitution , written by the american occupation government in 1947 , as the ' 'symbol of the state and the unity of the people . '' opinion_polls show that most japanese are largely indifferent to him . but he is revered by millions . he has sat on the chrysanthemum_throne since 1926 , making him the longest reigning of japan 's 124 emperors .

patricia a . hurt , the essex county prosecutor who defiantly vowed to fight last month 's decision by gov . christine_todd_whitman to strip her of her powers , relented today and resigned . in a three paragraph letter to governor whitman , ms . hurt said that she had no alternative but to resign since it was clear that the governor had lost confidence in her . over the last three months , ms . hurt 's office was riven by dissension and hints of wrongdoing . federal and state investigators were looking into everything from her handling of a high profile murder investigation to her spending practices . but in a meeting this morning with attorney_general john j . farmer , ms . hurt was told that ''all inquiries into her conduct had ended , '' said her lawyer , john j . fahy . a spokesman for the attorney_general added that ''any criminal investigations with respect to ms . hurt 's conduct have been closed . '' mr . fahy insisted that the state 's decision to investigate her conduct had not influenced ms . hurt 's decision to abandon her fight to hold onto the job and finally to resign . ''i have never been known as a quitter , '' ms . hurt wrote in the resignation letter , ''but i see no reason to continue in my position without your support . '' ms . hurt , 43 , had been essex county 's first black , female prosecutor . her resignation came less than a month after a group of black ministers angrily suggested that there was racial motivation in the public and humiliating way in which ms . hurt was ordered to leave her office and was superseded by an acting prosecutor , donald c . campolo . the ministers demanded that the many investigations that had cast a shadow on ms . hurt 's 18 month tenure be quickly concluded . when ms . hurt appeared to be girding for a political battle with the governor , the ministers' group advised her against resigning because it was sure she would be cleared of any wrongdoing and be restored to her post . but today , the group , the new jersey black ministers council , said in a statement that while it was disappointed in ms . hurt 's decision to resign , it was appropriate since it was clear that the governor and the attorney_general ''want her out . '' but they continued to lament the state 's treatment of her . ''it was not necessary for pat hurt 's reputation and integrity to be dragged through the mud and maligned through the media , '' said the rev . reginald t . jackson , the group 's executive director , in a statement . when ms . hurt was appointed by governor whitman , it was hailed as an example of the state republican leadership 's determination to include minority_group members . the appointment was also credited with helping the governor politically as well as the re election bid of james f . treffinger , the republican county_executive who had recommended her appointment . but almost from the start of what was to be a five year term , ms . hurt encountered problems . her closest aide was forced to resign and subsequently indicted on misconduct and brutality charges connected to a drug investigation . while being chauffeured in her official car , the prosecutor was stopped by state troopers for speeding on the garden state parkway . her lawyer suggested that racial_profiling might have been involved . ms . hurt subsequently disavowed this . but the biggest problems came in april when her office was criticized for mishandling the investigation into the shooting of an orange police_officer . one man who was later released was held for six days before his alibi was checked and he has charged that he was beaten while in jail . another man died in custody during the investigation . both cases are being investigated by federal and state law enforcement officials . then ms . hurt got into a budget battle with her former backer , mr . treffinger . he publicly questioned her spending practices , which led to state supervision of her office 's finances . by the time mr . farmer superseded ms . hurt on july 26 , she was prosecutor in name only . but the law says that county prosecutors can be removed only through impeachment by the legislature , resignation or after they have been indicted on criminal_charges . mr . fahy , her lawyer , said that ms . hurt had been ''angry and bitter'' when she was superseded . a hint of that anger could still be seen in her letter to the governor . she wrote that she ''would have appreciated the courtesy of a face to face meeting with the attorney_general'' before governor whitman took away her powers . but in the last three weeks , most of those feelings have subsided and reality has set in , her lawyer said . ''she got to that position through the political process and if those in the political process wanted her to leave , she reasoned , she should leave , '' mr . fahy said . he added that ms . hurt planned to return to private law practice and open an office in montclair , her hometown .

chinese consumer prices rose in february , raising hopes that a two year bout of deflation was ending . the consumer_price_index edged up 0.7 percent compared with the 1999 month and was up 1.9 percent from january . craig s . smith world business briefing asia.

after a three week sit_in protest by the opposition party , the lower_house of the japanese parliament passed a national budget today that includes funds to liquidate crippled lending institutions . passage of a budget had been stymied by opposition to the plan to allocate an initial 6 . 3 billion to help clear up bad housing loans . the government said a bailout was necessary to preserve faith in japan 's financial system , while the opposition party said a rescue was a waste of money . a deal struck late wednesday night between the opposition new frontier party and the ruling coalition group , allowing both sides to claim victory , paved the way for today 's vote . but the new budget appears to have only postponed the conflict over the plan to liquidate the home mortgage companies , or jusen . as part of wednesday 's compromise , the ruling coalition group agreed to hold off spending public money until a liquidation plan was put into operation . the ambiguously worded compromise allows the ruling coalition to insist that no changes were made to its original proposal .

long_island planting a new seed dom pellegrino had 13 tackles , 3 sacks and a fumble recovery as a linebacker and a 58 yard_touchdown as a tight_end as west_islip ( 6 0 1 ) upset the no . 1 rated team in the state and 23d in the nation , bellport ( 6 1 ) , 24 15 . the last time west_islip defeated the state 's no . 1 team was in 1984 , when it beat sachem . yesterday 's victory set the stage for west_islip to claim the no . 1 seeding in division_ii . quarterback chip jankow ( 10 of 13 for 151 yards ) led the charge offensively for west_islip . pittman breaks out all county runner andrew pittman , who was held to 10 yards on 10 carries in roosevelt 's 26 22 victory over mineola last week , broke out of his slump and rushed for 166 yards on 20 carries and one touchdown as the rough riders ( 6 1 ) routed wantagh ( 9 7 ) , 28 0 . jude innocent ( 9 carries for 105 yards ) scored two times for roosevelt . mike green ( 10 tackles ) was the standout on defense . three of a kind jerome mcmillan ( 10 carries for 110 yards ) scored three touchdowns to catapult lawrence ( 5 2 ) over oceanside ( 2 5 ) , 37 14 . eddie palleschi ( 8 carries for 72 yards ) and louis mastantuono ( 11 carries for 89 yards ) also contributed to the golden tornados' running attack . . . . brian alemaghides ( 21 carries for 168 yards ) rushed for three touchdowns and brian herbert had three sacks as bethpage ( 6 1 ) rolled over seaford ( 3 4 ) , 28 0 . double trouble brandon long scored three times and had 10 tackles as half hollow hills west routed greenport friday night , 42 0 . marc jurman , the colts' other two way standout , caught a 40 yard_touchdown pass from jason ism , made nine tackles and pulled down an interception . the victory improved the colts' record to 5 2 , the best in school history . greenport 's record dropped to 1 6 . hello , goal line all nassau_county runner mike townsend ( 21 carries for 165 yards ) scored farmingdale 's first two touchdowns in three weeks as the dalers blanked uniondale ( 5 2 ) , 13 0 . farmingdale lost by 12 0 to hempstead last saturday and played a scoreless tie against syosset two saturdays ago . carrying on sean goodwin threw two touchdowns and anthony picone rushed for 77 yards on 77 carries to lead lynbrook ( 7 0 ) over mineola ( 3 4 ) , 28 13 . the owls have a 17 game unbeaten_streak . drive terminator rob persandi of sewanhaka picked off two passes and recovered a fumble to preserve a 14 3 victory over southside . two way sophomore quarterback kyle inserra ran 7 times for 82 yards and threw for 162 yards as carle place ( 4 3 ) pounded east rockaway ( 2 3 1 ) , 34 8 . connecticut century mark lou marinelli , the coach of new canaan , gained his 100th victory as the rams routed staples , 30 0 . omar mysogland scored three touchdowns in the game . this thief can catch brian merritt picked off two passes and had five receptions for 127 yards and one touchdown as a receiver to lead darien ( 7 0 1 ) over ridgefield ( 2 6 ) , 28 14 . merritt now has 10 interceptions on the season , which ties a school record . anthony valentine ( 22 carries for 124 yards ) scored the blue waves' other three touchdowns . westchester rockland big man on the run coach brian walsh of brewster has a secret weapon all state two way tackle will santi coming out of the backfield . the 6 foot , 270 pound lineman , who runs a 4.7 40 , scored two touchdowns as a fullback on runs of 4 yards and 25 yards to leadbrewster ( 5 2 ) over peekskill ( 3 4 ) , 34 0 . santi , who averages 7 yards a carry , had 10 tackles and a sack on the afternoon . new jersey squaring off shon hart took a swing pass in the flat behind the line and then threw a 36 yard_pass to ron lee on the goal line to help elizabeth ( 4 2 1 ) salvage a 14 14 tie with westfield ( 4 2 1 ) . elizabeth rallied with two touchdowns in the fourth_quarter to secure the tie . it pulled to 14 6 on a 3 yard scoring burst by donald evans , who finished the game with 159 yards on 34 carries . a fumble recovery by omar diequez set up the 8 play , 66 yard drive . westfield , a decisive underdog , scored both its touchdowns in the second quarter . westfield quarterback chris infantino ( 4 of 13 for 76 yards ) ran 2 yards to end a 99 yard , 10 play drive for the first touchdown and then hit rodney hayes with a 35 yard_touchdown strike to cap the blue devils' scoring . jamal hester ( 20 carries for 107 yards ) was westfield 's leading ground gainer . safety dave schwartzenbeck ( 9 tackles , 4 blocked passes ) was a force defensively for the blue devils . a triple zero for becton sal picinich rushed for 146 yards on 18 carries and two touchdowns as becton regional ( 7 0 ) whitewashed leonia ( 1 5 1 ) , 34 0 , for becton 'sthird shutout of the season . the performance of defensive_end robert escobar ( 6 tackles , 1 sack ) loomed large in the blanking . four of a kind mike marchiano scored four touchdowns and rushed for 220 yards on 26 carries as jefferson ( 6 1 ) pounded hopatcong ( 1 6 ) , 40 14 . deuces wild mark derosa ( 7 of 12 for 119 yards ) threw two touchdowns and bill tierney ( 11 carries for 89 yards ) rushed for two others as bergen catholic ( 7 0 ) won its 18th consecutive game by defeating clifton ( 3 2 2 ) , 35 9 . chris polk ( 16 carries for 90 yards ) scored the other touchdown for the crusaders . . . . chris matteo rushed for 144 yards on 17 carries and two touchdowns as elmwood park sneaked past paterson catholic , 14 13 . . . . jason barber scored two touchdowns and rushed for 135 yards on 25 carries as delbarton ( 5 3 ) defeated essex catholic ( 1 6 ) , 13 6 . time out students at p.s.a.l . and c.h.s.f.l . schools took the scholastic_aptitude_test yesterday , forcing the postponement of all games . the games will be played this afternoon . football.

two groups of canadian indians have filed a lawsuit in toronto seeking 1 . 3 billion ( canadian ) in damages from the kimberly_clark corporation and the new york times company for the pollution of rivers in their native territory in northern ontario around james bay . the suit , which was filed on monday by the moose factory first nation and the new post first nation , charged that a 60 year old paper mill in kapuskasing owned by the spruce falls power and paper company , a joint_venture of the two american companies , had released dioxins and other dangerous substances into three rivers . it was filed on the eve of an expected announcement by ontario 's premier , bob rae , that negotiations had been completed to transfer ownership of the mill to an employee led group backed by the province and tembec inc . , a montreal based paper company . " the agreement has been pretty well finalized , " said dean williams , a spokesman for mr . rae . " this wo n't derail it . " kimberly_clark , which is based in dallas and owns 50 . 1 percent of spruce falls , declined to comment on the lawsuit or its impact on the pending agreement . so did the times company . the transfer of the mill has been linked to the sale of spruce falls' hydroelectric plant some 50 miles north of kapuskasing to ontario_hydro , the state owned utility . kimberly_clark , speaking for both american owners , had proposed to give the mill to employees upon completion of a deal that would pay kimberly_clark and the times company more than 100 million , after taxes , for the power plant . had an agreement not been reached , spruce falls would have been stripped of all but its most profitable operations , eliminating 1 , 200 of the 1 , 450 jobs it provided . the indian groups said the suit had been filed to make it clear that they believed they had claims against spruce falls' current owners , not to scuttle the deal . the province has also been named as a defendant . company news.

three months ago , we compiled a chart for this page on military and economic trends in postwar iraq . with president_bush 's assertion on sunday that ''a free iraq will make it easier for other children in our own country to grow up in a safer world , '' it seemed timet to revisit the numbers . there is no question that the last months have been bloody . insurgent_attacks have become more effective , especially through the downing of helicopters and the growing use of suicide bombers . security is also still a concern for ordinary iraqis . our best estimates on murder rates in baghdad a difficult calculation given that many iraqi families are burying their own dead without notifying the authorities indicate some improvement , but they are still far higher than in the most crime ridden american cities . these murder numbers , it 's worth nothing , are compiled using data from the baghdad morgue , a wide array of news accounts and our conversations with american officials in washington and iraq . ( despite repeated requests , the pentagon has not provided us with any figures of its own . ) on the positive side of the ledger , intelligence leads from locals are proving much more dependable . since the capture of saddam_hussein , coalition_forces have been killing or arresting suspected insurgents at about twice the pace of previous months . there is mixed news in terms of rebuilding civil_society . almost all schools , courts and hospitals are open . but electricity production , telephone service and the availability of cooking and heating fuels are no better than they were before the invasion . unemployment remains around 50 percent even if coalition_forces have now helped create some 400 , 000 jobs . the iraqi_dinar is showing some strength , but a real economic_recovery remains a distant prospect . against this backdrop , the coalition faces an enormous challenge as it tries to prepare the transition to iraqi sovereignty this summer and as it works to prevent growing anti_americanism from fueling further violent resistance . op chart adriana lins de albuquerque and michael o'hanlon are , respectively , senior research assistant and senior fellow at the brookings institution in washington . jelly associates is a graphic_design firm in south_norwalk , conn .

two years ago , joel soler chose to go on a dangerous journey to the middle_east to shoot an irreverent biography of a dictator who was then , in mr . soler 's words , ''a dead story . '' now the subject of ''uncle saddam , '' which is being shown tuesday on cinemax , is probably the world 's most talked about person . as the world debates about war with iraq , mr . soler 's film introduces a strange new perspective on saddam_hussein . did you know that saddam likes to be greeted with a kiss near the armpit ? that he sometimes fishes with grenades ? that he is building the world 's largest mosque near a man made island shaped exactly like his thumbprint ? these are among the personal details mr . soler has gathered in his highly_selective and darkly humorous biography , meant to highlight what he calls the ''camp'' aspects of a dictator 's rule . ''when i went to baghdad , my goal was n't to get saddam himself , '' mr . soler , 34 , said recently over lunch in the east_village . ''i knew he did n't speak to anyone . my goal was his entourage . no one had done those interviews . '' to get them , mr . soler , a freelance television_journalist and french citizen who lives in the united_states ( because of a death_threat , he declines to say where ) , spent six weeks in baghdad and a month in egypt and jordan . he interviewed mr . hussein 's interior_designer , his architects , his cousin and his personal filmmaker , as well as exiled former ministers . mr . soler also made contacts who later smuggled out film of mr . hussein , which he combined with his own images to make this fast_paced , opinionated film . the cult of personality around mr . hussein is mocked by the soundtrack music including ''no regrets'' and ''la vie en rose'' and the tongue_in_cheek narration written by the comedian scott thompson of the ''kids in the hall'' troupe . ''i wanted to bring a deadpan tone , '' said mr . thompson , who was mr . soler 's companion when they collaborated on the film . ''you 're dealing with such a monster , there 's no need to oversell it through words . '' though an invitation to iraqis to stay in the presidential palace as human shields against bombing is described in the narration as ''a giant sleepover party , '' mr . soler does not shy away from the grim realities of mr . hussein 's rule . about half of the film traces the ways he has shut out , imprisoned or killed many members of his own family . from the beginning of the project , mr . soler had to use subterfuge . as a french citizen he enjoyed an advantage , since france has historically had good relations with iraq . ''i pretended i was doing a movie against u.s . sanctions , '' mr . soler said of his application to the iraqi embassy in paris . ''you do n't say , 'i 'm going to do a funny homage to saddam . ' that does n't work too well . '' mr . soler , who once studied sumerian art at the louvre , also said he was interested in iraq 's architecture . ''if i was with saddam 's interior_designer , yes , i asked him about the palaces , but then at a certain point i would just ask , 'what is saddam like ? ' '' mr . soler recalled . once his camera crew arrived , his questions began to unnerve the two government agents who accompanied him everywhere , as well as the interviewees . ''they knew that it 's a death sentence to say the wrong thing about saddam , '' mr . soler said . but he grew increasingly bold . during an interview with one of mr . hussein 's chief designers and architects , hussam khadori , mr . soler locked the government agents out of the room . ''they were furious with me , '' mr . soler said . ''the question was , how far could i push my luck ? '' he found out quickly . the next day , he said , the agents took him to a hospital , ostensibly to show the tragic consequences of the economic_sanctions against iraq . ''they put me in a hospital room , and a nurse came toward me with a needle , '' mr . soler recalled . ''the agent told me , 'we 're going to do a series of blood tests . ' i said , 'what ? ' i jumped up on the exam table and said , 'you call my ambassador right now . ' '' mr . soler was given a choice , he said take the tests ( for which no reason was given ) or leave the country at once . he chose the latter . the drama did n't end once filming was finished . one night , the house he shared with mr . thompson was covered in blood red paint and a small kerosene bomb exploded in his garbage can . a note in the mailbox instructed mr . soler to ''burn this satanic film or you will be dead . '' he also learned that the two iraqi agents assigned to him had been punished for letting him roam . ''do i feel guilty ? '' mr . soler asked . ''not really , since they are agents of that regime . but i did feel guilty when i got a call from the state_department saying that two of saddam 's designers had been murdered . '' mr . khadori was one of them . it 's not known if the killings were connected to ''uncle saddam'' mr . khadori 's murder occurred well before the film was completed . ''joel was very young and more cavalier when he started the project , '' mr . thompson said . ''this made him realize that everything you do has repercussions . '' mr . soler was raised in n mes , france . though both his parents had grown up in algeria when it was a french colony , he knew little of the arab_world until he started traveling in dubai and other middle_eastern cities when he was in his 20 's . ''it spoke to my heart , '' mr . soler said of the middle_east . ''even though i am christian , i have a real passion for islam the islam of muhammad . if it was n't for the islam of today , i would have converted . '' now he is also studying arabic . so far , ''uncle saddam'' is scheduled for broadcast in many countries but not his own . ''i got so much backlash for this film in france , '' mr . soler said . ''i got one letter from a network saying that they did n't want to buy an american propaganda movie . '' he said that his only worry was that the film would add to american misperceptions about the region . ''there is so much anti arab feeling here , and i know my movie is not going to help , '' mr . soler said . ''but i hope that people who see this movie know the difference between saddam and islam , and saddam and arabs . '' uncle saddam cinemax , tuesday , 7 p.m . eastern television radio.

