A record percentage of American homeowners were facing foreclosure at the end of the first quarter of this year, according to a survey released yesterday. . . . According to the survey, 1.2 percent of mortgages were in foreclosure at the end of March, up 0.2 percentage points from the previous quarter. In the first quarter of 2002, the foreclosure rate was 1.1 percent. Loans usually go into foreclosure only when payments are overdue for 90 or more days. The rate works out to more than 400,000 households in foreclosure among the nation's 34 million primary mortgages.

"This isn't very surprising," Jan Hatzius, senior economist at Goldman Sachs Group Inc. in New York, said about the delinquency survey. "The key going forward is going to be the labor market. If we get enough economic growth to push down unemployment next year, then the mortgage market is going to get better." . . . "I don't see much change in these things," Hatzius said. "Whatever you thought yesterday you still more or less think today."

The government said the company's employees had given illegal financial inducements to as many as 400 doctors across the country to persuade them to prescribe the drug, Zoladex. Those inducements included thousands of free samples of Zoladex, worth hundreds of dollars each, which the physicians then billed to Medicare and other federal health care programs, prosecutors said. The company also gave doctors financial grants, paid them as consultants and provided free travel and entertainment, the government said. . . . Mr. Andrews said that AstraZeneca had reported false and inflated prices for Zoladex to the federal government so that doctors could earn significant profits by prescribing the drug. Medicare reimbursed the doctors based on the inflated prices that AstraZeneca reported, he said, while the company charged doctors for the drug at deep discounts. For example, the company reported to the government that the average wholesale price for a monthly dose of Zoladex was about $300, prosecutors said, but doctors were charged about $170 for that dose. That resulted in a $130 profit to the doctor, the government said.

Alterman includes in his book quotes from both James Baker and William Kristol happily admitting that there is no meaningful liberal bias in the media. Instead, they and other archconservatives concede, they are simply "working the refs," in order to force the media to bend over backward to compensate for a bias that even they admit is, at the very least, grossly exaggerated.

. . . Ultimately, as Alterman points out - and gives copious evidence to show - media conglomerates are motivated by money. They cater to the financial interests of their owners, as any other corporation does. And those owners are wealthy and often conservative. Thus, if the media has any inherent bias, it's a conservative one.

Tax shelters generally involve the use of complex transactions with no business or economic benefit other than to create paper losses and gains. The gains are taken by a partner who does not pay taxes in the United States, like an offshore bank or an Indian tribe, and the losses are taken by the buyer of the tax shelter to offset real financial gains. Typically, the transactions involve several layers of partnerships and other enterprises.

[A]s the Cold War developed, this positive feeling [toward the US for rebuilding Europe and Japan, establishing the UN, and defending democracy from communism] increasingly turned to criticism, hostility and condemnation. The international community has become resentful at the way America exercises its power. While America certainly protected the free world during the Cold War, America also comported itself in a way that the world increasingly mistrusted. It now seems to many in the international community that U.S. relies more on force than on persuasion, abuses human rights more than it fosters democracy, and exploits the poor more than it protects the weak.

. . . At the core of the relationship between America and the world is the issue of where the center of gravity should be for international affairs: the United States or the United Nations? This presents America and the world with a fundamental choice. At the end of World War II, the United States established the United Nations out of self-interest. Today, the United States disregards the United Nations out of a very different notion of self-interest. The United States founded the United Nations to help prevent war among the nations. The U.S. now considers the UN to be weak, corrupt, inefficient and bureaucratic. At the same time, the UN represents to most people, including many Americans, the desire for a community of nations, governed by the sanctity of international law and cooperating through dialogue and consensus. Whatever its flaws, it is the carrier of the deep human aspiration for peace. The Bush Administration's disparagement of the UN and its willingness to act alone in spite of the UN are of deep concern to the international public.

