NYT September 30, 2005
Have I Got a Fund for You

By ERIC DASH

Hedge funds are not meant to be for everyone. But that has not stopped Christian Baha from using the mass media to promote his fund.

A new commercial for his fund, Superfund, which is technically not a hedge fund but a managed futures fund, is expected to make its debut in a number of large markets.

But there is just one problem, Mr. Baha concedes halfway through the 30-second spot. As a pitchman for a product that is really not supposed to be publicly pitched, he is severely limited in what he can say. "I would love to tell you more about Superfund, but regulations prevent me from describing it on television," Mr. Baha, 36, explains in an Austrian accent that makes him sound like Arnold Schwarzenegger channeling Peter Lynch of Fidelity Investments. Instead, he flashes a Web site address and a wink.

His fund company, based in Monte Carlo and recently renamed Superfund Group, offers hedge funds in more than a half-dozen countries in Europe and Asia. But here they are carefully referred to by their technical name - managed futures funds that are publicly registered partnerships - to appease regulators in the United States. Hedge funds, after all, are private capital placements, and are forbidden by federal regulators from advertising their offerings to the general public.

His grand visions of giving the little investor a piece of the action is at the very least tempered by Superfund's extraordinarily high fees. Superfund is guaranteed at least 8.75 percent in brokerage and management fees, and can take up to a 25 percent cut of any profits after expenses in any month when a fund reaches a new high.

But a television commercial (that can't really advertise anything) for a hedge fund (that is not technically not a hedge fund) may take the cake.

The spot, scheduled to start running next month in San Francisco, South Florida and metropolitan New York, comes after a similar commercial broadcast this spring on cable stations like CNBC, CNN and ESPN. Filmed on a shoestring budget by Strong Academix, a small New York production company, it is awaiting the blessing of federal regulators, who must scrutinize the proposal and videotape for compliance with securities marketing laws.

"Typically, you think of alternative investments and hedge funds as being very secretive and not wanting a lot of attention," said Aaron Smith, Superfund's managing director for North America. "But our experience has been, if you are good at what you do, why wouldn't you market yourself?"

Superfund uses proprietary computer software to make trading decisions on scores of futures contracts, from soybeans to Swiss bonds, and its performance has fluctuated wildly in recent years. Despite strong double-digit net returns in 2002 and 2003, this year Superfund's Series A shares are down 14.7 percent and its Series B shares, which offer higher returns along with higher risk, are down almost 20 percent. And so far, the American funds have attracted only $90 million of the $200 million it hoped to raise since 2002.

Mr. Baha defends Superfund's recent struggles in the United States, suggesting that the last few months obscure the company's long-term results around the globe. He admits his fees, which rival those of the top hedge fund traders, are expensive but says "good things are not cheap and cheap things are not good."

Mr. Baha says that he is simply offering ordinary investors, with as little as $45,000 in income, the same products that high-net-worth individuals and institutional investors use. The aggressive marketing, he suggests, goes part and parcel with this approach.

In Manhattan, Superfund opened an investment center this spring across from the New York Public Library on Fifth Avenue.

Meanwhile, Mr. Baha has started lining up sports sponsorships in Europe, the first place where the television commercials for his hedge funds were broadcast. In January, Superfund signed Grand Prix racing champion Niki Lauda as a pitchman and it has plans for a Formula Superfund racing series. It already sponsors a professional soccer team, FC Superfund, and a basketball club that has won the Austrian league three years in a row.

Mr. Baha remains coy about any plans to own a major league sports team in the United States. After all, John W. Henry, a managed futures trader, holds a large stake in the Boston Red Sox. Would the New York Yankees be Superfund's next prize?

"That would be great," Mr. Baha said, "but we don't have enough volume acquired here."

NYT

September 30, 2005

Way North of the Border

By EDUARDO PORTER and ELISABETH MALKIN

ST. PAUL - At first blush, Mexico's newest American consulate might appear out of place. Far from the Mexican border, this prosperous state capital, along with Minneapolis and the surrounding suburbs, form a sprawling metropolis with Scandinavian overtones.

Yet by the time the Mexican government opened its 46th consulate in the United States here in June, it was already a latecomer to a bustling Mexican-American community that includes, according to consular officials, 22 churches offering services in Spanish, 9 Spanish-language newspapers, 3 tortilla makers and 9 Hispanic - mostly Mexican - soccer leagues.

"We are responding to the needs of the Mexican community," said Nathan Wolf, the new consul. "We are just following the movement of people."

The location of Mexico's latest American consulate provides a stark illustration of how economically improving groups of Mexican immigrants are establishing themselves across the country, in ways that experts say point to the futility of current attempts to plug the border and stem the flow of illegal migrants in search of a better life.

[Indeed, while overall migration to the United States peaked in 2000, according to a new study by the nonpartisan Pew Hispanic Center, the number of illegal immigrants - mostly from Mexico - rose sharply last year after three years of decline that started with the 2001 recession.]

When the governors of New Mexico and Arizona declared states of emergency in August and called on the federal government to help stop the tide of illegal immigrants coming across the border, their move did nothing to interrupt the consulate's busy preparations to start four Mexican "hometown associations," linking immigrants with their home states.

"They call Minneapolis the new Axochiapan," said Ramiro Hernández, a successful businessman who arrived in the United States illegally 20 years ago from Axochiapan, a small town in the central Mexican state of Morelos. "Ninety percent of the population there has people over here. Kids come here as soon as they come of age."

The 2000 census recorded 41,600 Mexican-born people in Minnesota, up from 3,500 counted in 1990. Locals in Minneapolis say that new arrivals have multiplied even faster over the last five years, coming from Mexico and from Mexican hubs in the United States, notably Chicago. "We think there are around 200,000," Mr. Wolf said.

A strong local economy helps pull Mexicans from steamy Morelos to the chilly Minnesota plain. The state's unemployment rate is among the lowest in the nation; at 3.3 percent, the jobless rate for Minneapolis-St. Paul is the lowest among big metropolitan areas. The forces driving migrants into the United States are even broader, however, and are increasing the supply of working-age Mexicans willing to do whatever it takes to cross the border.

"Immigration trends are virtually unaffected by spending on border enforcement," said J. Edward Taylor, a professor at the University of California, Davis, who has surveyed migrants in Mexico about their experiences. "It means the things driving migration are too big to be counteracted by enforcement."

Demography plays the biggest role. The Mexican government projects that the 11- to 40-year-old population - the prime age for migration - will continue to grow over the next decade, by roughly 6 percent, to 59 million people, before starting to decline over the subsequent 35 years as Mexico ages.

Economic dynamics also contribute to the flow. Mexico's backward rural economy, which produces only 5 percent of Mexico's output but employs more than a fifth of its labor force of 40 million, is poised to remain a plentiful source of migrants.

"There's an unexpectedly high share of workers still in agriculture," Professor Taylor said. "That's like a fault line."

While Mexican demographics are pushing, American demand for cheap labor is pulling just as hard. Gordon H. Hanson, an economics professor at the University of California, San Diego, argues the immigration boom of the last 20 years resulted from two factors: the growth in the Mexican working-age population and the decline in high school dropout rates in the United States, which reduced the domestic supply of low-skilled workers. "It was a match made in heaven," he said.

A Mexican government agency, the National Population Council, forecasts that about 400,000 Mexicans will migrate to the United States every year for the next decade and that the flow should then decline gradually to an estimated 325,000 a year by 2050. Jeffrey S. Passel, a demographer at the Pew Hispanic Center, argues that at least in the near term, even this estimate seems low.

To try to stem the flow, the United States government has increased annual spending on border policing in the last 10 years by more than fivefold in real terms. The Border Patrol has swollen to 10,000 agents, equipped with sensors and cameras, planes and drones.

Yet if the border has become tougher, so, too, have migrants. These days, only a third make it into the United States on their first try, according to a survey by the Center for Comparative Immigration Studies of the University of California, San Diego. But 59 percent make it across on their second to fifth attempts. Only 8 percent give up and go home.

"Once I was caught five times," said Arnulfo Pliego, 44, a migrant from Axochiapan who first came to the United States in 1989 and has shuttled between Morelos and Minnesota for the last nine years. "I said to myself, 'I must pass, I must pass,' and I passed."

From 1991 to 1994, some 450,000 illegal immigrants were coming to the United States annually, mostly from Mexico. In the first four years of this decade, the average exceeded 600,000, according to the Pew Hispanic Center report.

Mr. Passel estimates that the Mexican-born population in the United States has swollen to 11 million people, some 60 percent of them here illegally. "If you look at the numbers," he said, "it seems that anybody that wants to get in does."

Indeed, the stepped-up border policing is deterring immigrants from returning home and encouraging them to settle in the United States indefinitely. Meanwhile, the sheer numbers provide new incentives to migrate, as strong networks of immigrants emerge, linking communities on both sides of the border, making migration somewhat easier and effectively transforming it to a routine.