pointing to an unexpectedly robust economy , the bank of canada raised its crucial overnight interest rate today for the second time in less than two months . the central_bank 's lifting of the rate , from 2 . 25 percent to 2.5 percent , indicates that the bank is more concerned that accelerating growth will unleash new inflationary pressures than about political uncertainties stemming from sunday 's abrupt ouster of paul_martin , the finance minister . canadian banks responded to the bank of canada 's move by raising their prime lending rate from 4 percent to 4 . 25 percent . in today 's statement , the central_bank said that ''with the economy showing strong momentum and moving back toward full production capacity more quickly than had been expected , '' the bank would take whatever action was necessary to hold the inflation_rate to its 2 percent target . the core inflation_rate , which excludes volatile food and energy prices , accelerated to 2.2 percent in the year ended in april . statistics_canada reported last week that the economy grew at an annual rate of 6 percent , after adjusting for inflation , in the first quarter of 2002 , up from 2.9 percent the previous three months . just two months ago , the central_bank estimated that first quarter growth would be 4.5 percent . although canada 's economy has become increasingly integrated with that of the united_states , growth has recently outstripped that in the united_states . real gross_domestic_product in the united_states expanded 5.6 percent in the first quarter . george vasic , chief economist at ubs bunting warburg in toronto , said the divergence resulted because there was ''less exuberance'' in canada in the late 1990 's and canadian businesses were now cutting back less aggressively than were their american counterparts . mr . vasic said that tax cuts announced by mr . martin before the last federal_election in fall 2000 and carried out last year had also ''kept us on an even keel . '' aron gampel , deputy chief economist at the bank_of_nova_scotia , said that with interest rates low , canadian consumers ''have really decided to go on an epic shopping_spree . '' for instance , sales of new motor_vehicles jumped 10 percent in may from a year earlier , the fourth monthly double_digit gain so far this year . craig wright , chief economist at the royal_bank_of_canada , described today 's statement by the central_bank as ''a little more hawkish'' than in the recent past . echoing several other analysts , he forecast that the bank would push up interest rates by about another 1.5 percentage_points this year , with more increases probable in 2003 . meanwhile , the government has moved quickly to reassure financial markets that mr . martin 's departure will not affect its economic policies . prime_minister_jean_chr_tien dismissed mr . martin because of his efforts to rally support within the liberal_party for his bid to succeed mr . chr tien as party leader . in a speech on monday_night , mr . martin 's successor as finance minister , john_manley , said ''although individuals might change within government , our priorities and objectives have not and will not change . that means balanced_budgets , reduced debt , low and stable inflation , tax cuts and key investments . '' mr . manley is also deputy prime_minister . although mr . martin has been widely praised as one of the best finance ministers in recent canadian history , his departure has had little impact on financial markets . ''nothing is going to change with mr . martin on the sidelines , '' mr . vasic said . the canadian_dollar , which has firmed markedly against the united_states dollar the last month , was above 65 united_states cents today , a bit stronger than the level it settled at on monday . it touched a low of 62 . 1 cents in january .

lead the american television rights to the 1992 winter_olympics in albertville , france , were awarded yesterday to cbs_sports , whose bid of 243 million exceeded the international_olympic_committee 's expectation by 43 million and nbc 's bid by as much as 68 million . the american television rights to the 1992 winter_olympics in albertville , france , were awarded yesterday to cbs_sports , whose bid of 243 million exceeded the international_olympic_committee 's expectation by 43 million and nbc 's bid by as much as 68 million . in a one bid auction involving only the two networks , nbc bid 175 million plus 50 percent of any advertising sales over 325 million . abc did not participate in the bidding . despite the vast difference in the two bids and abc 's loss of 65 million on rights fees of 309 million paid for the calgary games last winter , neal pilson , the president of cbs_sports , said he expected cbs to achieve a ' 'modest profitability'' on its investment , which will paid through installments over the next four years . ''if you subtract abc 's losses from what they paid , although that is not how we determined our bid , you get very close to our number , '' pilson said at an afternoon news conference . ''we project a market growth by 1992 and that the sales climate will be somewhat better . we feel comfortable with our bid . '' to say nothing for the representatives of the i.o.c . and the albertville organizing_committee . ''a good day , a very useful day , '' said michel_barnier , a co president of the organizing_committee . ''we had hoped for around 200 million . '' 10 percent to u.s.o.c . besides the organizers and the i.o.c. , the chief beneficiary was the united_states_olympic_committee , which , according to the i.o.c . 's television rights distribution formula , will receive 10 percent off the top , or 24 . 3 million . of the remaining 218 . 7 million , the organizing_committee will get 116 . 64 million for its general fund and 43 . 74 million for facilities , which are spread throughout the savoie region of central france the i.o.c . will receive 58 . 32 million . the award procedure was much simpler than it was in 1981 , when abc succeeded after five rounds of bidding . this time , a minimum figure of 200 million was placed in a sealed envelope , after which the two participating networks submitted their offers . the networks were told that the games would be awarded to the higher bidder , provided the offer at least equaled the secret number . ''we figured 200 million was a sensible minimum to expect , '' said richard pound , a vice_president of the i.o.c . and chairman of its television negotiation committee . ''we recognized that calgary was an aberrational bid at the time and that this time , there would not be as much live , prime time coverage . '' by comparison , abc paid 91 . 5 million for the 1984 winter_games in sarajevo , yugoslavia . cbs last televised the winter_olympics in 1960 . puzzlement over abc pound said that he thanked arthur watson , the president of nbc_sports , for his active participation , but that he was mystified over abc 's decision not to bid . ''it 's incomprehensible to me why they dropped out before the bidding , '' pound said . ''i do n't know on what basis they made their decision . '' in preliminary discussions with abc , he said , the network asked about negotiating a package deal that would include the albertville games and the barcelona summer games later the same year . the i.o.c responded by saying it was unable to negotiate on behalf of both organizing committees . by the end of the i.o . c 's discussions with abc , it was clear to pound that the network wanted ' 'some kind of edge'' in the bidding for the albertville games , such as a chance to match the higher offer . but in the end , the procedure was designed to give each network an equal chance . watson , whose network paid 300 million for the rights to the seoul olympics later this year , said that he was disappointed to lose the bid , but that his offer still put nbc at ''a considerable risk , '' based on his analysis of the market . ''you 're always disappointed when you lose , '' he said . ''we came in with what i thought was a reasonable figure , but that was as far as we wanted to reach . '' abc officials have declined to comment since their decision not to participate in the bidding .

lead james kudelka , the 32 year old canadian choreographer , has been called the harold pinter of dance . a darkly intense man with short cropped black hair and restless eyes , his works teem with shadowy undercurrents of emotional ambiguity and inference . by critical consensus , he is a new voice in ballet , and on tuesday , his choreographic art will be given major display when les grands ballets canadiens opens a brief season ( through april 17 ) , at the brooklyn academy of james kudelka , the 32 year old canadian choreographer , has been called the harold pinter of dance . a darkly intense man with short cropped black hair and restless eyes , his works teem with shadowy undercurrents of emotional ambiguity and inference . by critical consensus , he is a new voice in ballet , and on tuesday , his choreographic art will be given major display when les grands ballets canadiens opens a brief season ( through april 17 ) , at the brooklyn_academy_of_music . the 40 strong montreal based company , of which mr . kudelka is resident choreographer , will present an all stravinsky evening featuring the new york premiere of mr . kudelka 's version of the composer 's ''sacre du printemps . '' a second program will offer three additional works by mr . kudelka ''in paradisum , '' ''alliances i'' and ''genesis . '' ''le sacre du printemps'' has challenged countless choreographers since 1913 , when vaslav nijinsky presented the first , highly controversial version for serge diaghilev 's ballets russes . ''of course , 'sacre' has been done to death , '' mr . kudelka said during a recent interview . ''i 've not seen one that i liked , except for mats ek 's version for the cullberg ballet in sweden , which was all done in kabuki style . mine is n't anything like that . on the other hand , it 's not as ritualistic as so many of the others , and it takes place indoors rather than out of doors . i do n't want to talk too much about it , because i want people to see it with a fresh eye . what i can say is that it 's about people awaiting the birth of a child , and it 's about the mother , who will eventually be victimized . '' the underlying thrust of mr . kudelka 's ballets , whether narrative or plotless , rides on the notion that classical_dance can be a vehicle for high drama as well as express the subtlest , most fleeting psychological nuances . like antony_tudor and jiri kylian before him , mr . kudelka offers passion leavened by a mysterious diffidence and restraint . ''i want my pieces to contain the weight of modern_dance and the clarity of classical_ballet , '' he said . a native of newmarket , ontario , a small farming town 30 miles north of toronto , james kudelka was one of six children of a hungarian father and a canadian mother . he began dance lessons at the age of 5 and , at 10 , enrolled in the national ballet of canada school in toronto . at 16 , he entered the national ballet of canada . while still at school , he had choreographed a pas de deux that so impressed veronica tennant , a principal_dancer with the company , that she asked him to create a new work for her . this brief pas de deux , set to the first movement of cesar franck 's sonata for violin and piano , launched the 18 year old 's choreographic career . for nine years from 1972 to '81 mr . kudelka distinguished himself as both dancer and choreographer with the national ballet of canada . for the company , he created 13 ballets , including ''a party , '' ''washington_square , '' ''all night wonder'' and ''playhouse , '' all hailed as original and superbly crafted . but the increasingly restless young choreographer began to feel that the national ballet was not sufficiently supportive of his work . under what some have called acrimonious circumstances , mr . kudelka left the company and , in 1982 , joined les grands ballets canadiens as principal_dancer . he was named resident choreographer in 1984 . ''at the national ballet , i was considered an angry young man and was continually being criticized for it , '' mr . kudelka recalled , ''but the reason i was an angry young man was because the powers that be , including alexander grant , then the company 's artistic director , were more interested in their classical repertory , their ashton works , and in mounting full evening ballets . of course , i understood that . the national ballet is a large , classical company . but they were n't bringing in original works . choreographic risk taking was not a priority . ''i was eager to bring something new to the company , '' he continued . ''i wanted to create all kinds of works , and i knew that the dancers were eager to have roles created on them . so , i fought with people and probably did and said things i should n't have . anyway , in 1979 , i decided to take a year 's leave of absence . i needed to leave toronto . i was 24 , and i had never been to europe . i applied for and received a sizable grant from the canada council and off i went to europe , where i stayed for seven months . '' it was in europe in cities like london , paris , hamburg , stuttgart , salzburg and copenhagen , that mr . kudelka absorbed art , music and dance on a major scale . it was an apprenticeship that would yield creative dividends , for he had never before been exposed to europe 's renowned classical_dance companies . at london 's royal_ballet , he was deeply impressed by the works of kenneth macmillan , particularly his ''meyerling , '' with its soaring , passion filled duets . in paris , john neumeier 's production of ''lady of the camellias , '' with its surprising boldness of phrasing , proved a lasting influence . having steeped himself in the classical_dance traditions of europe , mr . kudelka now turned his attention to the more astringent and , to him , mysterious disciplines of modern_dance . it was an encounter that proved both jolting and exhilarating . ''when i returned to canada from europe , i joined a choreographic workshop in banff run by the choreographers robert cohan , todd bolender and grant strate , '' mr . kudelka said . ''i was the only ballet person there . it was me and 40 dancers all of them modern dancers . the workshop consisted of six choreographers , six composers . and our project , over a period of three weeks , was to create a new dance every day ! it was an extraordinary experience . i worked with dancers who moved in a completely different way it was a new vision of dance , and it was an intense collaborative process , with new scores , new ideas , new ways of moving . all that just seeped into my brain . '' after his leave of absence , mr . kudelka rejoined the national ballet of canada . there , he was finally allowed to create a new work , ''playhouse , '' a highly experimental ballet . mostly , however , he danced in the company 's repertory . by now , he had risen to the rank of soloist and , under the guidance of the late erik bruhn , learned and performed such leading roles as james in ''la sylphide'' and frantz in ''coppelia . '' also during this time , mr . kudelka was one of six choreographers chosen to create a new work for the american_ballet_theater 's choregeographic workshop . the ballet , entitled , ''passage , '' was eventually added to ballet theater 's permanent repertory . ''it was now 1981 , and i was gnashing my teeth about not choreographing more , '' mr . kudelka recalled . ''the company could n't promise me another ballet . when it came time to renew my contract for the 1981 82 season , i did n't sign it . i felt it was time to move on . i approached les grands ballets canadiens in montreal , and they invited me to join the company as principal_dancer . more importantly , there was an understanding that i would create new works for them on a continuing basis . i 've been with les_grands ever since . i danced with them for five years , then , because of a back injury , i stopped dancing . now , i 'm simply their resident choreographer . for me , joining this company was a new beginning . '' mr . kudelka 's ballets for the company assumed a fuller , more daring intonation than those he choreograhped for the national ballet . indeed , a rush of creativity produced such emotionally charged works as ''in paradisum , '' a compelling choreographic essay on the subject of death and dying ''alliances i'' and ''la_salle de pas perdus , '' an exploration of a variety of love relationships ''dracula , '' a highly erotic retelling of the bram stoker classic , and the new ''sacre du printemps . '' just how does mr . kudelka create a ballet ? ''i do n't come into the studio with steps i just come in knowing the music . each piece has its own rules and its own life and its own inevitability . i never figure out a work in my head first . even if i did , it would n't come out looking that way once i started choreographing . with a narrative work , you know where you want to go emotionally . in an abstract work , the music is all . when i choreographed 'the heart of the matter' to prokofiev 's piano concerto no . 2 for the joffrey , i knew the music so well that the piece was already sitting within the music . as michelangelo once said , the finished sculpture already exists in the stone all you have to do is carve it out . so , my ballet simply appeared out of the music . '' mr . kudelka has recently completed two major commissions a second work for the joffrey_ballet , ''concerto grosso , '' to a score by the canadian composer jean papineau couture , and , for the san_francisco_ballet , ''dream of harmony , '' set to schumann 's symphony no . 2 . mostly , however , he says he is content to create works for les_grands ballets canadien . ''to create steadily for one company is of utmost importance to me , '' mr . kudelka said . ''my work seems to be about searching . put simply , i want my dances to communicate my feelings . ''

coached toward the curb by her own impromptu valet parking attendant in his actual job the well mannered executive director of working playground , an arts education nonprofit group that serves new york city schoolchildren the actress rosie perez halts her sporty black volvo station_wagon and hands him the keys . girl 's got clout . not that she flaunts it . not when the role she is playing is that of civic minded activist with not one cause , but two . she is ready to rhapsodize about working playground , whose creatively inclined but economically deprived student clientele conjures up memories of growing up the hard way in williamsburg and bushwick . and , as a member , with oscar figures like heath ledger , of the celebrity enhanced board of develop do n't destroy brooklyn , she is more than willing to vent about the multibillion_dollar atlantic yards project that is , she frets , threatening to change her eclectic home borough into , horrors , ''a mini manhattan . '' just call her citizen rosie . and just do n't ask her age . ''that question is so rude , '' she snaps . reflexively . ''i 'm an artist , not a criminal . '' but she was a college student in los_angeles when she made her film debut in spike_lee 's ''do the right thing'' in 1989 , which puts her somewhere north of 35 and south of , oh , never mind . ''i know it 's your job to ask , '' she explains , escalating her distinctive diction to jackhammer level . ''you 're in a rude business . '' occasionally . ms . perez , whose figure is hourglass curvaceous but taut , as befitting an emmy nominated choreographer and oscar nominated actress , is dressed to blend with the lower broadway crowd in a pink t_shirt , snug brown jeans , and platform sandals . the outfit does not scream diva , though her megawatt grin when she notices herself being noticed certainly does . she has dimples . ageless . she adjusts her kate spade shades and zips into the building where working playground , on whose artistic board she sits , has a one room office . no signs of administrative bloat around here . even the air_conditioner is turned off . a photograph on the wall catches her eye there she is , smile in full deployment , surrounded by female students she instructed in a master dance class a few years back . ms . perez , who is childless , seems to lose herself in the picture . ''seeing those kids again gives me goose bumps , '' she says . when she snaps out of her reverie , she is ready to chatter . preferably about working playground 's mission since 1991 enriching students' educational experience by immersing them in the in depth study of art forms ranging from film and theater to animated video production . the organization reaches 35 public schools and helped establish new design high_school , on grand street . this month , sharif james , a new design student who participated in a film class taught by ms . perez , is attending an architecture program at cornell_university . working playground provided a_4 , 000 scholarship to send him there . ''my mantra for working playground is , what separates an underprivileged kid from a privileged kid is opportunity , '' she says . ''these kids completely remind me of myself . you can be intelligent and be poverty stricken , but to be treated as a charity case by the welfare system is insulting i remember being insulted by it as a kid . i 've seen too many walking geniuses grow up to fail , to not rise to the occasion . working playground is unique because the kids are committed to the programs . it brings me to tears . '' ms . perez 's ideas were solicited six years ago by amy rosenfeld poux , the founding partner of working playground . it was a family obligation of sorts at the time , ms . perez was married to ms . poux 's brother . the marriage did n't last , but the affiliation did . ''the novelty of my celebrity has worn off , trust me , '' she says , twirling a corkscrew curl she has a head full around an index_finger . ms . perez is not a sit still type she prowls the office , serves herself from the water cooler , and scrolls through the student artworks . she never had much of an arts education , nor a traditional upbringing . aside from a sad stint in an upstate group_home run by nuns , she was raised by a maternal aunt . ''my aunt got custody and it changed my life she showed me love . '' she went to college for marine biology , but spike_lee intervened ''i told him i did n't know anything about acting and he said , 'you 're an actress , trust me . ' '' she dropped out of college . she made her broadway debut in ''frankie johnny in the clair de lune , '' opposite joe pantoliano , and also co starred opposite mary louise parker in ''reckless'' in 2004 . her directorial debut , ''yo soy boricua , '' a documentary , was featured at the 2006 tribeca film festival . ''dented cans , '' her first screenplay , will receive a reading at the public theater later this summer . she owns a house in los_angeles , but she 's never there she prefers brooklyn , where she lives in a victorian , circa 1864 , with two rescued dogs , one of them the nemesis of every rat in fort greene park . a public service dog , as it were . she is gearing up for a rally on july 16 against the atlantic yards project , which she describes as ''awfully ugly and so out of character for brooklyn . i 'm all for progress and i 'm all for development , but i 'm not for the betterment of the filthy rich . if that eyesore comes to brooklyn with the nets , it 's over , it 's done . but why give in and let bruce ratner take over ? my nabe was like my private mayberry . '' public lives.

