August 17, 2002

Observers see prickly relationship between Viacom chief executive Sumner M Redstone, who built formidable collection of media assets, and Mel Karmazin, chief operating officer viewed as disciplined manager of those businesses, thawing; number of investors say privately that they hope Karmazin will remain with company after his contract expires next May; photo (M)

Treasury to Ban Technique Used to Reduce Tax Bill The Treasury Department banned a technique that thousands of the wealthiest Americans have used to escape billions of dollars in gift and estate taxes. The technique involves buying expensive life insurance that will be passed on to heirs, but declaring a far lower price on gift-tax returns. The department said the technique was not valid and never had been, leading experts on taxes and insurance to predict that people who have bought these policies will be drawn into years of litigation with the government and with their advisers. [Page A1.] 4-Week Run for Dow and S.& P. 500 Stocks were mixed but the Dow Jones industrial average and the Standard & Poor's 500-stock index still managed to finish higher for the fourth consecutive week. At the close, the Dow fell 40.08 points, or 0.5 percent, to 8,778.06, while the S.& P. 500 index fell 1.48 points, or 0.2 percent, to 928.77. The Nasdaq rose 16 points, or 1.2 percent, to 1,361.01. [C4.]

Major league baseball players' union sets strike date of Aug 30; leaders feel that owners will put in place new economic system after World Series that will significantly depress salaries and that players have to strike before season runs out in order to maximize its leverage; Pres Bush warns both sides against work stoppage; negotiators for players and owners will continue meeting; chart on strikes and lockouts in major leagues; photo (M)

William C Rhoden Sports of The Times column argues that calling baseball players greedy, using recent layoffs and current economy as reasons not to strike and threatening to boycott baseball in event of strike are inappropriate and irrelevant reactions; photo (M)

Spencer Lee King, 17, says he beat 14-year-old Nonie Drummond to death in her home in Fabius, NY, then set house on fire; says two had engaged in 9-month-long Internet and telephone romance before meeting for first time at her grandfather's isolated farmhouse; says he 'snapped' when he discovered she was younger than she had claimed; girl's grandfather and mother try to comprehend how such a shy, obedient child managed to court danger right under their noses; her death is reminder that same technology that comforts people can also connect them to danger; photos;map (M)

Georgia is experiencing wave of violence against non-Orthodox faiths, particularly Protestant denominations that established themselves after fall of Soviet Union; Jehovah's Witnesses, Baptists, members of Assembly of God and members of Hare Krishna have been among those attacked; many ardent Orthodox followers regard growth of other denominations as threat to traditional dominance of Georgian Orthodox Church, which has increasingly become linked to nationalist causes; Pres Eduard Shevardnadze condemns violence and orders new measures to ensure rights of worshipers; photos of attack on Jehovah's Witness meeting hall in Kaspi; map (M)

New York Yankees defeat Seattle Mariners, 9-3; photo (M)

Pres Bush says that he is listening carefully to group of Republicans who are warning him against going to war with Iraq, but that he will still make up his own mind based on information that is very tightly held within his administration; comment comes day after Brent Scowcroft, first Pres Bush's national security adviser and close Bush family friend, writes opinion article in Wall Street Journal warning that attack on Iraq at this time will jeopardize global counterterrorist campaign; one senior White House official says Scowcroft's views clearly represent views of president's father (M)

Larry A Silverstein, leaseholder of World Trade Center, may be eased out by Bloomberg administration proposal to give Port Authority of New York and New Jersey city-owned land beneath two airports in return for now vacant 16-acre trade center site; if land swap is struck, city could presumably plan for future development at site without any encumbrances; insurance carriers with whom Silverstein is battling in court bitterly oppose Silverstein's claim that attack on trade center constituted two events--two planes, two towers--which would entitle him to double payment totaling $7 billion; insurers have eagerly embraced land swap proposal, saying they would prefer to negotiate with city than with Silverstein; photos (M)

Mayor Michael R Bloomberg says he expects New York City's 24,000 police officers to get 14 percent raise over two years, less than what city teachers won and far less than 21.9 percent police union has sought in protracted contract dispute; says city faces $5 billion deficit that could lead to layoffs; comments are said to be based on preliminary draft of ruling by state arbitration panel; arbitrators' final ruling would be binding, but Patrolmen's Benevolent Assn has already filed list of objections, hoping to win larger raise (M)

Boeing Co and International Association of Machinists, representing 25,000 company employees, bring in federal mediator after talks bog down over pensions and job security; unions are upset over increased use of overseas contractors that has limited number of laid off workers rehired (M)

Fred Funk takes second-round lead at PGA Championship; photo (M)