www.charlotte.com Posted on Fri, Jan. 31, 2003

WASHINGTON - Los Alamos National Laboratory officials failed to act to address problems in managing lab property and discouraged employees from voicing concerns, according to a report released Thursday by the Energy Department's inspector general. The report also corroborated many of the claims about weak internal control and property management at the lab made by investigators Glenn Walp and Steve Doran, and said the lab's firing of the two men after they blew the whistle on the problems was "incomprehensible." -- ASSOCIATED PRESS

NATION

Man's body hung from tree for at least a year

OLYMPIA, Wash. -- A man's body was found hanging from a tree in a rural area, and police said it may have been there for a year. No foul play was suspected. The body was reported Tuesday by a man who said he first saw it a year ago but kept quiet because he was facing outstanding warrants and feared arrest, police said. He called authorities after returning to the area -- a sparsely populated, heavily wooded part of Olympia -- and seeing the body still there, dangling from a noose about 40 feet off the ground. -- ASSOCIATED PRESS

AIR FORCE Staff Sgt. Sheridan Ferrell II was sentenced to six years in military prison Thursday for stealing four laptop computers from the center that oversees operations in the Middle East. He will be demoted and dishonorably discharged after his release from prison. -- ASSOCIATED PRESS

THE DIOCESE of Metuchen, N.J., will pay $800,000 to 10 current and former parishioners who claim they were sexually abused by five priests. In Kentucky, the Roman Catholic Archdiocese of Louisville reached out-of-court settlements with three men who claimed the church covered up their complaints of abuse by a priest in the 1960s; those terms were not disclosed. -- ASSOCIATED PRESS

TWO HIT MEN who were hired by a philandering New Jersey rabbi to kill his wife were sentenced to 23 years in prison Thursday for the fatal beating. Leonard Jenoff, 57, and Paul Daniels, 28, confessed nearly three years ago to killing Carol Neulander in 1994. They later testified against Rabbi Fred Neulander and helped secure his murder conviction last year. Neulander, 61, was sentenced earlier this month to life in prison. -- ASSOCIATED PRESS

THE NATIONAL Association of Police Organizations Inc., which represents more than 1,000 police unions around the country, filed a lawsuit in Manhattan on Wednesday claiming that Ford failed to fix a defect that can cause its Crown Victoria police cruisers to erupt in flames when hit from behind. -- ASSOCIATED PRESS

WORLD

Ireland will ban smoking in pubs, starting in 2004

DUBLIN, Ireland -- The social hubs of Ireland, the pub, is going smoke free. Bowing to health concerns, the government said Thursday that it will ban smoking from all workplaces, including pubs, where a pint and a cigarette have long gone hand in hand.

"This ban will mean a massive cultural change for people right around this country," said Health Minister Michael Martin in announcing the new rules. In fact, the change is so significant that the government has given the public 11 months' notice before enforcing the ban. The new law takes effect Jan. 1. -- ASSOCIATED PRESS

AN INDONESIAN COURT acquitted a prominent Islamic militant leader Thursday on charges of inciting Muslims to attack Christians on the religiously divided Maluku Islands. The cleric, Jaffar Umar Thalib, the head of a paramilitary group called Laskar Jihad, walked free. In contrast, two Christian separatist leaders were each sentenced two days ago to three years' imprisonment for subversion during the violence on the Malukus, in which thousands of people have been killed. -- NEW YORK TIMES

MOROCCO AND SPAIN announced Thursday the restoration of full diplomatic ties, ending a 15-month dispute that peaked with a military standoff over a tiny, uninhabited island. -- ASSOCIATED PRESS

BRAZIL'S NEW PRESIDENT launched his anti-hunger program Thursday with a move to provide $14 a month to 1.5 million families. President Luiz Inacio Lula da Silva's hunger task force estimated 46 million of the country's 175 million citizens survive on less than $1 a day. -- ASSOCIATED PRESS

CAMBODIA APOLOGIZED and offered compensation Thursday for a riot that damaged the Thai Embassy and severely strained relations with its neighbor. The embassy was partially burned and vandalized by mobs during riots Wednesday, leaving one Thai dead and seven injured. -- ASSOCIATED PRESS

sg.biz.yahoo.com Saturday February 1, 5:45 AM By Terry Wade and Gerald Jeffris Of DOW JONES NEWSWIRES

BRASILIA (Dow Jones)--European Union Trade Commissioner Pascal Lamy paid a visit to Brazilian President Luiz Inacio Lula da Silva on Friday, hoping to jumpstart trade talks stalled by Europe's reluctance to scrap its agricultural subsidies.