the ministry of finance said its survey of business sentiment showed that on balance big japanese companies remained optimistic about the business environment for a second consecutive quarter after 10 straight periods of overall pessimism . survey data also showed that business sentiment improved at small and medium size businesses in the first quarter , although those groups remained pessimistic about business conditions over all . the survey results suggest that japan 's strong economic performance for the fourth_quarter of 2003 is continuing into 2004 , economists said . a separate survey yesterday showed that japanese companies increased capital investment by 5.1 percent in the fourth_quarter of 2003 , compared with the quarter a year earlier . todd_zaun ( nyt )

china will ' 'resolutely oppose'' any moves to restore quotas on its textile exports to europe and the united_states , a chinese ministry of commerce official said on the ministry 's web_site yesterday . yi xiaozhun , one of china 's four assistant commerce ministers , said in a web posting that china was willing to ensure a ' 'steady transition'' to a new era of free_trade in textiles , acknowledging the surge in chinese exports . ''but we will resolutely oppose any developed countries attempting to reapply restrictions on garments to limit our exports , '' he said . the ministry 's web_site said mr . yi made his remarks at a meeting over the weekend , apparently in anticipation of a european_union warning on sunday of possible restrictions on chinese textiles . the top european_union trade official , peter mandelson , said sunday that he would open a formal two month inquiry into the flood of chinese textiles into europe , and warned of possible sanctions on chinese textiles by summer . yesterday , nicolas schmit , the deputy foreign_minister of luxembourg , whose country holds the european_union presidency , said in a statement that all 25 trade ministers had backed the investigation , but for some , the two month inquiry might take too long given the severity of the situation , and those countries might demand faster action . ''the countries most affected a dozen member states have insisted on this degree of urgency , '' mr . schmit said . on the chinese commerce ministry web_site , however , mr . yi , the assistant minister , said ''adopting the administrative measures of the era of classification quotas is unfair to china . it 's turning back to the past . '' china 's textile exports have long been harmed by ''long term distortions of the textile trade system , '' mr . yi said . ''at a time when the garment quota system has just been abolished , it 's only natural that china 's export volumes would rise . '' china is aware that some developing_countries have ''encountered hardships'' because of the surge in china 's garment exports , he said , adding that beijing is working to overcome those problems . the european investigation comes as french and italian clothing makers , in particular , are pressuring mr . mandelson to limit imports from china , which is making huge gains after a 40 year old quota system on its textile exports ended last year . getting tough with china , europe 's second biggest trading partner after the united_states , is a delicate matter because european officials want to keep good relations to smooth the way for sales of western technologies like nuclear_power_stations , high_speed_trains and aerospace equipment to china . mr . mandelson 's spokeswoman , claude v ron r ville , warned yesterday that the european_union should not act hastily , or risk litigation at the world_trade_organization . ''we are waiting for this formal request for emergency measures from those member states who said they would make such a request , '' she said in brussels . ''we are determined to act expeditiously with our investigation . '' international business.

lead italy 's inflation_rate this year is 5.1 percent , down a percentage point from 1986 , the government reported today . italy 's inflation_rate this year is 5.1 percent , down a percentage point from 1986 , the government reported today .

the vote on a 23 billion plan for federal transportation aid that new york city has threatened to veto was postponed yesterday , for the second time in two weeks . the plan includes a request from the port_authority of new york and new jersey to begin work on a 1 . 5 billion train connection from the new york city subway to kennedy international airport . the giuliani administration , which is trying to take over control of the city 's major airports from the port_authority , opposes the rail project because of its design and because the port_authority wants to pass 300 million of its cost on to the city . the new york metropolitan transportation council , the forum of city and state agencies that distributes federal transportation aid to downstate new york , has not rescheduled the vote on the plan . the city holds two seats on the nine member council , in which all members have absolute veto_power . the plan includes hundreds of projects in new york state , including new york city , that are in line for federal aid beginning on oct . 1 and that cannot receive the aid until the plan is approved by the council . transportation officials said long delays in approving the plan could endanger some projects . lawyers for the city and for the port_authority met last night to try to reach a compromise on the rail project .

just five months ago , in a rococo conference room at the waldorf astoria hotel , a top official of the new york mercantile exchange bitterly complained to a british counterpart about mysterious developments in the copper market that british officials seemed to be ignoring . neal wolkoff , the new york merc 's executive vice_president , told david e . king , the chief executive of the london_metal_exchange , that as copper prices climbed , huge stockpiles of the metal were flowing out of warehouses regulated by the united_states market officials . but at the warehouses operated by the london exchange , tons of copper were piling up . this was an anomaly " that indicated hoarding , said r . patrick thomson , the president of the new york mercantile exchange , whose comex division trades copper contracts . " the comex warehouses were emptying out , " he said , " and there was clearly a lack of surveillance and concern on the part of the l.m.e . , " which handles the bulk of the world 's trade in copper . mr . thompson , who recalled the waldorf incident in an interview this week , said that mr . king brushed aside the american concerns . indeed , mr . thompson soon tried to arrange meetings with top officials at the london exchange to discuss the problem when he traveled to britain but , he said , " their schedules did not permit " a meeting . american market officials took the british reaction as a not so subtle suggestion to keep their noses out of british matters . but the british say that they felt contrained by their own investigation of the matter not to discuss the copper market mystery . it was not the first time aggressive american market and regulatory officials clashed with taciturn british officials over supervision and regulation of the copper market . the waldorf incident points out not only differences in style but in regulatory regimens as well . where the americans were quick to sound alarms , british officials moved more gently and quietly . where united_states regulators question potential conflicts of interest on the part of the london exchange 's officials , the british saw a seamlessly self regulated market . " we were carrying out a full investigation with the regulatory authorities . we were not in a position to share information with the nymex , or the comex , " mr . king said yesterday , sounding wounded . beginning last year and until january , the commodity futures trading commission was repeatedly at odds with the london exchange over how to respond to puzzling price trends in the copper market . interviews with regulators in the united_states and britain , and copies of some of their correspondence , portions of which were released wednesday , provide the most detailed account the friction between both sides . senior officials at the c.f.t.c. , including mary l . schapiro , the chairwoman , who stepped down in january to become head of nasdaq 's regulatory arm , had taken an interest in the copper market as the london_metal_exchange made plans to open a copper warehouse in long_beach , calif . but c.f.t.c . requests for information on the copper market from the london exchange were generally met with polite but vague responses . " i think we have a different sense of urgency about things like this , and that was what the frustration was for me , " ms . schapiro said this week as she discussed the contrast in american and british approaches to copper market regulation . some pieces to the copper price puzzle ms . schpiro and other american market regulators had sought tumbled into view last month when the sumitomo corporation dismissed its chief copper trader , yasuo hamanaka , and accused him of making unauthorized trades that rolled up at least 1 . 8 billion in losses over a decade . ms . schapiro , in a series of letters last year to mr . king and raj k . bagri , chairman of the london exchange , had raised questions about oversight of the copper market , and the exchange 's plan to operate a copper warehouse in long_beach . in response , london officials seemed politely indifferent to american requests for information . in one instance last summer , it took two and a half months to respond to several general questions from ms . schapiro about the exchange 's operations . the agency released copies of some correspondence this week in response to requests under the freedom of information act . andrea corcoran , director of markets surveillance at the commission , said that " all this came to a head in late 1995 when there was extreme volatility on the copper market , and we were especially concerned about potential effects on the u.s . market . " british officials play down last year 's tensions and argue that they largely resulted from the different regulatory regimens in the united_states and britain . " we believe we have good relationships with the c.f.t.c . , " mr . king said , but " we are always very circumspect in what we communicate to other parties . we leave it , for example , to the securities and investments board " a regulatory body in britain " to communicate directly with the c.f.t.c. " mr . king also cited " the need for confidentiality and a slight wariness of a fishing expedition , " by american regulators seeking information on foreign markets . american and british regulators say they began cooperating on the copper issue since earlier this year , and are now working together to try to understand the background to copper trading losses of at least 1 . 8 billion which sumitomo disclosed last month . in an interview this week , mr . king detailed the exchange 's efforts , dating back to 1991 , to understand anomalies in the copper market . these efforts led in late 1995 , he said , to london 's collection of a large amount of information on traders' copper positions . after reviewing these data with " a subcommittee of independent persons , " the exchange and british regulators proceeded with a full international inquiry earlier this year of mr . hamanaka 's trading activities , mr . king said .

after being held for two years in a detention center in los_angeles , five iraqis were freed today and reunited with their families here , where they will be allowed to find jobs and stay until another country agrees to give them permanent political_asylum . the five were among 7 , 000 iraqi dissidents brought to the united_states after the unsuccessful effort to overthrow president saddam_hussein after the persian_gulf_war , but they fell under suspicion of being double agents working for baghdad . in may 1998 an immigration judge found that the men were a national_security risk and signed an order for their deportation to iraq , after a hearing in which the information against them was classified . at that point , a former director_of_central_intelligence , r . james_woolsey jr . , became involved in their fight to avoid deportation , which he said could have meant their ''being sent to their deaths based on classified_information . '' their freedom came as a result of an agreement reached on june 11 with the immigration and naturalization service . a leader of the iraqi_national_congress , dr . ahmad_chalabi , said he knew three of the men and could vouch for their integrity , calling them ''fighters for democracy . '' a spokesman for the immigration service in washington , russ bergeron , said the agency had acted properly . ''there was a broad range of evidence collected that indicated that these men were a threat to national_security , '' mr . bergeron said . one of the five , adil hadi awadh , said because of the aid of mr . woolsey and others , he felt no bitterness . ''we 're grateful for the support from the american people , '' he said .

the yen falls . the yen dropped on speculation that a business confidence survey would not prompt the japanese central_bank to raise interest rates . in new york , the dollar settled at 108 . 84 yen , up from 108 . 02 on friday .

lead richard_branson , the british entrepreneur whose holdings include virgin_atlantic_airways , urged the government today to refer a possible merger between scandinavian_airlines system and british_caledonian airways to the monopolies and mergers commission . lord young , the trade and industry secretary , is expected to decide this week whether the scandinavian carrier can proceed with plans to bid for a significant stake in british_caledonian , which is looking for a buyer and is talking with britain 's largest airline , british_airways . richard_branson , the british entrepreneur whose holdings include virgin_atlantic_airways , urged the government today to refer a possible merger between scandinavian_airlines system and british_caledonian airways to the monopolies and mergers commission . lord young , the trade and industry secretary , is expected to decide this week whether the scandinavian carrier can proceed with plans to bid for a significant stake in british_caledonian , which is looking for a buyer and is talking with britain 's largest airline , british_airways . mr . branson said in a letter to lord young that most other british airlines objected to the s.a.s . bid . ''why should a foreign carrier be allowed to take control of some of the united_kingdom 's best routes when there are plenty of british carriers eager and willing to fly them ? '' he wrote . s.a.s . is owned in part by the swedish , danish and norwegian governments the rest is held privately . company news.

day or night , go to any bar in the ironbound with a satellite_dish when professional soccer is being played and chances are there will be a crowd tossing back a few and watching the game . ''they go crazy , '' said nanda cerquira , owner of tio pepe , where patrons were leaping from their seats , pumping their fists in the air and shouting last wednesday afternoon as real_madrid and manchester united battled in european_cup competition on the bar 's motion_picture sized screen . at pegasus sporting_goods on ferry street , which stocks 20 models of outdoor soccer shoes and another 20 for indoor play , a sales clerk , anna santos , said gravely ''it 's not like , 'my favorite sport . ' it 's something much more than this . '' so it is a disappointment to residents of the ironbound the city 's most economically vibrant and socially stable neighborhood that even after construction of major amenities like the new jersey performing_arts center and a minor_league_baseball team , a soccer stadium has eluded city officials , community activists and the owners of the major_league_soccer 's metrostars . hopes for a stadium here rose again recently , when yankeenets , the organization that owns the new jersey nets basketball_team and has agreed to buy the devils hockey team , began negotiating to buy half of the metrostars . yankeenets intends to build a 295 million arena near the pennsylvania_station under a redevelopment plan that the city is in the process of adopting . had the organization become an owner of the metrostars , it would have probably sought to build a soccer stadium too . but last month , negotiations between yankeenets and metromedia , which owns the metrostars , collapsed . afterward , mayor sharpe_james pledged his continued support for a soccer stadium , although he did not provide any details . at the same time , the president of the east side community center , jack dasilva , a local banker and realtor , announced that his group had gathered nearly 3 , 000 signatures on a petition in support of a soccer stadium . ''i am very confident that , if the metrostars had a stadium in newark , they would be sold out for every game they play , '' mr . dasilva said . jose fernandes , owner of the play ball restaurant on ferry street , said ''most of the businesses here are portuguese , and we pay taxes . the people in this area , they do n't know anything about baseball or american_football or those kinds of sports . '' three years ago , mayor james a democrat , and county_executive james w . treffinger , a republican , reached across party lines to shake hands on a deal that would have developed a sports complex in an ironbound park with stadiums for minor_league_baseball and soccer . but the plan was killed by a combination of factors , including opposition led by a group known as the ironbound community corporation , which feared the loss of recreational space , including a soccer field . basically , the group preferred playing to watching . the baseball stadium , which is known as riverfront park and is home to the newark bears , was eventually built on a different site , just off mccarter highway outside the ironbound section . ''it 's a complex issue , '' said joe della fave , the group 's president . ''there are overcrowded schools and not enough places to play , and that 's got to be a priority . '' councilman augusto amador , who represents the ironbound section as part of the east ward where the baseball stadium and the performing_arts center are situated said he fully supported a stadium . last tuesday , mr . amador met with the general_manager of the metrostars , nick sakiewicz , to discuss the city 's old ironbound stadium site , a deteriorating piece of city owned property where a hulking concrete grandstand and an overgrown oval track linger as reminders of when the stadium was host to local matches and exhibitions featuring foreign professional teams . it is sandwiched between a hockey arena where indoor soccer is also played , and a large open space that is now being cleaned up and leveled for use as a multipurpose athletic field . even so , mr . amador said , the ironbound has higher priorities , including construction of a replacement for the aging and overcrowded east side high_school , a project that does not necessarily conflict with a soccer stadium , but must come first . in addition , the ironbound is becoming increasingly congested , a condition that stadium plans would have to be careful not to aggravate . ''soccer is synonymous with the ironbound , '' mr . amador said . but , he added , ''we have to minimize the negative impact that a stadium might have . '' rick cerone , the bears' owner , said a soccer stadium could only help his team by boosting newark 's profile as a sports venue . ''the more the merrier , '' he said . what is contemplated , mr . amador and mr . sakiewicz said , is a 25 , 000 seat stadium that could cost from 40 million to 60 million . most of the project would be financed privately , although the city would be asked to pay for road and other infrastructure improvements , mr . sakiewicz said . for now , the metrostars play at giants_stadium in east_rutherford , which is difficult to reach by public transportation , and where the team 's lease is up after the 2001 season . exactly one stadium has been built specifically for a major_league_soccer team since the league debuted in 1996 , a 28 . 5 million project finance privately in columbus , ohio , said dan courtemanche , a_league spokesman . mr . courtemanche said the stadium had solidified the columbus_crew 's identity among its fans , and helped the team lead the league in average attendance last year , at 17 , 406 a game . in contrast , the metrostars , which have struggled as a franchise , averaged just over 14 , 000 last year . to be sure , not everyone in the ironbound is passionate about soccer . manuel ferreira , 13 , was among several young hockey players working out at the rink on inline skates last week . why does he prefer hockey ? ''more speed , '' he said . communities.

