Month: March 2005


  • A Buddha statue in central Afghanistan, pictured in 1997, was ordered destroyed by the Taliban government in 2001.


    When Sentiment and Fear Trump Reason and Reality


    By LAWRENCE M. KRAUSS





    I have recently begun to wonder whether I am completely out of touch with the mainstream, and if so, what that implies.


    When I was a young student it became clear to me that the remarkable success of the scientific method, which changed the world beyond belief in the four centuries since Galileo, made the power and efficacy of that method evident. Moreover, scientific ideas are not only powerful but so beautiful that they are on par with the most spectacular legacies of civilization in art, architecture, literature, music and philosophy.


    This is what makes the current times so disconcerting. We like to think that spectacular intellectual developments bring progress, so that future generations may benefit from what has come before. But this is often an illusion.


    I remember the shock wave generated four years ago when the Taliban government in Afghanistan destroyed thousands of statues, including two priceless and awe-inspiring archaeological artifacts, the world’s largest standing statues of Buddha, created almost 2,000 years ago. The Taliban claimed that Islamic law prohibited the creation of idolatrous images of human faces that might be used for worship.


    I remember sharing the feeling of incredible sadness to know that the world had forever lost a precious part of its intellectual heritage. It was difficult to believe that in the 21st century such a return to the dark ages could happen anywhere.


    Those images came to mind again as I followed recent news of incidents in the United States in which fundamentalist dogma and its fear of the intellectual progress that comes from understanding nature has trumped the scientific method. These actions attack intellectual pillars of our civilization that are every bit as real as monumental statues of Buddha.


    The “reality-based community,” as one White House insider so poetically referred to it recently, is losing the fight for hearts and minds throughout the country to a well-orchestrated marketing program that plays on sentiment and fear.


    The open intrusion of religious dogma into the highest levels of government is stunning. Justice Antonin Scalia of the Supreme Court speaks of “the fact that government derives its authority from God” (during oral arguments before the court about displays of the Ten Commandments) while the president of the United States has argued that evolution is a theory not a fact.


    The effort to blur the huge distinction between faith and science, between empirically falsifiable facts and beliefs, was on display again this month in two very different contexts.


    Congressional leaders ignored the conclusions of the doctors who have actually examined Terri Schiavo and judges who have listened to the evidence. Senator Bill Frist, previously a heart surgeon who must have once known better, shunned the conclusions of these doctors and, without ever having examined Ms. Schiavo himself, stated his “belief” that she was not in a vegetative state.


    Meanwhile, on a much less emotionally tragic but no less intellectually puzzling front, the Templeton Foundation continued with its program to sponsor the notion that science can somehow ultimately reveal the existence of God by once again awarding its annual Templeton Prize for Progress in Religion not to a theologian, but to a physicist.


    Dr. Charles Townes, the winner, is a Nobel laureate whose scientific work has been of impeccable distinction; his prime contribution to religion appears to be his proudly proclaiming his belief in God as revealed through the beauty of nature.


    I confess that my immediate reaction was the same as it has been to all of Templeton’s recent awards to scientists. If this is the most significant progress in religious thought, beating out the work of distinguished theologians throughout the world, then it is a sad reflection on such progress. Of course, I rather believe that it reflects on the foundation’s misguided goals and methods.


    Nature’s beauty inspires religious fervor in some scientists. For others, like the Nobel laureate Dr. Steven Weinberg, it merely reinforces their belief that God is irrelevant.


    The point here, which should be obvious, is that science and religion are separate entities: science is a predictive discipline based on empirically falsifiable facts; religion is a hopeful discipline based on inner faith.


    Theologians as ancient as St. Augustine and Moses Maimonides recognized that science, not religion, was the appropriate and reliable method to try to understand the physical world. Yet it is precisely this ancient wisdom that is now under attack.


    Foes of evolution and the Big Bang in this country do not operate with the direct and brutal actions of the Taliban. They have marketing skills. Openly condemning evolution as blasphemous might play well to the fundamentalist true believers, but it wouldn’t play well in the heartland, which is the real target. Thus the spurious argument is created that evolution isn’t good science.


    This “fact” is established by fiat. The Discovery Institute in Seattle supports the work of several Ph.D.’s who then write books (and op-ed articles) decrying the fallacy of evolution. They don’t write scientific articles, however, because the claims they make – either that cellular structures are too complex to have evolved or that evolution itself is improbable – have either failed to stand up to detailed scrutiny or involve no falsifiable predictions.


    What is being obscured in this manufactured debate is that the underlying intent has little to do with evolution, or the age of the earth. The fundamentalist attack is on the basic premise that physical phenomena have physical causes that can be revealed by use of the scientific method.


    Because science does not explicitly incorporate a deity in its considerations, some fundamentalists believe that it undermines our moral order, just as the Buddha statues presented a threat to the fundamentalist Islamic moral order.


    The pillar of our humanity that is most under attack is our remarkable ability to understand nature. We claim that in places like Afghanistan the enemies of truth are the enemies of freedom and democracy. If the scientific method is out of the mainstream in our country it is time to take a stronger stand against the effort to undermine empirical reality in favor of dogma.



    Dr. Lawrence M. Krauss is chairman of the physics department at Case Western Reserve University. His new book, “Hiding in the Mirror,” will appear this fall.



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  • Dr. Gary Steinberg bypasses a blocked artery in Kathleen Young’s brain


    Out of Nowhere, a Devastating Tangle in the Brain


    By DENISE GRADY





    STANFORD, Calif. – Kathleen Young had no reason to believe she was anything but healthy. She led a hectic life, running a tree-trimming business with her husband, studying to become a nurse and bringing up three daughters, ages 10, 12 and 13, in Raymore, Mo.


    But in an instant last September, everything changed. While working out at the gym, Mrs. Young, 41, suddenly went blind in her left eye. Minutes later, her head began to pound. The diagnosis, after an M.R.I. and other tests, was almost beyond comprehension: a rare disease had created blockages in arteries deep inside her skull, cutting off blood flow to part of her brain and causing a stroke, which had partly blinded her.


    The disorder, called moyamoya disease, is so uncommon that her family doctor admitted he had never heard of it. The name is Japanese for puff of smoke, which is what the disease looks like on X-rays: a wispy cloud of fragile blood vessels that develop in the brain where normal vessels are blocked. It was first identified in Japan in 1959.


    When Mrs. Young looked it up, what she learned was devastating. The disease causes a progressive narrowing of the internal carotid arteries, which carry blood to the brain. Patients suffer multiple strokes, mental decline and, usually, death from brain hemorrhage. The cause is unknown, and there is no cure. Reading a textbook chapter on it, she was stunned to realize that much of the information came from autopsies.


    She swung between disbelief and dread. What would happen to her family if she died or became disabled from a stroke? How could she explain her illness to her 12-year-old, who has Down syndrome?


    “I feel like I’m a walking time bomb,” she said.


    She found one bit of encouragement: a Web site, www.moyamoya.com, created by a patient, described an operation for the disease, a type of bypass in the skull that could improve circulation to the brain and prevent further strokes. The site included a link to Dr. Gary Steinberg, the head of neurosurgery at Stanford University Medical Center. Dr. Steinberg, who has operated on more than 130 people with the disease, is one of the few surgeons in the United States who have treated more than a handful of patients with moyamoya.


    Mrs. Young e-mailed him. After studying her records and ordering more tests to map the blood vessels in her head, he recommended two operations, one on each side of her skull, a week apart. Her health insurer balked at first, insisting that she be treated in Missouri, but ultimately agreed that no brain surgeon there had Dr. Steinberg’s expertise in moyamoya. By late February, Mrs. Young was on her way to Stanford.


    On March 1, the day before her first operation, Dr. Steinberg peered at a light box holding X-rays of the blood vessels inside Mrs. Young’s head. He turned to her and gently touched her right temple.


    “You’ve got some nice scalp arteries,” he said. “I’m going to take this one here and sew it to one of the arteries on the surface of your brain” -he tapped his pen against the X-ray- “one of these that you can’t even see.”


    By 7:10 the next morning, Mrs. Young was under general anesthesia. The word “yes” was scrawled in black marker on her right temple to mark the incision site. A cooling element was inserted into a vein in her groin to lower her temperature by about 7 degrees Fahrenheit and cool her brain, to help protect it during surgery. Electrodes were attached to her skull to monitor brain activity.


    Dr. Steinberg would not arrive until he was needed for the critical parts of the operation, but could watch its progress on a video monitor in his office.


    Two assisting surgeons, Dr. Bernard Coert and Dr. Stephen Ryu, shaved a small rectangle just above Mrs. Young’s ear. Using ultrasound to find the scalp artery, they marked its path on her scalp. Next, they turned her head to the left and fitted her into a viselike skull immobilizer with pins that pierced her forehead and the back of her skull.