. . . Both Americans and the world must understand this new reality [that the USA is now an empire], whatever the desire of the international community for consensus through the United Nations or for everyone to work together according to the legalities of international law. Empires invariably reserve the right to act in their own interests, precisely because, from an imperial point of view, might makes right. While America was founded as a beacon of light, symbolizing freedom, empires are inevitably about power, relying on force. In assessing American actions, the world must remember from history that military power is the beginning and the end of empire and that empires seek to weaken international law and international institutions in order to maximize maneuverability and maintain dominion. Part of the predicament for the world is that it continues to view America in relation to its light when, in fact, America is now much more about power. This is what it means to say that America has become an empire.

This interplay between American power - unsurpassed, militarily oriented, and unilaterally directed, and the needs of an integrating world - highly diverse, culturally conditioned, and requiring compromise in order to effectively govern, is the framework within which the American empire will play out its unique and special destiny during the twenty first century. Both America and the world, for better or for worse, will be shaped by how this is done. . . . Only if it consciously takes up the mantle of leadership will it be able to set forth and implement the coherent series of policies necessary for global stability and prosperity. How the United States comports itself as an imperial republic will determine its own fate as well as the fate of the earth for a long time to come. To the degree to which it exercises its dominion consistent with its founding vision and informed by the lessons it can glean from the experience of other imperial powers, it will endure. It will be remembered as either the architect of the world's first global order or as a tragedy of epic dimensions.

After dipping in 2001, take-home pay for chief executives at some of the largest U.S. companies swelled last year, driven by fatter bonuses and bigger payouts from long-term incentive plans, a new study shows. Among the 1,019 public companies studied, the median bonus for chief executives in their posts in both 2001 and 2002 increased about 9 percent, to $451,000. Long-term incentive payouts, meanwhile, nearly doubled, from a median value of around $500,000 in 2001 to over $900,000 in 2002, according to the study, conducted by the Corporate Library, an independent research group, for release today. Total cash compensation in 2002, including salary, bonus and other direct payments, rose nearly 17 percent, to a median of about $1.2 million, in 2002. The median figure represents the point at which there are an equal number of chief executives above and below. The bigger salary and bonuses in 2002 came in a year when corporate profits continued to stagnate and the Standard & Poor's 500-stock index, a broad indicator of the market, dropped 23 percent.

The Environmental Protection Agency is preparing to publish a draft report next week on the state of the environment, but after editing by the White House, a long section describing risks from rising global temperatures has been whittled to a few noncommittal paragraphs. . . . The editing eliminated references to many studies concluding that warming is at least partly caused by rising concentrations of smokestack and tail-pipe emissions and could threaten health and ecosystems. Among the deletions were conclusions about the likely human contribution to warming from a 2001 report on climate by the National Research Council that the White House had commissioned and that President Bush had endorsed in speeches that year. White House officials also deleted a reference to a 1999 study showing that global temperatures had risen sharply in the previous decade compared with the last 1,000 years. In its place, administration officials added a reference to a new study, partly financed by the American Petroleum Institute, questioning that conclusion.

. . . It is the second time in a year that the White House has sought to play down global warming in official documents. Last September, an annual E.P.A. report on air pollution that for six years had contained a section on climate was released without one, and the decision to delete it was made by Bush administration appointees at the agency with White House approval.

Despite practical suggestions from small farmers and ranchers for streamlining the COOL process, the USDA instead has been taking its lead from big agribusiness, which doesn’t want consumers to know where food comes from or to give ranchers and farmers a desperately needed way to identify their crops and livestock as products of the United States. Throughout the process of implementing last year’s Farm Bill, the USDA has used outrageously inflated cost estimates and proposed unnecessarily complicated record-keeping requirements to try to convince consumers and lawmakers that COOL should not be mandatory. With this vote, the members of the subcommittee are also caving in to the meat and food processing industries.