ADVERTISEMENT Lamy, who earlier this week admitted E.U. trade growth in South America might be stymied by the competing U.S.-led Free Trade Area of the Americas initiative, said South America's Mercosur customs union was dragging its feet on coming up with a counterproposal to an E.U. offer.

He also spoke in general terms about what he characterized as a generous E.U. offer. But it's the specifics that are bothering Brazil, the leader of Mercosur, which also includes Argentina, Uruguay and Paraguay.

"The central proposal is to reduce domestic barriers by 55% and export support by 45%," Lamy said at a press conference. He added the E.U. proposal covers 90% of the goods traded between the two blocs.

Sounds good. Except to Brazil, where the specifics are all about agriculture. Brazil is the world's biggest grower of coffee, oranges, and sugarcane, has the globe's largest commercial cattle herd and is the second-largest soybean producer.

Agriculture has been a key source of much of Brazil's export expansion in recent quarters, a trend that, along with falling imports, has quickly narrowed the country's current account gap and should put the trade surplus north of $15 billion this year.

Despite the export growth, Lula wants more access abroad and says hefty agricultural protections in the U.S. and E.U. need to be taken down. With the local economy sluggish, a cheap currency that is fueling exports offers Lula one of the few means of boosting economic growth.

Though it's hyperbole, a common saying in Brazil's agricultural circles holds that that you could buy an apartment in Brazil for what it takes to produce a cow in France.

"The E.U. proposal is broad in numerical terms, but it still doesn't meet all of our interests," Brazilian Foreign Minister Celso Amorim said in his typically understated manner.

Amorim's aides said they will submit a counteroffer to the E.U. proposal by Feb. 28 as required.

Lamy said the E.U. offer does include agriculture.

"We've put our cards on the table, not all, but we've included agriculture, which we know is important to Mercosur," he said.

But the Brazilians say it's not enough and Lula, a legendary union negotiator, has made clear he won't sign any trade deal that fails to include Brazil's most competitive sector.

Unless Lamy can engineer support back at home for deep changes in Europe's Common Agricultural Policy, the sticking points with Mercosur won't go away.

Earlier this week, Lula lambasted U.S. agriculture subsidies while visiting French President Jacques Chirac.

He may well have been criticizing the E.U. too, as it's generally agreed E.U. tariffs exceed those in the U.S.

Besides being the leader of Mercosur, Brazil is the co-chair of talks with the U.S. to create the FTAA by 2005 and has repeatedly signaled it will pressure the U.S. and E.U. to make tariff concessions by negotiating on competing trade fronts at the same time.

-Terry Wade in Sao Paulo and Gerald Jeffris in Brasilia, Dow Jones Newswires; 5511-3145-1479; brazil@dowjones.com

www.washingtonpost.com By Carlos A. DeJuana and Todd Benson Reuters Friday, January 31, 2003; 6:46 AM

SAO PAULO, Brazil - Brazil's new president, Luiz Inacio Lula da Silva, has spent his first month on the job doing everything he can to break protocol.

The burly, gruff-voiced former metalworker cries in public and drives his security detail nuts by jumping out of the car unexpectedly to chat with supporters outside the presidential palace. Recently he flew to Europe on a commercial flight to save his penny-pinching government some cash.

Lula, it seems, is surprising just about everyone, supporters and detractors alike.

"The critical question was always Lula's capacity to lead, and so far he has shown that he is quite adept and frankly better prepared than we thought for the presidency," said Riordan Roett, director of the Western Hemisphere Program at Johns Hopkins University in Washington.

Lula, 57, was elected Brazil's first working-class leader in October, winning a landslide in his fourth bid for the presidency. To get there, he had to overcome serious doubts that he -- a former left-wing union leader who never went beyond elementary school -- could aptly steer the world's fourth-most populous democracy and ninth-largest economy.

Spooked by Lula's radical past, financial markets plumbed to record lows before his victory, expecting him to default on the country's $250 billion public debt and drive Brazil -- and perhaps the rest of Latin America with it -- to ruin.