    The vessels they would be working on were so small – only one to two millimeters wide – that they would need magnification. A microscope with two eyepieces was wheeled in, and the lights were dimmed. A four-foot-wide flat screen showed the surgical field, magnified 100 times, but the surgeons looked only into the eyepieces as they wielded forceps and scissors to expose the superficial temporal artery in her scalp.


    Dr. Steinberg arrived at 8:55, and the other doctors stepped aside as he sat on a stool, rested his wrists on Mrs. Young’s skull and, looking through the microscope, quickly finished freeing the artery. Then he pushed it aside, cut through the muscle and separated it from the skull, and removed a disk of skull bone about the size of a half dollar. The other surgeons opened the membranes that cover the brain to expose an artery on its surface.


    When Dr. Steinberg began operating on moyamoya patients in the 1990′s, he saw only a few cases a year. But in 2004 he operated on 35, and now he sees about one a week. One-third are children. He has so many patients not because there is an epidemic of moyamoya but because he is one of the few surgeons with much experience in it. The rate of new cases each year in the United States is estimated at one in two million people. It is twice as common in Southeast Asia, and some cases may be hereditary.


    But Dr. Steinberg said that the number of patients he has been seeing makes him wonder if the disease is really so rare.


    “It’s probably more common than we thought and a more common cause of stroke than we had thought, stroke in young people, and an unusual type that we can prevent,” he said.


    An M.R.I. can detect the disease, he added, and increased use of the scans may be finding patients whose symptoms would have been misinterpreted in the past.


    Moyamoya is still unlikely to account for more than a fraction of a percent of the 700,000 strokes that occur in the United States every year. But the National Institutes of Health sponsors research on the disease.


    Dr. Tom Jacobs, director of the stroke program at the National Institute of Neurological Disorders and Stroke, said, “This is an important disease that could have implications for further understanding other vascular diseases in the brain.”


    He said that if research could explain more about the disease process and possible genetic links, the information might have relevance for other disorders that cause strokes.


    Most patients with moyamoya are children from 5 to 15, or adults from 30 to 40, and nearly two-thirds are female. Some have strokes; others, in earlier stages, have temporary speech problems, headaches, seizures or attacks of numbness or weakness in their limbs.


    The symptoms, though transient, can occur so often that people cannot function. Some adult patients also notice problems with thinking or memory.


    But often the symptoms are mild, ignored by patients or misdiagnosed as coming from pinched nerves or migraines. Mrs. Young, for instance, had episodes of eye trouble and tingling in her arm for a year or two before her stroke, but paid little attention to them.


    The artery blockages in moyamoya are nothing like the fatty deposits in atherosclerosis. In moyamoya, the inner surface of the arteries and the muscle in the artery walls grow thicker.


    “The whole vessel actually closes off,” Dr. Steinberg said. “We don’t know why it happens. If we knew, we might be able to prevent it.”


    The shutdowns occur in a limited but vital area near the base of the brain, a loop of vessels about the size of a quarter, called the circle of Willis. It looks a bit like a traffic rotary – with branches that provide nearly all the brain’s circulation.


    Over the years doctors tried giving moyamoya patients aspirin, blood thinners, clot busters and other drugs in hopes of preventing strokes. None worked. They also tried opening blocked vessels with balloons, or severing nerves believed to be causing artery spasm, but those techniques failed, too.


    Surgery to restore blood flow is the only thing that works, Dr. Steinberg said. The most common operation is a bypass of the pinched off-vessels. Because the disease seems to affect arteries at just a few specific points, surgeons can usually find healthy vessels to splice together, rerouting blood around the blockages. In children or other patients whose arteries are too small to sew together, surgeons use other techniques like placing a scalp artery or other tissue containing blood vessels on the brain so that branches will grow into the oxygen-starved areas.


    “We’re not curing the disease, but the bypass is effectively treating it,” Dr. Steinberg said. “You want to treat them before they have the big stroke, the devastating stroke that’s going to change their life forever.”


    Over all, he said, a majority of patients, 95 percent or more, have no further strokes or related problems after the surgery. Three of his patients died from brain hemorrhages after surgery, though not recently, Dr. Steinberg said, and he abandoned an early surgical technique he had used on one of them.


    At 11 a.m., Dr. Steinberg clamped Mrs. Young’s scalp artery in two places and cut it between the clips. Its flow would be diverted into the brain artery instead of the scalp.


    Tension began to build as the neurologist monitoring Mr. Young’s brain activity at a computer in the operating room warned that he was seeing worrisome dips, a possible sign of lack of oxygen. Hoping to improve the circulation to her brain, the anesthesiologist administered a drug to raise her blood pressure.


    The next step was to prepare the brain vessel to accept the graft. Because he would be opening the vessel, it would have to be clamped to prevent blood loss. But clamping a brain artery is risky business, especially in a patient like Mrs. Young, whose brain circulation is already poor.


    At Dr. Steinberg’s signal, the anesthesiologist gave her a drug to quiet the brain’s activity and diminish its need for oxygen. When the drug took effect, Dr. Steinberg applied the clamps and announced that the artery was shut down, or occluded. The occlusion time would be clocked; ideally, it should be as short as possible and is usually about 30 minutes.


    Looking through the microscope, Dr. Steinberg snipped a tiny window into the side of the brain artery and began stitching the open end of the scalp artery to it. The suture line was finer than a hair and the curved needle, passed between pairs of forceps, no bigger than an eyelash. To the naked eye, he seemed to be sewing with an imaginary needle and thread.


    By noon, the vessels were sewn together, and Dr. Steinberg tested the connection by loosening the clamps. Blood welled up into the field. He closed the clamps, cauterized, added two stitches, released the clamps. More blood. He reapplied the clamps and added another stitch. He did this again and again. Finally, after the 10th extra stitch, the bleeding stopped, and he removed the clamps. The occlusion time had been long, 55 minutes. Still, Mrs. Young’s brain activity had returned to a safe level.


    Ultrasound measurements showed that blood flow through the graft was excellent. At 12:43 Dr. Steinberg said, “O.K., let’s get out of here.”


    An hour later, Dr. Ryu and Dr. Coert stapled Mrs. Young’s skin closed and released the skull immobilizer. By 2 p.m. the anesthesiologist was tapping her on the forehead, pulling open her eyelids and calling her name. Soon, her eyes opened, and she wiggled her toes on request. Patting her shoulder, the anesthesiologist said: “Everything is O.K. You’re done with your surgery.”


    Three days later, Mrs. Young was well enough to leave the hospital, despite a headache and some bruises. Her peripheral vision began to improve. After four more days, she went back to the hospital and had the same operation all over again, on the other side of her brain. On March 17, she flew home to her family in Missouri, ready to resume the hectic life she had left behind.


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  • Panel’s Report Assails C.I.A. for Failure on Iraq Weapons

    By DAVID E. SANGER and SCOTT SHANE





    WASHINGTON, March 28 – The final report of a presidential commission studying American intelligence failures regarding illicit weapons includes a searing critique of how the C.I.A. and other agencies never properly assessed Saddam Hussein’s political maneuverings or the possibility that he no longer had weapon stockpiles, according to officials who have seen the report’s executive summary.


    The report also proposes broad changes in the sharing of information among intelligence agencies that go well beyond the legislation passed by Congress late last year that set up a director of national intelligence to coordinate action among all 15 agencies.


    Those recommendations are likely to figure prominently in April in the confirmation hearings of John D. Negroponte, whom President Bush has nominated to be national intelligence director and who is about to move to the center of the campaign against terror.


    The report particularly singles out the Central Intelligence Agency under its former director, George J. Tenet, but also includes what one senior official called “a hearty condemnation” of the Defense Intelligence Agency and the National Security Agency.


    The unclassified version of the report, which is more than 400 pages long, devotes relatively little space to North Korea and Iran, the two nations now posing the largest potential nuclear challenge to the United States and its allies. Most of that discussion appears only in a much longer classified version.


    In the words of one administration official who has reviewed the classified version, “we don’t give Kim Jong Il or the mullahs a window into what we know and what we don’t,” referring to the North Korean leader and Iran’s clerical leaders.


    Mr. Bush is expected to receive the report officially on Thursday.


    As early copies of the report circulated inside the government on Monday, officials said much of the discussion of Iraq went over ground already covered by the Senate Intelligence Committee and by the two reports of the Iraq Survey Group, which was set up by the government to search for prohibited weapons after the Iraq invasion, and came up basically empty-handed.


    After Iraq’s defeat in the Persian Gulf war in 1991, international inspectors dismantled an active nuclear program – which had not produced a weapon – along with biological agents and chemical weapons. Much of the flawed intelligence was based on a series of assumptions that Mr. Hussein reconstituted those programs after inspectors left the country under duress in 1998.


    But in retrospect, those assumptions by American and other intelligence analysts turned out to be deeply flawed, even though some of Mr. Hussein’s own commanders said after they were captured in 2003 that they also believed the government held some unconventional weapons. It was a myth Mr. Hussein apparently fostered to retain an air of power.