Research indicates that irradiated food may not be safe for human consumption. Irradiation results in the formation of chemicals that are known or suspected to promote cancer and birth defects. New research indicates that irradiation of ground beef can increase the amount of heart-clogging trans fatty acids, according to an article published in Radiation Physics and Chemistry. Further, the process does nothing to remove the feces, urine, vomit and pus that contaminate meat in today's high-volume, factory-style slaughterhouses and processing plants.

Allowing millions of Americans to live without health insurance costs the nation between $65 billion and $130 billion every year, according to a report released yesterday. That is because many of the uninsured receive inadequate medical care, which translates into a poorer quality of life and a shorter lifespan, concluded an expert panel assembled by the National Academy of Sciences' Institute of Medicine. The 22-member panel was asked to calculate the "hidden" costs of leaving an estimated 41 million Americans uninsured. . . . Each uninsured person loses the equivalent of between $1,645 and $3,280 annually in lost wages and benefits and in the value of what would be a better quality of life and a longer lifespan if the person were insured, the panel concluded. . . . "Providing health care coverage to those who lack it is likely to be a cost-effective strategy that pays not only in lives saved and better health, but also in economic dividends," said Arthur Kellerman, a professor and chairman of emergency medicine at Emory University School of Medicine in Atlanta, who co-chaired the panel.

Depression costs employers $44 billion a year in lost productive time, according to a second survey reported in the same issue of the journal. That figure is $31 billion more than the amount lost because of illnesses in people who do not have depression. . . . "People are making it to work," Dr. Stewart said. "They're just not engaged in work. They're getting to the door, but then closing it and just not functioning. People have called this `presenteeism,' and it is often invisible to employers."

. . . "Depression," Dr. Insel said, "brings a tremendous sense of hopelessness. When you're in the middle of it, you can't remember that things were ever any better." The illness displays sadness, hopelessness and difficulty concentrating. . . . People living in poverty are nearly four times as likely to suffer chronic depression as affluent people, the survey reported.

Guidant's decision to halt sales of the device, known as the Ancure Endograft System, will not significantly hurt the company's total sales. Last year, its sales of the Ancure device were $63 million, accounting for about 2 percent of its total sales, according to UBS Warburg. After expenses, the company lost about $50 million last year on the device, UBS said. Sales will end Oct. 1.

"The party chief is in a unique position to help friends and punish enemies," Public Citizen President Joan Claybrook said. "This is just one more step in the merger of the Republican Party and Corporate America. Ed Gillespie is a richly rewarded lobbyist who greased the wheels in Congress and the White House for Enron, one of the most crooked companies in U.S. history. And now he’s at the head of the GOP. That should tell citizens where President Bush’s interests lie."

. . . As chairman of the RNC, Gillespie will be the party’s lead fundraiser and spokesman, responsible for raising hundreds of millions of dollars each election cycle and determining which candidates get the money, thereby holding the purse strings for the legislators his firm works to persuade.

For Mr. Grassley [a Senator] and most other senators, it is important, morally and politically, to provide poor families with the same $400-per-child increase in the tax credit as middle-class families get, while not increasing the deficit to do so. For Mr. Thomas [a Representative], who helped take the credit for poor families out of the tax law President Bush signed last month, it is not a high priority to give tax refunds to people who do not pay income taxes. The point of tax cuts is to stimulate economic growth, he and other House Republicans have said, not to redistribute income; with such stimulus, they say, the deficits will eventually disappear.

Preferred drug lists steer doctors away from some of the most expensive drugs and toward different, less expensive ones that the state deems equally effective, a practice that many private insurance companies and employee health plans have adopted and that is being considered by Congress as part of a government-subsidized drug benefit for 40 million Medicare recipients. Such limits have persuaded pharmaceutical companies to lower the cost to states of some medicines. Doctors who want to deviate from the list must get prior approval, a process whose difficulty varies widely from state to state.