So far, he appears to be proving the skeptics wrong.

"On the economic front, the government has only put out positive signals," said Sergio Abranches, a political columnist and consultant based in Rio de Janeiro.

Lula's top economic chieftains, Finance Minister Antonio Palocci and Central Bank President Henrique Meirelles, have repeatedly stressed the administration's commitment to low inflation and austere fiscal policies, evoking cries of betrayal from the far left of Lula's own Workers' Party.

Investors took notice and sent Brazil's stocks, bonds and currency soaring in the first half of January before the threat of a U.S. war against Iraq cast a pall over global markets.

LULA SUPERSTAR

Brazilians too are rallying behind their new president who is mobbed like a rock star wherever he goes. A poll this week showed nearly 80 percent of Brazilians believe Lula will do a good or a great job of leading the country.

If anything, Lula has spent his first month in office trying to temper those hopes, saying it will take time to narrow Brazil's yawning income gap, create more jobs and get the economy running at a healthy rate.

Analysts say he is spending his political capital wisely.

While the finance ministry is busy cutting spending across the board, Lula spends the bulk of his time talking up social programs like his flagship "Zero Hunger" project. Some of his first acts as president were to suspend a $700 million fighter jet contract, arguing the money would be better used on social programs, and to take his entire Cabinet on a reality tour of Brazil's poorest ghettos to "look misery in the eye."

He has also been careful to cultivate allies in Congress, skillfully brokering the nomination of former President Jose Sarney to lead the Senate over a rival candidate who was more hostile to the president's agenda.

On the international stage, Lula has won praise from anti-globalization protesters and the world's financial elite alike, while leading a push among six nations to negotiate a peaceful end to Venezuela's political crisis.

"Both in terms of the political handling internally and the foreign policy initiatives, what we've seen so far is very encouraging," said Roett.

STRESS POINTS

But Lula, and Brazil, aren't out of the woods yet.

If the honeymoon is to last, analysts warn, Lula is going to have to move swiftly to pass much-needed economic reforms, like overhauling Brazil's costly pension and tax regimes.

Abranches, the political analyst, fears Lula's penchant for opening each policy initiative to debate with the public could hamper the reform efforts.

"Every time you allow more players in the game, the chances of maintaining the status quo increase violently," he said.

Lula will also to have to get even tougher on the fiscal front to reduce Brazil's crushing debt burden, now equivalent to 56 percent of gross domestic product.

One way to do this would be by pushing up the government's budget surplus above the current target of 3.75 of GDP -- something Finance Minister Palocci has said is in the works.

While raising the surplus would certainly win Lula and his economic team more points on Wall Street, fickle financial investors are unlikely to give the new president an easy ride.

"Lula is beginning to acquire credibility, but this process is far from being consolidated," said Paulo Leme, managing director of emerging markets at Goldman Sachs in New York. "The demanding part will come, which is delivering the goods."

www.forbes.com Reuters, 01.31.03, 10:56 AM ET

In SAO PAULO story headlined, "Brazil stocks choppy,currency ticks up,Iraq weighs," please read in paragraph 14 "...It announced on Friday it did not make an $85 million payment..." instead of "...it made an $85 million payment..." Corrects to show Eletropaulo did not make payment.

A corrected version follows.

SAO PAULO, Brazil, Jan 31 (Reuters) - Brazil's stock market hovered near break even in volatile trade but the currency ticked slightly higher on Friday amid ongoing worries about the financial impact of a U.S. war on Iraq.

Traders said signs inflation was slowing had helped boost markets early in the morning, but the increasingly likelihood of war in the Middle East continued to haunt investors.

"The market isn't being very consistent," said Alvaro Bandeira, head of Agora Senior brokerage.

"The possibility of war is always in the background, but we have some good news in the meantime, like the IGP-M (inflation index) which came out well."

The IGP-M index slowed for the second month in a row on January, bolstering hopes the spike in prices seen late last year may be easing.

The Sao Paulo Stock Exchange's benchmark Bovespa <.BVSP> index was 0.05 percent lower at 10,745 points near noon after opening on the upswing on Friday.

The Bovespa rallied earlier in the month as investors grew more confident President Luiz Inacio Lula da Silva would not steer the economy into a hole, as feared by some before his election in October.