since its founding 22 years ago , st . michael the archangel , a roman_catholic congregation in the bronx , has had to make do with commercial basements and storefronts in co op city , where most of its parishoners live . but this fall ground is to be broken for st . michael 's first real church . " basements and storefronts are just not adequate , " said the rev . william di raffaele , the pastor of st . michael 's congregation of 2 , 000 families . " they do not meet our current space needs and commercial space certainly is not satisfying from an esthetic standpoint . " the church will be built on a 57 , 0000 square_foot parcel bought from new york city at 765 co op city boulevard at the corner of rombouts avenue . included in the blueprints for the church building will be office space , residences for the priests and all purpose rooms for nonreligious activities . father di raffaele said that st . michael 's parishioners raised 1 million to buy the land and the archdiocese of new york will lend the church 2 million , the estimated cost of construction . the firm of belfatto pavarini of purchase , n.y. , which specializes in church design , is serving as the project 's architect . the new church will be contemporary georgian in style and will feature a pitched roof with dormers as well as both clear glass and stained_glass_windows . ground is scheduled to be broken in october and st . michael 's parishioners hope to move into the church next summer .

japan is set to announce on friday a series of measures aimed at supporting an economy that is likely to be hurt in the near term by the government 's plan to speed up write_offs of bad_loans by the nation 's banks . with tax revenue falling and the national debt exploding , however , such measures may , at best , only prevent another recession instead of spurring growth , experts said . prime_minister_junichiro_koizumi 's council on economic and fiscal_policy favors tax cuts and other support worth no more than 5 trillion_yen ( 40 . 2 billion ) , or about 1 percent of gross_domestic_product . but the council has said that accelerating write_offs of the estimated 423 billion in bad_loans will depress growth by an equal amount , 1 percent , as bankruptcies and unemployment rise . worse , the government expects to raise social_security taxes next year , a step that would wipe out most benefits of any tax cuts . still , the government 's report on friday is expected to include calls for tax cuts of 2.5 trillion_yen ( 20 . 1 billion ) , mostly aimed at companies . it is also likely to recommend expanding low cost loan programs for small businesses under pressure from their banks , and it is expected to propose broader unemployment_benefits . the council may also call on the bank of japan to loosen monetary_policy further to counter the negative effects of the write_offs of bad_loans . the governor of the bank of japan , masaru_hayami , who is a member of the economic council , said the group had not discussed the bank 's monetary_policy at today 's meeting . the central_bank 's policy board will meet on oct . 30 . while the government scrambles to find ways to bolster growth as the nine month recovery loses steam , one of the few drivers of the economy exports is slowing . shipments overseas have declined for three consecutive months on a seasonally_adjusted basis as economic_growth in the united_states and asia has slowed . all of this , combined with continued weakness in capital spending and new home starts , make it increasingly likely that japan 's economy will tip back into recession , analysts said . ''we are in for tough times , '' said kazutaka kirishima , an economist at the sumitomo life research institute , adding ''the risk of a double dip recession is high . the government 's stimulus_package will have little impact in this environment . '' if the government carries through with its plan to push banks to write off their bad_loans faster , the unemployment rate could easily spike to 7 percent from the current 5.4 percent , economists said . personal bankruptcies are also likely to rise . the number of people filing for bankruptcy was already on track to grow nearly 40 percent this year , according to the nihon_keizai_shimbun , the leading japanese business newspaper . the government fears that its push to get the banks to write off their bad_loans will lead to a credit squeeze in which even healthy companies have trouble getting money , as happened in 1998 and 1999 . most of the measures it is considering are aimed at helping businesses get the financing they need to keep employees working . mr . koizumi 's council said the government would create more jobs , but it offered few specifics . the new chief financial regulator , heizo_takenaka , said that his financial_services agency would be setting up a telephone hot line to field calls from small businesses that are having trouble obtaining loans from banks . with interest rates still at rock bottom , the central_bank has little left to offer , except uncollateralized loans to companies in need . and that throws the burden back on the government , which is wrestling with a national debt that is expected to grow by march to 693 trillion_yen ( 5 . 6 trillion ) , an amount equal to 140 percent of the gross_domestic_product .

it was a leaky roof at a decrepit , 95 year old public_school in chinatown that led to the discovery that years and millions of dollars had been wasted on negligent or fraudulent asbestos inspections , that scores and possibly hundreds of city schools may still be contaminated with the cancer causing material . but long before asbestos was found last june at public_school 1 , at 8 henry street , touching off the investigation whose explosive results were announced at city hall yesterday , authorities in charge of school asbestos abatement programs should have known that the problem was widespread , investigators said . over the last three years , the investigators said yesterday , the school construction authority created by the state in 1989 to speed renovations in schools had found asbestos in walls and ceilings at 70 schools , all sites that federally mandated reports in the 1980 's had pronounced asbestos free . the construction authority reported its asbestos findings , and contradictory reports made under the federal asbestos hazard emergency response act of 1986 so called ahera reports to the board of education 's asbestos task_force , but apparently nothing was done to determine the extent of the problem or to alert the public or other officials . problem ignored , report says thus , asbestos that posed dangers to children , teachers , custodians and other school staff members " was ignored over long periods of time because of a misplaced reliance on inaccurate ahera reports , " the investigators , edward f . stancik and thomas d . thacher 2d , said in a report to mayor david n . dinkins . efforts to obtain comment from officials of the asbestos task_force late yesterday were unavailing . the problem of inaccurate or fraudulent asbestos reports may date back more than a decade . in 1979 , the state directed all local school systems to survey their schools for asbestos and develop plans for abating hazards , which often meant sealing them rather than trying to remove them , since asbestos fibers are dangerous when airborne . that same year , the board of education created and staffed the asbestos task_force to comply with the law . in 1986 a similar but more comprehensive federal law was passed and the task_force was expanded to fulfill its requirements it hired a consultant , enviro_safe , to assist with inspections , training and the preparation of asbestos reports on 1 , 100 schools before a 1989 deadline . then , in renovating city schools the school construction authority began to find asbestos in places where the ahera reports said none was present . it happened often enough , investigatators said , that the authority began to distrust the ahera reports , and before undertaking any extensive work at a school it began conducting its own sampling and testing . in the last three years , investigators said , the authority found asbestos in 70 schools in walls and ceilings that had been called asbestos free in the ahera reports , and it detailed these findings and the discrepancies to the board of education 's task_force , which took no action . investigators yesterday said that it was unclear when , or even if , officials in the construction authority or the task_force recognized that a pattern of consistent errors in the ahera reports was developing . the authority was merely reporting a series of discrepancies to the task_force , which was responsible for keeping the asbestos records accurate and up to date , one official said . the problem finally came to light last june when the construction authority , nearing the completion of roof repairs at p.s . 1 in chinatown , began work on walls that had been damaged by longstanding leaks . it found extensive asbestos , much of it flaking dangerously . inaccuracies cited the ahera reports for the school , completed in 1988 , were so egregiously wrong , even as to the location of walls , ceilings and other fixed locations , investigators said , that they might have been describing another school in another community . spots that the ahera reports said were asbestos free were in some instances laden with asbestos , while others were in " thin air in the middle of the room or some location outside the room , " the report to the mayor said . " in one case , it added , the coordinates describe a spot outside the building . " the construction authority , instead of notifying the asbestos task_force about just another discrepancy , told amy linden , the school system 's chief executive for school facilities . it was the decision to inform ms . linden , investigators said , that apparently broke the logjam in the case . amid an uproar by alarmed parents and teachers who charged that the health and safety of hundreds of pupils and staff members had been jeopardized , the school a five story white brick building erected in 1898 , was closed on june 16 and its children sent to another school for the final week of classes . consultant called in ms . linden , who is responsible for planning the school system 's capital construction and renovations , asked a consultant , con test , of nutley , n.j. , to investigate the situation and notified the construction authority 's inspector general , mr . thacher , and mr . stancik , the special schools investigations commissioner , of the problem with the ahera reports . the ensuing investigation by mr . thacher and mr . stancik over the next four weeks examined fewer than two dozen schools and ahera reports , but concluded that " each one was fundamentally inaccurate . " it also found that the extent of asbestos contamination in city schools was " impossible to determine . " but so alarming were the preliminary results and so large were the stakes the dangers to nearly a million students and the possibility that some schools may not be able to open when school starts on sept . 9 that the investigators and mayor dinkins decided to make matters public , even at the risk of further eroding public confidence in a school system where unknown dangers lurk . while responsibility for what has happened remains to be determined , the investigators were clearly blaming the asbestos task_force . citing the public 's right to know about asbestos contamination in schools , they told the mayor " the a.t.f . has effectively frustrated these provisions , providing an already skeptical and cynical public with further reason to mistrust government . "

even in a combat zone , sometimes it 's the little things that count . in a recent e mail message , air_force tech . sgt . brian burke , stationed in balad , north of baghdad , wrote about a wounded female soldier who had arrived at the military_hospital there ''all she had was her small backpack and her clothes . so she takes off and cleans up , and when she came back , she had on makeup from one of the girl packs you sent ! '' ''it was a total change not only did you give her cleanliness , but you gave her her identity back as a human being ! ! , '' wrote sergeant burke , a volunteer at the hospital . ''at that moment , i knew that she had chosen to not be a killer for that time , but to simply be a girl . most people never would have noticed . i did because i brought the stuff up there , and knew that the package was from you ! '' the message was written to gail van vranken of wheeling , w . va . , the founder of boatsie 's boxes to baghdad ( boatsie . com ) , which sends items like toiletries , sweatshirts and sweat_pants to the troops overseas . she decided to start boatsie 's when her son , patrick , a technical sergeant in the air_force awaiting deployment to iraq , forwarded her an e mail message from a military official that said a hospital in baghdad was running short of basics like toothbrushes , toothpaste , shaving cream , books , magazines and pens . ( the name boatsie , from boatswain 's mate , is a nickname her husband , a former sailor , had given her years ago . ) mrs . van vranken wrote to friends and neighbors for contributions . she bought everything listed in the e mail , added extras like snacks , candy and four portable dvd players and sent her first shipment to iraq on june 1 . boatsie 's boxes is one of a number of organized efforts to help the troops that have sprung up around the country . they range in size from small family run groups who have personal reasons for wanting to donate , to church or civic organizations who want to support institutions like the american_red_cross or the army itself , which runs the web_site defendamerica . mil support troops . sites like treatanysoldier . com offers different sizes of packages from a catalog , while give2thetroops . org asks for donations to buy items needed overseas . to discern what the troops may need , mrs . van vranken relies on feedback from her son and the other soldiers who distribute boatsie 's packages . for example , when her son first arrived in iraq , he sent her an e mail message that said the mattresses were almost unusable . ''if you could find some 'egg carton' foam camping type mattresses please send them , '' he wrote . the next day mrs . van vranken shipped 40 mattresses . and recently she changed the way she packs . instead of putting many items in one box , she now makes up individual zip lock bags with everything already parceled out , which saves precious time for the soldiers . boatsie 's boxes has grown into a full time job for mrs . van vranken , who ships 12 to 20 boxes a week . the scope of her undertaking is still growing as arrangements have been made to bring her boxes , via helicopter , to the front lines . right now mrs . van vranken has a goal to send 2 , 000 christmas stockings . but her thoughts are already on the months beyond that . ''homemade cookies , treats and snacks are great , '' she said , ''but i 'd really like for people to get involved for the long haul . '' overseas.

lead worried about having interest on their savings taxed at the source , west germans have joined foreign investors in a significant exodus out of mark deposits . worried about having interest on their savings taxed at the source , west germans have joined foreign investors in a significant exodus out of mark deposits . their concern has been prompted by the bonn government 's plan to impose a_10 percent withholding_tax on interest derived from domestic mark savings , starting jan . 1 . although west germans are already liable to a_10 percent tax on such interest , many of them do not declare it as income . the new withholding provision is an attempt to catch up with the tax evaders . the combination of higher interest rates in other currencies , notably the dollar , and the government 's planned withholding policy has caused a record net capital outflow so far this year of almost 60 billion_marks ( 32 billion ) , according to karl_otto_pohl , president of west_germany 's central_bank , the bundesbank . this is in contrast to an inflow during the first six months of last year of 19 billion_marks ( 10 . 2 billion ) . helping drag down the mark the flight of capital caused by the withholding provision has helped drag down the mark , and to compensate , the bundesbank has been forced to increase interest rates . in turn , according to economists , these increases threaten to slow economic_growth just as it shows signs of picking up . mr . pohl is among those who have expressed concern at the outflow , especially its weakening effect on the value of the mark . ''we are not so much worried about losing capital as such we can afford to but at its effect on the mark , '' one bundesbank official explained . recognizing strong consumer demand , bonn has recently increased its growth estimate this year to an inflation adjusted 3 percent . but analysts regard the bundesbank 's recent series of interest rate increases as detrimental to sustaining a strong economic_growth rate , so a 3 percent growth rate seems unlikely to continue into 1989 . bankers oppose tax the bundesbank and commercial_banks have tried unsuccessfully to dissuade bonn from introducing the withholding_tax on the ground that the effects of the investors' negative view of it would far outweigh the 3.5 billion_marks ( 1 . 9 billion ) of extra revenue that the government hopes to gain by tightening its tax collection system . but gerhard_stoltenberg , finance minister , insists that the withholding measure will go into effect . at a news conference late in august , mr . pohl said that the fears the central_bank had expressed over the withholding_tax 's detrimental effect on the value of the mark had been ''clearly exceeded . '' the capital outflow , in his opinion , had reached a point where it was dragging down the mark and raising the specter of imported inflation . he pointed out that in the past seven months the mark had fallen 16 percent in value in relation to the dollar and 4 percent against the currencies of west_germany 's 14 most important trade partners . such a depreciation , he added , was not justified by fundamental economic data . special lure of luxembourg commercial bankers have been particularly concerned that the withholding_tax will make west_germany and frankfurt , its banking hub , less attractive as a financial center , driving foreign and domestic investors elsewhere . luxembourg , in particular , has benefited from the outflow . in the first quarter of this year west_german savers made deposits there totaling 2.8 billion_marks ( 1 . 5 billion ) , compared with less than 240 million marks ( 128 million ) in the final quarter of 1987 . ''i feel like offering the west_german finance minister a case of champagne , '' said one luxembourg banker . several leading west_german banks have sent letters to clients suggesting they make appointments to discuss their savings . upon arriving at the bank , the saver is asked in a hushed voice whether he or she is aware of the implications of the withholding_tax . advice for bank customers the bank representative , making clear that the bank has no wish to encourage tax_evasion , then suggests transferring domestic mark savings into a withholding_tax free luxembourg investment fund , which includes a range of european and other leading currencies , or a mark denominated eurobond issue offered by the bank . as a result , in the first six months of this year there was a surge of deposits in specially established luxembourg investment funds to 6.3 billion_marks ( 3 . 4 billion ) , or more than 10 times more than the money placed in domestic securities . the bundesbank has described demand for the new investment funds , which are managed by the luxembourg affiliates of west_german banks , as ''tumultous . '' west germans invested more than 27 billion_marks ( 14 . 4 billion ) in fixed rate paper in the first five months of this year . of this , 17 . 2 billion_marks ( 9 . 2 billion ) went into foreign currency bonds and 3.4 billion_marks ( 1 . 8 billion ) went into mark denominated foreign loans . foreign loans called risky but the bundesbank believes that investors may have underestimated the exchange risk involved in choosing foreign currency loans with high interest rates . ''german investors are showing at first sight a perhaps somewhat surprising preparedness for risk , '' the central_bank has said . favorite currencies have included the united_states , canadian and australian dollars , british_pound , danish crown and french_franc . all of them offer much higher interest rates and freedom from withholding_tax . until the recent spell of mark weakness , all these currencies were themselves prone to softness . international report.

stocks traded lower here today . at the close , the nikkei index of 226 issues was down 119 . 77 points , or 0 . 67 percent , at 17 , 682 . 74 . on tuesday , the nikkei ended almost unchanged , rising 13 . 05 points .

