www.nj.com Thursday, January 23, 2003 By Michaelangelo Conte Journal staff writer

WEST NEW YORK - U.S. Customs agents intercepted 35 pounds of heroin hidden in a shipment of handbags bound for West New York, U.S. Customs officials said yesterday.

On Friday customs agents arrested Rafic Nahle, 41, of Brooklyn, and Nelson Pulecio-Barrera, 33, of Plainfield, when agents followed the handbags to their destination at Venise Verde LTDA, a company Nahle recently started on Bergenline Avenue at 55th Street, officials said. Try Our Classifieds

The men are charged with conspiracy to import and distribute heroin, and if convicted could face life in prison, officials said.

The heroin, which has a $3.3 million "street value," arrived at JFK International Airport on Jan. 11 and was hidden in-between the cardboard lining of a shipment of 90 leather purses in 12 crates, officials said. The shipment came from Venezuela via Miami, officials said.

U.S. Customs agents allowed the shipment to be delivered to West New York. They arrested the two men at the Bergenline location, officials said.

Last year, U.S. Customs agents working in "Operation Tonquista" broke up a narcotics smuggling ring which recruited "mules" from Memorial High School in West New York and used them to smuggle drugs in their stomachs from South America, officials said.

"Operation Tonquista" resulted in the arrest of 60 people and the seizure of 220 pounds of heroine, officials said.

Michaelangelo Conte can be reached at mconte@jjournal.com.

www.brw.com.au By Aaron Patrick

It is a tactic that Rupert Murdoch has perfected over five decades: bleed your competitors dry until they close shop or accept an unfavorable merger, then recoup your losses with monopolistic glee. The News Corporation chairman seems to be doing it again in Latin America, where, after years of heavy losses, his main rival in the pay-television market is on the verge of insolvency. The fact that company happens to be DirecTV - the satellite broadcaster Murdoch wants to buy - is the icing on his cake.

SOUTH OF THE BORDER: From Mexico to Argentina, News has been under pressure

DirecTV operates a successful satellite broadcasting service in the United States that has 10 million subscribers, and an unprofitable operation covering South and Central America and the Caribbean.

Murdoch's plan to buy the company has received much attention for the reach it will give him in the US - a broadcaster with 10 million subscribers and the capability to reach almost every home in the country. What has not been highlighted is the potential effect on his interests in Latin America, which happen to be one of the black holes of the News empire.

From Mexico to Argentina, News has been squeezed between expensive US-dollar contracts for Hollywood movies and television shows, and an economic downturn that has savaged the middle class and depressed local currencies.

Sky Latin America lost $US152 million ($259 million) last year, most of it in Brazil and Mexico. To put this in context, News's Australian operations achieved an operating profit of $US125 million ($238 million) last year. The entire profit from Murdoch's 100 or more Australian newspapers was surpassed by the losses in Latin America. Put another way, Murdoch could have doubled the company dividend last year if he had not been subsidising television soap operas for rich Mexicans.

But the size of the operation becomes clear only when it is realised that News is sharing the losses with its partners in Sky Latin America. If News's losses are in proportion to its level of ownership, then the joint ventures that Sky Latin America signed with Brazil's Globopar, Mexico's Grupo Televisa and John Malone's Liberty Media have lost $US1.2 billion ($2 billion) over the past four years.

It is an expensive strategy that increasingly looks like a replay of Sky Television in Britain in the late 1980s, when Murdoch ran up huge losses while running his competitor, BSB Holdings, into the ground. Financially exhausted, BSB's backers agreed to a merger in 1990 that created BSkyB, an asset now worth $12.5 billion to News shareholders.

Just like BSB, DirecTV Latin America is fighting for its life. As Sky's subscriber numbers in Brazil and Mexico increased 3% to 1.4 million last financial year, DirecTV lost $US202 million and 2% of its customers. It expects revenue to fall this year and has not been helped by the fact that two of its operations are in Argentina and Venezuela, which have serious economic and political problems.

In January, DirecTV hired a corporate turn-around expert and said it might seek Chapter 11 bankruptcy protection under US law, a step companies take when they are about to become insolvent. The chief executive, Eddy Hartenstein, says he may take the drastic step if programming contracts cannot be renegotiated by the end of January.

This would not necessarily lead to DirecTV Latin America being wound up because US companies are allowed to trade out of bankruptcy. But it would be a clear signal to suppliers, creditors and customers that Sky is the more stable satellite broadcaster in the region - and may soon be the only one.

DirecTV Latin America's chairman, Kevin McGrath, told investors on January 15: 'Our company's financial position is unacceptable and an acceptable solution must be executed urgently.'

