August 3, 2002

Defense Sec Donald H Rumsfeld, moving to strengthen his control over military's intelligence apparatus, proposes civilian post reporting directly to him to manage vast operation that accounts for nearly 80 percent of overall intelligence budget; his call to establish post of undersecretary for intelligence potentially sets up turf war with Central Intelligence Agency head George J Tenet for dominance over American intelligence community; he is expected to name his special adviser on intelligence policy, Richard L Haver, to post; Haver says post is intended to make it easier for Pentagon and Central Intelligence Agency to work together, interview; says he was never asked for his views on whether to replace Tenet when he was in charge of intelligence policy for Bush transition team (M)

Wall Street is beginning to expect Federal Reserve will cut interest rates against next few months in effort to stave off double-dip recession; Federal Reserve's open market committee meets on Aug 13, and market consensus is that it will not move then; futures market indicates that there is better than 50 percent chance that Fed will cut rates by quarter point at its September meeting (M)

New York City officials propose swap in which city would take over World Trade Center site in exchange for giving land beneath La Guardia and Kennedy Airports to Port Authority of New York and New Jersey; there is no certainty that agreement will be reached; deal would give control of process of rebuilding Lower Manhattan to city and state without worries about whether revenues from commercial space at trade center site would satisfy financial needs of Port Authority or New Jersey; details of proposal discussed (M)

New York Jets quarterback Vinny Testaverde will play in preseason opener after recovering from hand sprain; photo (M)

Victor I Barron, former Brooklyn Supreme Court justice charged with accepting bribe, reaches plea deal with prosecutors; under agreement, he will acknowledge at hearing that he is guilty of felony and spend at least three years in jail; case reviewed; other New York State Supreme Court judges convicted on felony charges noted; photo (M)

Loans to Units of Enron Draw Regulators' Attention By taking out loans and transferring the money to Enron in an attempt to save the company from bankruptcy, two of Enron's most valuable subsidiaries may have run afoul of federal regulations. The Federal Energy Regulatory Commission has ordered the units, Transwestern Pipeline and Northern Natural Gas, to explain their accounting practices and prove that loans they took out on Enron's behalf will be repaid. The commission has neither finalized any rulings nor accused Enron of wrongdoing. [Page C2.]

Judge Gladys Kessler orders Bush administration to release most of names of hundreds of people arrested after Sept 11 terror attacks within 15 days; rejects Justice Department's stand that disclosure would impede terrorism probe; says public does not know how many people are being held, who and where they are and whether they are represented by counsel; notes Justice Department has said that 751 people were arrested for immigration violations and that most of them have been released or deported, with 74 still in custody; suit seeking names of immigration detainees was bought by 22 advocacy groups (M)

AOL Time Warner chief executive Richard D Parsons needs initial downpayment of at least $1 billion to buy out 25 percent stake company does not already own in Time Warner Entertainment; Comcast Corp chief executive Brian Roberts this fall willgain control of that stake and, eager for cash himself, wants AOL Time Warner to buy him out; Parsons must borrow money and endanger company's credit rating, or issue stock at time when investors are shunning cable and media companies; analysts and some within company have even speculated that AOL Time Warner may seek to sell off noncore businesses; photo (M)

Jack Curry Sports of The Times column argues that Major League Baseball players see costly disadvantage to striking over labor disputes, contending that many players would suffer heavy financial losses; photos (M)

Proposal for Trade Center New York officials have proposed a trade for the site in which the Port Authority would get the land beneath the two city airports. PAGE B1 Ireland as a Tax Haven As Stanley Works and other companies abandon plans to move to Bermuda, Ireland may emerge as the next tax battleground. PAGE C1

Whitney Museum of American Art trustees join forces to give it trove of 86 paintings, sculptures and prints valued at $200 million, apparently largest donation of postwar American art to any museum; gift raises level of Whitney's holdings to world-class status, particularly in Abstract Expressionism and Pop Art; joint gift follows quiet three-year effort by trustees, led by chairman Leonard A Lauder to amass important works; some works are from trustees' own collections; photos (M)

Israeli Army pens Nablus old city with tanks and other vehicles and searches house to house amid little resistance for explosives labs and suspected militants in action against suspected source of bomb that killed seven at Hebrew University; reports finding two labs and blowing up apartment buildings containing labs; steps up punishment elsewhere of relatives of suicide attackers, destroying homes of at least two families and preparing to banish brothers of two assailants to Gaza Strip; five Palestinians are killed in day's fighting, two of them in Nablus's casbah; photo (M)