    The discovery of the false assumptions forced Mr. Bush to appoint, somewhat reluctantly, the Commission on the Intelligence Capabilities of the United States Regarding Weapons of Mass Destruction, which has operated largely in secret under the direction of Laurence H. Silberman, a senior judge on the United States Court of Appeals, and former Governor Charles S. Robb of Virginia.


    According to officials who have scanned the document, the unclassified version of the report makes a “case study” of the National Intelligence Estimate on Iraq, the major assessment that the intelligence agencies produced at the White House’s behest – in a hurried few weeks – in 2002.


    After the Iraq invasion in March 2003, the White House was forced to declassify part of the intelligence estimate, including the footnotes in which some agencies dissented from the view that Mr. Hussein had imported aluminum tubes in order to make centrifuges for the production of uranium, or possessed mobile biological weapons laboratories.


    The report particularly ridicules the conclusion that Mr. Hussein’s fleet of “unmanned aerial vehicles,” which had very limited flying range, posed a major threat. All of those assertions were repeated by Mr. Bush, Vice President Dick Cheney and other senior officials in the prelude to the war. To this day, Mr. Cheney has never backed away from his claim, repeated last year, that the “mobile laboratories” were probably part of a secret biological weapons program, and his office has repeatedly declined to respond to inquiries about whether the evidence has changed his view.


    One issue the commission grappled with is whether the intelligence agencies failed to understand what was happening inside Iraq after the inspectors left in 1998, a period that David Kay, the first head of the Iraq Survey Group, referred to last year as a time when the country headed into a “vortex of corruption.” Mr. Kay, who also testified before the commission, said Mr. Hussein’s scientists had faked some of their research and development programs, and Mr. Hussein was reported by his aides to be increasingly divorced from reality.


    One defense official who had been briefed on an early draft of the report said Monday that one of its conclusions was that “human intelligence left a lot to be desired” in the global war against terror.


    The official also indicated that there was already considerable anxiety about the final report and its recommendations. “We’re all wondering what it will say,” said the official, who spoke on the condition of anonymity because the report had not been publicly released yet. “We all know there were shortcomings before 9/11,” the official said. “Will this report take into account what we’ve done since then?”


    The commission’s mandate was to examine the intelligence agencies’ ability to “collect, process, analyze and disseminate information concerning the capabilities, intentions and activities of foreign powers.” Besides Iraq, Iran and North Korea, that mandate covered terrorist groups and private nuclear black market networks created by Dr. A. Q. Khan, the Pakistani scientist.


    The classified version of the report is particularly critical of American failures to penetrate Iran’s program, and notes how much of the assessment of the size of North Korea’s suspected nuclear arsenal is based on what one official called “educated extrapolation.” Officials and outside experts who were interviewed by the commission or its staff said they had been asked at length about the absence of reliable human intelligence sources inside both countries.


    The commission’s conclusions, if made public, may only fuel the arguments now heard in Beijing, Seoul and the capitals of Europe that an intelligence system that so misjudged Iraq cannot be fully trusted when it comes to the assessments of how much progress has been made by North Korea and Iran. North Korea has boasted of producing weapons – but has never tested them – and Iran has now admitted to covering up major elements of its nuclear program, even though it denies that it is building weapons.


    The nine-member commission has met formally a dozen times at its offices in Arlington, Va., and in November visited Mr. Bush at the White House to speak with him and his staff. It had formal meetings with most top administration intelligence and foreign policy officials and interviewed former C.I.A. directors and academic experts on weapons proliferation. The commission, which has a professional staff of more than 60 people, mostly longtime mid-level intelligence professionals, has had access to even the most secret government documents.


    All the sessions have been closed to the news media and the public, and the commission members and staff have been tight-lipped about the contents of their report.


    “We and the staff have made a commitment in blood not to discuss the report in advance,” said Walter B. Slocombe, a former defense official and member of the commission.



    David Johnston and Anne E. Kornblut contributed reporting for this article.


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  • Damage from the earthquake was severe on the Indonesian island of Nias.


    Powerful Quake Jolts the Seabed Off the West Coast of Indonesia


    By SOMINI SENGUPTA





    NEW DELHI, Tuesday, March 29 – Just three months after a deadly tsunami punched through the Indian Ocean, a powerful underwater earthquake struck again late Monday off the west coast of Indonesia, sending a ripple of panic and public warnings across a still traumatized region.


    The quake, which was measured at a magnitude of 8.7, hit shortly after 11 p.m. about 200 miles farther south along the same fault as the more powerful Dec. 26 earthquake and tsunami that killed as many as 270,000 people in 12 Indian Ocean countries, including more than 100,000 in Indonesia.


    Early signs seemed to indicate that this time the quake had not inflicted anywhere near the same damage. The one glaring exception was the Indonesian island of Nias, where 1,000 to 2,000 people were feared dead, Indonesia’s vice president, Jusuf Kalla, said in an interview on Al Shinta radio. But reports from remote affected areas were slow in coming, and scientists and other officials were reluctant to dismiss the possibility of wider devastation, including what might come from new tsunamis.


    Most clear was that this latest jolt spread fear, that gigantic waves would again inundate many of the same South and Southeast Asian countries still struggling to recover from the disaster of December.


    The tremor struck about 125 miles off the Indonesian island of Sumatra, home to Aceh Province, among the hardest hit areas in December. It sent jittery residents fleeing from their homes – relief tents in many cases -into the night and away from the ocean or toward higher ground.


    In Banda Aceh, the provincial capital, Diah Zahara, 24, said in a telephone interview that the tremors were so strong that they immediately engendered fears of another tsunami. “Suddenly the road was full of cars,” she said. “People were running out onto the street toward safe places.”


    Ms. Zahara said she and her mother, Ummi, her father, Gazali, and her 21-year-old brother, Mafoud, all ran from their house and then made their way toward an area away from the sea. “We just ran, there was panic, and we just wanted to keep going,” she said.


    Alessandra Cilas Boas, the communications manager for Oxfam in Banda Aceh, said by telephone that the tremors were so severe that parked cars “were moving backward and forward” on the street.


    “It was hard to walk,” she said, as she and her colleagues rushed out of their compound. The tremors lasted for about two minutes, she said. The power went out for some time, adding to the anxiety.


    In one relief camp in Banda Aceh, an Associated Press photographer reported seeing people fleeing their tents in panic, only to be urged by police to return to their shelters.


    Reuters quoted Agus Mendrofa, deputy mayor of Gunungsitoli, the main town on the Indonesian island of Nias, as saying buildings had been flattened and townspeople trapped inside.


    “Gunungsitoli is now like a dead town,” he told Reuters. “The situation here is in extreme panic.”


    [In the Sumatran city of Medan, Erni Ginting, a spokeswoman for the disaster center for Aceh and North Sumatra, said Tuesday that the death toll was 322, Reuters reported. She said all the fatalities were on Nias, 220 of them in Gunungsitoli.]


    On the Thai resort island of Phuket, Wayne Graham, a Canadian real estate agent who lives 200 yards from the shore, said that as soon as the earthquake hit, there was immediate worry of another tsunami. From his house, Mr. Graham said he could see Thai military boats scouring the sea for any changes signaling a tsunami. “We were nervous and on standby,” he said in a telephone interview.


    In Sri Lanka, state-run radio and television urged people to leave the seaside in favor of higher ground. In India, officials in New Delhi alerted local officials to tell residents of the coastal area to move at least 200 yards from the water.


    The quake’s impact could be felt as far as the Malaysian capital, Kuala Lumpur. Australian meteorologists recorded two waves in the Cocos Islands, some 1,500 miles south of the epicenter; the second of the two waves measured 10 inches.


    Scientists said it was too early to conclude that the quake had generated no tsunami at all, particularly along the coast of Sumatra. The Pacific Tsunami Warning System, based in Hawaii, pointed out that areas that had not witnessed abnormally large waves within about two hours of the quake had probably been spared a tsunami.


    Speaking to reporters at the United Nations, Jan Egeland, the emergency relief coordinator, said United Nations agencies in the region had received no reports of tsunamis.


    Before daylight broke on Tuesday, India, Thailand and Sri Lanka – all hit badly by the December quake – withdrew their tsunami warnings. Late Monday night, they had urged people to leave low-lying coastal areas.


    By early Tuesday, there were no reports of abnormal activity on the ocean. The United States military’s Pacific Command, based in Hawaii, said it had received no reports of tsunami damage, said its spokesman, Lt. Col. Bill Bigelow.


    The quake on Monday pointed once again to the lack of a tsunami early warning system in Asia. “A little bit stronger earthquake and we could have had a major tsunami in the middle of the night,” Mr. Egeland said. “We need that early warning system.”


    Such a tsunami early warning system exists in the Pacific, but not yet in the quake-prone Indian Ocean, making it impossible for scientists to plan whether and where evacuations should be ordered.