Embarrassingly, DirecTV may be unable to pay the money it owes to the satellite operator PanAmSat. It and DirecTV are owned by the same company, Hughes Electronics.

In News's New York headquarters there is great interest in DirecTV's woes. News is refusing to publicly declare victory but, for months, Murdoch has been confident that he is close to winning the battle.

Analysts assume that DirecTV's problems will strengthen Murdoch's hand in  negotiations to buy a controlling stake. Talks have been going on for two years, and News's chief operating officer, Peter Chernin, says he expects a decision from DirecTV by the end of January. DirecTV said in the second week of January that it would take between 30 and 60 days to reach a decision.

The view on Wall Street is that News and its partner Liberty Media will each take a 17% stake, and Murdoch will assume management control at a cost of about $3.5 billion.

A top priority after a purchase would be to either merge the Latin American networks or close one of them, creating a satellite-TV monopoly from the Rio Grande to Rio de Janeiro. David Gibson, a media analyst for Macquarie Bank in New York, puts a rough estimate on the savings to News at $US200 million. 'The real drivers would be in marketing, lower content costs and lower subscriber acquisition costs,' Gibson says. 'But it is pretty hard to judge exactly how much it would be worth, and they would still have to compete with all the cable companies down there.'

First, Murdoch would have to clear a few regulatory hurdles. Mexico's anti-monopoly watchdog, the Federal Competition Commission, would frown on a merger between DirecTV and Sky, says the chief analyst for Santander Investment in Mexico City, Francisco Rivero.

It would be ironic if Latin American regulators blocked a merger between Sky and DirecTV on the grounds of monopoly, because Murdoch was given his chance to buy the company by US regulators, who rejected the preferred bidder, Echostar, for the same reason.

While Murdoch pursues his latest acquisition, his senior executives have been promoting a new image for the company. They say News has reached the point where decades of assembling an integrated global media business are starting to pay off in the form of huge sums of cash. 'After years of building our assets with patient investment and organic growth, we are now at the point where success begets success,' Chernin told a Salomon Smith Barney conference in January.

The 'new' News provokes responses ranging from sympathy to cynicism. The head of a hedge fund for one large investment bank says Murdoch, 71, has become 'financially respectable' since News's close call with bankruptcy in 1990. 'I don't think he ever really was not respectable, but that was the image around him,' the fund manager says. 'But he is back and he has got a solid balance sheet behind him, and people feel more comfortable with him these days.'

The head of a share-trading desk in New York says: 'If you are posing the question, 'Is Rupert Murdoch the new cleanskin?', for every person who says he is, there are a whole load of people who think he is not. But you talk to investors here about the writedowns at One.Tel or Gemstar and they either don't know about them or don't care.'

In the five years to the middle of January, News Corporation shares rose about 50%, compared with 18% for the S&P/ASX 300 index. But most of News's gain has come in the past four months with a recovery in the US advertising market.

Target tactics

• After years of heavy losses in the Latin American pay-television market, News Corporation's main rival there, DirecTV, is on the verge of insolvency.
• News Corporation has been negotiating to buy DirecTV.
• If DirecTV folds, News Corporation will have a monopoly in Latin America.

Source: BRW The two known events with the most potential to move the share price in the next month are the terms of any deal on DirecTV, and News's first-half profit result, due for release on February 10 or 12. Helped by a weak result last year, it is likely to show that operating earnings are on track for a full-year increase of 20%, to $US2.2 billion.

Some analysts, particularly Merrill Lynch's Jessica Reif Cohen, are talking up the stock and telling investors who want to board the Murdoch bandwagon to look at the US-listed Fox Entertainment Group, 80% owned by News Corporation.

Fox is a pure play in the US media - there is no Sky Latin America in it - and can expect to benefit disproportionally as the US economic recovery continues.

www.usatoday.com Posted 1/21/2003 8:17 PM

Much of the world and some of the American public already believe that the Bush administration's plan to drive Saddam Hussein from power is a thinly disguised grab for Iraq's rich oil reserves. Little wonder, then, that the White House ignited a furor by proposing more generous tax breaks for certain businesses that buy the biggest gas-guzzling sport-utility vehicles. Talk about sending the wrong message at the wrong time.

The tax break, tucked into the economic stimulus plan that President Bush unveiled earlier this month, would raise from $25,000 to $75,000 the deduction small business owners can claim right away on the purchase of a heavy SUV or pickup.

The loophole could boost SUV sales at the same time a group of anti-SUV crusaders has launched TV ads linking foreign-oil profits to terrorism. And the proposal comes on the heels of warnings last week by the president's own traffic-safety experts about SUV safety problems.