Consider Rosalba Cano. When she followed her husband north, leaving Axochiapan with her 2-year-old child 10 years ago, there were very few of her compatriots in Minneapolis. "I only came because my husband said he was leaving and wouldn't be back in a while," said Ms. Cano, 33, a former preschool teacher. "I was all alone here for a long time."

But then one of Ms. Cano's sisters arrived, followed by her brother and a couple of cousins. She now has three uncles in town. Ms. Cano's husband, Osvaldo García, a former farmworker from Axochiapan, has two brothers and two sisters living in the Twin Cities.

The latest arrival is Ms. Cano's sister-in-law, Obsidiana Enríquez Navarro, 25, who quit her job with the Axochiapan municipal government last year, paid a smuggler $2,000 to get her across the border, then trudged through the Arizona desert before catching transportation to Minneapolis.

There are so many men from Axochiapan in the area that the village priest came to visit. "Father Miguel came to look for the husbands and take them back, but he didn't manage to get any," Ms. Enríquez Navarro said.

Migration is leaving a deep mark on Axochiapan, a county seat at the center of a cluster of villages with a population of some 30,000. In one village, Quebrantadero, people talk of closing the primary school because there are so few young children left.

In Tlalayo, another village, the streets are paved and lined with two-story concrete houses, the product of a construction boomlet financed by remittances from the United States. But with crop prices low and government subsidies limited, the traditional agricultural economy has withered, leaving only elderly men to till the fields.

Municipal officials in Axochiapan estimate that at least a third of the population has moved. The mayor wants to honor the migrants with a 10-foot statue of a man carrying a bag and leaving his wife and two children behind. That may seem paradoxical but he has his reasons.

"I realize that Mexico has moved ahead thanks to remittances," said the mayor, Leopoldo Rodríguez Galarza. "In part, they have helped reduce poverty."

The human flow is changing the Twin Cities, too. East Lake Street in Minneapolis, formerly gang-ridden and drug-infested, has become a lively Mexican commercial center.

Mr. Hernández, who is now a legal resident in the United States, first went into business bringing in Mexican cuts of meat like the salt-cured cecina steak and the heavily spiced pork al pastor from Chicago, and Mexican videos he bought from a bankrupt Blockbuster in California.

He now owns several jewelry shops, a money remittance business, three cowboy-wear stores and a video-rental shop. He is a partner in a local Spanish-language radio station and a supermarket.

And in an echo of the planned Axochiapan monument, he is working with other local community leaders to persuade the governor of Morelos to donate a statue of Emiliano Zapata, the Mexican revolutionary hero.

These cross-border connections have become so strong, officials say, that nothing is likely to stop Axochiapan's citizens from continuing to seek jobs in the Twin Cities.

In the Cano-García household, Mr. García earns $15 an hour driving a dump truck for a landscaping business and Ms. Cano makes $11 an hour as a supervisor at a taco grill. It is money they could never dream of earning in Mexico.

With two more children, they now own a house, a small duplex in a leafy neighborhood across from a park. The state government has provided extensive help to care for their second son, who is autistic.

"I am very happy with Minnesota," Ms. Cano said. "I have done very well here. It's the best for the future of my children."

Meanwhile, the Mexican government is making plans for its next consulate. According to Mr. Wolf, it should open in Little Rock, Ark., before the end of the year.

Eduardo Porter reported from Minnesota for this article, and Elisabeth Malkin from Axochiapan, Mexico.

NYT September 30, 2005
EU Tries to Unblock Internet Impasse

By TOM WRIGHT

International Herald Tribune

The United States and Europe clashed here Thursday in one of their sharpest public disagreements in months, after European Union negotiators proposed stripping the Americans of their effective control of the Internet.

The European decision to back the rest of the world in demanding the creation of a new international body to govern the Internet clearly caught the Americans off balance and left them largely isolated at talks designed to come up with a new way of regulating the digital traffic of the 21st century.

"It's a very shocking and profound change of the EU's position," said David Gross, the State Department official in charge of America's international communications policy. "The EU's proposal seems to represent an historic shift in the regulatory approach to the Internet from one that is based on private sector leadership to a government, top-down control of the Internet."

Delegates meeting in Geneva for the past two weeks had been hoping to reach consensus for a draft document by Friday after two years of debate. The talks on international digital issues, called the World Summit on the Information Society and organized by the United Nations, were scheduled to conclude in November at a meeting in Tunisia. Instead, the talks have deadlocked, with the United States fighting a solitary battle against countries that want to see a global body take over supervision of the Internet.

The United States lost its only ally late Wednesday when the EU made a surprise proposal to create an intergovernmental body that would set principles for running the Internet. Currently, the U.S. Commerce Department approves changes to the Internet's "root zone files," which are administered by the Internet Corporation for Assigned Names and Numbers, or Icann, a nonprofit organization based in Marina del Rey, California.

Political unease with the U.S. approach, symbolized by opposition to the war in Iraq, has spilled over into these technical discussions, delegates said. The EU and developing nations, they added, wanted to send a signal to America that it could not run things alone. Opposition to Washington's continued dominance of the Internet was illustrated by a statement released last week by the Brazilian delegation to the talks. "On Internet governance, three words tend to come to mind: lack of legitimacy. In our digital world, only one nation decides for all of us."

In its new proposal, the EU said the new body could set guidelines on who gets control of what Internet address - the main mechanism for finding information across the global network - and could play a role in helping to set up a system for resolving disputes.

"The role of governments in the new cooperation model should be mainly focused on principle issues of public policy, excluding any involvement in the day-to-day operations," the proposal said. The new model "should not replace existing mechanisms or institutions," it added. The proposal was vague but left open the possibility, fiercely opposed by Washington, that the United Nations itself could have some future governing role.

The United States has sharply criticized demands, like one made last week by Iran, for a UN body to govern the Internet, Gross said. "No intergovernmental body should control the Internet," he said, "whether it's the UN or any other." U.S. officials argue that a system like the one proposed by the EU would lead to unwanted bureaucratization of the Internet.

"I think the U.S. is overreacting," said David Hendon, a spokesman for the EU delegation.

"But I think it's a tactical overreaction for the negotiations," he added.

"We expected this proposal to move the summit along from the stalemate," Hendon said. "It is unreasonable to leave in the hands of the U.S. the power to decide what happens with the Internet in other countries."

Various groups, including the International Telecommunication Union, a UN agency based in Geneva, have suggested that the U.S. government has too much control over the Internet.

Under the terms of a 1998 memorandum of understanding, Icann was to gain its independence from the Commerce Department by September 2006.

But the Bush administration said in July that the United States would "maintain its historic role in authorizing changes or modifications to the authoritative root zone file." In so doing, the government "intends to preserve the security and stability" of the technical underpinnings of the Internet.

Without consensus, some experts say that countries might move ahead with setting up their own domain name system, or DNS, as a way of bypassing Icann.

The United States argues that a single addressing system is what makes the Internet so powerful, and moves to set up multiple Internets would be in no one's interest.

"It's not just working," said Michael Gallagher, an assistant secretary at the Commerce Department who heads communication policy. "It's working spectacularly." Paul Twomey, chief executive of Icann, said fears of U.S. government influence on the Internet were overstated.

Delegates say the conference has made much better progress on issues like dealing with spam e-mail messages and identity theft since it began in 2003. But they said they did not expect to be able to complete a document on Friday, as had been planned, and that further talks would be needed before the Tunisia meeting Nov. 16 to 18.

NYT September 30, 2005
Trying to Imprint 'That's Classic' in Younger TV Viewers' Minds

A CABLE network specializing in vintage movies known for classic lines like "Here's looking at you, kid," is hoping to get more kids looking at it.

The network is TCM, formally Turner Classic Movies, which since its introduction in 1994 has presented films like "Casablanca," the source of the line above, in uncut and commercial-free form. Long a favorite of older viewers drawn to its movies from the golden age of Hollywood, TCM is now trying to appeal to younger film fans.

The intended audience is not kids in the sense of say, the children who watch cable channels like Nickelodeon or Cartoon Network. Rather, the goal is to attract additional viewers around the age that Ingrid Bergman was when Humphrey Bogart called her "kid" (just shy of her 27th birthday) - or even some the same age Bogart was (42).

TCM is seeking more youthful viewers through an extensive campaign with a budget estimated at more than $10 million, its largest ever. The ads are appearing on television, in movie theaters, on the network's Web site (turnerclassicmovies.com) and in magazines. The humorous campaign, which tries to redefine "classic" in a more contemporary way, is the first work created for TCM by Leo Burnett USA in Chicago, part of the Leo Burnett Worldwide division of the Publicis Groupe.

Burnett was coincidentally the agency that a decade ago undertook a similar mission for another client, Dewar's, aimed at making Scotch whiskey more palatable to consumers ages 21 to 34. There were cheeky print advertisements that carried headlines like "O.K., you've done the goatee thing. Now can we all just move on" and "It's not so much the 'chat room' as it is the sitting-home-alone-by-yourself part that concerns us."

Selling a product to a more youthful audience, while at the same time not alienating older core customers, is among the trickiest tasks in marketing. And the failure rate is high.