. . . Prescription drug costs are the fastest-rising part of Medicaid, which is paid for by the federal government, the states and, in some states like New York, by local governments as well. The tab for Medicaid drugs doubled in just four years, reaching $23 billion last year, and accounted for one of every 10 dollars the program spent on health care.

The decision is the first to allow a case to stand against directors simply accused of failing to uphold their duties without any suggestion of self-dealing, corporate lawyers said. . . . The suit says that members of the Disney board and its compensation committee approved the basic outlines of Mr. Eisner's plan to hire Mr. Ovitz without seeing a copy of the employment agreement, without consulting an expert on executive pay and without asking how much severance Mr. Ovitz stood to receive.

According to the rules of the Senate's plan, fewer than half of all Medicare recipients would actually benefit from buying into the prescription drug program in any given year. And the plan would not offer comprehensive benefits to its members who are the most sick, either. Even people with $10,000 in prescription drug costs in a year — a tiny percentage of the elderly population — would still pay more than 40 percent of those costs themselves. In addition, the Congressional Budget Office's estimate of the plan's costs, $400 billion over 10 years, could be too low, experts said, because of the mix of people likely to enroll and their demand for drugs. Whatever the government spends, economists say, a lot of the money may end up inflating the profits of drug makers rather than helping patients.

. . . Only people with more than about $1,100 in drug costs in a year would be better off, in retrospect, for having enrolled in the plan. According to data compiled by Professor Lichtenberg from the government's Medical Expenditure Panel Survey, about two-thirds of the elderly used less than $1,100 worth of drugs in 1999. The 10 percent of the elderly who used the most drugs averaged $3,720 in total costs; at that level, the out-of-pocket cost under the Senate plan would be $2,418. Of course, drug prices have risen by about 20 percent since 1999. Even so, eliminating coverage between $4,500 and roughly $5,800 in drug costs — a feature not included in the House proposal — would still punish only the patients with the most extreme need. Professor Lichtenberg said he saw no economic reason for creating that gap, rather than maintaining the same levels of coverage no matter how much people spent beyond the initial deductible.

. . . These two factors — changes in membership mix and price sensitivity — have already had startling effects on health spending. Professor Reinhardt said that regardless of health status, elderly people who have existing insurance rack up about twice as much in drug spending as those without insurance. All that extra use would be a boon to drug makers, Professor Reinhardt said. "With this coverage, there will be a lot more volume," he said. "But there is no additional research needed to make these pills. So a huge amount of this money is just pure gravy." Yet another factor, which neither the House nor Senate plan takes fully into account, could result in the biggest cost increases: new drugs. "There is a tremendous number of therapeutic advances that may be very expensive that will be coming on the market," Mr. Goldman said. "Five years ago, you never would have expected that drug spending is where it is. The idea that this prescription drug benefit is going to cost $400 billion over 10 years may in some ways be ephemeral."

The six largest tobacco companies spent $11.2bn on advertising and promotions in 2001, up 17 per cent from the $9.6bn total logged in 2000. In 1998, the year in which the industry agreed to settle health-related lawsuits brought by 46 states and cut back on some of its promotions, it spent $8.2bn on marketing.

Corporate America's reputation took another battering on Thursday as a leading medical devices company was fined $92.4m for failing to report deaths from a defective product and three former Dynegy employees were charged for fraudulently inflating the energy trader's figures. In California, the former vice-president of finance at Network Associates, the security software supplier, pleaded guilty to securities fraud. Terry Davis admitted to orchestrating a scheme to inflate revenues over three years to meet sales targets. The new blows came in the week that federal prosecutors launched a criminal inquiry into Freddie Mac, the giant mortgage finance provider, amid questions about its accounting and Sam Waksal, the biotechnology entrepreneur, was jailed for seven years for insider dealing.

Guidant, one of the US's largest heart device makers, pleaded guilty to 10 felonies after failing to tell federal authorities of 12 unreported deaths linked to a product that was subsequently withdrawn. Guidant admitted covering up 2,800 instances where the device malfunctioned. . . .