lead as hundreds of thousands of east_germans marched in protest today against bonn 's proposed currency conversion , the west_german government took the first legal steps toward monetary_union for the two nations but did not discuss the conversion rate , senior government officials said . as hundreds of thousands of east_germans marched in protest today against bonn 's proposed currency conversion , the west_german government took the first legal steps toward monetary_union for the two nations but did not discuss the conversion rate , senior government officials said . the ''german unity committee'' of chancellor helmut_kohl 's cabinet met to discuss the first draft of a state treaty that would legalize monetary_union and establish common social and economic policies for the two germanys . mr . kohl requested at the meeting that there be no discussion of what rate east_germans will receive when they turn in their currency for deutsche_marks , the officials said . the draft treaty did not specify any rate , they added . the final version of the treaty is subject to the approval of the east_german government . ''no decisions were made on the conversion rate . that is completely open , '' said a senior government official who asked not to be identified . ''there are a great many political , economic and social factors to be considered . '' at a briefing after the meeting , finance_minister_theo_waigel outlined the kohl government 's schedule , which gives the east_german government little time for consideration . once east_germany 's new government is formed , the treaty could be signed by the end of april and actual monetary_union could come by july , he said . under the treaty , east_germany will surrender its sovereignty over monetary , economic and social_policy to west_germany , and will be required to establish ''a completely new tax system and government_budget law by jan . 1 , 1991 , '' mr . waigel said . those tasks are likely to fall to a coalition headed by the east_german christian_democratic_union , which emerged as the strongest party when the nation held its first free elections on march 18 . the issue of the conversion rate has dominated the news here since last weekend , when the government in bonn said it was considering a proposal by its central_bank , the bundesbank , for conversion at a rate of one deutsche_mark for every two east marks , with an exception for a small portion of personal savings . hundreds of thousands of east_germans marched this evening to protest the plan . in east_berlin , about 10 , 000 people marched past the palace of the republic , where the newly elected parliament was holding its inaugural meeting . the authorities in leipzig reported 50 , 000 protesters there . the protesters carried signs reading , ''without 1 to 1 , we wo n't become one , '' and ''give mommy her pay . '' speaking to the east_berlin rally , helga mausch , the head of east_germany 's free german trade_union association , said , ''bare fear is going through the land the people are struggling for their naked existence . ''

lead set between the east haven salt marshes and the thimble islands is a rocky 10 acre peninsula that cuts deeply into the choppy waters of long_island_sound . on this outcropping , bounded by sandy beaches and festooned with dune grass , nolan kerschner , one of connecticut 's best known condominium developers , is building waterfront homes for a new kind of buyer the affluent elderly . set between the east haven salt marshes and the thimble islands is a rocky 10 acre peninsula that cuts deeply into the choppy waters of long_island_sound . on this outcropping , bounded by sandy beaches and festooned with dune grass , nolan kerschner , one of connecticut 's best known condominium developers , is building waterfront homes for a new kind of buyer the affluent elderly . such buyers are increasingly attracting the attention of residential developers and builders in connecticut . it is a market made up not only of successful local people the state has the highest per capita income in the country but also of new york residents in their late 50 's or early 60 's who are eager to enjoy a more leisurely living environment while still retaining easy access to business endeavors in new york city . these buyers , according to brokers , have become particularly prevalent in historic communities like essex and old saybrook , where the connecticut river flows into long_island_sound . they are also having an impact upon the sort of construction being planned in litchfield county , the pastoral northwest corner of the state that has long enjoyed a cachet as a fashionable retreat for the wealthy and famous . among those who have second homes there are among them meryl streep , dustin hoffman , henry a . kissinger and william f . buckley jr . ''right now a new york developer has me chasing around looking for a 100 acre site , '' said nathan h . zimmerman , president of northwest corner properties of torrington , brokers and development consultants . ''he wants to build upscale condos he can combine with transportation , housekeeping and all sorts of services for the older buyer . '' obtaining such a choice waterfront parcel was thus a coup for mr . kerschner since good development land , especially near water , has become as rare as an inexpensive summer cottage . the scarcity is the result of a white hot residential market that had prevailed , until recently , for all types of properties throughout the state for more than four years the outcome of an economic boom that began in the early 80 's , is still continuing and shows no signs of slowing down . prices for existing single family houses rose a ' 'remarkable'' 31 . 6 percent statewide in 1986 , double the increase for 1985 , according to the annual housing market report for 1986 , compiled by the connecticut department of housing . the average sales price of these homes was 164 , 297 , more than 50 percent higher than the national average of 98 , 000 . land costs rose even more up an average of 59 percent for the year , according to the report . by this spring , however , the market had settled down , dampened somewhat by a buildup of inventory , especially in fairfield_county . key reasons , according to peter helie , residential sales manager for william_pitt , a real_estate agency with offices throughout fairfield , were the tax_reform_act_of_1986 , which encouraged investor owners to unload the departure of several major employers , such as j . c . penney , mobil , richardson vicks and international_paper the steep escalation in values that is pricing a growing number of people out of the market higher mortgage interest rates , and the peaking of pent up demand . prices are therefore beginning to level off , according to brokers . but in other parts of the state , especially the hartford and new haven areas , prices and demand remain strong , said john scott , president of scott , fitton company of new haven , marketing consultants to the real_estate industry . even with the heavier inventory , a rollback in prices is not anticipated . ''you are not going to see a significant drop in a state like connecticut , '' said mr . scott . ''the need is too great and the economy too strong . '' in architectural style , location and interior_design , the east haven waterfront development , called four beaches , is typical of the housing now in strong demand . the site was acquired by the kerschner companies of norwalk three years ago at a time when the area was a deteriorated neighborhood known as mamaguim , a cluster of aging beach cottages dubbed ' 'motorcycle haven'' because it had become a hangout for youth gangs . nothing stood on the site , which in past years featured a restaurant , a small amusement_park and a few cottages . mr . kerschner saw it as an opportunity for an elegant form of housing 174 spacious condominium units perched high on concrete pilings set at a 30 degree angle to the shoreline , with angled bays jutting out of their sides to give each good views of the water . but since the land was below flood tide level it took three years to get his plans approved . the pilings had to raise the structures to 20 feet above high tide level . and they had to have a footing in the bedrock to fulfill the stringent building codes now required by the federal and state governments for any structure so close to the water . one of the four condominium buildings that will eventually make up the complex is complete and gives a good idea of how the rest will look . the basic architecture is traditional new england coastal style narrow clapboards with sharply pitched shingle roofs . units are reached from plank boardwalks and open steps . the clapboards are being stained blue , with the wood of the boardwalks and steps left natural , said mr . kerschner , to allow them to weather naturally to a light silver gray . to complete the blending , the shingles are all gray blue . the units themselves are large , averaging 1 , 400 square_feet at least two full bedrooms and an eat in kitchen . they have been designed to be on a single level , so the older buyers will not have to negotiate stairs . there are three levels of these apartments in each of the four buildings and an elevator at one end , so that climbing can be kept to a minimum . the space under the high pilings acts as a garage ( ''although the cars may have to be moved to higher ground in severe weather , '' said mr . kerschner ) . the apartments will have extra large walk in closets , and an additional storage closet is being incorporated into the triangular waterfront deck provided for each unit . lockers are to be available at street level for even more storage , said mr . kerschner . natural_gas heat was chosen , and triple glazing used throughout , since the peninsula is subject to high winds . the boardwalks are being landscaped with box plantings and hanging baskets . and a swimming_pool , paddle tennis and tennis_court will also be available in the complex . the appeal for older buyers seems to be primarily the location . robert and anne baldine , both around 50 years old , moved into one of the units facing long_island_sound in july . when mr . baldine , a commodities trader on wall_street , retires in a few years it will become their year round home . ''it 's a wonderful place to be if you are home all day , '' said mr . baldine . ''it 's like a resort . yet it 's close to everything we might need , like highways , airports , the railroad station and even yale_university . my wife says she feels like she 's in a luxury hotel . '' mr . kerschner said he did not plan the complex with age restrictions or provide special amenities usually associated with the elderly , such as special buses or community activities , because he wanted to keep his market wide open . ''we thought there might be some young professionals or somebody with a child who might like to live here too , '' he said . ''the other way we would have been restricting our market . '' even though there are no age restrictions , older buyers predominate among those who have already purchased units . prices of the units range from 250 , 000 to 475 , 000 , for those with three bedrooms and three bathrooms . common charges average 150 a month . in the new york region.

to the editor , your article about co op city , " a city , bigger than many , within a city , " on nov . 20 on its surface looks bright but has a much much darker side . the opening of co op city in 1968 was the last hurrah for those solid middle_class renters who were watching their neighborhoods crumble around them . in the two year period when the state pulled 15 , 000 working_class families out of the last viable neighborhoods in the middle and south_bronx , the fate of private profit making rental_housing in the borough was sealed . the state compounded the error when it promised the new shareholders a monthly_maintenance of only 25 per month per room . the state knew that it could not operate and properly maintain the complex with such a low income but it kept lying anyway . even the rent controlled occupants in luxury grand_concourse apartments could not pass up such a dreamy offer . co op city was a free ride for those who initially flocked there . a short time later , though , the rent strikes and major construction deficiencies were a rude_awakening . to this day the taxpayers of new york state continue to pour many millions of dollars into that ill conceived and poorly designed boondoggle . what was experienced were the corrossive effects of a quarter of a century of rent regulations laws at their root which caused owning rental property to be a money losing business . the building of co op city was the short term political solution towards a topic way , way too hot to handle . sid miller the writer is director of the haven heights group , a real_estate brokerage in the bronx .

lead the bank of canada stopped issuing dollar bills last week in a program to phase in the 11 sided gold colored coin bearing the image of a loon , the bird that makes its distinctive call in many northern canadian lakes . the royal canadian mint has 240 million in new 1 coins in circulation and reluctance among canadians to use them is fading , said michael francis , a spokesman . the bank of canada stopped issuing dollar bills last week in a program to phase in the 11 sided gold colored coin bearing the image of a loon , the bird that makes its distinctive call in many northern canadian lakes . the royal canadian mint has 240 million in new 1 coins in circulation and reluctance among canadians to use them is fading , said michael francis , a spokesman . dollar bills remain legal currency , but their life_expectancy under normal use is 9 to 12 months . the 2 bill is now the smallest issued by the bank of canada .

the white house press corps should have seen it coming . ari_fleischer , the spokesman for the president , had warned them that once the war in iraq started , he would be even less forthcoming than usual . and their coming isolation was etched all the more vividly when a coincidental renovation on the press building sealed the whole place in plywood . no windows , no light . just one little hobbit hole for ingress and egress . crammed into a small workspace , they watched tiny televisions as baghdad was ignited on friday . a few television technicians made the same kind of noises children make when playing a particularly vivid video_game , while the writers in the back room mostly watched in silence . the air raid subsided , and after defense secretary donald h . rumsfeld 's televised briefing from the pentagon concluded , the lights came up in the press room and mr . fleischer stepped to the podium . campbell brown , a correspondent for nbc , pressed mr . fleischer on whether the commander in chief had seen the violence he had authorized as it was broadcast on television . ''the president , again , understands the implications of the actions that he has launched to secure the disarmament of the iraqi regime to liberate the people , '' he said evenly . ''right , right right , '' ms . brown responded . ''the question , though , is he watching tv or not ? '' ''the president may occasionally turn on the tv , but that 's not how he gets his news or information , '' mr . fleischer said , smiling this time . just 90 minutes after the united_states military unleashed ' 'shock and awe'' on baghdad , it was all bob and weave on the podium . ms . brown tried again , others tried , but no one was able to divine whether president_bush had seen the same images of mayhem over baghdad that other americans had watched . that experience happens a lot in the press room of the bush white_house , where he who briefs least , briefs best . ( a ' 'senior administration official , '' an oft used item in the white_house correspondent 's tool belt , later confirmed that the president had in fact seen some of the coverage after mr . fleischer had left his side . ) as the war began , the routine became even more frustrating for reporters . the white_house press room , a place one might expect to be a throbbing epicenter of wartime news and rhetoric , seemed vestigial . issues of national importance , like saddam_hussein 's status ''we do not know how saddam_hussein is feeling today , '' mr . fleischer said sweetly were considered operational details and best left in the hands of the professionals at the pentagon . as mr . fleischer repeatedly suggested that the answers to questions lay elsewhere , the white_house reporters who fancy themselves part of one of the mightiest journalistic corps on the planet realized that once again they were embedded in the wrong unit . sometimes mr . fleischer does not know the answers to the questions , but often he seems just not in the mood to share . his occasional lack of information is tactical and should not be misinterpreted as ignorance . he has a precious adjacency to the most powerful man on earth . ''my job , '' he explained in a telephone interview later , ''is to reflect the president . my job is to reflect his mood and reflect it accurately . '' more often than not , especially since the sept . 11 attacks , the president 's mood is ' 'resolute . '' and so is his spokesman . lording over a drab press room that looks like an underfinanced public_school kindergarten classroom mr . fleischer , with his immaculate suits and an unwrinkled manner , passes for glamorous in beltway culture . he has mastered the art of the entrance and knows how to work both a lectern and the room it confronts . ''someone told me that it was friday , but i have no official confirmation of that fact , '' mr . fleischer said at an informal briefing on friday morning , breaking the tension by lampooning both his punchiness and his reputation for informational parsimony . a recently reconfigured seating chart has set up a new hierarchy , with those reporters from major news organizations who show up the most regularly receiving prized permanent spots , and mr . fleischer scrupulously observes it . by calling on people right to left , front to back , he radiates even handedness , even as the routine thwarts the possibility of rapid fire questions that would build momentum . the clinton white_house schmoozed the press and leaked prodigiously , several reporters say , only to find itself besieged the moment there was a trace of blood in the water . in the first bush white_house , mr . bush 's father made efforts to accommodate the press and was rewarded with an image as a feckless man . his son is making no such mistake . ( ''good will does n't equal good coverage , '' explained one press officer , stubbing out a cigarette on the driveway in front of the press room . ) mr . fleischer observed sympathetically in a phone interview that ' 'reporters have come to cover the white_house at the peak of their career . '' but , he added , ''the best place to go to get operational information about the war is not from the white_house . '' enterprising reporters have been invigorated by the challenge of covering a ship of state that almost never leaks , but an air of fatalism hangs over those awaiting spoon fed scoops . more often than not , the questions fired at mr . fleischer are beside the point . he and the rest of the communications apparatus at the white_house decide on a message of the day early in the morning . that message is repeated so implacably that reporters , especially reporters for the cable news networks in need of sound bites , end up surrendering and head out onto the lawn to parrot what they have heard . ( on thursday , the message was that ''the coalition of the willing'' was growing despite the fact that in the persian_gulf_war of 1991 , dozens of nations sent troops to join the fighting and this time only a handful did so . mr . fleischer parsed it differently , saying that operation_iraqi_freedom had the support of countries with a population of 1 . 18 billion and with a combined gross_national_product of approximately 21 . 7 trillion . ) and tight image management matches the message management . when photographers were allowed out into the rose garden to take pictures through a window while the president gave his speech announcing the beginning of the war , the associated press had the gall to publish a picture that showed the president before he began speaking , when he made a real , live , spontaneous gesture . the word in the press room the next day was that access for still photographers would be curtailed due to the transgression . presidential spokesmen are often imprisoned in an awkward middle earth , caught between serving the chief executive and enabling the public 's right to know . mr . fleischer has no such problem . he works for the president , serving as the emperor 's clothes when his boss is particularly exposed . even if he sometimes looks silly in the process , mr . fleischer knows that the president sees reporters as a necessary , and persistent , evil , so the care and feeding of the species is best accomplished by giving them small , inscrutable bites . reporters initially railed against mr . fleischer 's engaging nonengagement , but briefing by briefing , he has worn them down . his boss has no problem with a well timed bout of lockjaw . on friday morning , when the president was meeting with members of congress , reporters wanted to ask the president why he was leaving town at such a critical juncture in the war . they shouted their questions to mr . bush . ''you 're on the wrong beat , '' mr . bush replied . ''you should have been at the pentagon . '' the president 's helicopter flew to camp_david at 1 30 that afternoon , leaving reporters in mr . fleischer 's capable hands . a nation at war the spokesman.

alitalia needs a bailout this spring or risks not being able to pay salaries , according to domenico cempella , the executive appointed last month to save italy 's ailing national carrier . in discussions with other members of the airline 's management , the gist of which has been published here , mr . cempella said alitalia 's debt now totals the equivalent of 2 . 2 billion , double the amount one year ago and almost one third of it in costly short term obligations . alitalia lost 175 million in the latest quarter , more than in all of 1995 . an infusion of 260 million from the sale by alitalia last year of its share in the company that runs rome 's municipal airports is used up , he said . mr . cempella did not say when the istituto per la ricostruzione industriale , or i.r.i. , the state holding_company that controls alitalia , would seek permission from the european_union to provide fresh capital . such a move would make alitalia the latest state run european airline to get help . in recent years , air_france , air portugal , iberia of spain and olympic airways of greece have obtained a total of 7 . 4 billion in subsidies with grudging approval from the european_union , which wants such aid to be halted by 1997 , when full deregulation of the continent 's airlines begins . time is not on alitalia 's side . i.r.i. , which owns 90 percent of alitalia , evidently fears that after deregulation opens europe to competition , alitalia will be battered by more efficient european carriers like lufthansa and british_airways . moreover , in the partial liberalization that has already begun , new low fare airlines are elbowing into alitalia 's lucrative domestic routes . in recent months , former charter airlines like air one , noman and meridiana have begun scheduled flights on the heavily trafficked milan rome route at fares 30 percent below alitalia 's . though 10 percent of alitalia 's shares trade on the milan stock_exchange , the idea of raising fresh capital there appears unfeasible . " with debt at six times equity , it 's too high a risk , " said luca comi , who follows alitalia at the milan brokerage_firm intereuropa . few doubt that given the precedent elsewhere , alitalia will get what it needs . yet its case is complicated . for one thing , resistance to government handouts is mounting among europe 's healthier airlines , which are riding a revival of air travel to strong profits . scandinavia 's air carrier , s.a.s. , recently protested that air_france was using at least part of the 3 . 7 billion subsidy it won last year to finance aggressive low fares . british air , which was sold to private investors in 1987 and has since been thriving , has gone to the european_court_of_justice to challenge the aid given to air_france . " obviously subsidies skew their positions , " said hedda harris , a british air spokeswoman in london . moreover , italians go to the polls in april to elect a new parliament whose principal task will be to bring the relentless growth of government spending under control and accelerate the selloff of state owned assets like alitalia . in 1994 , i.r.i . appointed two tough executives from private industry , renato riverso , the former chairman of ibm europe , and roberto schisano , a former manager at texas instruments , to straighten out alitalia , which last turned a profit in 1987 . alitalia had followed the growth of other international airlines in the 1980 's by overextending its fleet and travel routes without attending to costs . service and punctuality were bad and productivity notoriously low . last year , while pilots at british_airways logged 18 million passenger miles , alitalia 's pilots flew half that amount . on intercontinental routes , alitalia racked up losses with big and costly to run boeing 747 's when competitors were flying more efficient jetliners like boeing 's 767 or new 777 . when mr . riverso sought to change that by leasing 767 's from other carriers , alitalia 's pilots struck . last year , alitalia faced 184 hours of strikes . to offset losses on intercontinental routes , alitalia traditionally milked cash cows like the milan rome run . but the arrival of the new low fare airlines ended that . paolo rubino , air one 's commercial director , said air one expects to win a 30 percent share of the milan rome traffic this year . though only flying since november with five boeing 737 's , air one expects pretax_profits in 1996 of 2 . 5 million to 3 million . the remedy prescribed by mr . riverso and mr . schisano resembled that applied elsewhere in the industry improve productivity by cutting jobs and scaling back routes , then expand the airline 's profitable activities and commence a new phase of growth . last november , however , after a controversy over concessions that were reputedly secretly made to pilots , mr . schisano was dismissed , and in march , mr . riverso quit amid bitter recriminations over i.r.i . 's corporate_governance . but mostly , i.r.i . 's withdrawal of support was because of jobs and politics . " there are 18 , 000 people at alitalia , and elections are soon , " said giulio la starza , who started noman as a regional charter carrier in the 1980 's and is now its general_manager . mr . cempella , 59 , a former alitalia executive who left the airline temporarily to run the rome airport company , has not said how he will resolve alitalia 's problems and has asked for two months of labor peace to work out a plan . but as a condition for fresh capital , the european_union will almost certainly mandate measures like job cuts and reductions in the number of alitalia 's aircraft and routes . some industry executives believe mr . cempella , who seems to understand the carrier 's culture and unions and who successfully oversaw the recent expansion of rome 's airports , might succeed where outsiders have failed . " it 's a strong recovery of competence and of leadership , " said mr . rubino of air one . international business.

