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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.