August 29, 2002

Pres Mohammad Khatami of Iran says hard-line clerics make it all but impossible for him to do his job; says he will propose legislation to restore powers that Iran's president has lost to clergy; his statement seen as clear expression of frustration with clerics who hold most real levers of power and have thwarted president elected twice on promises to open economy and usher in greater civil liberties; says his dialogue with hard-liners has proved fruitless; his challenge suggests new willingness to confront them more forcefully; it seems certain to intensify long power struggle in Iran; his proposals seem certain to pass in Parliament, where his supporters hold majority; but any changes can be blocked by religious panel called Guardian Council, which has turned back reforms before; Khatami says he has already presented Parliament with bill to limit powers of council, and will soon send bill to restore presidential powers that would allow him to act as head of state, enforce Constitution and protect citizens' rights; says public disaffection is rising, stemming mostly from his government's failure to bring citizens greater freedom; photo (M)

Marconi agrees to hand over almost complete control of company to creditors in return for forgiveness of most of its debts; says existing shareholders will probably wind up owning only 0.5 percent of company, though they will have right to buy additional 5 percent in future (M)

Foster's Group is selling more wine than beer in dollar terms; reports 21 percent increase in profit, to $310 million in year to July, and revenue of $2.8 billion, up 14.6 percent; wine revenue was $1.1 billion, exceeding beer sales of $960 million; wine sales increased 28 percent and beer sales just 1.7 percent in period; photo (S)

Regional drought, worst on record, takes heavy toll in North and South Carolina, which have some of fastest-growing cities and suburbs in nation and are proving unexpectedly vulnerable to water shortages; water shortages are so severe that one North Carolina town is borrowing water by fire hose; cities and small towns face mandatory restrictions intended to reduce water use by as much as 20 percent; water experts and city planners blame water shortages on abnormalities in climate; those abnormalities are compounded by sprawling growth, which has sent water use spiraling ahead even of population increases and has cut into supplies of water that would have otherwise recharged aquifers, rivers and streams; in Charlotte, number of water users served by local utility has increased 36 percent since 1992, but average daily water use has increased 56 percent; this shrinks cushion that planners expected might prevent water rationing in rain-scarce years; water managers in region say more must be done sooner to promote conservation; photo; graph (L)

Saudi government has spent millions of dollars on lobbyists and national television advertisements since Sept 11 in drive to improve its image among Americans and is poised to spend more as anniversary of events approaches; Saudi officials say they want to counter intensified anger or skepticism among Americans toward their country, which was home to 15 of 19 hijackers and which has clashed publicly with Bush administration over possible attack against Iraq; royal family is scrambling to find gesture of solidarity with American people on anniversary of attacks, in striking sign of Saudis' eagerness to reach out to US; toward that end, Saudis have hired several public relations firms and already spent more than $5 million, according to new Justice Dept filings; Adel al-Jubeir, adviser to Saudi government and key figure in new effort, says his government is appropriating techniques of American political campaign to overhaul its image in US (M)

Personal Shopper column on new upright vacuum cleaner from England, the Dyson Root8cyclone, invented by James Dyson; basic model sells for just under $400; photo (M)

Securities and Exchange Commission approves use of new automated trading system for Nasdaq stock market; system, which cost Nasdaq more than $100 million to develop and has been repeated stymied by lobbying efforts of its rapidly growing competitors, will let investors view orders placed through variety of marketplaces that are now separate from one another; architects of system say that by posting stock prices and orders from all market participants and rivals, new system--known as SuperMontage--will enable stock traders to pick from variety of sources for lowest buy and highest sell prices; competiting trading companies including Instinet, subsidiary of Reuters Group, and Archipelago have steadily eroded Nasdaq's trading business to point that they now say they executive more than half trades in Nasdaq stocks; rivals have complained that Nasdaq's new system would create would create new and anticompetitive marketplace (M)

Article on hugely popular independent film My Big Fat Greek Wedding; star Nia Vardalos comments; photo (M)

Memo, dated March 31, 1999, details requests for shares of hot new issue, Rhythms NetConnections, made by 26 wealthy and generally well-known clients of Salomon Smith Barney; provides insight on how one brokerage firm handled hot stock offerings for favored clients at height of technology stock mania; memo is excellent starting point for lawmakers, regulators and investors pondering how to make Wall Street fairer place; Salomon and Merrill Lynch led group of brokerage firms that were selling shares in Rhythms' to public, and, thanks in part to buy recommendations from Jack Grubman, Salomon's star telecommunications analyst at time, and others, Rhythms's shares soared above $93 in week from initial public offering price of $21; at issue is whether Salomon dispensed its Rhythms shares to former WorldCom chief executive Bernard J Ebbers and other WorldCom executives to ensure firm's bond with company remained strong; Salomon maintains that allocations made to its customers were proper and were in keeping with Wall Street tradition of rewarding top private clients with access to new offerings; photos (Market Place column) (M)

US Census shows 41,289 American Indians living in New York City in 2000, largest number for any city; even more New Yorkers, 87,241, claimed some American Indian heritage; Los Angeles and Phoenix are second and third in both categories; Michael A Taylor, who works with Thunderbird American Indian Dancers, explains that population is spread throughout boroughs, with many of nation's 500 tribes represented; American Indian Community House in lower Manhattan provides services to about 6,000 people a year; efforts to sustain heritage described; photos (M)

Andrea Zittel concocts utopian habitats, then enlists herself to test them; her A-Z Cellular Compartment Units are mini-apartments with connected living chambers, inspired by compact, self-sufficient arrangement of boats and trailer homes; photos of her and her designs at home in Joshua Tree, Calif (M)

Daewoo Motor Co has stopped making cars at its three Korean plants after its leading supplier Korea Delphi Automotive System stopped shipping parts ahead of boycott planned for Aug 29 by all 191 companies that make parts for its vehicles (S)