because of an editing error , an article yesterday about a deadline given to iraq for withdrawing its missiles referred incorrectly in some copies to the parties that declared the air exclusion_zone in southern iraq . the zone was established by the united_states and its allies on the security_council , not by the united_nations itself .

japan 's global trade surplus shrank to 666 billion_yen ( 5 . 4 billion ) in april , an unexpectedly steep decline of 41 . 6 percent from april 2000 and the 10th consecutive month in which the surplus has contracted . the biggest factor in the decline was a strong increase in imports , which grew 13 . 2 percent . trade with the united_states was less notably affected , with japan 's surplus shrinking 7.4 percent from the april 2000 level . miki_tanikawa ( nyt )

haunted castle and sixth annual halloween parade and pumpkin sail , both sponsored by the central park conservancy . the castle is open tomorrow , 1 to 4 p.m. , at belvedere castle ( midpark at 79th_street ) , central_park , and is to feature vit horejs and his marionettes a story hour and ''bats in the belvedere . '' free . on sunday , the annual pumpkin sail is at the charles a . dana discovery center , 110th_street and fifth avenue , central_park , and consists of a costume parade , a carved pumpkin sail on the harlem meer ( take your own pumpkin , under 10 pounds it will not be returned ) , storytelling , treats and even snoopy and charlie brown . free , 3 30 to 6 p.m . information ( and number to call to register for the sail ) ( 212 ) 860 1370 . halloween party , in tandem with the exhibition ''scaasi the joy of dressing up , '' at the new_york_historical_society , 77th_street at central_park west . children show up in costumes and model them , runway style , in an auditorium with a workshop on creating fashion accessories , country_music , storytelling in a creepy room and a pumpkin carver . tomorrow , noon to 4 p.m . families in costume admitted free adults , 5 children , 3 . information ( 212 ) 873 3400 .

more than 13 years after they began , russia and the united_states have destroyed the last of 2 , 692 nuclear_missiles marked for elimination under the 1987 intermediate range nuclear forces treaty , the foreign ministry said . besides silos and other equipment , russia destroyed 1 , 846 missiles , and the united_states 846 , all with ranges between 300 and 3 , 000 miles . michael wines ( nyt )

with a combination of business acumen , ruthlessness , deep pockets and near obsession with winning , walter e . hussman jr . has made his arkansas democrat the dominant paper in little rock and seems poised to run the long dominant arkansas gazette out of business . since 1974 , when his family run communications company acquired the democrat , mr . hussman has twice beaten the gazette in a bitter war for advertising and circulation . the victory has come despite arguments by some that the politically conservative_democrat is inferior journalistically to the gazette , the state 's main liberal voice and long one of arkansas 's most powerful institutions . for instance , the gazette won two pulitzer prizes for its coverage of school integration in the 1950 's and has traditionally dominated arkansas journalism competitions , winning the top award in the three main contests for the last two years . slashing of ad prices mr . hussman principally used extreme slashing of advertising prices to force the patterson family to sell the gazette to the gannett company in 1986 he then shifted tactics and has whipped gannett , one of the most sophisticated newspaper chains . though gannett does not acknowledge it , the company is known to be trying to sell the gazette to mr . hussman , who is widely expected to close it . an executive familiar with the situation who spoke on condition of anonymity , said the gazette would probably cease publication within 10 days . a last minute local effort to buy the gazette is currently under way , but its chances look slim . though both the gazette and the democrat are unprofitable , gannett is said to be losing more than 30 million annually and is apparently unwilling to sustain such losses as a public_company with an obligation to shareholders . mr . hussman has voting control over his far smaller but private company , which effectively has given him a free hand to absorb losses . profit seen if gazette closes john morton , a newspaper analyst for lynch , jones ryan in washington , estimated that if the gazette closes , the democrat could earn about 30 million annually on revenues of about 110 million . in one sense , mr . hussman 's success is an inspiration to the underdog small businesses competing with bigger , entrenched rivals or leviathan conglomerates . " given a certain level of ability , i do n't think anyone can beat an owner operator , " mr . hussman said late last week . " unfortunately , there are n't that many of us left in the newspaper business . " but mr . hussman 's success is also a demonstration of how price cutting and shrewd public_relations can win a newspaper war where , on the surface , the battle should be over quality . hugh patterson sr . , who ran the gazette for his family , said that the pattersons were actually the only independent operators in the fight and that mr . hussman unfairly used his family 's profits from other papers and cable_television to subsidize losses that the pattersons , with no other properties , could not sustain . gannett , which had revenues of 3 . 4 billion in 1990 , cannot claim any economic handicap , and the newspaper industry generally expected gannett to make fast work of mr . hussman . but mr . hussman won again with hardball business tactics , aided by some gannett misteps and by successfully portraying himself as the local boy beseiged by an exploitive conglomerate . in one typical move after gannett became the competition , mr . hussman changed the democrat 's front page slogan from " arkansas 's largest newspaper , " which had helped beat the pattersons , to " arkansas 's newspaper . " he labeled the opposition " gannett 's gazette . " " the democrat systematically painted a picture of gannett as a company not committed to arkansas , " said j . keith moyer , editor of the gazette since march 1990 . from survivor to competitor mr . hussman , who is 44 years old , said his only goal at first was the democrat 's survival . the event looked very unlikely when the paper was acquired in 1974 by the camden news publishing company , the hussman family 's holding_company situated in camden , ark . , about 100 miles from little rock . the family business , started by mr . hussman 's grandfather , now includes six small dailies in arkansas and texas , including the camden news ktal tv , an nbc affiliate in the shreveport texarkana market am and fm radio stations in camden and shreveport texarkana , and about 100 , 000 cable subscribers in 17 cable systems , mostly in arkansas . in 1974 , the afternoon democrat was in decline . mr . hussman thought he saw an opportunity and purchased the paper for 3 . 5 million . his initial strategy was to cut costs , and he did so largely by combating and eventually removing the paper 's unions and installing labor saving equipment . but the democrat 's advertising and circulation were so marginal that the paper lost money despite efficiences . in 1977 and 1978 , mr . hussman tried unsuccessfully to persuade mr . patterson to forge a joint operating agreement in which the business and production aspects of both the gazette and the democrat would merge but the papers would remain separate new organization . after calling other no . 2 papers in competitive markets for ideas , mr . hussman increased the size of the paper , especially its sports coverage , and offered unlimited free calssified advertising to individuals , though not to businesses . the democrat 's circulation began to rise . he then offered to sell large advertisers ads for 1 and inch , compared with about 9 an inch in the gazette . deal with dillard 's dillard 's department_stores inc . , a little rock based chain and the city 's top advertiser , was spending 150 , 000 on the democrat in 1983 , compared with 1 . 1 million on the gazette mr . hussman offered dillard 's all the advertising it wanted for 500 , 000 a year , thus raising his revenues and giving the democrat more credibility with other advertisers . the democrat continued to lose money , but the gazette had to cut its own ad rates and its profits went into steep decline . mr . patterson brought an antitrust suit against mr . hussman , and when he lost that case in 1986 , he quickly sold to gannett for 51 million in cash and assumption of a 9 million debt . gannett invested heavily in new presses , a bigger staff , more color and a thorough revamping of what had been known as the " gray lady " of arkansas . it also changed its senior manager repeatedly . the democrat noted every change as a departure from the tried and true old standards and an attempt led by outsiders to make the gazette into usa_today . when the gazette cut circulation rates drastically . the democrat successfully countered by casting the new reduced price as reflecting a decline in value . gannett adopted the expensive strategy of offering free classifieds and cut ad rates in a free for all of discouting . dillard 's stopped advertising in the paper in 1989 when mr . hussman used invoices from the gazette to prove that small advertisers were getting better rates . the media business.

lead gatt has postponed a meeting to consider a bid by china to join the 96 nation trade forum ''because of difficulties in having meaningful discussions in present circumstances , '' a spokesman for the group said today . gatt has postponed a meeting to consider a bid by china to join the 96 nation trade forum ''because of difficulties in having meaningful discussions in present circumstances , '' a spokesman for the group said today . but the spokesman , david woods , said the postponement was not intended as a sanction against china because of its actions last month in crushing pro_democracy_demonstrations there . a special working party that has been studying china 's application was scheduled to meet here next week to discuss the terms of a draft document for beijing 's possible accession to the general agreement on tariffs and trade . following informal consultations among delegations and with china 's agreement , gatt decided to put off the meeting until a date to be announced later , mr . woods said . china was a founding member of gatt in 1948 , but quit two years later after the present communist authorities ousted the nationalists from power . beijing applied in july 1986 to ' 'resume its seat'' in the organization , which sets the rules for four fifths of the world 's commerce . the working party has been questioning china in detail about its economic and trade policies .

questions about the ethics of county executive andrew p . o'rourke multiplied today when he acknowledged that he sought a job for his son in law and an admission interview for his daughter at new york medical college , which has a 14 . 6 million contract to furnish doctors to the county hospital . the disclosures followed earlier ones that mr . o'rourke successfully recommended the woman he lives with for a job with the county medical insurer and that his daughter was hired by a law_firm that does the county 's medical_malpractice work . impression that could hurt cumulatively , the charges could create an impression that mr . o'rourke has been using the county government as a family employment_agency , an impression that could harm him as he seeks re election this fall to the job he has held for 11 years . the earlier charges are under investigation by carl a . vergari , the county 's district_attorney . mr . vergari said this afternoon that he was examining the new ones as well to see whether any laws had been broken . mr . o'rourke , a witty , avuncular man who was the unsuccessful republican candidate for governor in 1986 , did not deny that last year he spoke to msgr . james p . cassidy , then chancellor of new york medical college , about a cardiologist 's job for his son in law , dr . eugene carraciolo . the conversation took place while the college 's affiliation contract was under negotiation . he also did not deny that 10 years ago he asked monsignor cassidy to help his daughter alice obtain an interview for admission to the medical_school . 'everyday courtesies' " these are , as far as i 'm concerned , the everyday things and courtesies that are done in life , " he said at a strained and emotional news conference this morning . but he insisted that he never tied those requests to continuation of the affiliation the college has had since 1976 with westchester_county medical center in valhalla . he pointed out that dr . carraciolo , who is married to a second o'rourke daughter , aileen , did not get the job and alice o'rourke did not receive an interview , yet the hospital retains its affiliation . an article today in gannett suburban newspapers quoted monsignor cassidy as saying " you could say o'rourke used the affiliation agreement as a hammer over me to try and get what he wanted . " at the news conference , mr . o'rourke provided a different account by playing a tape_recording of a trans_atlantic telephone conversation on thursday between his press_secretary , clare palermo flower , and monsignor cassidy , now president of a vatican health organization . ms . flower had called the monsignor after mr . o'rourke found out that gannett was preparing an article about the proposed job for his son in law . in that conversation , monsignor cassidy denied a link between a temporary_suspension last year of the affiliation and favors for mr . o'rourke 's son in law and daughter . " oh , no , i never said they were definitely related , " the monsignor is heard to say on the tape . " you know , i said , you know , there was always the thing we wanted to try to get along with the county , so we tried to be , you know , uh , work together on it . " gannett fired back by passing out a transcript of part of a conversation a reporter had this morning with monsignor cassidy , in which the reporter asked if the monsignor had " any problem " with the published report and he replied , " no , i did n't . " attempts to reach monsignor cassidy later in the day were fruitless . he did not respond to messages left on his vatican answering_machine . in an interview , mr . o'rourke placed the referral for his son in law in the context of his own bitter divorce proceedings , which began in 1988 and are pending . a chill developed in his relations with his daughters , he said , and , to resolve that estrangement and to keep his grandchildren close by , he was eager to have aileen , dr . carraciolo and their two children settle in the white_plains area once dr . carraciolo completed a fellowship at new york_university . " i was interested in keeping him here , " mr . o'rourke said . " he was reticent . he said , 'doctors are not going to like any influence . ' i said , 'i 'm sure you 're going to make it on your own . ' " the college did not have room for another cardiologist , mr . o'rourke said , and so dr . carraciolo joined st . louis university hospital . in may 1992 , mr . o'rourke notified the medical college that he intended to cancel its contract , citing the school 's refusal to pay property_taxes and its demand for reimbursement for renovations . the contract , however , has been extended provisionally and negotiations for a new one are under way , according to ellen f . carr , a college spokesman .

the canadian government said today that it had postponed to sept . 9 a decision on a bid by a european consortium to buy the de havilland aircraft plant in toronto from the boeing_company . the extension was granted by the agency , investment canada , because progress had been made by the consortium in meeting conditions for approval of the sale set by the canadian trade minister , michael wilson , said investment canada 's spokesman , charles byron . investment canada reviews corporate investments and purchases in the country by foreign entities and has the authority to prohibit deals deemed to be against canada 's national interest . mr . byron said the agency needed more time to consider a new business_plan from the consortium , which consists of aerospatiale of france and alenia of italy . the group wants to buy the de havilland plant from boeing . the operation , which employs up to 4 , 900 people , produces the dash 8 commuter plane . a aerospatiale spokesman said the company would have no comment on the decision . mr . wilson , the trade minister , said last month that he was not satisfied with the initial proposal from the consortium because it appeared to have no net benefit for canada . company news.