For instance, the Dewar's ads never gained the traction that the agency or client hoped to achieve. It was only more recently, when the so-called cocktail culture began to catch on with younger drinkers, that they started increasing their purchases of distilled spirits. Still, many brands try to cultivate less stodgy images to remain relevant in competitive categories. Other current examples include Cadillac, Miller High Life beer and Camel and Kool cigarettes.

TCM is facing increasing competition from other cable networks that also specialize in movies. Among them are IFC and Sundance Channel, which do not run commercials, and AMC, Bravo and Trio, which do. TCM, being commercial-free, does not live or die by the Nielsen ratings. But it does want to remain popular with cable viewers to ensure that operators of cable systems, which pay fees to carry TCM, keep it among the channels they provide to 70 million cable households.

"We know TCM has a loyal fan base among people who grew up with our movies and film buffs," said Katherine Evans, senior vice president for marketing and enterprises at TCM in Atlanta, part of the Turner Broadcasting System unit of Time Warner. "Our previous advertising was reinforcing the existing audience, but wasn't working hard enough to reach beyond."

"The challenge is, how do we generate a broader fan base" among TV watchers ages 35 to 54, she added, "to make sure they know we exist and get them to tune in and give us a try."

A promising avenue was discovered through research among cable viewers, which found that "about 40 percent say they are somewhat to very interested in 'classic' films," Ms. Evans said. "So we had to figure out creatively how do we get on their radar."

Enter Burnett, which among the agencies TCM talked to "was the one that came to us and said, You have to embrace 'classic'; be the arbiter of 'classic,' " she added.

The Burnett campaign does that in a manner that spins "classic" in an updated direction by offering tongue-in-cheek reinterpretations of the plot lines of TCM movies. To signal younger viewers that TCM is not just for golden oldies, the ads use a mix of titles from "King Kong" (1933) to "2001: A Space Odyssey" (1968).

For instance, the ad for "Psycho" (1960) declares: "When a grown man lives with his mother, that's pathetic. When a grown man lives with his dead mother, that's classic." The ad for "Mildred Pierce" (1945) asserts: "When a mother shares everything with her daughter, that's precious. When 'everything' includes her husband, that's classic."

Here is how an ad describes "Lolita" (1962): "When a middle-aged man's girlfriend is Size 14, that's chunky. When a middle-aged man's girlfriend is age 14, that's classic." And this is how an ad retells the plot of "North by Northwest" (1959): "When you barely miss your plane, that's frustrating. When your plane barely misses you, that's classic."

The idea from the research that the definition of a classic film could be extended beyond the stereotype of a musty chestnut "became fascinating to us," said Scott English, a creative director at Burnett who produced the campaign along with his colleague Victor LaPorte.

The focus on specific TCM movies is meant to suggest "that current movie plot lines have nothing on classic movie plot lines for being relevant and timeless," Mr. English said, adding: "We want to blow the dust off 'classic.' With a different perspective, the classics take on a modern sheen."

The magazine ads are running in publications like Men's Health, The New Yorker, O: The Oprah Magazine, Premiere and Vanity Fair. They also appear in magazines owned by the Time Inc. division of Time Warner like Entertainment Weekly, People and Time.

Commercials in movie theaters are scheduled to start today in Landmark Theaters in 22 markets. They include Atlanta, Boston, Chicago, Dallas, Houston, Los Angeles, New York, Philadelphia, San Francisco, Seattle and Washington.

Commercials for TV are to begin running Monday on four cable networks that are also part of Turner Broadcasting: CNN, Headline News, TBS and TNT.

NYT September 30, 2005
Times Reporter Free From Jail; She Will Testify

By DAVID JOHNSTON and DOUGLAS JEHL

WASHINGTON, Sept. 29 - Judith Miller, the reporter for The New York Times who has been jailed since July 6 for refusing to testify in the C.I.A. leak case, was released Thursday from a Virginia detention center after she and her lawyers reached an agreement with a federal prosecutor in which she would testify before a grand jury investigating the case, the publisher and the executive editor of the paper said.

Ms. Miller was freed after spending more than 12 weeks in jail, during which she refused to cooperate with the inquiry. Her decision to testify was made after she had obtained what she described as a waiver offered "voluntarily and personally" by a source who said she was no longer bound by any pledge of confidentiality she had made to him. Ms. Miller said the source had made clear that he genuinely wanted her to testify.

That source was I. Lewis Libby, Vice President Dick Cheney's chief of staff, according to people who have been officially briefed on the case. Ms. Miller met with Mr. Libby on July 8, 2003, and talked with him by telephone later that week, they said.

Discussions between officials and journalists that week that may have disclosed the identity of a Central Intelligence Agency operative, Valerie Wilson, have been a central focus of the investigation.

Ms. Miller said in a statement that she expected to appear before the grand jury on Friday. Ms. Miller was released after she and her lawyers met at the jail with Patrick J. Fitzgerald, the prosecutor in the case, to discuss her testimony.

The publisher of The Times, Arthur Sulzberger Jr., said in a statement that the newspaper supported Ms. Miller's decision, just as it had backed her refusal to testify.

"Judy has been unwavering in her commitment to protect the confidentiality of her source," Mr. Sulzberger said. "We are very pleased that she has finally received a direct and uncoerced waiver, both by phone and in writing, releasing her from any claim of confidentiality and enabling her to testify."

For more than a year, Mr. Fitzgerald has sought testimony from Ms. Miller about conversations she had with Mr. Libby. Her willingness to testify now was in part based on personal assurances given by Mr. Libby this month that he had no objection to her discussing their conversations with the grand jury, according to those officials briefed on the case.

Mr. Fitzgerald's investigation has centered on whether anyone in the Bush administration illegally disclosed to the news media the identity of Ms. Wilson, a C.I.A. employee. The first published reference to Ms. Wilson was in July 2003 in a syndicated column by Robert D. Novak, who referred to her by her maiden name, Valerie Plame.

Another important question has been whether officials were truthful in their testimony to investigators and the grand jury.

Ms. Miller never wrote an article about Ms. Wilson. Mr. Fitzgerald has said that obtaining Ms. Miller's testimony was one of the last remaining objectives of his inquiry, and the deal with her suggests that the prosecutor may soon end the long-running investigation. It is unknown whether prosecutors will charge anyone in the Bush administration with wrongdoing.

The agreement that led to Ms. Miller's release followed intense negotiations among her; her lawyer, Robert Bennett; Mr. Libby's lawyer, Joseph Tate; and Mr. Fitzgerald.

The talks began with a telephone call from Mr. Bennett to Mr. Tate in late August. Ms. Miller spoke with Mr. Libby by telephone this month as their lawyers listened, according to people who have been briefed on the case. It was then that Mr. Libby told Ms. Miller that she had his personal and voluntary waiver.

The discussions were at times strained, with Mr. Libby and Mr. Tate's asserting that they communicated their voluntary waiver to another lawyer for Ms. Miller, Floyd Abrams, more than year ago, according to those briefed on the case.

Other people involved in the case have said Ms. Miller did not understand that the waiver had been freely given and did not accept it until she had heard from Mr. Libby directly.

Ms. Miller authorized her lawyers to seek further clarification from Mr. Libby's representatives in late August, after she had been in jail for more than a month. Mr. Libby wrote to Ms. Miller in mid-September saying he believed that her lawyers understood during discussions last year that his waiver was voluntary.

On Sept. 16, Mr. Tate wrote to Mr. Fitzgerald saying his conversations with Mr. Abrams last year were meant to assure Ms. Miller that a broad waiver that Mr. Libby signed in late 2003 was not coerced and applied specifically to Ms. Miller.

On Thursday, Mr. Abrams wrote to Mr. Tate disputing parts of Mr. Tate's account. His letter said although Mr. Tate had said the waiver was voluntary, Mr. Tate had also said any waiver sought as a condition of employment was inherently coercive.

Mr. Tate said in an interview on Thursday, "Her lawyers were provided with a waiver that we said was voluntary more than a year ago." Mr. Abrams would not discuss the question in a brief telephone conversation on Thursday.

As part of the agreement, Mr. Bennett gave Mr. Fitzgerald edited versions of notes taken by Ms. Miller about her conversations with Mr. Libby.

In statements on Thursday, Ms. Miller and executives of The Times did not identify the source who had urged Ms. Miller to testify. Bill Keller, the executive editor, said Mr. Fitzgerald had assured Ms. Miller's lawyer that "he intended to limit his grand jury interrogation so that it would not implicate other sources of hers."

Ms. Miller's lawyers had sought such an assurance as a condition of her testimony.

Mr. Keller said Mr. Fitzgerald cleared the way to an agreement by assuring Ms. Miller and her source that he would not regard a conversation between the two about a possible waiver as an obstruction of justice.

According to someone who has been briefed on Mr. Libby's testimony and who believes that his statements show he did nothing wrong, Ms. Miller asked Mr. Libby during their conversations in July 2003 whether he knew Joseph C. Wilson IV, the former ambassador who wrote an Op-Ed article in The Times on July 6, 2003, criticizing the Bush administration. Ms. Miller's lawyers declined to discuss the conversations.