According to federal prosecutors, the [Dynergy] executives hatched a plan, codenamed Project Alpha, to disguise loans from Citibank, Deustche Bank and Credit Suisse First Boston as operating cashflow. Jamie Olis, Gene Foster and Helen Sharkey, hid the details of the transactions from Dynegy and its auditors, Andersen, according to the Securities and Exchange Commission.

. . . [F]ederal prosecutors launched a criminal inquiry into Freddie Mac after the departure of its top management. . . . He added that it was too soon to say how serious the accounting problems at Freddie Mac were. "This may end up being a relatively minor thing or it may end up being far more serious. We don't know at this point."

. . . [T]he idea that any administration would allow one of the props of the mortgage and housing markets to go under is absurd. However that does not make the shares [in Freddie Mac] a good investment. . . . The mortgage market will not be sacrificed to free market principles if the company gets in trouble, so the lenders will be saved. But the shareholders will be on their own. . . . Investors should have no fear of credit losses on Freddie or Fannie's paper. However, their earnings stability is likely to suffer greatly in the future. To prop up the stock price (and get their own stock options well into the money), Fannie and Freddie's managements have attempted to smooth out the company's earnings by using more financial engineering than is good for the US system as a whole. Don't try bottom fishing for Freddie's stock. But go ahead and buy their bonds.

Mr Giffen [another executive] was accused of funneling more than $78m in payments from Mobil and other western oil companies to senior Kazakh officials. . . . The government claims that Mr Williams [who pled guilty] stashed $7m in unreported income in a Swiss bank account, including $2m in kickbacks from the Tengiz deal paid to him by Mr Giffen.

Many Democrats and Republican centrists expressed surprise that the House leadership would support such an expensive bill [$82B over 10 years] a day after the Congressional Budget Office projected that this year's deficit would exceed $400 billion, by far the largest ever. A report prepared today by Citizens for Tax Justice, a liberal budget group, found that one of every three dollars spent by the federal government this year outside of Social Security would be paid for by borrowing, the highest such percentage since World War II.

. . . "The House has always taken the attitude that we don't need pay-fors for tax relief [i.e., balancing the ledger], because tax relief brings growth and higher revenues to the government," Mr. DeLay said on Tuesday.

Median CEO pay at the 37 largest defense contractors rose 79 percent from 2001 to 2002, while overall CEO pay climbed only 6 percent, according to a new report from United for a Fair Economy, More Bucks for the Bang: CEO Pay at Top Defense Contractors, by Chris Hartman and David Martin. Median pay was 45 percent higher in 2002 at defense contractors than at the 365 large companies surveyed by Business Week magazine. The typical U.S. CEO made $3.7 million in 2002, while the typical defense industry CEO got $5.4 million. The jump in median defense contractor CEO pay far exceeded the increase in defense spending, which rose 14 percent from 2001 to 2002. Compared with an army private’s pay of $19,585, the average CEO at a major defense contractor made 577 times as much in 2002, or $11,297,548. This is also more than 28 times as much as the Commander in Chief’s salary of $400,000.

The study also looked at the size of campaign contributions by the largest defense contractors and found a strong correlation between campaign contributions made by a company in the 2000 and 2002 election cycles and the value of defense contracts awarded to that company. Ninety percent of the difference in contract size can be accounted for by size of contributions. For example, top arms contractor Lockheed Martin was also the top campaign contributor among defense firms.

At least 3,240 civilians died across Iraq during a month of war, including 1,896 in Baghdad, according to a five-week Associated Press investigation. The count is still fragmentary, and the complete toll - if it is ever tallied - is sure to be significantly higher. . . . Many of the other 64 hospitals are in small towns and were not visited because they are in dangerous or inaccessible areas. Some hospitals that were visited had incomplete or war-damaged casualty records. Even if hospital records were complete, they would not tell the full story. Many of the dead were never taken to hospitals, either buried quickly by their families in accordance with Islamic custom, or lost under rubble. The AP excluded all counts done by hospitals whose written records did not distinguish between civilian and military dead, which means hundreds, possibly thousands, of victims in Iraq's largest cities and most intense battles aren't reflected in the total.