    Here in the Indian capital, meteorologists staffing an emergency control room said they could only call for calm and caution along the country’s Indian Ocean coast. “You will not know till it comes,” said S. K. Swamy, a meteorologist in the control room. “There is no system of knowing it.”


    The United States Geological Service reported that the quake on Monday emerged along the same fault line that caused the December quake, which measured 9.3, the world’s biggest in 40 years.


    The quake, Mr. Egeland said, caught the relief community better prepared than the disaster last December, not least because many operations were already in place and running.


    “We started in the morning of the 27th of December with virtually nothing, and it really hurt our early relief effort after the tsunami,” he told reporters. “We start tomorrow morning with 1,000 international aid workers, with several thousand local aid workers in Sumatra alone, with a dozen helicopters, with 50 to 100 trucks, with several landing boats which we can use for these islands, and we have very good working relations with the government of Indonesia both the local and regional levels.”


    United Nations officials are scheduled to start doing aerial surveys on Tuesday morning to gauge the full magnitude of damage. “My impression is that the system worked far better this time,” Mr. Egeland said.


    In Washington, the State Department spokesman, Adam Ereli, told reporters that the agency immediately began communicating with its embassies and coordinating with relief agencies in the region.


    “We’re applying what we’ve learned from the previous earthquake so that we can be prepared to be responsive quickly and in a meaningful way,” he said. “So where we are right now is having alerted all our posts, been in contact with all our posts, putting ourselves in battle mode to be in a position where we can act.”



    Reporting for this article was contributed by Joel Brinkley and Eric Schmitt from Washington, Jane Perlez and Andrew C. Revkin from New York, and Warren Hoge from the United Nations.


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  • Maureen Dowd


    OP-ED COLUMNIST


    The Vatican Code


    By MAUREEN DOWD





    Some may mock the Vatican for waiting until everyone on earth has read “The Da Vinci Code” to denounce “The Da Vinci Code.”


    I am not one of them. It’s Easter, and I don’t want to blot my catechism.


    It’s a little late, now that the two-year-old thriller by Dan Brown is a publishing miracle – with 25 million copies sold in 44 languages, a cascade of other books inspired by the novel and a movie with Tom Hanks set to start filming this spring – for Cardinal Tarcisio Bertone to intone on a Vatican radio broadcast: “Don’t read and don’t buy ‘The Da Vinci Code.’ “


    But when you think of the history of the Catholic Church, the Vatican is acting with lightning speed. It took the church more than 350 years to reverse its condemnation of Galileo. The Vatican only began an inquisition of the 16th-century Inquisition in 1998. It wasn’t until the reign of Pope John Paul II that the Vatican apologized for the crimes of the Crusaders and offered contrition for the silence of Catholics in the Holocaust. The church has still not apologized for shameful dissembling by its hierarchy on the sex abuse scandal. And America’s Catholic bishops only last week announced they were finally going to get serious about opposing the death penalty.


    The 70-year-old cardinal assigned by the Vatican to exorcise the success of the novel is the archbishop of Genoa, a former soccer commentator and a contender to succeed the ailing pope. “There is a very real risk that many people who read it will believe that the fables it contains are true,” he told Il Giornale.


    It evokes the Dan Quayle-Murphy Brown flap for a Vatican official to slam Dan Brown’s fictional characters, but a former Vatican reporter explained it this way: “The church is founded on a story that some people believe and some people don’t, so the Vatican tends to get very threatened by other versions of that story, especially racier ones.”


    Mr. Brown’s zippy version has Jesus and Mary Magdalene marrying and having children. This “perverts the story of the Holy Grail, which most certainly does not refer to the descendants of Mary Magdalene,” Cardinal Bertone said. “It astonishes and worries me that so many people believe these lies.”


    The novelist is not the first one to conjure romantic sparks between the woman usually painted as what one writer calls “the Jessica Rabbit of the Gospels” and the eligible young Jewish carpenter and part-time miracle worker.


    For years, female historians and novelists have been making the case that Mr. Brown makes, that Mary Magdalene was framed and defamed, that the men who run Christianity obliterated her role as an influential apostle and reduced her to a metaphor for sexual guilt.


    The church refuses to allow women to be ordained as priests because there were no female apostles. So if Mary Magdalene was a madonna rather than a whore, the church loses its fig leaf of justification for male domination and exclusion.


    It’s obvious that Vatican officials did not read to the end of Mr. Brown’s novel or they never would have denounced it.


    (Caveat lector: If you have somehow missed reading the blockbuster or are one of the thrifty souls waiting for the paperback to finally come out, do not read further.)


    After whipping you into a feminist frenzy over the hidden agenda of the church’s unjustly perpetuating itself as an all-male, all “celibate” institution – precepts that have clearly led to some unnatural perversions and attracted a disproportionate number of priests fleeing sexual confusion – Mr. Brown abruptly deflates you at the end, going along with the notion that women should stay silent and submissive, letting the men who run the church continue to run the church with men.


    The woman who is the descendant of Mary Magdalene and Jesus tells Robert Langdon, Mr. Brown’s Harvard symbologist hero, that the secret saga of how the church smeared her ancestor as a slut and swindled all women out of serious roles in the church does not need to be aired. It can continue to remain a secret.


    “Her story is being told in art, music and books,” the woman says, adding that things are gradually changing for women: “We are beginning to sense the need to restore the sacred feminine.”


    No whistle is blown. No alarm is sounded. Talk about an anticlimax for a fantastic ride. As it turns out, Mr. Brown is not the tormentor of the Vatican, but an ally.



    E-mail: liberties@nytimes.com


    Copyright 2005 The New York Times Company | Home | Privacy Policy | Search | Corrections | RSS | Help | Back to Top




  • Choice Is Good. Yes, No or Maybe?


    By EDUARDO PORTER





    CHOICE is the driving force of capitalism. Choosy consumers determine what products and companies thrive or die as they pick among tubes of toothpaste or plans for cellphone service. Choice fuels competition, innovation and efficiency.


    These days, consumer choice has claimed a prominent new position as a policy tool: the prescription for everything from improving public schools to paring bloated health care costs to saving Social Security.


    Yet even as choice is brought to bear on the nation’s most pressing problems, critics point out that expanding consumers’ options is not always a good idea. People, they argue, often do not know how to choose properly or they simply refuse to choose. Sometimes, critics argue, government should limit people’s choices. That is, choose for them.


    “More choice can be worse than less choice,” said Sheena Iyengar, a psychologist at Columbia University.


    Advocates of unfettered markets are riled by these arguments. “If you were to walk into a Wal-Mart and say to people, ‘Don’t you feel really depressed by having 258,000 options; shouldn’t it be their obligation to reduce the choice you must endure?’ They would think you were nuts,” said Newt Gingrich, the former speaker of the House of Representatives.


    Free marketeers like Mr. Gingrich argue not only that consumers are better than the government at making choices that drive an efficient economy. Choice, they argue, is a right. The government can limit it only when one person’s choice imposes costs on the rest of society.


    “The notion of entrusting a bureaucrat with the power over people’s choices is inauthentic in a particularly offensive way,” said Richard A. Posner, the legal scholar and federal appeals court judge.


    But empirical studies have found that people, regardless of intelligence, do not always choose well. Often they prefer to let inertia take over, unable or unwilling to choose for themselves.


    For instance, participation rates in 401(k) plans are known to rise sharply when the default choice for the employee is switched to an opt-out from an opt-in.


    In Sweden, where personal savings accounts were carved out of the social security system in 1998, 9 out of 10 new entrants to the work force let their investment portfolio go to a default fund set up by the government, instead of choosing one themselves.


    Too many options may drive consumers away. In one experiment, Ms. Iyengar found that people who were shown a selection of six different jams in a store were about 10 times as likely to buy a jar than those exposed to a range of 24 flavors.


    In another study, she found that people who chose one chocolate from a selection of 30 expressed more regret and uncertainty about their decision than those who chose among six kinds. That’s because with 29 other options, there is a bigger chance of losing out on something better.


    Of course, lack of choice will also inhibit people. When Ms. Iyengar gave undergraduate students $10 and the option to spend it right away or invest it, only 6 percent of them chose to invest when the professor decided the asset allocation.


    The key is whether people understand their choices, said Richard H. Thaler, an economist at the University of Chicago. “People have to know what their preferences are and they have to know how the options they have map onto their preferences,” he said.


    This might be easy when choosing between chocolate and vanilla ice cream. But it gets progressively more difficult as the number of flavors increases. When the risks are high and the decisions complex – as when choosing between medical procedures or investment portfolios – consumers may become easily flummoxed.


    In one experiment, Mr. Thaler and Shlomo Benartzi of the University of California, Los Angeles, asked employees in one company to select among three 401(k) portfolios.