A White House spokesman says the proposal doesn't promote SUVs over other vehicles. Rather, it's designed to help small companies buy equipment and create jobs.

Perhaps. But by proposing special treatment for gas-guzzlers, the administration suggests it is tone deaf to concerns about the nation's seemingly unlimited appetite for oil and its effect on the environment.

Among the worries:

• Oil prices are spiking at two-year highs of $34 a barrel. And the United States continues to be dependent on oil-producing countries with unsavory or unstable regimes, including Iraq, Saudi Arabia, Venezuela and Nigeria. Encouraging Americans to buy more vehicles that get low gas mileage could increase reliance on these foreign suppliers.

• The administration is poised to launch another Gulf War in part because of the danger Iraq poses to the world's largest oil reserves. If Saddam acquired a nuclear weapon, as the U.S. fears, he would be within striking distance of Saudi Arabia's oil fields. Because of the USA's high oil consumption, it can't risk such a threat.

The White House has company on both bad timing and cavalier behavior. At Detroit's annual auto show this month, the automakers unveiled "muscle cars" as a special theme. Anyone in the mood for a 1,000-horsepower Cadillac?

Retreating on the SUV tax break won't prevent war in the gulf, curb global warming or ease U.S. dependence on imported oil. But it could show that the U.S. considers each a real concern.

www.wbko.com Shane Holinde

The cost of farm items such as diesel and anhydrous ammonia is up considerably from this time last year. With the threat of war in Iraq and a crude oil strike in the South American country of Venezuela, it's unlikely that prices will fall anytime soon.

One employee at a Bowling Green farm supply store says he's received a few complaints lately from farmers about the rising costs of several items. Although he says costs for fuel generally climb in the winter months due to higher demand, the current world events are having an impact locally.

The average price for diesel is up about 30% nationally from this time last year, while most nitrogen-based products have seen a 9% jump in price from last January.

www.miami.com Posted on Tue, Jan. 21, 2003

By MARIKA LYNCH mlynch@herald.com

The United Kingdom -- in a travel advisory -- branded Trinidad and Tobago a possible terrorist target, and as a result a major cruise line pulled out. Now the two-island nation off Venezuela has the unwelcomed mission of scrambling to keep its image as a tourist spot.

Trinidad may be experiencing a crime wave and recent kidnapping spree, but it's not a haven for terrorists, government officials say. The country is instead a casualty of an overcautious United Kingdom.

'Following the carnage in Mombasa, Dar es Salam and Bali, governments around the world now wish to be `safe rather than sorry' insofar as the provision of information on foreign travel to their citizens is concerned,'' Prime Minster Patrick Manning told the House of Representatives Friday.

'Unfortunately in this instance . . . it is the government and people of Trinidad and Tobago who are being called upon to pay the price, economic and otherwise, for the new doctrine of `just in case.' ''

Selwyn Ryan, a professor at the University of the West Indies, agreed.

''What they are doing is out of an abundance of caution rather than in response to any information that is credible and worth taking seriously,'' Ryan said.

Politics also has clouded the issue, with the opposition accusing Manning's People's National Movement of being linked to a radical Muslim group.

The trouble started when police began investigating a Muslim cleric known to sympathize with Osama bin Laden. Though never charged with a crime, the cleric at one time was suspected by Trinidad police of making threats against Western interests.

The British government then issued a warning: ''We believe Trinidad and Tobago to be one of a number of countries where there may be an increased terrorist threat,'' it said. ``British nationals should exercise vigilance, particularly in public places frequented by foreigners such as hotels, restaurants and shopping malls.''

The UK-based P&O Princess Cruises started canceling stops -- six since December, diverting about 1,200 passengers each time, said Renatta Mohammed, communications manager for Trinidad's tourism promotion agency.

Last year, about 75,000 cruise ship passengers landed on the country's shores. The state agency is still gauging the economic impact of the pullout, since P&O Princess Cruises canceled service last week. No other lines have threatened to do the same.

Trinidad's economy is primarily fueled by rich gas and oil finds. The most immediate effect will be money lost to local entertainers and tax drivers, Mohammed said.

The U.S. government, by contrast, hasn't issued any similar travel advisories, and instead in a consular sheet says the country is ``considered safe.''

U.S. officials have been monitoring Trinidad and Tobago since local media reported in December that the cleric might be planning an attack. But no attacks materialized, a State Department official said, and neither did a warning.

''We're a democratic, peace-loving country known for its hospitality,'' said Mohammed, of the state tourism agency. This week, three former and current government ministers are being dispatched to London, New York and Washington to spread that message.