Indeed, investment bank Morgan Stanley raised its recommendation on Brazilian bonds to outperform from market perform on Friday amid optimism Lula will have congressional support to pass reforms to modernize the antiquated pension and tax systems.

But worries the outbreak of war will scare investors away from emerging markets such as Brazil has plunged the index back into the red for the year.

Brazil's currency, the real, has also lost the gains it made this month and is near flat for the year so far. On Friday it was 2.2 centavos firmer at 3.542 per U.S. dollar, giving stocks a lift as well. "The more agonize over how long before a decision on the war takes, the more turbulent the market is going to be," said Luiz Roberto Monteiro, head of equities trading at Souza Barros brokerage in Sao Paulo.

He said the market would be especially keen to see the reaction to U.S. Secretary of State Colin Powell's presentation before the United Nations on Wednesday. Powell is expected to present evidence that Iraq is hiding weapons of mass destruction and has ties to al Qaeda to strengthen the United States' case for war. On the home front, ordinary shares for Embratel were up 3.1 6 percent at 4.25 reais.

Shares for energy company Eletropaulo <ELPL4.SA> were also propping up the market with a 1.35 percent rise to 26.35 reais. It announced on Friday it did not make an $85 million payment to Brazil's BNDES development bank.

But market bellwether Tele Norte Leste Participacoes (Telemar) <TNLP4.SA> was weighing on the market with a 0.38 percent dip to 26.40 reais. Its shares account for about 13 percent of the index.

www.cnn.com Friday, January 31, 2003 Posted: 8:00 AM EST (1300 GMT)

Brazilian President Silva discusses the plan Thursday at a Brasilia ceremony.

BRASILIA, Brazil (AP) -- Brazil's new president launched his anti-hunger program Thursday with a move to provide $14 a month to 1.5 million families, most from the country's poverty-stricken northeast.

While the stipend may seem insignificant, President Luiz Inacio Lula da Silva's hunger task force estimated 46 million of the country's 175 million citizens survive on less than $1 a day.

"The struggle against hunger is a fundamental step toward overcoming misery, poverty, a lack of opportunities and social inequality," said Silva, who as a boy dropped out of grade school to help support his family.

He made hunger eradication his top priority during his January 1 inauguration speech.

"We are going to create the conditions so that everyone in our country can eat a decent meal three times a day, every day, without needing donations from anyone," he said.

But Silva, Brazil's first elected leftist president, cautioned that there were no quick fixes to eliminate hunger in Brazil, which has the world's fifth-largest population.

"Hunger cannot be vanquished from one day to another, or with some isolated government measures," he said. "Conquering hunger will demand a lot of effort, a lot of persistence, a lot of courage and dedication from all of us during the next four years."

Brazil will spend $514 million this year on its food program, and the first payments start next week when 1,000 poor families in the arid northeastern state of Piaui receive their $14. All the 1.5 million families will be enrolled by the end of the year.

Eligible families living in towns and cities will get a kind of debit card to draw funds from a state-owned bank, while coupons similar to food stamps will be used in remote regions without banks.

Controversy and a supermodel

Still, the launch of the program has been burdened with controversy.

Inexplicably, Maranhao -- which borders Piaui -- was left off the initial list of participating states. And Maranhao ranks second worst of Brazil's 26 states on a human development index that measures income, illiteracy, life expectancy and school enrollment.

It is also the home state of former Brazilian president Jose Sarney, who backed Silva during his presidential campaign. Silva spokesman Andre Singer would say only that Maranhao would be discussed at a press conference scheduled for Thursday evening.

The government also says it will maintain anti-hunger programs developed by Silva's predecessor, Fernando Henrique Cardoso, including a project that gives families up to $13 per month for food as long as their children stay in school.

Another program gives up to $13 a month to poor families with pregnant women or breast-feeding mothers.

Earlier this week, Brazilian supermodel Gisele Bundchen opened Sao Paulo Fashion Week in Brazil's largest city by donating $29,000 to Silva's anti-hunger effort.

Silva's program has also received a little over 3 tons of donated food -- including milk, soybean oil, rice, beans, wheat, flour and corn, said Luiz Roberto Baggio, a program coordinator. Guidelines are not in place yet for how to distribute those goods.

After he was inaugurated, Silva delayed putting in place a plan to spend $400 million on new jet fighters to upgrade Brazil's antiquated air force planes. His aides said anti-poverty programs were more important.