    Unbeknownst to the employees, one portfolio was their own. The other two reflected the average and median choices of all the workers in the company. Yet only one in five employees preferred his or her own portfolio over the median. “Apparently people do not gain much by choosing investment portfolios for themselves,” Mr. Thaler wrote.


    Mr. Thaler and Cass Sunstein of the University of Chicago Law School suggested that it is proper for the government, or an employer, to set boundaries to choice to achieve desired social objectives, an approach they call “libertarian paternalism.”


    Sweden’s default fund for social security accounts – a mixed low-fee portfolio – is an example of such paternalism. Another would be to place the dessert display at the far end of the company cafeteria. Employees could still have dessert, but the hurdle to make that choice would be a little higher. Obesity might decline.


    Eric J. Johnson and Daniel Goldstein, co-director and associate director, respectively, of the Center for Decision Sciences at Columbia University, found that big majorities of Americans approve of organ donations, yet only about a quarter consent to donate their own. Meanwhile, nearly all Austrians, French and Portuguese consent to donate theirs. The difference? In the United States people must opt to become an organ donor. In much of Europe, people must actively choose not to donate. So if organ donation is considered a social good, American defaults could just be flipped around.


    Despite the problems, free marketeers argue that more choice is better, simply because it builds character. For instance, Judge Posner said, allowing people to invest part of their Social Security taxes in personal accounts is a step toward a system in which people pay for their own retirement. “It makes people more independent and responsible for their future,” he noted. “It makes them better citizens.”


    Copyright 2005 The New York Times Company | Home | Privacy Policy | Search | Corrections | RSS | Help | Back to Top




  • Karl Rove is assuming a more expansive role, bringing the same intensity to the big issues in President Bush’s second-term agenda that he brought to the president’s re-election campaign


    With Bush Re-elected, Rove Turns to Policy


    By RICHARD W. STEVENSON





    WASHINGTON, March 27 – Jack Kemp was causing problems for President Bush’s drive to overhaul Social Security, and it naturally fell to Karl Rove, Mr. Bush’s strategist, enforcer and closet policy expert, to take him on.


    Mr. Kemp, the 1996 Republican vice presidential nominee and a founder of a conservative advocacy group, was publicly attacking an idea floated by the White House to cut benefits in the retirement system and was rallying support for an alternative approach that, on paper, would be pain free. Mr. Kemp’s statements exposed a split among Republicans and complicated the administration’s efforts to prepare the public for possible benefit cuts.


    After a ceremony several months ago in the White House East Room that Mr. Kemp attended, Mr. Rove sought him out, associates of the two men said. But their exchange was less a scolding by Mr. Rove, they said, than an assertive, detailed argument against Mr. Kemp’s favored approach. Mr. Rove, they said, went through a point-by-point critique of the plan and left Mr. Kemp with the message that he considered it unworkable.


    As Mr. Bush pushes doggedly ahead with his battle to add investment accounts to Social Security, he is betting heavily on Mr. Rove’s well-chronicled political skills to build public support, hold Republicans together and overcome intense Democratic opposition.


    But as the confrontation with Mr. Kemp suggests, Mr. Rove is assuming a more expansive role, bringing the same intensity to the big issues in Mr. Bush’s second-term agenda that he brought to the president’s re-election campaign. In naming Mr. Rove deputy White House chief of staff for policy last month, on top of his continuing catch-all title of senior adviser, the president formally recognized Mr. Rove’s affinity for the nitty-gritty of governance and publicly acknowledged his influence over whatever deal might emerge on Social Security, his No. 1 domestic priority.


    “All roads lead to Karl,” said Kenneth J. Duberstein, a Republican lobbyist who was the White House chief of staff under President Ronald Reagan and is now part of Mr. Rove’s vast network of informal advisers and intelligence gatherers.


    Under one of his hats, Mr. Rove is running a sophisticated campaign on behalf of the president’s Social Security proposals, employing all the components of the national political machine built to re-elect Mr. Bush. Under the other, he is overseeing policy meetings where the administration’s senior officials analyze the competing Social Security proposals, bone up on arcane economic concepts and plot how to hit back at the substantive arguments made by people on the other side of the issue.


    Other presidents have had powerful advisers with a hand in both politics and policy. The most-cited model in recent times is James A. Baker III, who had a wide-ranging portfolio in the administrations of Mr. Reagan and Mr. Bush’s father, and went from political operative to treasury secretary, to secretary of state, then back to overseeing a presidential campaign.


    But the intensity of Mr. Rove’s involvement in politics and policy makes his current status unusual and gives him remarkably broad authority inside the White House and out. And in giving Mr. Rove his new title, Mr. Bush, freed from the need to think about re-election, seemed to acknowledge what everyone in Washington knows: that in this administration, as in all others, politics and policy are inextricably intertwined.


    “Karl Rove is the crossing guard at the intersection of policy and politics,” said Marshall Wittmann, a senior fellow at the centrist Democratic Leadership Council, who previously observed Mr. Rove for years as an aide to Senator John McCain, the Arizona Republican, and as legislative director of the Christian Coalition.


    “He blends political hack and propeller head in a way no one has ever achieved,” Mr. Wittmann said. “No one is going to question his political expertise or his policy expertise. The question for him is always one of hubris.”


    The most concrete change stemming from Mr. Rove’s additional title may be that he has moved to a prime piece of real estate on the first floor, down the hall from the Oval Office, from a small office on the second floor of the West Wing. Beyond that, at least as administration officials tell it, nothing fundamental has changed in his power or his role, and his additional title does not portend a more aggressive melding of political and policy concerns. Mr. Rove declined to be quoted for this article.


    To outsiders, it is hard to know exactly what to make of Mr. Rove’s new role as one of two deputy chiefs of staff (the other, Joe Hagin, is little known outside the White House but is also close to Mr. Bush). After years at Mr. Bush’s side – they met in the 1970′s and have worked together closely since before Mr. Bush first ran for governor of Texas in 1994 – Mr. Rove does not really need a new title to convey his power, especially after guiding the president to a convincing re-election last year. In retaining his title as senior adviser, he in any case has a job broadly defined enough to weigh in on big decisions whenever he wants.


    But on the organization chart, the new post leaves him – or the half of him that is purely policy – beneath Andrew H. Card Jr., the chief of staff and one of only two people in the White House (Vice President Dick Cheney being the other) whose power and reach are in the same league as Mr. Rove’s.


    “I count on him to keep me well informed and have me get engaged at the right time to help drive policy recommendations to maturity so the president can consider them,” Mr. Card said.


    Beyond his new bureaucratic chores, like allocating time on Mr. Bush’s schedule for policy discussions, helping set the president’s travel schedule and keeping track of daily policy developments for Mr. Bush and Mr. Card, Mr. Rove participates in a separate set of meetings devoted to Social Security. Twice a week he sits down to plot legislative strategy, and roughly as often participates in high-level meetings about the substantive issues in play.


    The talk runs from what the latest public polls show to the latest proposals being floated in Congress, participants said. From time to time, they said, Charles P. Blahous, the White House economic team’s resident expert on Social Security, gets so detailed and arcane in his presentations that only Mr. Rove can follow him.


    “He can talk the specifics even with Chuck Blahous,” Mr. Card said. “I’ve never actually seen him correct Chuck, but I have heard him tell Chuck how to explain what he’s saying so the rest of us can understand.”


    But while Mr. Rove’s policy acumen has helped him expand his portfolio, his influence is derived in large part from the political apparatus he has built up.


    He plays an important role in deciding where Mr. Bush, Mr. Cheney and other administration officials go as they crisscross the country trying to win public support. He is overseeing an intelligence-gathering effort that closely tracks the positions of every Republican in Congress and makes sure they get phone calls, invitations to the White House, rides on Air Force One or other expressions of support if they come under pressure from the forces battling Mr. Bush over Social Security.


    The work done inside the White House is augmented by the Republican National Committee, now run by Ken Mehlman, who managed Mr. Bush’s re-election campaign under Mr. Rove. The committee holds a nationwide databank on Bush supporters that Mr. Rove’s team amassed during the election, a treasure trove that Republicans said would be used to mobilize public pressure on Congress when Social Security legislation is taken up.


    Additionally, Mr. Rove is calling on a handful of outside groups to play a substantial, loosely coordinated role in the effort.


    Every Friday the Republican National Committee holds a meeting on Social Security that is often attended by Barry Jackson, Mr. Rove’s deputy in his senior adviser role, who handles much of the day-to-day oversight of the Social Security campaign. Also in attendance are representatives of Progress for America, an advocacy group that is running television commercials supporting Mr. Bush’s call for individual accounts in Social Security, and Compass, a business-backed group that is running a grass-roots campaign on behalf of the initiative.


    Although those groups operate independently of the White House, they have close ties to the administration and to Mr. Rove. Compass’s campaign is being run by Terry Nelson, who was one of Mr. Rove’s top aides as political director of Mr. Bush’s re-election campaign. Compass is an offshoot of the Alliance for Worker Retirement Security, which was once run by Mr. Blahous, the Social Security expert. Progress for America recently adopted an advertising strategy used by the Bush campaign, sponsoring traffic reports on radio stations in cities around the country.