Mr. Libby said that he did not know Mr. Wilson but that he had heard from the C.I.A. that the former ambassador's wife, an agency employee, might have had a role in arranging a trip that Mr. Wilson took to Africa on behalf of the agency to investigate reports of Iraq's efforts to obtain nuclear material. Mr. Wilson's wife is Ms. Wilson.

Mr. Libby did not know her name or her position at the agency and therefore did not discuss these matters with Ms. Miller, the person who had been briefed on the matter said. Ms. Miller said she believed that the agreement between her lawyers and Mr. Fitzgerald "satisfies my obligation as a reporter to keep faith with my sources."

"I went to jail," she added, "to preserve the time-honored principle that a journalist must respect a promise not to reveal the identity of a confidential source. I chose to take the consequences, 85 days in prison, rather than violate that promise. The principle was more important to uphold than my personal freedom. "

Ms. Miller said she was grateful for the "unwavering support" shown by her husband, family and friends and The Times. She said that she would say nothing more publicly about the case until after her grand jury testimony.

Mr. Fitzgerald declined to comment, a spokesman, Randall Samborn, said.

The case has been the most significant test in decades of whether reporters can refuse to disclose to prosecutors their discussions with confidential sources. Many journalists say those sources would refuse to provide information if their anonymity could not be protected.

At least four other reporters are known to have provided information to Mr. Fitzgerald. But Ms. Miller had until refused to do so. In July, the Supreme Court refused to hear her appeal of a lower court order that she be jailed for contempt for her refusal to testify.

When Mr. Wilson emerged as a critic of the Bush administration in July 2003, administration officials questioned his credibility. The column by Mr. Novak said Mr. Wilson's wife, who worked for the agency, had suggested the trip.

New details about the case have emerged in recent months. Karl Rove, the president's senior political strategist, and Mr. Libby both discussed Ms. Wilson with reporters, according to testimony provided by Matthew Cooper, a Time magazine reporter, and by others.

But neither White House official is known to have mentioned Ms. Wilson by name or to have mentioned her status at the C.I.A.

Mr. Cooper testified in August 2004 about a conversation with Mr. Libby conducted in 2003. But Mr. Cooper had resisted a subpoena to appear before the grand jury to discuss a conversation with Mr. Rove.

In July, after his employer, Time Inc., part of Time-Warner, complied with a subpoena seeking his notes from the period, Mr. Cooper agreed to testify, after seeking and obtaining what he called a specific waiver from Mr. Rove, releasing him from a pledge of confidentiality.

That decision left Ms. Miller alone in resisting the prosecutors' demand to testify. Much about Ms. Miler's role remains unclear. Mr. Keller, the executive editor, has declined to say whether she was assigned to report about Mr. Wilson's trip, whether she tried to write an article about it or whether she ever told editors or colleagues at The Times that she had obtained information about Ms. Wilson's role.

Under the terms of her jailing, Ms. Miller faced incarceration through the duration of the current term of the grand jury hearing the case, and that is due to expire on Oct. 28. Had Ms. Miller continued to resist, lawyers involved in the case said they believed that it was highly likely that Mr. Fitzgerald would have tried to keep her in jail by extending the grand jury term or convening a new grand jury.

Ms. Miller had been housed at the Alexandria Detention Center, a county jail in suburban Virginia. As a federal prisoner, Ms. Miller was an exceptional case. But a spokesman for the sheriff's office, which administers the center, said she had been granted no special privileges.

NYT September 30, 2005
Leveling the Freedom Center

To almost no one's surprise, Gov. George Pataki banished the proposed International Freedom Center from ground zero on Wednesday, a day before he announced plans to build a half-million square feet of retail space at the World Trade Center site. Any orderly, open process for creating a vibrant, meditative space there has been discarded. Mr. Pataki killed the Freedom Center a few hours before a public forum on its fate was scheduled to be held. He killed it before the Lower Manhattan Development Corporation had a chance to vote on it.

Since late June, it has been clear that Mr. Pataki would no longer support the Freedom Center, except on terms that would render it meaningless. His argument is that the center's plans are simply too controversial, a notion that was also endorsed by Senator Hillary Clinton earlier this week. It seems to have made no difference that this was an idea Mr. Pataki supported early on, or that the Freedom Center's plans are almost precisely what the development corporation proposed in its outline for a cultural presence at ground zero. Nor does it seem to have mattered that the protest against the Freedom Center - or, more truthfully, against any cultural presence at the World Trade Center site - was based on false information and a profound fear of free speech.

At the root of that vitriolic protest was one question: "Why here?" Why imagine creating an institution that would celebrate freedom and foster discussion of its meaning, and the meaning of 9/11, within the memorial quadrant of ground zero? Wouldn't that dishonor the dead? We have never thought so. We believe that the site is sacred to more than death. It is sacred to life and to the principles - as well as the people - attacked there on Sept. 11, 2001. We believe that this country can be made stronger only by free speech. We believe that the power of that site should be used to consider what happened that day and to see what lessons we can derive from it, not only to mourn the dead.

NYT September 30, 2005
Turkey's Disabled

The treatment of the mentally disabled has fundamentally changed in recent years. The awareness that people with mental retardation or psychiatric diseases can thrive with the proper therapy and attention has led doctors to abandon huge institutions and give patients care in their communities, living with or near their families. Electric shock therapy is now used only in certain cases, with anesthesia.

But these reforms have bypassed Turkey, says a new report by Mental Disability Rights International, a Washington-based group that studies the treatment of the mentally disabled. The group convincingly documents, with heartbreaking photos and video, practices that it calls "torture."

Turkey's psychiatric system, the group found, makes widespread and indiscriminate use of unmodified electric shock therapy - electroshock that is administered without muscle relaxants or anesthesia. Such therapy is frightening, painful and dangerous. Electroshock therapy can be useful against some mental diseases, but Turkey uses it on nearly a third of its patients with acute mental disorders , including children. The group quoted the director of the electroconvulsive therapy center at one hospital as saying the therapy is effective only without anesthesia because patients need to feel "punished."

Turkey should immediately ban unmodified electric shock therapy and limit the use of modified therapy to cases in which it is medically indicated. It should never be used as a first resort, and never on children.

It will be more difficult to reform the country's practice of warehousing retarded or mentally ill children. Investigators found giant buildings - supposedly rehabilitation centers - filled with children confined to their cribs or living in total inactivity. When children begin the self-destructive behaviors that are a product of such boredom and abandonment, staff members tape plastic bottles over their hands so the children cannot use them. The staff in one institution told investigators that children who cannot feed themselves are left to starve to death.

How can such medieval practices thrive in a modern country? One reason is that these institutions are virtually hidden. In addition, Turkey lacks a widespread culture of rights, and its citizens do not often challenge the practices of a state that has at times given them good reasons for fear.

Some in Turkey's establishment have complained that the report was released just before Turkey was to begin formal talks to move toward joining the European Union. But the talks are an opportunity for European mental health experts to work with Turkey on meeting deadlines for progress.

NYT September 29, 2005
What's Cool Online? Teenagers Render Verdict

By JULIE BOSMAN

MARKETERS spend a lot of time figuring out what teenagers want. Teenagers are their most desirable and fickle demographic, the arbiters of cool who set trends, influence brand health and part with their discretionary income most freely.

So as part of Advertising Week 2005, interactive advertising agencies tried to answer the question last Tuesday of what teenagers want. The Interactive Advertising Bureau gathered 10 teenagers onstage at the Millennium Broadway Hotel to informally evaluate the creativity and effectiveness of three teenager-oriented interactive marketing campaigns, all before an audience of hundreds of industry executives.

So what do teenagers want? As one might expect, they want to have some fun. They want to customize products, they want to play games and they want to socialize. The online campaigns, created by three marketing agencies promoting Nike, Coca-Cola and the video game Halo 2, focused on the selling points for teenagers.

Nike iD products embodied customization with a Web site created by R/GA, an agency in New York. It created a "build your own" concept that allows users to design and customize sneakers with a variety of styles, colors and materials.

As a final flourish of customization, users can add a word or number to be sewn on the heel of the shoe. (This feature became briefly prominent in 2001, when Nike denied a request from an enterprising graduate student to emblazon the word "sweatshop" on his shoes.)

"The fact that you actually get to do it yourself is good," said James Del Guidice, 18, who nonetheless was wearing black Converse Chuck Taylors. "I definitely think the more custom, the better."

Mildred Arteaga, 17, said, "Everybody is looking to be different."

Coca-Cola's campaign was met with less enthusiasm. Designed by the Atlanta-based agency Studiocom, Coke Studios is an online chat game that encourages visitors to create their own music, make friends and decorate an interactive personal studio. Since its creation in 2002, the Coke Studios Web site has logged more than seven million registered users, a large percentage in their early teens.

The teenagers on the panel, who ranged from 15 to 18 years old, were not impressed. "I thought it was a really good idea if I was, like, 12," said Haley Ratner, 15.