the bush_administration sought sunday to allay concerns that a shiite religious state could emerge in iraq as a result of last weekend 's elections . speaking on television news programs on sunday , vice_president dick_cheney and defense secretary donald h . rumsfeld said that iraq 's most influential shiite_cleric , grand_ayatollah_ali_al_sistani , opposed direct cleric involvement in daily governing , and that most iraqis rejected an iranian style theocracy . ''we have a great deal of confidence in where they 're headed , '' mr . cheney said on ''fox_news_sunday . '' ''i do n't think , at this stage , that there 's anything like justification for hand_wringing or concern on the part of americans that somehow they 're going to produce a result we wo n't like . '' he added , ''the iraqis have watched the iranians operate for years and create a religious theocracy that has been a dismal failure , from the standpoint of the rights of individuals . '' in his interview , mr . cheney also elaborated , for the first time , on the meaning of president_bush 's challenge to the iranian people to rise up against their ruling clerics . in the state of the union address , mr . bush said , ''as you stand for your own liberty , america stands with you . '' pressed to say what , exactly , the united_states would do , mr . cheney said he and mr . bush ''wanted to encourage the efforts that we 've seen previously in iran to promote freedom and democracy . '' the statement , he said , was intended ''to encourage the reformers , if you will , inside iran to work to build a true democracy , one that does n't vest enormous power , as this one does , in the unelected mullahs , who , we believe , are a threat to peace and stability in the region . '' both mr . cheney and mr . rumsfeld addressed iran 's nuclear ambitions , with mr . rumsfeld saying in a cbs_news interview that he thought iran ''could be some period of years off'' from actually building a nuclear_weapon . both men said there was still time to use diplomacy to disarm iran , though mr . cheney said that if the current talks broke down , the administration would seek sanctions at the united_nations_security_council . it was iraq , however , and the delicate question of who will emerge in control of the country , that dominated the comments of both men . as shiite_religious_parties prepare to take power in the new national_assembly , senior shiite_clerics are debating how much of the islamic faith should be enshrined in iraq 's new constitution , which the assembly will write . a constitution based on koranic law would sharply depart from the transitional law that the americans enacted . in one of four appearances on television news programs on sunday , mr . rumsfeld echoed mr . cheney 's cautionary words . ''the shia in iraq are iraqis , '' mr . rumsfeld said on the nbc_news program ''meet the press . '' ''they 're not iranians . and the idea that they 're going to end up with a government like iran , with a handful of mullahs controlling much of the country , i think , is unlikely . '' but he warned that it would be ''a terrible mistake'' if the new assembly adopted a constitution that denied ''half of their population , women , the opportunity to participate fully . '' administration officials acknowledged that they would have much less influence over a transitional iraqi government selected by the newly elected assembly , but were relying in part on ayatollah sistani 's stature to steer iraq clear of a government led by clerics . ''if you 're looking for guidance in terms of what the relationship is likely to be between the religious faith , islam , and the secular side of the house , the government , you really need to look at the top cleric , sistani , '' mr . cheney said . ''he also has been very clear , from the very beginning , that he did not want to play a direct role and does n't believe clerics should play a direct role in the day to day operations of government . '' as officials here monitor the election returns , mr . rumsfeld declined to set any schedule for withdrawing the 150 , 000 american_troops . he said any exit_strategy would be based on conditions on the ground including the size of the insurgency , syrian and iranian help in combating it , and whether iraqi ''fence sitters'' joined the political process rather than a specific date . mr . rumsfeld also spelled out in greater detail than before the abilities of the 136 , 000 iraqi_police and military personnel that the pentagon has said are trained and equipped . until recently , defense officials had given scant details on the abilities of individual iraqi units . last week , gen . richard b . myers , chairman of the joint_chiefs_of_staff , said 40 , 000 of those iraqi forces were able to handle the most challenging missions . but mr . rumsfeld said sunday that that did not mean the remaining security forces were ill prepared . ''some of them are trained to be policemen , and now a policeman is not a counterterrorism , or a police commando , '' he said on cnn 's ''late edition . '' ''there are about 7 or 8 or 10 different categories that are being trained to do very different things . '' when asked about the american plans to train and advise iraqi forces , mr . rumsfeld said on ''meet the press , '' ''the important thing to do is to see that we do not create a dependency , that we encourage them to take over that responsibility . '' mr . cheney reiterated but this time with more definitiveness and humor in his voice his determination never to seek the republican nomination for president . pressed on the issue by the host of ''fox_news_sunday , '' chris wallace , mr . cheney said , ''i do n't know whether you want me to take a sherman . '' the reference was to the civil_war general william tecumseh sherman , who declared , ''if nominated , i will not run if elected , i will not serve . '' ''that 'd be good , '' mr . wallace said . mr . cheney then took an abbreviated sherman , and added , ''not only no , but hell , no . '' ''i 've got my plans laid out , '' he said , describing rivers he has not yet fished and time he wants to spend with his grandchildren . ''i 'm going to serve this president for the next four years , and then i 'm out of here . ''

in a milestone announcement that pushed britain closer to joining europe 's single_currency , prime_minister tony_blair today offered parliament a tentative schedule for membership provided the british people agree and the economic terms are considered right . beyond hinting at possible entry between 2002 and 2005 at the latest , however , he gave no firm timing for britain to abandon the pound and its position as the only big economy within the european_union to remain outside the 11 nation euro_zone . ( switzerland , which has extensive trade ties in europe , is not a part of the 15 nation union . ) mr . blair had promised since last year to give some kind of blueprint for britain 's possible entry , and the announcement appeared timed to precede a routine meeting of european leaders in bonn on friday . ''what we announce today is not a change of policy it is a change of gear , '' mr . blair told parliament . he drew taunts from william hague , leader of the opposition conservatives , that the timetable represented a plan to hand over the economic and political freedoms of this country . despite the political opposition , the government 's commitment to a written plan moved britain 's most contentious political debate over its future relationship with the continent to a new level , creating the clear impression that mr . blair was committed to britain 's membership . by publishing a timetable , moreover , he seemed to give momentum to the process of joining the euro . mr . blair and his aides avoided suggesting what might be the right exchange_rate at which to join the euro . mr . blair 's spokesman said membership of the euro represented ''the biggest decision that this prime_minister and this government are going to face . '' today 's announcement was the latest sign of declining opposition to the currency among those european_nations outside the euro . the euro came into use in all electronic forms of trading , like stock_market and government transactions , on jan . 4 after a lengthy period of economic convergence among its member countries . notes and coins are to enter circulation in january 2002 . the smooth introduction has generally eased opposition to the euro in denmark and sweden , while greece , the fourth member of the european_union outside the euro , is trying to get its economy in shape to join . sticking to the broad outlines of previous statements but for the first time offering a rough timetable mr . blair 's plan foresaw a four month period between a government decision to join the euro and a referendum seeking the approval of the british people . then , the timetable envisioned a 24 to 30 month period when britain would lock its currency into the same irrevocable relationship with the euro that the current 11 currencies have . after that time , there would be a six month period when euro notes and coins would phase out the pound . mr . blair 's spokesman said the timetable would begin to run ''barring unforeseen circumstances'' after britain 's next scheduled elections , which must be held by may 2002 . that could mean a referendum in late 2002 and british membership anytime between then and 2005 . ''the government itself will be making active preparations for the euro in the belief that it will be in this country 's interests to join in the future should our economic tests be met , '' mr . blair said . he pledged tens of millions of pounds to help make government departments ''euro compatible . '' britain 's conditions revolve around whether there is ' 'sustainable convergence'' between the british and euro economies . but , additionally , the british authorities are looking for evidence of greater economic flexibility in continental_europe , positive gains for investment and the british financial_services industry and guarantees that euro membership will not lead to greater unemployment . british benchmark short term rates are 5.5 percent compared with 3 percent in continental_europe . but long term rates are much closer , with a spread of about half a percentage point , mr . blair said . british inflation is comparable with inflation in the euro nations , but british joblessness is half the continental average of about 10 percent . politically , mr . blair is treading a narrow line between euro skeptics , including some in his own party , and pro euro legislators in both the government and the opposition . above all , he faces the prospect of fierce opposition from newspapers . british growth weakens london , feb . 23 ( bloomberg_news ) britain 's economy expanded at its slowest pace in six years in the fourth_quarter , the government reported today . the news left the door open for further cuts in interest rates . economic_growth slowed to two tenths of a percent in the fourth_quarter of 1998 , unchanged from an initial estimate last month and down from a revised three tenths of a percent in the third quarter . it was the slowest rate of increase since the second quarter of 1992 . international business.

japan 's top banking regulator , heizo_takenaka , said the government would explore ways to help shareholders of the insolvent ashikaga bank , which has been nationalized . speaking in parliament , mr . takenaka , left , said regulators would try to minimize the impact on shareholders , whose stock fell to zero after the government took over the bank on monday . many of the shareholders are businesses in tochigi prefecture , where ashikaga is based . ken_belson ( nyt )

continuing a recent trend in which the world 's richest religion prize has gone to scientists , john d . barrow , a british cosmologist whose work has explored the relationship between life and the laws of physics , was named the winner yesterday of the 2006 templeton prize for progress or research in spiritual matters . dr . barrow will receive the 1 . 4 million prize during a ceremony at buckingham_palace on may 3 . the prize was created in 1972 by the philanthropist sir john marks templeton , who specified that its monetary value always exceed that of the nobel_prize . five of the last six winners have been scientists . asked about this , dr . barrow said , ''maybe they ask the most interesting questions . '' dr . barrow , 53 , a mathematical sciences professor at the university of cambridge , is best known for his work on the anthropic principle , which has been the subject of debate in physics circles in recent years . life as we know it would be impossible , he and others have pointed out , if certain constants of nature numbers denoting the relative strengths of fundamental forces and masses of elementary particles had values much different from the ones they have , leading to the appearance that the universe was ''well tuned for life , '' as dr . barrow put it . in a news release , the prize organizers said of dr . barrow 's work ''it has also given theologians and philosophers inescapable questions to consider when examining the very essence of belief , the nature of the universe , and humanity 's place in it . '' dr . barrow is the co author of ''the anthropic cosmological principle , '' a primer on the subject , as well as 16 other books , more than 400 scientific papers , and a prizewinning play , ''infinities . '' asked about his religious beliefs , dr . barrow said he and his family were members of the united reformed church in cambridge , which teaches ''a traditional deistic picture of the universe , '' he said . noting that charles darwin is buried in westminster abbey , dr . barrow said that in contrast with the so called culture wars in america , science and religion had long coexisted peaceably in england . ''the concept of a lawful universe with order that can be understood and relied upon emerged largely out of religious beliefs about the nature of god , '' he said .

after negotiators failed to come up with a settlement in a nine hour session that ended shortly after 3 a.m . today , public_school teachers stayed off the job for a third day , leaving schools with few adults in charge and high absences . the city 's five high_schools remained closed , and district officials said they probably would be closed again on tuesday . the grammar schools , with children from prekindergarten through eighth_grade , were again reduced to half day schedules . district officials said attendance today was about 35 percent . ''we made small progress last night , '' said frank_sinatra , the district 's business administrator . ''we at least narrowed the number of people who will sit at the negotiating table to two for each side . '' but both sides said there was little if any progress on other more contentious issues , like salary increases , teacher evaluations and the district 's proposal to extend the school day and the school year . karen joseph , a spokeswoman for thomas j . favia , the president of the jersey_city education association , which represents the 2 , 500 teachers and 1 , 000 support personnel at the district , said teachers were more concerned about an evaluation system that does not give them much chance to respond to reports by teams of educators who come in , unannounced , to review their classroom work . ms . joseph said that at the session that ended early_today , union representatives typed up a proposal on ways to change the evaluation system that was similar to one in place at the newark schools . the exchange between the two sides , she said , illustrated why there had been such little movement since last week . ''their answer was no , '' ms . joseph said . ''in most negotiations , one side gives the other side a proposal , and the other side comes back and says , 'well , i can deal with this , but i want to modify that . ' you get an idea for what the other side can live with . no you ca n't live with that kind of attitude . '' representatives for the two sides were to meet again tonight for an informal session . if the strike continues until tuesday , the union risks being fined 100 , 000 a day . union lawyers will be in court tuesday to argue against the fine , and against the back to work order imposed last week by judge martin greenberg of hudson_county superior court . mr . sinatra , the business administrator , said that the district is intent on making teachers more accountable about the work they perform , because the district has been under state control for about 10 years for poor performance , and has to demonstrate that it is serious about making changes .

members of a republican congressional delegation to iraq who were criticized by iraqis for portraying the security situation in baghdad as much improved said tuesday that they were realistic about the dangers that remain there . representative mike pence , republican of indiana , said a brief weekend tour of the shorja market had given him some hope that the recent increase in american_forces in baghdad and some new military_tactics were having a measurable impact on security in the city . he said he was able to walk around the marketplace with a relatively small military escort and without a helmet . he compared it to an open air market in a small indiana town . ''there were thousands of people just walking the streets , '' he said . ''it was very encouraging to me . '' but mr . pence stressed that he did not believe that baghdad had suddenly become safe . ''is there violence ? yes , '' he said . ''are there tough days ahead ? you bet . '' some baghdad residents interviewed for an article that appeared in the new york times on tuesday said the delegation , led by senator john_mccain , republican of arizona , had seen an unrealistic version of the central marketplace . the delegation was accompanied by more than 100 soldiers in armored_vehicles and watched by helicopters and snipers . the market has been the scene of deadly bombings , including one in february that killed 60 people . neither mr . pence nor mr . mccain was available monday to comment on the iraqis' remarks in the article . mark salter , a senior aide to mr . mccain , said tuesday that the senator was under no illusions about the violence in iraq . at a news conference in baghdad on monday , mr . mccain said , ''we have a new strategy , and it 's making progress , '' mr . salter said , reading from a transcript . ''i 'm not saying the mission is accomplished or the insurgency is in its last throes or this is a few dead enders . '' mr . salter said mr . mccain had received briefings from gen . david h . petraeus and lt . gen . raymond t . odierno , the top commanders in iraq , about the effect of the new american deployments , the training of iraqis and political developments . ''no one , whether a supporter or opponent of the war , has been more brutally honest about what he sees in iraq , '' mr . salter said of his boss . ''what he said was that these are reasons for cautious very cautious optimism about the effects of the new strategy . ''

young american men are not short on media outlets . for the last decade , they have been awash in video_games , internet sites , cable channels , radio shows and movies that are all designed to separate them from their disposable_income . but far from cashing in , american publishers surrendered to the conventional_wisdom that this was a post literate generation , with little taste for the simple pleasure of cracking open a magazine . then came the british publishers . they attacked the american market by mating the bawdy fleet_street tabloid tradition to the untethered humor of monty_python and conjured something truly new must read magazines like maxim , stuff and fhm for the gen x and gen y young man . they captured nearly five million new american readers , virtually all men and all lost to american publishers . how did the sophisticated , careful american publishing industry awash in marketing , surveys and expertise miss such a grand opportunity ? were the brits just smarter , or just more willing and better positioned to address the purient but persistent interests of their readers ? ''i think it is one of the great mysteries of our time why american publishers did n't do this first , '' said clare mchugh , an editor at_large at time inc . and one of four former editors of maxim , one of the so called lad magazines , employed by aol time warner . american publishers appear ready to join the fight now for the 55 million american men 18 and 45 years old . time inc . is investigating a lad informed men 's magazine or bring one over from its british subsidiary , and rolling_stone recently hired the former editor of the american fhm to lead rolling_stone . the peculiar differences in american and british publishing may have left the british well positioned to kidnap readers . publishing in britain is a newsstand enterprise , with single copy readers making up almost 90 percent of the audience . it is a small , competitive market where magazines that do not immediately acquire an audience disappear . american magazines are designed more to assemble an audience gradually mostly through subscriptions which is then delivered to advertisers . the americans were blinded by their own assumptions . there was a widely held belief in american publishing in 1997 , when maxim burst onto the newsstand , that advertisers would never warm up to an editorial formula that veers from bawdy to beery . wrong again . gq , published by cond_nast , has the most ad pages in the men 's group , but maxim has far more revenue , while stuff and fhm are experiencing explosive growth in ad pages . ''when these magazines launched , they were way over the edge in terms of what is acceptable content and people thought that wal_mart and chrysler would never buy in , '' said mike lafavore , the founding editor of rodale 's men 's health , the rare american men 's magazine that used a single obsession , fitness , to reach a mass audience . ''but they move a lot of copies through wal_mart , and i just noticed that chrysler , which is thought of as a very conservative advertiser , was in maxim . '' norman pearlstine , editor_in_chief of time inc . , acknowledged that the opportunity was missed by his company and others . ''i think that for a long time , the conventional_wisdom was that time inc . would never do a magazine like maxim because we did n't think the advertising would be there , '' he said . ''there was just a perception that young men did n't read and did n't spend money , and it turns out that they do both . '' mark golin , a former editor of maxim on loan to time inc . from aol , is currently working on the possibility of a magazine for grown up males that uses lad motifs . the formula has been successful from the start . beginning with loaded magazine in britain in 1994 , introduced by ipc media , a slew of magazines with covers anchored by buxom women , with the inside pages decorated with pub humor and short , goofy articles . in 1996 , felix dennis , owner of dennis publishing and maxim magazine in britain , sent over steven colvin , now president of dennis publishing u.s.a. , to see whether the lads had potential in the united_states market . ''i know a number of british publishers approached american publishers to partner , but they were n't interested , '' mr . dennis said . although american companies were skeptical , ''i did n't know any better . '' maxim took off immediately in the united_states , and dennis publishing began a second , darker version called stuff that grew even faster . now a third lad magazine fhm , published by emap metro has become the fastest growing magazine in the country in the last six months . american magazines like playboy and sports illustrated still own six million readers , but had difficulty wooing the next generation of readers , whose formative philosophical icon is bart simpson . american publishers were hamstrung by a chaste , brainy approach to making men 's magazines and plugged their noses rather than respond to the lad magazines . keith blanchard , editor_in_chief of maxim , was recently invited to the columbia school of journalism , a hallowed training ground for tomorrow 's journalists . his talk , cheekily entitled ''maxim saves journalism , '' began with a slide of a maxim cover showing the actress tara reid tugging at her clothing underneath the magazine 's slogan . ''sex , sports , beer , gadgets , fashion , fitness , '' he read off the slide . ''revel in the rhythm of these great pillars of the human endeavor , '' he said to the students . mr . blanchard suggested that dennis publishing made readers out of nonreaders by ' 'supercharging the magazine format specifically for them'' with a graphic rather than the word driven approach favored by most american editors who ' 'see themselves as keepers of the flame of culture . '' he added , ''as a class , they believe it 's their right , nay , their sacred duty as the informed elite to use their pages to educate and uplift a nation of irrelevant drones . '' david granger , editor_in_chief of esquire , pleads guilty , to uplift , if not elitism . ''there are two warring impulses that go into making a magazine , '' he said . ''there is the fairly cynical impulse to make money and the other impulse to do something good . i try to factor in both those impulses . '' but even a magazine as storied as esquire is not above trying to borrow a little thunder from their british inflected mates . ''fifteen amazing tales of orgies , gunshots , exorcisms , shark attacks , sword swallowing , avalanches , dwarfs , giants and more ! '' blares the headline on the august issue of esquire . mr . granger said the laddies have not influenced his magazine and said esquire was ''the original racy magazine . '' lad magazines prey on the male impulse , giving the hunter and gatherer a product that is jam packed with browsable bits . there is a mid atlantic neither brit nor american , but a mix of both swagger to the magazines that may leave many grown_ups cold , but has found the sweet spot between frat boys and soccer hooligans . mike soutar , a former editor of fhm in england who edited maxim in the united_states , is managing director of ipc ignite , a unit of ipc media that was recently bought by time inc . and may serve as something of a laboratory for future american publications . the company also publishes loaded , the original lad magazine . mr . soutar believes that the dna at the heart of the lad magazine is actually american . ''this is guy culture , which was first popularized in the u.s . with 'animal house' and 'cheers , ' '' he said . '' 'cheers' had an enormous effect in britain . it was about the importance of being the funniest guy in the bar . guys communicate with humor . '' seminudity is apparently another universal language . the use of models that are almost , but not quite nude , on the cover proved critical . while playboy and penthouse , if they were lucky enough to be sold , are stuck behind the counter , the new generation of men 's magazines is right out on the racks at the 7 11 for all to ogle . by far the most naked activity under way is the pandering to readership , something british editors are extremely proud of . in america , the general interest men 's magazine has been defined as a modicum of service attached to long , narrative pieces . the publishers of the new men 's magazines think that may be a worthy kind of magazine , but it does not reflect the general interest . ''there are music magazines , and fitness magazines , and fashion magazines for men , '' said dana fields , president and executive publisher of the american version of fhm . ''the reality check has been that men are interested in all of those things , but they want it in the same magazine , one that has is actually entertaining . i mean , where is the cosmo for men ? '' what may seen juvenile , even puerile , to american publishing executives is seen by some as actually perfectly pitched entertainment . it is as if adam sandler left his career as a cinematic knucklehead and decided to make a magazine . mark crispin miller , a professor of media studies at new york_university , said the magazines are designed to appeal in a digital visual age . ''it is a funny paradox , '' he said . ''these young men have been cocooning with unimaginably clever and sophisticated high tech entertainments , and they 've found a way to engage them with a magazine . there is big money in appealing to those high tech cave men . '' whether the phenomena represent a fad or a long term trend remains to be determined . the category stormed along for seven years in britain after loaded , the first lad magazine , came out in 1994 . but the lad magazines were off 16 percent in 2001 in circulation compared with that of the previous year , according to the british audit bureau of circulations . mr . dennis says it is only natural that magazines like maxim flatten out a bit after such phenomenal growth , but he says the men 's category can only grow in america . ''there are 20 to 25 general interest women 's magazines in america , '' he said . ''to somehow suggest that the five or six magazines that are out there for men is the end of it is silly . '' correction august 1 , 2002 , thursday a chart in business day on monday showing circulation and advertising revenue for men 's magazines , with an article about the success of a new class of magazines published by british companies , omitted figures for maxim . its average monthly circulation for the six months ended dec . 31 , 2001 , was 2 . 55 million . its advertising revenue for the first six months of 2002 was 76 . 6 million .

