January 19, 2002

Enron Chief Went Online To Urge Stock Purchase More than a month after an Enron vice president warned that the company might be an ''elaborate accounting hoax,'' chairman Kenneth L. Lay used an online chat to urge employees to buy Enron shares, a transcript of the session shows. Mr. Lay, who apparently disposed of some Enron stock himself within days of receiving the warning, assured employees in the chat session that executives were convinced that Enron's finances were legal and appropriate. But he did not mention the issues raised by the company vice president, who warned of serious accounting problems. [Page A1.]

Arthur Levitt Jr, former chairman of Securities and Exchange Commission, recalls warnings and threats he received from dozen senators when he tried to impose tough conflict-of-interest rules on accounting industry two years ago; says barrage of high-powered lobbying reflects political influence of industry, which ultimately succeeded in weakening his proposals to reduce potential conflicts of interests at accounting firms; battle waged against Levitt, which he calls most intensive and venal in his 8 years as SEC chief, shows how difficult it may be for more stringent proposals to be adopted, even in wake of revelations of document destruction at Arthur Andersen, auditors for Enron Corp, and losses of more than $60 billion by Enron shareholders; photo; graphs showing political contributions of accounting firms (M)

Many families in Herculaneum, Mo, where one-fourth of children under 6 have lead poisoning, say relocating them while cleanup is under way is not enough; they want Doe Run Co, owner of smelter, to buy them out of their homes; relocation offered to families renews decades-old questions over dangers of lead, which is believed to hamper intelligence and contribute to kidney failure; people in Herculaneum believe it is also responsible for clusters of brain cancer and multiple sclerosis around town; Doe Run, subsidiary of Renco Group Inc, spent $15 million in last year to clean up Herculaneum, where its smelter produces 160,000 tons of lead a year; it has reduced emissions from stack to projected 34 tons this year from 81 tons last year, and 800 tons generation ago; company has purchased 60 local homes in last decade, and 24 more families want to be bought out; company has been working with regulators for years to ease problem of contamination; no one know why issue has heated up so over course of last six months; photos; map (M)

Analysis of demise of Talk magazine; co-founder Tina Brown comments, interview; others in magazine industry question if venture, backed by Disney's Miramax Films and Hearst Magazines, was doomed from start; photo (M)

Enron chairman Kenneth L Lay urged employees to buy Enron shares more than month after being warned by Enron vice president Sherron S Watkins that company might be 'elaborate accounting hoax'; Lay himself apparently disposed of some Enron stock within days of receiving Watkins' warning, but in online chat session with employees he assured them that company's finances were legal and appropriate, and did not mention that he had asked Enron's outside law firm, Vinson & Elkins, to review Watkins' claims; ultimately, Enron restated nearly $600 million in profits over four years, largely because of issues raised in Watkins' letter to Lay; earnings restatement, and other negative financial disclosures, put company on path to filing for bankruptcy protection in Dec; photo; excerpts from Lay's online question and answer session with employees (M)

Thousands of people who have been able to return to their offices ringing World Trade Center must decide every day whether to gaze at or avert their eyes from place where towers once stood; some find it unnerving to look out their windows, and at least two companies offered to move any employee who faces site to another part of office; others have accepted, even embraced, wrenching rooms with view, finding solace in changes below; photo (M)

Preliminary Vinson & Elkins law firm probe for Enron Corp of Enron collapse finds board was actively involved in key decisions that may have led to company's downfall; notes board, whose prominent and financially sophisticated members include Wendy L Gramm, Lord John Wakeham and Norman P Blake Jr, suspended Enron's ethics code to approve creation of partnerships between Enron and chief financial officer Andrew S Fastow that kept significant debt off Enron's books and masked much of what was really going on at company; board's role raises concerns that director Herbert S Winokur Jr is member of special committee probing collapse; tables of biographical data on board members; photos (M)

Sports of The Times on Donovan McNabb, high school star quarterback in Chicago who is returning to city after leading Philadelphia Eagles to win over Tampa Bay in playoff game; photos(M)

Secretary of State Colin L. Powell ended his South Asian cross-border diplomacy saying he had received strong signs from India and Pakistan that tensions were decreasing. But he reached no concrete agreements on easing their military standoff. Article, Page A6.

New York City police arrest Vincent Rodriguez in shooting that wounded two classmates Andre Wilkins and Andrel Napper at Martin Luther King Jr High School; in taped and written statements, Rodriguez describes how he planned and executed shooting, which points to lax security at school; police are able to trace handgun used to batch of pistols sold during late 1980's and early 1990's; friends and neighbors of Rodriguez comment; photo (M)

Residents of West Village in Manhattan say they are fed up as neighborhood is overrun with truculent groups of drug dealers and transvestite prostitutes; they are critical of police and local government officials for not doing more to help; as other adjacent areas are being developed, prostitution has moved to West Village; local government leaders, many of whom are gay, express concern at being construed as anti-gay or racist if crackdown occurs, however, residents are concerned with safety; photos (M)

Analysis of impact of Enron Corp's collapse on its auditor, Arthur Andersen LLP; firm's business could erode in crisis of confidence if too many of its clients decide its future is uncertain and switch auditors; firm has resources to combat suits from Enron creditors and shareholders; some clients say they will stand by firm; potentially at risk are thousands of jobs among firm's 85,000 employees in 84 nations; map; photo (M)