    Many Democrats say Mr. Bush and Mr. Rove have reached too far on Social Security and are headed for the first big defeat of their partnership. Republicans have yet to settle their own differences; Mr. Kemp, for one, continues to publicly support the approach Mr. Rove objected to, which is embodied in legislation sponsored by Representative Paul D. Ryan of Wisconsin and Senator John E. Sununu of New Hampshire.


    And there is grumbling among some Republicans that Mr. Rove has mishandled the Social Security campaign. But Mr. Rove’s allies and fans say that he anticipated the difficulties of moving the Social Security debate forward and that he and Mr. Bush remain convinced that they will win in the end.


    “Anyone who thinks otherwise,” said Charlie Black, a veteran Republican strategist, “they’re underestimating Karl and they’re underestimating the president.”


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  • Warren E. Buffett has led Berkshire Hathaway for four decades


    Investigation of Insurance Puts Buffett in a Spotlight


    By TIMOTHY L. O’BRIEN





    Over the last four decades, Warren E. Buffett has built Berkshire Hathaway into one of the world’s largest and most successful insurers. Along the way, he has navigated the stock market with legendary prowess and offered folksy guidelines for proper corporate governance.


    Now, with investigators on three continents examining Berkshire affiliates and a deadline looming tomorrow to respond to an Australian regulatory inquiry, Mr. Buffett’s company is in the unfamiliar position of having to defend its integrity.


    Berkshire insurance affiliates run by Mr. Buffett’s most trusted deputies are involved in what investigators describe as possible financial manipulation at insurance giants like the American International Group and the Zurich Financial Services Group. Investigators are examining Berkshire transactions that they say helped lead to the collapse four years ago of an insurance company involved in the biggest financial scandal in Australian history.


    Investigators say they have traced many suspect transactions to a Berkshire subsidiary in Dublin, where at least two Berkshire executives who were recently banned from the Australian insurance market for engaging in abusive practices continue to work for the company.


    Investigators are trying to determine the extent of Mr. Buffett’s knowledge of the deals, which remains unclear. The involvement of other senior executives based in the United States, Ajit Jain and Joseph P. Brandon, and Ron Ferguson, a retired Berkshire insurance executive, is also unclear; all three men oversaw insurance operations that sold products at the core of international regulatory scrutiny. None of the executives has been charged with wrongdoing.


    The broad investigation into the insurance industry has already brought down top executives of other insurers, including Maurice R. Greenberg, the former chief executive of the American International Group. A.I.G. directors are nearing a decision to cut all ties to him. Among other transactions, regulators are looking at a deal Mr. Greenberg struck in late 2000 with the General Re Corporation, a unit of Berkshire Hathaway.


    While many companies are being scrutinized, one person briefed on the various investigations described General Re as “at the center of the storm.”


    A Berkshire spokesman declined to respond to questions about the executives, their business dealings or the investigations, other than to cite a statement from Berkshire’s most recent annual report: “Operating decisions for the various Berkshire businesses are made by managers of the business units. Investment decisions and all other capital allocation decisions are made for Berkshire and its subsidiaries by Warren E. Buffett.”


    To the extent that the statement distances Mr. Buffett from Mr. Jain, Mr. Brandon, and Mr. Ferguson – all of whom report or reported directly to him – it contrasts with Mr. Buffett’s description in his 2001 shareholder letter about his interactions with Mr. Jain. “I have known the details of almost every policy that Ajit has written since he came with us in 1986,” Mr. Buffett wrote. “Ajit’s business will ebb and flow – but his underwriting principles won’t waver.”


    Mr. Buffett has successfully dealt with scandals in the past. Berkshire invested heavily in Salomon Brothers in 1987 and four years later, Mr. Buffett agreed to become the firm’s interim chairman in the wake of a Treasury trading scandal, and he quickly cleaned house. Although he is best known for multibillion-dollar returns on investments in Coca-Cola, The Washington Post, Gillette and other concerns, his company, Berkshire, is an Omaha holding company that owns major insurers including National Indemnity and General Re.


    Mr. Buffett, 74, is a self-described devotee of the insurance business who relishes the challenge of assessing risks and offering policyholders protection from daily mishaps like auto accidents to more exotic catastrophes like hurricanes. As Berkshire’s insurance offerings have evolved, it has crafted ever more esoteric products that in theory exist to help users insulate themselves financially from the world’s calamities. But in practice, law enforcement officials and regulators say, users have deployed these same products to manipulate corporate earnings or mask underlying financial woes.


    The Securities and Exchange Commission; the Justice Department; the New York attorney general, Eliot Spitzer; and regulators in Ireland, Britain and Australia are all shining investigative spotlights on arcane products known as finite reinsurance – with General Re figuring in each of those investigations. Fitch Ratings, a firm that monitors insurers, criticized finite reinsurance in a recent report, noting that its “primary purpose is not true risk transfer in the traditional sense, but financial statement enhancement.” Analysts and regulators said that investigations of the improper use of finite reinsurance were still in their early stages but that in many instances the suspect buck stopped at Berkshire’s door.


    “At the end of the day, in terms of the finite universe that Fitch is aware of, Berkshire Hathaway has deep roots into this market,” said Michael J. Barry, a managing director at Fitch. “They’re one of the biggest sellers. And it’s just not here in the U.S. It’s global.”


    Reinsurance is protection insurers buy for themselves to limit their own exposure to large claims. Finite reinsurance is used to soften the impact of claims that may have to be paid out over a particularly long period. Investigators and regulators said that some reinsurers have used finite products as substitutes for bank loans, selling them to companies that want to artificially pump up their books.


    The perils of that game have surfaced in charges of financial manipulation and a number of prominent insurance failures. Australian regulators said that a troubled company named FAI used finite products to feign profitability shortly before HIH Insurance Ltd., a fast-growing Australian conglomerate, bought it in 1998. HIH later toppled beneath the weight of ill-considered acquisitions like FAI and other problems.


    According to regulators, General Re, the Berkshire affiliate, sold suspect finite products to FAI in 1998 when Mr. Ferguson was the unit’s chief executive. Another Berkshire unit, National Indemnity, sold a questionable finite product to FAI in 1998, when Mr. Jain was overseeing the unit. That transaction included a “side letter” that required FAI not to seek payment on the policy for three years. Regulators consider side letters red flags because they mitigate the risk transfer in finite reinsurance – and essentially repackage the product as a short-term loan used to spruce up an income statement.


    Although Berkshire itself acquired General Re in 1998 after the first FAI transaction, Mr. Ferguson served as General Re’s chairman and chief executive from 1987 to 2001. He remained as chairman until retiring in 2002. Berkshire’s Mr. Brandon, who joined General Re in 1989 and became the insurer’s chief financial officer in 1991, has been the unit’s chief executive since late 2001. When Mr. Ferguson was succeeded as chief executive by Mr. Brandon in 2001, Mr. Buffett offered praise for both men.


    “Ron has exemplified integrity, professionalism and leadership,” Mr. Buffett said at the time. “In selecting the people I want to work with and who have run businesses for me, I look for the very same qualities that I would want to see in a man who was going to marry my daughter. Ron passes this test with flying colors.


    “I have great confidence in Joe Brandon’s leadership abilities,” Mr. Buffett added, “reinsurance expertise and financial skills, and look forward to working closely with him and General Re’s next generation of leaders.”


    Insurance premiums accounted for about $21 billion of Berkshire’s $74.3 billion in revenue last year. General Re represents one of Berkshire’s four main insurance units and contributed about a third of the premiums Berkshire booked as revenue last year, but it has been plagued by large underwriting losses in recent years.


    In October, Australian regulators barred six General Re executives from the country’s insurance industry for improprieties related to the FAI transaction. Two of them, John Houldsworth and Tore Ellingsen, continue to work for Cologne Re, a General Re division based in Dublin. In December, Australian regulators barred another General Re executive, Milan Vukelic, for the FAI deal, but reinstated him on appeal. Mr. Vukelic is now the chief executive of the Faraday Group, a General Re unit based in London. Mr. Houldsworth, Mr. Ellingsen and Mr. Vukelic did not respond to phone calls seeking comment.


    Regulators and investigators said that most of Berkshire’s questionable finite products sold in Australia and elsewhere originated in a General Re division known as the “alternative solutions group,” which is based in Dublin. Ireland is among the world’s friendliest jurisdictions for reinsurers, offering a regulatory environment that some analysts have criticized as overly loose and forgiving. Ireland established a new monitoring agency, the Irish Financial Services Regulatory Authority, in 2003 in response to these concerns. Regulators said the agency is currently investigating General Re’s operations in Ireland.


