May 31, 2002

dA

Caisse de Depot et Placement du Quebec for most of its 36 years has seen no conflict between its role as government agency promoting economic independence for Canada's French-speaking province and its obligation to seek highest return for millions of Quebecers who entrust their retirement savings to government-sponsored plans; juggling act has become increasingly difficult to defend as Caisse has moved beyond its Quebec roots in quest to become global asset management powerhouse; Quebec government, spurred by criticism over some investments and recent lackluster performance, has named Henri-Paul Rousseau, president of Laurentian Bank of Canada, to replace Jean-Claude Scraire as agency's chairman and chief executive; agency has played crucial role in Quebec's economy, especially in helping it to recover from flight of businesses and capital from Montreal to Toronto after separatist Parti Quebecois first took power in 1976; Caisse has become Canada's biggest institutional investor and real estate owner; agency's investments outside Canada have grown to 40.3 percent of of its total last year from just under 15 percent in 1992 (M)

Shareholders of MobilCom hand vote of no confidence to company's chief executive Gerhard Schmid after inquiry ordered by France Telecom found that stock option plan he proposed broke German securities rules; MobilCom's shares fall 14 percent after Schmid admits he violated rules by failing to give finance chief Thorsten Grenz enough information about option program; vote further erodes Schmid's credibility and gives France Telecom's chief executive Michel Bon upper hand for control of MobilCom (S)

European Parliament passes data protection law that civil liberties campaigners, telecommunication companies and Internet industry representatives condemn; law allows 15-member European Union states to force Internet and telecommunications service providers to retain data on their customers' online and phone activity beyond one or two months information is normally stored for billing purposes; also bans spam, or unsolicited e-mail advertisements (S)

Pres Bush will send Defense Sec Donald H Rumsfeld to India and Pakistan in effort to defuse threat of nuclear war between longtime enemies; makes strongest demand yet that Pres Pervez Musharraf of Pakistan crack down on infiltration of terrorists into India, amid growing alarm that five-month-long military buildup has reached new point of crisis; Sec Colin L Powell is sending his deputy, Richard L Armitage, to region next week; Bush has been praising Musharraf for his pledge to clamp down on Islamic extremists who carry out attacks on Indian civilians along line of separation, and newly harsh tone appears aimed at assuaging Indian rage over incursions; Bush also warns remnants of Al Qaeda thought to be gathered in western Pakistan not to exploit India-Pakistan conflict to make trouble along Pakistan's western border (M)

Schools Chief Stays, for Now Mayor Bloomberg announced that he and Schools Chancellor Harold O. Levy had agreed that Mr. Levy would stay on while the mayor searches for his successor. PAGE B1 More Portraits of the Artist The National Library of Ireland spent $11.7 million for a big collection of James Joyce manuscripts. PAGE E5

Philippine economy expanded 3.8 percent in first quarter of year compared with first quarter of 2001; graph (S)

Collapse of agreement last week for Hutchison Whampoa and Singapore Technologies Telemedia to make bid for Global Crossing is being attributed to actions by J P Morgan Chase that may have soured transactions; J P Morgan is leader of group of banks that face potential losses on more than $2 billion in loans to Global Crossing; letter that J P Morgan sent on May 24 to Asian companies is described by several people involved in talks as move that led to breakdown of deal (M)

Bush administration wants to replace existing air quality controls and apply 'emissions trading' to other pollutants; environmentalists and economists warn that administration's 'Clear Skies' initiative, while generally promising improvements, threatens to intensify pollution in certain 'hot spots,' and could create poor incentives for businesses; in 1990's, sulfur dioxide levels fell broadly but they barely changed from Columbus, Ohio, to northern West Virginia; companies paid to pass on their obligations to reduce pollution in some of worst spots; David D Doniger, former EPA official who now sets policy at Natural Resources Defense Council, warns that abandoning existing safeguards would not only encourage concentrations of other pollutants it could even allow some plants to increase harmful emissions; Pres Bush hopes to cut pollution even more by letting electric utilities cut deals; diagram (M)

Asia hosts World Cup for first time, but presence of favorite contenders like France, Argentina, Italy and Brazil, make exotic settings in South Korea and Japan seem more familiar; photos (M)

South Korea's new $5.6 billion Inchon International Airport will clearly convey nation's soaring economic ambitions to 300,000 visitors expected for monthlong World Cup soccer championships; passenger terminal is linchpin of wider bid to make Seoul transportation and business hub; airport has already embarked on $3.6 billion project to add third and fourth runway by 2020 and to expand its passenger and cargo terminals; another $1 billion project will link Inchon by high-speed rail to airport it replaced--Kimpo, now used for domestic flights--by 2005 and downtown Seoul by 2007; photo of South Korean police SWAT team practicing security measures at airport in preparation for World Cup visitors (M)

People who manage vacation homes shared by number of people paying thousands of dollars for their rooms must resolve issues that may seem small but can loom very large over course of summer; unpaid bills, overcrowded houses, no rules, bounced checks and suits can all result from inept management; managers rent or buy house, pick people who will share it, handle cash flow and deal with mix of personalities; photos (M)