"The cartoons reminded me of those kids who dress up like vampires," said Jill Moskowitz, 18.

The final demonstration was by AKQA, a San Francisco advertising agency that created a Web site previewing the video game Halo 2. The agency converted the game to an invented language they called Covenant, hoping to appeal to the teenage obsession with game playing.

It paid off: game enthusiasts who visited the site deciphered the language in less than a day, and the site attracted more than 140,000 visitors in a weekend, the agency said.

Interactive agencies say that they are more in touch with teenagers than traditional media agencies, and are armed with statistics about teenage Internet usage. According to research by Studiocom, teenagers are online more often than any other demographic.

Not only have 97 percent of teenagers used the Internet, the agency said, but they spend more time online than they do watching TV. Interactive advertising usually appeals to teenagers, the agency said, because it engages their desire to control what they buy. For marketers, it allows advertising to masquerade as a game and engage the consumer.

"This is advertising, but it's not behaving like advertising," said Nick Law, the vice president of visual design at R/GA in New York. "It's behaving more like a demo."

And no other group is as interested in controlling the product as the teenage market, he said. "I think what distinguishes how teenagers interact with the media in contrast to us older folks is that they want control over the media they consume," Mr. Law said. "The possibilities of self-expression are endless."

Capturing the teenage demographic is a primary concern for marketers looking to stamp their product with a cool image. "They're crazy about the teenagers - that's one of the brand health measures that companies look at now," said Juan Pablo Gnecco, the chief executive of Studiocom. "If you can be cool, then you're going to be talked about, and that's going to produce results."

Grant McDonald, a founding partner of North Castle Partners, an advertising and communications firm that specializes in youth marketing and advertising, moderated.

"This is a very tough audience," he said of teenagers as the session ended. "They're so sophisticated, more than anyone else. It takes a lot to turn them on."

After the teenagers disbanded, Mr. Gnecco winced at the reaction to Coke Studios. "They destroyed me," he said.

NYT September 29, 2005
Students Discover Economics in Its Natural State

By ROBERT H. FRANK

WHY do the keypad buttons on drive-up cash machines have Braille dots? It is an interesting question, since the patrons of these machines are almost always drivers, none of whom are blind. The answer, according to my former student Bill Tjoa, is that because A.T.M. producers make keypads with Braille dots for their walk-up machines anyway, it is cheaper to make all machines the same way. The alternative, after all, would be to hold two separate inventories and make sure that each machine went to the right destination. If the Braille dots caused trouble for sighted users, the extra expense might be justified. But they do not.

Mr. Tjoa's question was the title of one of two short papers he submitted in response to what I call the "economic naturalist" writing assignment in my introductory economics course. The specific assignment is "to use a principle, or principles, discussed in the course to pose and answer an interesting question about some pattern of events or behavior that you personally have observed."

"Your space limit is 500 words," the assignment continues. "Many excellent papers are significantly shorter than that. Please do not lard your essay with complex terminology. Imagine yourself talking to a relative who has never had a course in economics. The best papers are ones that would be clearly intelligible to such a person, and typically these papers do not use any algebra or graphs."

Over the years, my students have posed and answered literally thousands of fascinating questions. My favorite was submitted by Jennifer Dulski, who asked, "Why do brides often spend thousands of dollars on wedding dresses they will never wear again, while grooms often rent cheap tuxedos, even though they will attend many formal social events in the future?"

Decades ago, when I first started teaching introductory economics, it never would have occurred to me to give an assignment like this. The idea grew out of my participation in an early pilot program in Writing in the Disciplines, a new pedagogical movement that promises to revolutionize the learning process at every level. The aim of the program, which was sponsored by the John S. and James L. Knight Foundation, was to encourage students to write about concepts they were grappling with in the various disciplines.

The initiative was inspired by the discovery that there is no better way to master an idea than to write about it. Although the human brain is remarkably flexible, learning theorists now recognize that it is far better able to absorb information in some forms than others. Thus, according to the psychologist Jerome Bruner, children "turn things into stories, and when they try to make sense of their life they use the storied version of their experience as the basis for further reflection." He went on, "If they don't catch something in a narrative structure, it doesn't get remembered very well, and it doesn't seem to be accessible for further kinds of mulling over." Even well into adulthood, we find it easier to process information in narrative form than in more abstract forms like equations and graphs. Most effective of all are narratives that we construct ourselves.

The economic-naturalist writing assignment plays to this strength. Learning economics is like learning a language. Real progress in both cases comes only from speaking. The economic-naturalist papers induce students to search out interesting economic stories in the world around them. When they find one, their first impulse is to tell others about it. They are also quick to recount interesting economic stories they hear from classmates. And with each retelling, they become more fluent in the underlying ideas.

Many students struggle to come up with an interesting question for their first paper. But by the time the second paper comes due, the more common difficulty is choosing which of several interesting questions to pursue.

The paper is not a complete substitute for the traditional syllabus. But the lasting impact of the course comes mainly from the papers. When students come back to visit during class reunions, the equations and graphs long since forgotten, we almost always end up talking about the questions they have posed and answered during the intervening years.

To answer her question about wedding dresses, Ms. Dulski argued that because most brides wish to make a fashion statement on their wedding day, a rental company would have to carry a huge stock of distinctive gowns - perhaps 40 or 50 in each size. Each garment would thus be rented only infrequently, perhaps just once every four or five years. So the company would have to charge a rental fee greater than the purchase price of the garment just to cover its costs. In contrast, because grooms are willing to settle for a standard style, a rental company can serve this market with an inventory of only two or three tuxedos in each size. Each suit can thus be rented several times a year, enabling a rental fee that is only a fraction of its purchase price.

Daniel Boorstin, the former librarian of Congress, used to rise at 5 each morning and write for two hours before going into the office. "I write to discover what I think," he explained. "After all, the bars aren't open that early." Mr. Boorstin's morning sessions were even more valuable than he realized. Writing not only clarifies what you already know; it is also an astonishingly effective way to learn something new.

Robert H. Frank has been teaching introductory economics at Cornell University since 1972. He is the co-author, with Ben Bernanke, of "Principles of Microeconomics."

NYT September 29, 2005
Romance Made Electric

By DANNY HAKIM

DETROIT, Sept. 28 - Alexandra Paul, a former star of "Baywatch," is not a satisfied General Motors customer - to put it mildly.

In 2002, G.M. sent a tow truck to her house to reclaim a car she had leased from the company. When it was done, she went inside and cried.

"I've never had any emotional feelings toward a car in my life," Ms. Paul, 42, said in an interview recently. But this particular car was the EV1, a low-slung, battery-power car that zipped out from a standing start without releasing emissions from the tailpipe.

G.M. and other automakers had decided to discontinue their electric vehicle programs that had been started in response to a California clean-air law, contending that they were economically unsustainable. The companies reclaimed most of the vehicles they had leased.

Ms. Paul, who is now making movies for Lifetime, would plug in her EV1 at home through an adapter, and in the seven years she leased the car never stopped at a gas station. She keeps pictures of it in an album.

"To me, it heralded a new wave of people's thinking about cars, maybe a new era of clean cars," she said.

These days, everyone paying $40 or $50 at the gas pump would like a silver-bullet alternative to gasoline. There are none. But devoted pioneers around the country are trying something else - driving cars that do not use gasoline, or even combustion engines.

And this year, while much of the interest in electric motors among major automakers is focused on building gas-and-electric hybrid vehicles, the battery-powered electric car is showing signs of a pulse.

Recently, Mitsubishi said it was developing one for sale in Japan by the end of the decade, and Subaru plans to start testing a prototype version in March. Shinichi Murata, a spokesman for Fuji Heavy Industries, Subaru's parent company, said electric vehicles would be more realistic "if we can develop a high-efficiency, high-performance battery."

Fuji Heavy Industries and other companies are working on that, and the technology can also be used in developing hybrid-electric cars and other variations of the electric vehicle. A futuristic industry project, cars powered by hydrogen fuel cells, would also produce electric vehicles, but ones equipped with an onboard power-generating system fueled by hydrogen.

Battery-electric cars continue to have drawbacks that bedeviled Thomas A. Edison a century ago, in the days when steam and electricity vied with combustion for hegemony under the hood. Even now, a typical electric vehicle travels less than half as far as most gasoline cars before it needs recharging - something that often takes hours.

And they are emissions-free only in the sense that pollution may not come from the tailpipe; power plants that produce the electricity to run the cars generate emissions.

Still, for all their drawbacks, electric cars, like G.M.'s EV1, inspired deep devotion among their drivers. Tens of thousands of vehicles that ran on electricity stored in cumbersome battery packs were produced in the 1990's because of a California regulation forcing automakers to sell zero-emission vehicles in the state.

Some automakers put electric motors under the hoods of conventional vehicles, and enough batteries for 50 miles to 130 miles of driving - Toyota did so with its RAV4 sport utility vehicle and Ford with its Ranger pickup truck.

G.M. built its EV1 from the ground up as an electric car. The vehicles are noticeably different, from the whine of their electric motor to their instantaneous acceleration. "It was like being in a rocket ship compared to the cars I've had before," Ms. Paul remarked.