    Mr. Spitzer was in Dublin last week to give a speech on corporate governance. Mr. Spitzer’s office is investigating a questionable finite transaction between General Re and A.I.G. that originated in Dublin in late 2000 and early 2001 and involved Mr. Ferguson. The attorney general’s office said the deal artificially increased A.I.G.’s premium reserves and helped it acquire another company. Mr. Buffett and Mr. Greenberg, the former A.I.G. chief, have been friendly rivals over the years and they banded together in an unsuccessful attempt to buy the portfolio of Long Term Capital Management, a hedge fund that roiled financial markets when it nearly collapsed in 1998.


    The S.E.C. and Mr. Spitzer’s office issued subpoenas to Berkshire, General Re and Berkshire’s other insurance affiliates in December and January. Other problems have cropped up for General Re. It sold a questionable finite product to an Australian unit of Zurich Financial, a Swiss insurer buffeted by financial woes, and Australian regulators are investigating that transaction. A Zurich Financial spokesman confirmed the investigation but declined to comment other than to say the deal occurred between 2000 and 2002.


    Australian regulators recently told General Re that the company has until tomorrow to show cause why it should not face further investigations for finite dealings in Australia. Meanwhile, the Justice Department is investigating General Re for questionable policies it sold to Reciprocal of America, a failed malpractice insurer that operated in the South. Tennessee and Virginia regulators have also sued General Re for fraud, contending that the company sold finite policies to Reciprocal that masked financial problems at the company.


    In addition to Fitch, Standard & Poor’s, another major ratings agency, has voiced misgivings about finite reinsurance while also pointing out its belief that most finite products have legitimate and important uses. A spokesman for the Reinsurance Association of America, an industry trade group, said that reinsurers were working with state regulators and law enforcement officials to develop a response to the recent round of investigations but that the industry does not believe that its accounting and disclosure practices need repair.


    An individual with direct knowledge of Berkshire’s finances said finite reinsurance accounts for just 1 percent of the company’s overall earnings and that the business does not propel its growth. So far, all the inquiries have not been much of a drag on Berkshire’s stock. Even so, the legal risks and possible damage to its reputation that Berkshire has incurred as a finite vendor may be costly.


    “From an investigative perspective we’re probably at the top of the fourth inning,” said Mr. Barry of Fitch. “There’s a lot more that we expect to happen.”


    Copyright 2005 The New York Times Company | Home | Privacy Policy | Search | Corrections | RSS | Help | Back to Top




  • Liz Smith, the columnist, left, chatted with Donna Hanover last week at an event sponsored by Elle Magazine and Mount Holyoke College.


    In the Blog Era, Liz Smith Wonders if There’s Room for the Pro


    By KATHARINE Q. SEELYE





    Let’s dish…


    So LIZ SMITH was having dinner with NICOLE KIDMAN at New York’s Four Seasons and it seems the actress really likes to pig out.


    “Nicole ate the entire bread basket,” Ms. Smith said. “Then she said, ‘Let’s have some of those fabulous fried shrimp.’ ” Ms. Kidman then plowed through a main course and finished with chocolate cake and ice cream, convincing the gossip columnist that the actress meant it when she said she did not believe in diets.


    Okay, pretty tame stuff by today’s gossip standards. But the gentle behind-the-scenes glimpse of celebrities is Ms. Smith’s stock in trade. And it has helped her survive the increasingly cutthroat business of gossip-writing, an industry that has mushroomed over the last three decades and spawned scores of magazines, television shows, Internet sites and blogs that are consumed with all manner of people-watching and celebrity doings.


    In an interview last week, Ms. Smith admitted that the gossip industry has become so pervasive and ruthless that it is difficult to break through with a distinctive voice.


    “You can go to so many places now to get the down and dirty, I don’t even try,” she said. “It’s really hard now to get a scoop. With the whole world writing gossip, where is the place for the professional gossip?”


    Ms. Smith, who started her career as a columnist at The Daily News in New York in 1976, is now 82 and continues to pump out six columns a week. She has just signed another two-year contract with The New York Post and is in negotiations for another contract with Newsday. Her new book, “Dishing,” comes out next month.


    Ms. Smith said she was initially reluctant to take the job at The Daily News because, as she told her editors at the time, she thought gossip was dead.


    Gossip-writing was a no-go for a time, after the industry collapsed in scandal in the late 1950′s. But it got a second wind in the early 1970′s with the introduction of People magazine, and now it is flourishing.


    But Ms. Smith, who said she believed she was the highest-paid newspaper gossip columnist in the country – she was estimated to be making $1 million in 1998 – said she doubted she would be hired as a new gossip writer today.


    Col Allan, editor in chief of The New York Post, agreed that Ms. Smith would have a hard time in today’s world.


    “It’s rare for a successful columnist not to have a mean streak and she doesn’t have a mean streak,” he said. “These days it would be difficult to carve out a position for yourself without that, partly because people look for it.”


    Gone are the days when a single powerful columnist could make or break a career. At the height of Walter Winchell’s influence in the late 1930′s and 1940′s, his column was syndicated in more than 2,000 newspapers; Ms. Smith is syndicated in 70 newspapers.


    “Franklin Roosevelt used to give him tidbits,” Ms. Smith said of Mr. Winchell. “Imagine that! Today, even serious reporters can’t get the ear of the president.”


    Gone too are the days when columnists had individual identities. Hedda Hopper and Louella Parsons, who created their own celebrity brands with their trademark chapeaux, have been replaced by interchangeable mass market magazines and faceless blogs.


    But what sets Ms. Smith apart is that she doesn’t trash her subjects. This helps her maintain access, but it also means her column often lacks the prerequisite of the day: edge.


    Jeannette Walls, the purveyor of gossip at MSNBC, said of Ms. Smith: “She made a decision not to be nasty and not to exist on schadenfreude, and that’s not a formula that would work today.”


    Ann Gerhart, who co-wrote The Reliable Source column for The Washington Post from 1995 to 1999, described Ms. Smith’s modus operandi this way: “She’s friendly with Lauren Bacall, so when Lauren Bacall updates her memoirs, Liz will throw her a bouquet and help boost sales. You have far better access when you’re kind to people.”


    In today’s gossip world, being kind is hardly an option. “The Internet and blogs have returned gossip to its earliest human roots – the kind of gossip that the priests told you was a venal sin,” said Ms. Gerhart. “You can make it up. You can speculate wildly. You can accuse people of the most taboo practices, all in this sort of merry way.”


    In this free-for-all, some celebrities are branching into gossip themselves. Rosie O’Donnell, the former talk show host, is writing her own blog. Teri Hatcher, of “Desperate Housewives” on ABC, recently interviewed Ms. Smith for Interview magazine’s May issue.


    “The world has come full circle,” Ms. Smith chuckled. “Anybody can be a gossip.”


    Publicity agents, too, are less reliant on the gossip columnists, partly because they have so many other outlets. “Press agents used to beg you” to write about their clients, Ms. Smith said. “But now they only want the cover of Vanity Fair or Vogue and they don’t much care about being in the gossip columns. Most of the gossip columns have already treated their clients so badly, the agents don’t want to serve them in any way. Gossip columnists generally have no conscience.”


    Leslee Dart, president of the Dart Group, a marketing and public relations agency specializing in the entertainment industry, agreed.


    “Columnists now are willing to go further, divulging things that 20 years ago you wouldn’t have seen and wouldn’t have believed,” she said in an interview last week after appearing with Ms. Smith at a forum sponsored by Elle Magazine and Mount Holyoke College.


    Because of that, Ms. Dart said, some agents spend their time negotiating with columnists to protect their clients. “I know there are press agents who say to the columnists, ‘If you don’t write this, then I’ll give you so and so,’ ” Ms. Dart said, adding that that was not her style. “My best advice to a client is that today’s newspaper wraps tomorrow’s fish. And a week from now or a month from now, we’ll find a way of balancing it out.


    “If someone’s going through a public divorce and they feel the need to put something on the record, Liz will do that. She’ll give you the opportunity to speak your mind, and because of that, people are more willing to sit down and tell her what’s going on.”


    This kind of transaction makes Ms. Smith a further anachronism in her profession, where one of the newest entries, in Los Angeles, is a blog called Defamer, a title that almost begs its subjects to take it to court.


    David Patrick Columbia, editor of NewYorkSocialDiary.com, a blog that reports on social events and the celebrities and socialites who attend them, said that where Mr. Winchell used his power to destroy people, Ms. Smith used hers to help people, including work on philanthropic projects and to promote literacy.


    “She gives away her money,” he said. “There are a lot of people whose rent she’s paid. When I started my Web site, I hardly knew her, and she asked me if I needed to borrow some money. She asked me three times.”


    Even back in 1990 when Ms. Smith scooped the world with news of the breakup of Donald and Ivana Trump, she specialized in lending a sympathetic ear. Ms. Smith, then with The Daily News, allied herself with Ivana while Cindy Adams of The New York Post allied herself with Donald, a standoff that further inflamed New York’s tabloid wars.


