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)