for the 414 days that he was america 's proconsul in iraq , l . paul_bremer iii was forever reacting to surprises sprung by others , often deeply jarring or violent ones , for america , iraq and mr . bremer . on monday , there was a surprise of a different kind , and it allowed mr . bremer to end america 's formal occupation of iraq in a way that pre_empted the insurgents who have thrown into doubt everything he came here to achieve . until the last moments , the 48 hour advance of iraq 's return to formal sovereignty requested by prime_minister iyad_allawi and approved by president_bush was known in baghdad to only a small group of senior iraqis and to the most trusted of mr . bremer 's american aides . mr . allawi 's aim of forestalling insurgent_attacks to disrupt the transition which american military_intelligence had warned of in recent days was successful , and set the stage for a relatively quiet day at the start of iraq 's newfound sovereignty . mr . bremer , 63 , was far from a household name in may 2003 when president_bush picked him for the most powerful post any american has held abroad since gen . douglas_macarthur 's postwar years in japan . his low key manner was broken notably , in december , when he vaulted into the american press center here and stunned the world with his opening words , ''ladies and gentlemen , we got him ! '' announcing the capture of saddam_hussein . on monday , mr . bremer , brooks_brothers smart as always , still matching his suit to the desert boots that became his trademark here , allowed himself a smile of satisfaction as he handed iraqi officials the blue leather bound folio containing legal documents affirming the transition . ''it 's a great pleasure to be here this day to formally hand over sovereignty on behalf of the coalition , '' he said , cursory as ever at the moment when his plenipotentiary powers slipped away . that said , he boarded a black hawk helicopter to begin his journey out of iraq , and eventually to his house in vermont , teaching the gourmet cooking classes that are his favorite pastime , and the book on his iraq experiences that he plans to write . although he broke a habit of months in his last days here by giving a series of interviews to american reporters , his discretion , to the last , meant that americans wanting to know his innermost thoughts on his tenure here will probably have to wait for the book . in the interviews , including two meetings with the new york times late last week , mr . bremer seemed intent on bolstering the flagging confidence of many here and in the united_states that the american enterprise can recover from the blows of the insurgency and lead to the creation of a stable , democratically governed iraq . that has been his mantra through the months that the war has worsened . but for all his professed belief that matters will get better now that iraq is governed by iraqis again , an undercurrent of caution and uncertainty showed through at several points in the interview . ''of course , '' he said at one point , ''the future , as yogi_berra might have said , is hard to know . '' ironically , considering the criticism directed at mr . bremer for his decree last may disbanding mr . hussein 's 400 , 000 man army , mr . bremer returned repeatedly to iraq 's critical need to build up its own armed_forces . it is an undertaking that gained fresh urgency with mutinies and desertions involving one of the first battalions of the new army , many regional police_forces and elements of the newly formed iraqi civil_defense force under the challenge of the uprisings that exploded in april in falluja and several cities across southern iraq . ''i think we 'll win the war , and we 'll win it as we get more and more iraqis standing up and fighting , and as we proceed on the second pillar , which is getting an iraqi government , '' mr . bremer said . but later in the interview , asked whether he thought the american military commitment here could end with a vietnam like withdrawal , he replied ''you can certainly draw any kind of scenarios you want . i think it will all depend on what happens with security . '' as if sensing that he had ventured too close to doubt , he added , ''but as i said earlier , i am optimistic that they can manage this and get through the next year and a half to a more representative government . '' then he switched again , to a more modulated view . ''but you can certainly write scenarios that take it in a different direction , '' he said . ''there are a lot of strains in this society iraq is surrounded by unfriendly neighbors , at least two or three of which do n't want us to succeed . and the worldwide fight against terrorism has a major battlefield here . '' for now , nobody can know what will become of the fragile iraqi political structures mr . bremer has left behind . at best , the interim government of appointed leaders that took over on monday will be a first step toward a series of elections next year leading to a permanent constitution , and a five year , elected parliament and government by january 2006 . if the plan holds up , the new iraq of which mr . bremer was a principal architect could go down in history as an extraordinary achievement . but at worst , things could descend into one of the doomsday scenarios feared by iraqis , and by americans who worry about the safety of nearly 140 , 000 united_states troops and 25 , 000 others from more than 30 allied nations who will remain here as guarantors a new dictatorship , the rise of a militantly islamic shiite government , or worse yet , a civil_war . one certain thing is that historians will weigh in on mr . bremer 's stewardship , and on that score , his record seems , on balance , unlikely to win the sort of endorsements that have enveloped general macarthur 's legacy in japan . the general , of course , did not have an insurgency to contend with as he oversaw japan 's transition to democracy . for mr . bremer , the deaths of more than 850 american_soldiers and thousands of iraqi civilians , and the impediment that the violence posed to the 18 . 6 billion reconstruction voted by congress last fall , bedeviled everything that america sought to accomplish here . on monday , the constant chance of violence hung like a dark cloud over the transition ceremony , even if the timing confounded the insurgents for a day . notably , though , mr . bremer left iraq with wide respect among ordinary iraqis no small thing , given that a recent poll by an iraqi newspaper found that more than 80 percent of iraqis condemned the occupation . there has been admiration for his courage in venturing outside the occupation headquarters in baghdad 's so called green_zone , facing the ever present risk of assassination . ''i 'm really upset about this , '' said anaam abdul wahed , 35 , having lunch with her niece in a baghdad restaurant , when she learned mr . bremer had gone , in hastened circumstances that denied him even a broadcast farewell . ''he has become our friend . he 's really kind , and handsome . we did n't look at him as we look at iraqi officials . '' but neither mr . bremer 's personal popularity , nor the fact that his stewardship was beset by war , may win him a break in history . before he left , an aide described him as feeling like ''a punching bag'' for the criticisms he has taken from some quarters in washington for the many reversals of the occupation , especially after the jubilant welcome given to american_troops as they captured baghdad . at the white_house , at the state_department , which he served as a diplomat for 23 years , and at the pentagon , where secretary of defense donald h . rumsfeld had appointed him chief administrator for iraq as well as among american field commanders frustrated by the disbanding of the iraqi_army and resentful of what they regarded as mr . bremer 's interference in the conduct of the war he became less favored as his time here wore on . mr . bremer 's frustration at those shadowy assaults showed only obliquely in the interview , when he alluded to his strong personal relationship with mr . bush , who appears to have remained his backer even as others in the white_house began looking for a scapegoat . ''i 've always been amazed it 's an interesting phenomenon , and i 've talked to the president about it how good the view is from the back of a car , '' mr . bremer said . then he added , smiling , ''particularly looking backwards . '' mr . bremer 's most controversial decision was the one to disband the old army , a move reportedly determined during discussions with another high ranking pentagon official on the plane to baghdad in may 2003 . as the war worsened last autumn and winter , he described the decision as an affirmation of reality , recognizing that the army had disintegrated during the american invasion and that the soldiers would not have responded to a summons to regroup . the decision was coupled with an order excluding thousands of officials from returning to their government jobs if they held a senior rank in mr . hussein 's baath_party , a ruling mr . bremer began to think too harsh by the end of last year , but officially relaxed only this spring . together , those decisions left the occupation without the backbone that might have come from an effective iraqi military force and experienced iraqi administrators . in effect , america and its allies , along with a few hundred returned iraqi exiles , found themselves largely alone in tackling the daunting_task of rebuilding a country the size of france , with a population of 25 million people , that had been devastated by three wars under mr . hussein , 13 years of united_nations economic_sanctions and 35 years of government neglect . when mr . bremer was asked in the interview whether there was anything the united_states might have done better , he skirted the issue but in a way that suggested that the entire american undertaking here was based on na_ve assumptions about the magnitude of the postwar challenge , or at least a failure to prepare for it adequately . ''people have said the prewar planning was no good , '' he said . ''i do n't know . i was a businessman until 10 days before i pitched up here , so i do n't know . '' looking back , mr . bremer liked to remind his critics what he inherited when he arrived , succeeding a brief lived predecessor , gen . jay_garner , who was fired by mr . rumsfeld after less than a month on the job . ''baghdad was on fire , literally , as i drove in from the airport , '' he said when he summed up the occupation 's progress last march , a year after the invasion . ''there was no traffic on the streets there was no electricity anywhere no oil_production no economic activity there was n't a single policeman on duty anywhere . '' in his farewell interviews , he ticked off the achievements that have offset the miseries iraqis have endured from the insurgency 100 , 000 policemen back on duty electricity flows , on the best days , at the highest levels iraq has ever recorded oil_production back to prewar levels , before insurgents sabotaged key pipelines unemployment down , by occupation authority estimates , to about 20 percent nationwide , against 60 percent in the invasion 's aftermath . if mr . bush and the invasion 's planners in washington had rose colored expectations of how the american takeover would be received , iraqis , mr . bremer suggested in his interview , had similarly unrealistic hopes about america . ''the attitude was , 'you guys put a man on the moon , and threw out a regime that we could n't touch for 35 years in three weeks , so why was the electricity not fixed in three weeks ? ' '' mr . bremer said . mr . bremer said he did not think america 's prospects were as badly_damaged as many americans may have assumed by disclosures about the abuse of iraqi detainees at abu_ghraib_prison . ''in my conversations with iraqis , though they disliked it intensely , '' they contrasted the american crackdown on misbehavior with the days of saddam_hussein when , he said , ''this kind of behavior was a policy , was not talked about , and was certainly never punished . '' at the conclusion of the interview , mr . bremer offered what amounted to his own epitaph for the occupation . ''you can make all these criticisms of what has happened here no doubt we made mistakes , '' he said . ''but iraq is unarguably a better place today than it was before we came here , and people who are critical have to be able to answer the question , 'would it have been better if we had simply left saddam in power ? ' ''and i 'll tell you , you wo n't find more than 2 percent of all iraqis , for all their complaints they 're making now , who think it would have been better if we had never come . '' transition in iraq the departing administrator correction july 2 , 2004 , friday because of an editing error , a credit on tuesday for two pictures with an article about l . paul_bremer iii , the former american civilian administrator of iraq one showing him and other iraqi officials looking over documents , the other showing him escorted to his plane for the flight out of iraq misspelled the pool photographer 's surname . she is pauline lubens , not lubans .

the justice_department asked today that the banker at the center of a multibillion_dollar loan scandal involving iraq receive a heavy prison sentence because of his failure to cooperate fully with prosecutors . in a sentencing memorandum filed in federal district court in atlanta , prosecutors demanded that judge marvin shoob reject any request to reduce the sentence of christopher p . drogoul , who was branch manager of the atlanta branch of the italian owned bank , banca_nazionale_del_lavoro . mr . drogoul was indicted for making an estimated 5 billion in unauthorized loans to iraq , many of them guaranteed by the bush_administration as part of a policy to curry favor with baghdad . in june , the united_states_attorney 's office in atlanta accepted a guilty_plea by mr . drogoul to 60 of the 347 initial counts of fraud and conspiracy . a sentencing hearing is to begin monday in atlanta . a number of congressional democrats say the bush_administration policy toward iraq was not only flawed , but also criminal , and have charged , among other things , that the administration interfered in the criminal_prosecution of the bank , delaying the indictments for more than a year . the justice_department has rejected a request from the house_judiciary_committee to appoint an independent_counsel to determine whether crimes were committed . bargain with prosecutors the prosecution made the motion despite a plea_bargain with mr . drogoul stating that he would receive a lesser sentence if he " substantially assisted " in the investigation . the charges carry a maximum penalty of 390 years in prison , millions of dollars in fines and 1 . 8 billion in restitution . the decision by the prosecution was prompted , at least in part , by the recent refusal of his new defense lawyer , bobbie lee cook , to allow prosecutors to debrief mr . drogoul . " we 've demanded from mr . cook he make mr . drogoul available to us and he has refused , " gerrilyn g . brill , the acting united_states_attorney in atlanta , said in a telephone interview . next week 's sentencing is likely to become a vehicle for the defense to charge that the bush_administration is involved in a cover up in the bank scandal . mr . cook said in a telephone interview that mr . drogoul did not act alone , but that officials of the bank in rome and new york were aware of his activities . the justice_department and the prosecutors have angrily denied those charges .

lead multimillion_dollar lawsuits between the national_basketball_association and donald t . sterling , the owner of the los angeles clippers , were averted when the parties reached an out of court settlement that will allow the clippers to remain in los_angeles , according to a report yesterday in the los_angeles herald multimillion_dollar lawsuits between the national_basketball_association and donald t . sterling , the owner of the los angeles clippers , were averted when the parties reached an out of court settlement that will allow the clippers to remain in los_angeles , according to a report yesterday in the los angeles herald examiner . under the agreement , sterling will pay the league approximately 6 million in fines and has signed documents stating that league rules regarding franchise moves are valid and binding . he has also agreed to drop all claims against the league , including a 100 million lawsuit . the agreement was reached less than a week before the league 's 25 million lawsuit against the clippers was scheduled to go to trial in a san_diego district court . the league was seeking the return of the clippers to san_diego or the termination of the franchise . against the objections of the league , sterling moved his franchise from san_diego to los_angeles in 1983 . sports people.

treasury_secretary john w . snow said today that he was encouraged by ''interim steps'' china is taking to modernize its financial system , but acknowledged that beijing had not committed itself to liberalize trading in its currency anytime soon . mr . snow is under heavy political pressure at home to talk tough to china about the way it pegs its currency , the yuan , to the dollar , a system that some critics in the united_states argue has kept the chinese currency artificially undervalued and helped china amass the largest bilateral trade surplus with the united_states . in meetings with china 's top financial officials tuesday and today , mr . snow said he pressed them to establish a flexible exchange_rate system , which some analysts believe would lead to an appreciation of the yuan and potentially reduce the advantage china 's exports have in many overseas markets . he said chinese leaders reaffirmed that they had a longstanding goal to move toward more flexibility , but did not provide a timetable . chinese officials have said that they do not intend to overhaul their currency system immediately , especially at a time when international pressure is intense and currency speculators are seeking to force their hand . ''i was encouraged to hear a reaffirmation of china 's longstanding goal to move toward greater flexibility , '' mr . snow told reporters this morning . ''i was assured that interim policy steps are now being taken and progress in this area will continue . '' among the policy steps he said he had discussed with chinese officials were relaxation of capital_controls that restrict the amount of foreign currency chinese companies and individuals can take out of the country . he said chinese officials also told him they were moving to loosen regulations on companies and individuals who want to invest abroad , a step he said could lead to an increase in the flow of chinese money into american stocks and bonds . he said he hoped that china would also move to create more opportunities for american financial firms to own asset_management companies , and for american insurance_companies to open branch offices around the country . ''these are interim measures that prepare an economy for a more flexible exchange_rate system , '' mr . snow said . ''it is to china 's advantage to encourage flows both in and out . '' mr . snow did not make much headway , however , on pressing china to change its currency system . chinese officials , in fact , appear determined to resist any outside pressure . they are also cautious about tampering with a currency system that has been a source of stability for the country 's still backward banks since the yuan was pegged at 8 . 28 to the dollar in 1994 .