February 8, 2002

Credit-rating agencies, independent securities analysts that pass judgment on company's financial fitness, saw signs of Enron Corp's deteriorating finances last May, but agencies--Moody's Investors Service, Standard & Poor's and Fitch Ratings--did little to warn investors until at least five months later, long after more problems had emerged and Enron's slide into bankruptcy had accelerated; role of ratings agencies, which are unregulated and consider themselves publishers rather than self-regulating professionals like accountants or lawyers, has come under scrutiny since Enron filed for bankruptcy protection in December; Arthur Andersen chief executive Joseph F Berardino says Congress should examine actions of agencies, saying that they 'played a significant role' in Enron's failure; Securities and Exchange Commission chairman Harvey L Pitt has testified that agency is 'looking at how rating agencies perform,' given their 'enormous impact on the stock market'; graph (M)

Air Canada reports fourth-quarter net loss of 380 million Canadian dollars ($236.9 million) compared with loss of 274 million Canadian dollars year earlier; chief executive Robert Milton pledges aggressive program of cost and debt reduction; photo (S)

Enron's Ex-Chief Testifies But Is Sharply Contradicted Lawmakers heard sharply conflicting testimony from Enron's former chief executive, Jeffrey K. Skilling, who portrayed himself as ignorant of the company's questionable practices, and other executives who said he received numerous and specific warnings that Enron's off-the-books partnerships were improper. Mr. Skilling's testimony, met by hostile questioning and harsh skepticism from lawmakers, came after a parade of current and former Enron executives who invoked their Fifth Amendment right against self-incrimination rather than explain the partnerships at the center of Enron's collapse. [Page A1.]

Many pastors of Lutheran Church-Missouri Synod sharply criticize Rev David Benke, Lutheran leader in New York, for participating in national prayer service at Yankee Stadium following Sept 11 terrorist attacks; he is accused of tolerating syncretism, or combining of Christian and non-Christian views, and such charges could lead to his dismissal; Benke rejects accusations, but church will investigate further; photos (M)

Japan's Home Affairs Ministry reports residential land prices will probably fall 5 percent in fiscal year beginning April 1, continuing 10-year decline (S)

Irv Gordon comments on driving same 1966 Volvo for nearly 2 million recorded miles in continual, heavy use; he credits routine maintenance for car's longevity; photos (M)

People who live within half mile of World Trade Center face series of questions and choices about how to live in altered place and how to assess environmental risks that proximity to disaster site and cleanup project may entail; community leaders estimate that 75 percent of roughly 20,000 people have returned to their homes since Sept 11 disaster; many residents face diversity of views about safety of air, and no answer seems certain, scientifically airtight or obvious; individual tenants, owners and workers have been left to determine for themselves how to clean contaminated apartment or office, whether to pay for expensive tests or filters, whether to worry about how well neighboring apartments or offices have been cleaned; residents with young children are particularly concerned about safety of their homes; photos (L)

Mayor Michael Bloomberg is reconsidering plan to move Museum of the City of New York from East Harlem to renovated Tweed Courthouse in Lower Manhattan; some his aides say it may be used for office space, much to dismay of former deputy mayor John Dyson who says it would be silly to use it for that purpose after $80 million restoration; photo (M)

Opening ceremonies for 19th Winter Olympic Games to be held in Salt Lake City on Feb 8; games have newly heightened profile in United States, which is poised to become Winter Olympic power for first time; US team could win as many as two dozen medals, based on recent international results; photos (M)

European Central Bank president Wim Duisenberg says he will retire in July 2003, opening new phase in what is already tangled succession struggle; announcement does not resolve intensely political question of his successor, issue that French and German leaders thought they had settled more than three years ago; France's Pres Jacques Chirac badly wants next president to be Bank of France governor Jean-Claude Trichet; Trichet remains entangled in criminal investigations of collapse and bailout of French bank Credit Lyonnais in early 1990's; European leaders have not challenged widespread presumption that Duisenberg's successor will be French; economists say succession struggle is unlikely to have any impact on monetary policy or on exchange rate of beleaguered euro; photo (M)

Harvey Araton Sports of The Times column examines first-time drug testing practices at 2002 Winter Games; medical director of doping control Doug Rollins will administer about 850 drug tests before events commence; photo (M)

Lawmakers hear sharply conflicting testimony from Enron's former chief executive Jeffrey K Skilling, who says he knew nothing of company's questionable practices, and other executives who say he got many warnings about Enron's improper off-the-books partnerships; parade of current and former Enron executives appear and invoke their Fifth Amendment rights against compelled self-incrimination rather than explain partnerships at center of company's collapse; refusal to testify by Andrew S Fastow, Enron's former chief financial officer, and three others provides rich tableau of far-reaching consequences of Enron's collapse; Skilling tells openly skeptical lawmakers that on day he left company, Aug 14, he believed company was in strong financial condition; Rep Clifford B Stearns cites conflicting evidence and testimony and accuses Skilling of practicing 'plausible deniability'; photos (M)