    Ms. Smith is now Ms. Adams’s colleague on The Post, where their work appears as part of Page Six, a gossip brand name that Mr. Allan, the editor, said was recognized the world over and that thrives even in the age of bloggers. “Page Six survives because people expect original content from it and they get it,” he said. “It drives tremendous traffic to our Web site.”


    Gossip has been a circulation-builder for the tabloids, and advertisers like to appear on Page Six. But while more traditional newspapers have an uneasy relationship with gossip, they have devised their own versions of celebrity columns. Last week, both Richard Leiby, who has written The Reliable Source at The Washington Post since January 2004, and Joyce Wadler, who has written Boldface for The New York Times since 2001, said they were leaving their columns. Mr. Leiby said he was tired of writing ephemera, even though he was widely read.


    “What people hunger for is insider, salacious material,” Mr. Leiby said. “At The Post, that’s a high-wire act. We’re beholden here to the two-source rule or direct observation or document-based material.”


    Ben Bradlee, the former executive editor of The Washington Post, said the mainstream press was conflicted over how to handle gossip, even though it was one of the best-read parts of the paper. “We’ve had more bloody trouble with gossip columns,” Mr. Bradlee said. “We deep down in our little constipated souls don’t believe in gossip columns.”


    He said that articles in the 1960′s and 1970′s by Maxine Cheshire, The Post’s long-time society writer, required his endless attention as an editor. “I spent more time with Max than I spent with Woodward and Bernstein,” he said.


    Ms. Walls, at MSNBC, said that editors had a love-hate relationship with gossip. “It brings in readers and viewers, but you lose credibility,” she said. Ms. Walls, who wrote a book called “Dish” in 2000 about the evolution of gossip, said the Internet was “the perfect format” for gossip.


    “It’s quick and immediate, you can write short, and you can go into it and update it if something happens,” she said.


    The real-time pace of Internet gossip has made it difficult for newspaper gossip columnists to stay ahead of the curve. Mr. Leiby said that many people in the Post newsroom monitored Wonkette.com, a Washington blog, all day long. “She often has the lead on me because she’s in real time,” he said.


    But Ms. Smith said that the blogs left her cold. She says she reads six newspapers a day, but not the blogs. “I only have a few years left to live, and I don’t have time for them,” she said. “Besides, I don’t believe them.”


    Copyright 2005 The New York Times Company | Home | Privacy Policy | Search | Corrections | RSS | Help | Back to Top



  • Make It in Dan Tana’s, You Can Make It Anywhere



    The restaurant is always packed, and if you’re not a regular, sometimes you might just fuhgeddaboutit.


    March 27, 2005

    Make It in Dan Tana’s, You Can Make It Anywhere


    By HOOMAN MAJD





    LOS ANGELES


    ON a Monday night at Dan Tana’s restaurant, two generously proportioned men with pronounced Brooklyn accents stood waiting at the bar for a table to be ready. Wearing a velour jogging suit accessorized by a few gold chains, the slimmer of the two unfurled a roll of hundreds to pay for his drinks. The other, wearing gabardine slacks with an oversize rayon shirt, never looked away from the N.C.A.A. tournament playing on the muted televison hanging above the bar.


    It would be a typical scene in any one of a dozen restaurants in Queens, Brooklyn or the Bronx; but Dan Tana’s is located just outside Beverly Hills on Santa Monica Boulevard and Brad Grey was sitting at a nearby table. Mr. Grey, the newly minted chairman of Paramount Pictures, was eating dinner with his former partner, Bernie Brillstein, a founder of the production and management firm Brillstein-Grey, in a booth with their wives. Dabney Coleman, meanwhile, would walk through the door shortly, followed by Marko Jaric of the Los Angeles Clippers.


    With its red-and-white checked tablecloths, plastic floral arrangements and hanging Chianti bottles, Dan Tana’s hardly seems like one of the most sought-after reservations in town. But for 41 years that is exactly what it has been. Over time, regulars like Lew and Edie Wasserman have given way to Rick Yorn and his brother Pete; Johnny Carson to Jay Leno; Julie Christie to Cameron Diaz. And while 30 years ago Drew Barrymore was getting her diapers changed in one of the leatherette banquettes, these days you might see Leonardo DiCaprio seated a few tables away from Clint Eastwood, who could be next to Rupert Murdoch, whose table might be later occupied by George Clooney.


    Dan Tana’s is a rare place, regulars say, where generations mingle, where people go to go; not to be seen. “It’s one of my very favorite restaurants,” said Sumner M. Redstone, the chairman of Viacom and therefore Mr. Grey’s boss’s boss. Mr. Redstone goes to Tana’s, as some of the regulars call it, as much as three times a week when he’s in Los Angeles. He was, in fact, just about to dig into some takeout the restaurant had sent over. “I take everyone there and they all fall in love with it,” he said. “It’s the first restaurant I took my wife Paula to.”


    Known for its steak, which comes in only one cut – New York strip – and is served with a dish of pasta as a side, Dan Tana’s has not changed its menu since it opened in 1964, when salad meant iceberg and pasta was spaghetti. “It’s like Arthur Avenue,” said Mr. Brillstein, referring to the old Italian Bronx neighborhood of his native New York. “Great food,” he explained, as he finished off a cannoli, “and an eclectic crowd.”


    “You can bring anyone here: even the head of a studio,” he said, gesturing toward Mr. Grey.


    Mr. Tana, a Yugoslavian soccer star, defected to the West in 1953 with hopes of playing soccer in the United States. Instead, he found himself in Hollywood playing bad guys in movies including “The Enemy Below” (1957). (He also lent his name to the lead character in the television series “Vega$.”)


    Mr. Tana is neither Italian nor even from New York, yet he has created what many people view as a shrine to their old East Coast stomping grounds.


    “It reminds me of my old neighborhood in New Jersey,” said Rick Yorn, the talent agent.


    Mr. Coleman, who has come to the restaurant so regularly since it opened in 1964 that the steak is named after him, said, “It’s the best New York saloon in L.A.”


    Mr. Coleman arrives on the later side, about 10 p.m. – just as the younger crowd begins to fill the room. Though Los Angeles is a town where even the most popular restaurants can be deserted by 10:30 p.m., in true New York style the kitchen at Dan Tana’s takes its last order at 1 a.m.; the restaurant is open until 2.


    But even non-New Yorkers find themselves seduced by the pull of Dan Tana’s. “It’s like eating in your living room,” said David Naylor, a video and commercial producer who has been dining there two or three times a week since the mid-70′s. “I like the fact that when I walk in the door I’m handed a glass of Dewar’s on the rocks.”


    Famous for dating Julie Christie, Joni Mitchell, and Linda Fiorentino, among others, Mr. Naylor has taken them all to Dan Tana’s.


    “I’ve seen it all,” he said. “From the drug-taking in the wine room, to fights where plates of pasta fly across the room. It was one of the only places between Hollywood and the West Side where you could get a decent meal and where there were no paparazzi.”


    This lack of paparazzi, who long ago gave up trying to penetrate this fiercely protected turf, and the fact that no one at Dan Tana’s seems at all interested in trading on the famous and powerful people they serve every day, is according to regulars one of its most singular charms. So is the fact that celebrities don’t necessarily get first pick of the scant 20 tables. Craig Susser, the maître d’hôtel, who has worked there for 18 years, said he has to turn away four or five people for every reservation he makes and that the restaurant gives first priority to regulars.


    “Our best clients are the regulars who come at least once or twice a week,” Mr. Susser said. “Even a studio chief might not get a booth at the last minute if they haven’t been in for a while,” he added.


    Mr. Naylor once brought Martha Stewart, who is a friend of his, because she wanted to know where he ate on a Saturday night. Ms. Stewart suggested that he use her name to get a reservation. “I had to explain to her that that doesn’t work at Tana’s,” he said with a laugh.


    So how do you become a regular, or at least someone who can get a table once in a while? Mr. Susser said it’s simple. “You just have to be patient and flexible,” he said. “If you can eat at 10 o’clock instead of 8, you’re more likely to get in. Or if you’re willing to sit in the back room instead of ‘front-side’ ” (where the bar is). It also helps if you’re generous; Phil Spector once left a $500 tip on a $50 tab.


    When Mr. Tana opened his restaurant he played up the role of the glad-handing proprietor, assiduously greeting the famous and the not-yet famous who flocked through his doors. Today, however, he spends much of his time in London and Belgrade, where he has been on the board of professional soccer teams.


    Still, like a parent who has left the teenagers alone for a weekend, he always comes home, for about a week every month. When he is in town he is at his restaurant, usually standing at the bar, talking to the regulars.


    “I’m as much at home there as any restaurant, and I’ve been to a lot of restaurants,” Mr. Redstone said. “He’s a great host.”


    Copyright 2005 The New York Times Company | Home | Privacy Policy | Search | Corrections | RSS | Help | Back to Top