But these cars have become an endangered species. After California amended its regulations in 2003 in the wake of a legal challenge from G.M. and DaimlerChrysler, automakers began reclaiming and dismantling their electrics as they came off lease. Among other things, they said they would face lawsuits over safety issues if the cars remained on the road without adequate replacement parts.

Electric cars, however, have advantages. Electricity can be domestically produced and is potentially cleaner.

"EV's generally have less of a deleterious impact on climate and urban air quality than do gasoline vehicles," said Mark A. Delucchi, a research scientist at the University of California, Davis, who has studied transportation technologies and fuels. "The only general exception to this would be if relatively dirty coal-fired plants are used, relatively near to cities."

Electric vehicles are also much more efficient in translating energy into motion than gasoline-fueled cars, though higher manufacturing costs to this point have wiped out cost advantages.

And driving them over longer distances also means more expensive batteries. Toyota, which mostly leased the electric RAV4 sport utility vehicle, briefly sold it for $42,000 - more than double the base price of the gasoline-powered vehicle - but they cost the company more than $100,000 to make.

A spokesman for G.M., Dave Barthmuss, said the company stopped producing the EV1 because it had little to show for more than $1 billion in investment.

"We couldn't afford to lose any more money on a program that appealed to a very small number of people," Mr. Barthmuss said. "As great as it was, it would go about 100 miles and take about six to eight hours to charge."

The company has refused offers to sell the vehicles to lessees, like Ms. Paul. Toyota and Ford, though, relented and sold some of their remaining electrics.

People who still drive the vehicles say the auto industry never wanted to give them a real chance, and resented being forced by California to produce them.

"Most of the people who complain about range and recharging time haven't used EV's," said Tom Gage, a former Chrysler engineer who is now president of AC Propulsion, a small company that builds electric cars. "There certainly are times when using an EV would be an inconvenience, but one idea that has to be replaced is the idea that EV's would replace gasoline cars 100 percent. Nobody is saying they will or they should."

Bill Reinert, Toyota's national manager for advanced technologies, said: "Maybe as we make some progress with the batteries, maybe it will result in EV's as an acceptable product.

"Or maybe the conditions regarding transportation throughout the world as a result of, say, geopolitics, will mean that there's a strong case to be made for EV's."

Several hundred electric vehicles are still up and running, mostly in California. Their drivers say admiringly that they are quiet, fast and futuristic.

Ms. Paul has had electric cars since 1990, when she bought an old Datsun that was converted in someone's garage. She had consulted with her friend Ed Begley Jr., another actor-environmentalist.

"I first decided to get an electric car in 1989," the year of the Exxon Valdez oil spill, she recalled. "I was all on my high horse about Exxon, and then I realized hey, you know what, the reason that boat was out there is because I need gasoline for my car. I was part of the problem."

Her perspective on conservation was inherited, she said, from a mother raised in wartime Britain.

"When I go to the grocery store to buy peanut butter," Ms. Paul added, "I check to see if there are any glass containers because to me they're better than plastic."

She and other former EV1 lessees have formed a small but voluble group that has protested the dismantling of their vehicles.

In March, Ms. Paul was arrested during a protest at a Burbank, Calif., installation where G.M. was stockpiling reclaimed EV1's. She and another protester locked themselves in a car parked at the building's exit, blocking trucks that were ready to ferry the cars away. Burbank police officers converged on the scene for more than an hour before jimmying the lock and hauling Ms. Paul and the other protester away to jail. She spent five hours in the lock-up, and received a $1,600 fine and 80 hours of community service.

But she has faced worse: After G.M. took her car away, she could not quickly find an electric car to buy. That meant going back to the gas station.

"It was months, torturous months," she said, before she found a used electric RAV4. In the meantime, she had to drive her husband's Toyota Prius hybrid, which to many Americans is the height of eco-wizardry.

Not to her.

"I'm not particularly impressed with going 50 miles per gallon," she said. "To me in the 21st century, 50 miles per gallon doesn't impress me when we can go to the moon."

NYT September 29, 2005
A Part-Time Office Puts On a Good Face for Clients

By MELINDA LIGOS

Andrea Westmeyer, president of Relationship Marketing Inc., a communications consulting firm, knows how to make a good first impression with Fortune 500 clients. She has a well-appointed office in Rockefeller Center in Manhattan. She has a secretary who answers the phone on the first ring. And she comes across as a seasoned New Yorker - always able to chat about restaurant openings or commiserate about finding a taxicab on a rainy Manhattan day.

But Ms. Westmeyer's company is actually based in Des Moines. She rents the Manhattan office - along with the conference room and the secretary, who diverts her calls to Iowa - by the hour from HQ Global Workplaces, a company that leases part-time office space, so she can meet with clients there a few times a month. Along with her monthly fee comes the privilege of having her company listed in the Rockefeller Center electronic directory and printing the renowned address on her company's business cards.

Why go to so much trouble to make it seem her headquarters are in Manhattan? In a word: prestige. "A Rockefeller Center address gives clients a certain level of comfort," she said.

It is a trick a lot of entrepreneurs are discovering, not only to impress clients but also to gain affordable space for meeting clients, or just getting mail, in cities where office rents are going through the roof. "Small-business owners don't want to add overhead just for the sake of adding overhead," said Mark Dixon, chief executive of the Regus Group, which rents out offices and conference rooms by the hour in more than 750 "flexible workspaces" around the world (including one in Ms. Westmeyer's building in Rockefeller Center). "They may only need an office occasionally when they're meeting with clients, and they don't have thousands of dollars to spend to do it."

Mr. Dixon said demand for his company's spaces had grown by 25 percent in the last two years, with about 35,000 tenants in the United States alone. He says he believes one reason for heightened interest is the rising cost of office space in most major cities. According to a July report by Cushman & Wakefield, the commercial real estate firm, Manhattan vacancy rates in mid-2005 dropped to the lowest levels since the fourth quarter of 2001 and rents have surged 22 percent, to $48.21 per square foot, from $39.55 in 2004. Signing a lease at those rates "can be a risky proposition if your company is just getting off the ground," Mr. Dixon said.

In Boston, too, entrepreneurs faced with skyrocketing office rents are looking for alternatives, said Phil Montero, the founder of YouCanWorkFromAnywhere.com, a consulting firm in North Andover, Mass., for companies with workers at remote locations. "You could spend thousands of dollars per month for a not-that-great space here," he said.

By contrast, part-time office space, along with a secretary to relay calls to you, can cost as little as $300 a month and $7 an hour for the time you actually spend in it. Use of fax machines, photocopiers and conference rooms is extra.

"The fees are negligible for someone who wants to portray a professional image but can't afford the cost that comes along with it," Mr. Dixon said.

That is why Matthew Tuttle, president of Tuttle Wealth Management, leases part-time space from one of the Regus Group's centers in Stamford, Conn. Mr. Tuttle spends most of his time working out of his home in Greenwich, Conn. But with a wife and three children under the same roof, he views his home office as an inappropriate place for meeting his wealthy clients.

"Image is very important to me, and my office has to look impressive," he said. For about $2,000 a month, Mr. Tuttle maintains part-time office space in an office that "looks like an executive suite at Goldman Sachs." For that price, he also gets a secretary who transfers his calls, confirms appointments for him, sorts his mail and "does anything else I need her to do."

Since the same woman performs the same duties for so many other entrepreneurs, he says, "I pay about 1 percent of her salary, yet I get all of the benefits of a full-time secretary. If she leaves, I don't have to replace her - and I don't have to pay her any benefits."

Mr. Tuttle said he could probably find full-time office space in Stamford for about the same price, but "it wouldn't be nearly as swanky as what I have. It would have cheap furniture and probably be sort of seedy."

For Scott Testa, chief executive of Mindbridge, a software company in Norristown, Pa., the issue is less about impressing clients and more about finding a quiet meeting spot. Mr. Testa has about 100 employees scattered throughout the country, many of whom work out of their homes. Some live in metropolitan areas and rent office space by the hour when they need to see clients or work with one another on a project. "We've all done the 'meet at a coffee shop' thing, but that leaves little room for privacy," he said.

While presenting a positive image and cutting down on costs are the primary reasons small-business executives opt to rent part-time office space, there's also less risk, said Mr. Montero of YouCanWorkFromAnywhere.com. He says entrepreneurs looking to expand into new regions often find part-time office space appealing. "If a small company based in Boston is looking to expand on the West Coast, it might hire a sales rep to work from home but occasionally meet with clients in a part-time office in San Francisco," he said. "If it doesn't work out, you can simply close up shop without a lot of expense."

Many small-business owners say there's a side benefit to renting part-time office space: "You get to hobnob with other entrepreneurs," said Ben Dattner, president of Dattner Consulting in Manhattan and an adjunct professor at New York University. Because there are typically dozens of entrepreneurs in close proximity in such spaces, Mr. Dattner said, "a lot of very productive mingling goes on."