Lt. Col. Jim Cassella, a Pentagon spokesman, said Tuesday that the U.S. military did not count civilian casualties. "Our efforts focus on destroying the enemy's capabilities, so we never target civilians and have no reason to try to count such unintended deaths," he said. Cassella also said an accurate count of civilian casualties among the population of 24 million would be impossible, in part because Iraqi paramilitaries fought wearing civilian clothes and because of "the regime's use of civilian shields, and unaimed antiaircraft fire falling back to earth." The British Defense Ministry says it didn't count casualties either.

The accounting firm forecast that US advertising revenues would rise 3 per cent to $153bn this year, up from $148bn last year. That is nearly double the 1.6 per cent in 2002, and a sharp reversal from the 10.1 per cent decline in 2001. . . . "This market is huge," said Mark Rosenthal, president and chief operating officer of MTV Networks, Viacom's cable subsidiary. "Advertisers have product to sell, and they want to be able to sell them on television."

For the first time on Monday, outsiders were given an official picture of the increasingly audacious steps a small group of executives took to conceal WorldCom's deteriorating financial position, and of the spineless culture that meant no employees, auditors, lawyers or directors were willing to question what was going on until the very end.

. . . WorldCom's fraud was relatively straightforward. The company released reserves it had previously taken - mostly in connection with large mergers - in order to make its costs seem lower than they were. When the reserves ran out, officials reclassified regular costs as capital expenditures. . . . The fraud was enforced by concealing the real picture from all but a small number of employees, and by threatening those who asked difficult questions. . . . When asked to explain a large discrepancy, Mr Yates reportedly told the employee: "Show those numbers to the damn auditors and I'll throw you out the f*****g window." The board of directors never had any idea of the fraud. Then again, as the report by Richard Thornburgh makes clear, directors did not even question some of WorldCom's largest transactions. A complex deal with EDS, which included the $1.65bn sale of SHL to EDS and a 10-year IT outsourcing agreement, was approved after just 20 minutes' consideration and without any written materials. . . . The 2000 acquisition of Intermedia Communications for $6bn, described as an "ego deal" for Mr Ebbers, was approved after 60-90 minutes of due diligence and a 35-minute board meeting for which some directors received less than two hours' notice. One remaining question is whether there is enough evidence to link Mr Ebbers to the fraud.

The federal government's chief procurement agency has defended its decision to continue contracting with scandal-ridden telecommunications giant WorldCom Inc.. In a letter to a key U.S. senator dated May 30, the General Services Administration said it had not disqualified WorldCom, now doing business as MCI, because there was no evidence the company could not provide the services for the government.

WorldCom filed for bankruptcy in July last year. That same month, the Bush Administration said it was reviewing federal contracts with WorldCom and might bar it from new government deals. But in November the government agreed to extend a lucrative contract with the company to provide telecommunications services to dozens of government agencies, including the Pentagon and the Federal Aviation Administration. WorldCom has continued to win new contracts, including a recent one to build a wireless network in Iraq.

. . . "GSA's evaluation leaves many unanswered questions," the senator said. "Rather than performing its own, in-depth inquiry into the company's alleged accounting fraud, ... GSA appears to have relied very heavily upon WorldCom representations in determining the company's continued status as a federal contractor and in extending existing contracts."

In a tactical retreat, the Bush administration told Congress today that it would accept equal prescription drug benefits for people in the traditional Medicare program and those who join private health plans. Administration officials had long insisted on more generous drug benefits for enrollees in private plans, especially the preferred provider organizations that steer patients to certain doctors and hospitals. Officials said they were bowing to political reality and giving up, at least for now, on a two-tier benefit.