While renting temporary office space a few years ago on Park Avenue, Mr. Dattner rubbed elbows with a number of dot-commers, as well as a high-ranking executive with close ties to Senator John McCain, the Arizona Republican. "We all had that start-up mentality going on, so we weren't afraid to share marketing strategies or names of good accountants," he said.

NYT September 29, 2005
Chevron Oil Platform Is Adrift in the Gulf

By JAD MOUAWAD

Five days after Hurricane Rita made landfall, the extent of the damage to offshore oil operations in the Gulf of Mexico sharpened yesterday after Chevron indicated that one of its three large platforms had capsized after losing its moorings.

The deepwater platform, called Typhoon, was spotted Sunday drifting nearly 80 miles from its original position, a Chevron spokesman, Mickey Driver, said. The company had first said on Monday that Typhoon had been "severely damaged."

"We want to find out what happened, obviously," Mr. Driver said, "and what caused it to lose its moorings, whether it was the winds or the waves, we will try to determine that."

Offshore platforms, especially those that operate in deep water, are designed to withstand the most severe storms. Typhoon's accident came a few weeks after Royal Dutch Shell, the largest operator in the gulf, said that its Mars platform, which accounted for 15 percent of the gulf's oil production, had been damaged by Hurricane Katrina.

After initial relief that Hurricane Rita had largely spared the oil and gas industry, analysts are becoming increasingly concerned about how quickly oil and gas production can be restored.

Those worries pushed up energy prices in New York yesterday with natural gas futures closing at $13.90 a thousand cubic feet, up 9.8 percent, after touching $14.80 earlier in the day. Oil futures jumped 2 percent and closed at $66.35 a barrel.

The gulf's entire oil output of 1.5 million barrels a day, as well as 80 percent of the natural gas production, which is typically 10 billion cubic feet a day, remained shut out yesterday, according to the Department of the Interior.

The Department of Energy said in its weekly report that it expected about 15 percent of the nation's refining capacity to be out of service for "at least another couple of weeks."

Hurricane Rita disrupted production after it made landfall close to the Port Arthur-Lake Charles region, where about 10 percent of the nation's refining capacity is concentrated.

Hurricane Katrina, which hit New Orleans a month ago, shut down four refineries that account for 5 percent of the country's capacity. Chevron expects that Hurricane Katrina will cost it more than $350 million in damages and lost production. The company has not yet estimated the cost of Hurricane Rita to its business.

The company said its two remaining platforms, Genesis and Petronius, did not appear to have been damaged. Typhoon, a $250 million tension leg platform, was operating in 2,100 feet of water about 165 miles southwest of New Orleans.

NYT September 29, 2005
After Hurricane Katrina, a Bank Turns to Money Laundering

By KEN BELSON

GULFPORT, Miss. - The scene would make a mob boss proud: workers in a windowless hallway scoop armfuls of grimy cash out of plastic garbage bags and sling them into a washing machine. Others fill the dryers and iron the clean bills. Nearby, a half-dozen women count the freshly pressed bills and bundle them into thousand-dollar wads.

In an era of cashless and instantaneous transactions, this laundering operation, which has been up and running since shortly after Hurricane Katrina hit on Aug. 29, is no mirage. In fact, it is part of the recovery process for one of Mississippi's largest financial institutions, Hancock Bank, which like most banks in Katrina's path is still repairing its network.

Hancock Bank's branches in the worst-hit areas had no phone or data lines or power for weeks. Bank tellers could not find account balances or swap crucial information with the bank's backup data centers in Baton Rouge, La., and Chicago. Automated teller machines were inoperable.

About 90 of the bank's 103 branches in the New Orleans area and along the Mississippi coast were damaged in some way. Many of them lost connections to the main data center in the company's headquarters in Gulfport, which was shattered. Most branches are now functioning again, but seven were smashed and have been temporarily replaced by mobile operations in R.V.'s.

"We've moved a $5 billion bank in three days to four states," said John Hairston, the bank's chief operating officer. "It will take up to at least half a year to reconsolidate."

Katrina also forced the Federal Reserve operations in New Orleans to move to Atlanta, making it harder for Hancock Bank to get fresh cash to meet surging demand. To remain liquid, the bank recovered millions of dollars from its A.T.M.'s, night deposit boxes and vaults that had filled with water and silt - and washed and dried the cash as fast as they could. "We're doing it the old-fashioned way," Mr. Hairston said.

Even for Hancock, which has endured hurricanes for a century, the storm exposed how dependent banks have become on telephone and power networks. Without them, Hancock was forced back to the 1960's, before centralized computers at corporate data centers turned branches into satellite offices.

Still, banks on the Gulf Coast, like Hancock, typically fared better than many other businesses because they are required by federal law to keep backup copies of their data. Their disaster recovery plans are also tested and audited frequently. Hancock has a full-time manager - whom executives jokingly call Dr. Doom - to keep the bank's equipment and plans current.

Even so, the bank was overwhelmed because the telecommunications providers, including BellSouth, that support its networks were knocked out by flooding in New Orleans and the storm surge that engulfed Mississippi.

"The banking industry is extraordinarily prepared, but there's no way to keep all operations up and running when they are under the water," said Scott MacDonald, chief executive of the Southwest Graduate School of Banking at Southern Methodist University in Dallas.

One problem, Mr. MacDonald said, is that most banks are regional, not national, so their offices and networks are heavily concentrated in one area and thus susceptible to being knocked offline during big storms. When phone and power lines go down, they can lose connections with their backup data centers, even if those are in distant states.

Hancock, which has branches from Tallahassee, Fla., to Alexandria, La., has an operations center in Baton Rouge and backup computers in Chicago, which are maintained by SunGard, the financial processing company. This set-up allowed the company to get its A.T.M.'s and branches outside the affected areas running a few days after the storm.

But without Internet connections to the branches in the hard-hit areas, tellers there were forced to write customers' names, account numbers and the amounts they withdrew on pieces of paper. The chits and checks were driven to Baton Rouge overnight, where workers - more than 100 of whom are bused in from Gulfport daily - typed the data into computers.

Hancock worked with BellSouth to reconnect its local branches and the headquarters with the backup computers in Chicago. The lines were not restored until Sept. 15, or 17 days after the storm. To make sure the A.T.M.'s worked, Corrine Buchholz drove down to the machine at the Crossroads branch near the company's abandoned headquarters.

"We were dancing in the driveway," said Ms. Buchholz, who oversees the A.T.M. network at the bank.

Customers were so hungry for cash that within seconds, cars driving on Highway 49 nearby spotted her and made U-turns in traffic to get in line at the carport.

"If people can get their balance and some cash, they feel better," she said.

Mr. Hairston said service would have been restored in less than a week if federal regulations had not forced BellSouth to handle other customers first. To speed restoration efforts during emergencies, the Department of Homeland Security assigns agencies and companies a Telecommunications Service Priority code. The executive branch of the federal government is at the top of the list; other agencies and utilities follow.

Banks are typically in the fourth tier. As a result, when a group ahead of Hancock asked BellSouth for help, the phone company stopped work and moved elsewhere.

A month after Katrina, much has been done. In addition to restarting A.T.M. service in Gulfport, the bank's command center now has landlines. It has 120 phone lines at Hancock University, the company's training center, thanks to a digital router that BellSouth installed.

Before that, employees relied entirely on cellphones.

After several weeks of sleepless nights, the bank's technology manager, Walter Hatten, now has time to assemble a to-do list. First on the list: Set up a new data center, most likely north of Interstate 10, which runs parallel to the coast, but was far enough north that the storm waters did not reach it. A storm might knock out power or phone service there, but the equipment and building would be unlikely to be damaged.

Or so they hope.

NYT September 29, 2005
A Mogul Who Would Rebuild New Orleans

By GARY RIVLIN

BATON ROUGE, La., Sept. 28 - Many of the business elite of New Orleans seem preoccupied these days by what some here simply call The List - the chosen few Mayor C. Ray Nagin is expected to name on Friday to a commission to advise him on the rebuilding of the stricken city. Almost certain to make the grade is the real estate mogul Joseph C. Canizaro, the man best known for bringing high-rises to the New Orleans skyline.

Mr. Canizaro has emerged as perhaps the single most influential business executive from New Orleans. One fellow business leader calls him the local Donald Trump. But Mr. Canizaro derives his influence far less from a flamboyant style than from his close ties to President Bush as well as to Mr. Nagin, and that combination could make him a pivotal figure in deciding how and where New Orleans will be resurrected.

Mr. Canizaro has not only secured a coveted spot on the commission, those who have seen the list said, but he has played a critical role in shaping it. At a state Senate hearing held in Baton Rouge on Wednesday, Mr. Nagin confirmed that he would be naming an advisory panel, but that he had not completed a list.

New Orleans is a town where generally it helps to have local roots that go back at least one or two generations, if not back to the days before the Louisiana Purchase. Mr. Canizaro first arrived in New Orleans in the mid-1960's, when he was in his 20's.

Yet despite his status as a relative newcomer, Mr. Canizaro's stature has grown because of his political influence, the force of his personality and his record of public service to the city where he has lived for 41 years.

Like Mr. Trump, he has celebrated the ribbon-cutting of buildings that have achieved iconic status in New Orleans, and has faced down bankruptcy, only to emerge so financially strong that he recently moved into a home that Lt. Gov. Mitchell J. Landrieu described as "perhaps the nicest house in all of Louisiana." That home, which took four years to build and resembles a European palace, was severely damaged by three feet of water that flooded his neighborhood just west of the city.

Mr. Canizaro is inclined to view the flooding of New Orleans as both a tragedy and an opportunity. He notes that the city's schools were substandard, its housing stock crumbling and its crime rate among the nation's highest. "I think we have a clean sheet to start again," Mr. Canizaro said. "And with that clean sheet we have some very big opportunities."

Like many in the city's establishment, Mr. Canizaro declined to give his vision for a new New Orleans. But many locals expect Mr. Canizaro will use as a starting blueprint a report from the Committee for a Better New Orleans that he and other civic leaders have sitting on their shelves. In 2000, he started that committee, which brought together more than 100 business and community activists to talk about everything from the poor state of the city's schools to the high crime rate and preponderance of dilapidated buildings.

"Joe was very involved, coming to every meeting, really pushing people to come up with concrete proposals," said Norman C. Francis, the president of Xavier University, the nation's only historically black Catholic university. "Joe is a can-do guy; he's a go-getter, a doer," said Mr. Francis, who co-led the committee with Mr. Canizaro.

Over the years, Mr. Canizaro has socialized with the president, a man he describes as a friend. And Mr. Bush no doubt appreciates the hundreds of thousands of dollars Mr. Canizaro has contributed to the Republican Party, according to campaign finance records. In 2004, he attained Ranger status in the Bush campaign - someone who raised at least $200,000 for the president's re-election.

Mr. Canizaro said he was not acting as a formal intermediary between the president and local leaders, and had not spoken directly to Mr. Bush since Katrina struck.

But he said he had kept in regular contact with Mr. Bush's top aides. "I've been having conversations with people around the president, for guidance and direction and commitment and support," he said. "I've been trying to help out in that way."

The city's other business leaders assume that his connections are sterling. One prominent local business leader, who declined to be named for fear of jeopardizing a slot on the commission, was downright giddy that his name was on a draft list of names Mr. Canizaro was circulating last week.

"From what I understand, Joe is the prime mover on this thing, at least as far as the business members' portion of the commission," this person said.

"The general perception is that Joe, as someone locally who has the president's ear, will be playing a particularly critical role as we start getting down to the work of rebuilding the city," said J. Stephen Perry, a former gubernatorial chief of staff who now heads the New Orleans Convention and Visitors Bureau. While Mr. Perry is expected to be an important player as the city rebuilds, his name was not on the list as of midweek.

Since Katrina, Mr. Canizaro has spent much of his time in Utah, where he owns a second home. In mid-September, when the mayor invited a group of business leaders to Dallas to discuss the city's future, the mayor took the time for a phone conversation with Mr. Canizaro.

"It was an incredible thing to witness," said one participant in the Dallas meeting, who did not want his name used because he was talking about a private gathering. "The mayor stood there on the phone, nodding and jotting down notes, as if Joe were passing on bullet points directly from the president."

Mr. Canizaro, who earlier this year hosted a fund-raiser in his home for the mayor, tiptoed around the topic of his behind-the-scenes role. Only when pressed did he acknowledge that he is fully engaged in the creation of the advisory council: "The mayor and I have spoken numerous times about getting the commission together," he said, but he stressed that ultimately the mayor, and no single private individual, would fill out its roster.

"This is the mayor's thing," he said, over a breakfast of ham and eggs in Baton Rouge last week. "I'm just doing what I can to help."

Mr. Canizaro is on the short side but has a strong jaw and steely gray hair and a clipped, authoritative way of speaking that suggests he is accustomed to giving orders. At breakfast, he was constantly in motion, his leg bobbing as he played with his eating utensils and fiddled with whatever was within reach.

Of course, other business leaders are expected to play a central role in the rebuilding of New Orleans. One is Donald T. Bollinger Jr., who runs Bollinger Shipyards, based in Lockport, Miss., and who confirmed that he had been asked to serve on the commission.

Mr. Bollinger, who splits his time between homes in New Orleans and others scattered around the Gulf Coast, is also prominent in Republican circles in Louisiana. His résumé includes a long list of community activities, including a stint as chairman of the local United Way and a turn as the head of Citizens for a Better New Orleans.

"I'm a friend of the president's, but I don't know if that was the governing factor in my name ending up on the list," Mr. Bollinger said.

The list also includes several prominent African-American business leaders, including Alden J. McDonald Jr., the chief executive of the Liberty Bank and Trust Company, and Daniel F. Packer, the chief executive of the New Orleans subsidiary of the Entergy Corporation, which filed for bankruptcy protection last week.

Scott Cowen, the president of Tulane University, who first arrived in New Orleans in 1998, is also expected to be named to the mayor's commission. "A few decades ago, New Orleans was the kind of closed community where unless you were born and raised here, you couldn't have much influence," Mr. Cowen said. "In recent years, that's clearly changing. As a result, people like Joe Canizaro and others can have much more influence than they would have had a decade or two ago."

Mr. Francis, the Xavier University president, said he, too, had been asked to serve on the mayor's commission but declined because he had already committed to serving on a similar group being formed by Gov. Kathleen Babineaux Blanco.

While in New Orleans last week to visit his home and check on his various business interests, Mr. Canizaro met with Mr. Nagin. Among other things, he stressed his belief that any commission must consist of an equal number of representatives from both the black and white communities.

"We in the business community must realize that we need to work with the balance of the community, particularly our African-American associates, to help develop a plan for the revival of the city," he said. Unless the discussions encompass a more wide-ranging group, he said, stabbing a meaty finger in the air to drive his point, even the best-intentioned efforts would probably fail.

When asked if he thought racial balance might prove controversial with conservatives, he responded, "I can assure you the president feels the same way."

Mr. Canizaro, the oldest of eight children, said he left Biloxi, Miss., in 1963 because he felt his opportunities there were limited. In the ensuing decades, he has built a number of large projects that have come to define New Orleans, including the 500-room Ritz-Carlton hotel and an office-condominium project called Canal Place. He is best known for constructing a cluster of high rises on Poydras Street, including the Texaco Center and LL&E Tower, which helped create a new corridor of commerce in the central business district.

Mr. Canizaro thrived through the first half of the 1980's, when the city was awash in oil money. But when oil prices dropped sharply in the mid-1980's, some of his more ambitious projects sat largely empty, and more than a few tenants were forced to break their leases.

"I definitely went through some hard times," Mr. Canizaro said. "I came close to bankruptcy."

He survived through a combination of stubbornness - he refused to lower his rents - and the good will of some creditors, including Citicorp, that did not demand repayment of their loans. After surviving the downturn of the 1980's, he diversified by forming the Firstrust Corporation, a bank holding company that acquired banks in and around New Orleans, and in 1998 he founded Corporate Capital, a venture capital firm.

NYT September 29, 2005
Tom DeLay Behind the Curtain

The criminal conspiracy indictment of Tom DeLay, the House majority leader, remains to be tested in a court of law, and Mr. DeLay adamantly says he is innocent. He is also loudly denouncing the prosecution as baldly political. But it might be easier to take that seriously if the Republican leadership in Congress had not staged such a baldly political response.

Mr. DeLay should simply have resigned as majority leader, as Republican rules require and as others have done in this position. Instead, the House speaker, Dennis Hastert, called the move temporary, did not actually replace him and made it obvious to everyone that Mr. DeLay would run the show from the wings. Leaving aside the rather comical hypocrisy of the Republicans, who started hounding Representative Dan Rostenkowski from office even before he was indicted in 1994, this display was unnecessary. It would hardly have provoked a constitutional crisis for Mr. DeLay to resign from a purely partisan post, for which no ordinary American casts a vote, in a House held in an iron grip by his party.

Win or lose in court, Mr. DeLay should be permanently stripped of his leadership powers. The imperious Texan is an increasing embarrassment to his party, turning its majority into an undisguised fountain of patronage and an ideological cudgel while skirting the bounds of campaign law. The underlying deed that prompted the Texas indictment is reason enough for him to relinquish leadership. Mr. DeLay was open in his stratagem of using his federal clout to game state elections in Texas and force an unusual and legally dubious gerrymander to cushion the Republican Congressional majority.

Mr. DeLay's tooth-and-claw tactics taint his whole party. His role as a millstone in the coming elections will only grow in the eyes of gleeful Democrats and other critics who have long called for the moribund House ethics committee to investigate various aspects of the DeLay machine. These include his overseas junketeering with the power lobbyist Jack Abramoff, who has been indicted in another case. Mr. DeLay's indictment is a reminder of the committee's failure to enforce its own rules.

It's long been clear that the political damage to Mr. DeLay has been self-inflicted. His value as a leader was compromised well before his run-in with the prosecutor in Texas.