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LOAD-DATE: July 10, 2008
LANGUAGE: ENGLISH
GRAPHIC: PHOTOS: The App Store will let iPhone users download applications like games. One program offers baseball highlights.
PUBLICATION-TYPE: Newspaper

Copyright 2008 The New York Times Company



599 of 1231 DOCUMENTS

The New York Times
July 10, 2008 Thursday

Late Edition - Final


After Selling the Company, Remorse
BYLINE: By ABBY ELLIN
SECTION: Section C; Column 0; Business/Financial Desk; Pg. 9
LENGTH: 1061 words
Christopher A. Baker had two goals when he started his company, MailCode, in 1989: to build a successful business and to sell it one day. He achieved both.

But what he had not taken into consideration were the challenges he would face as he stopped being the head of a small start-up and became a cog in the wheel of a major corporation. In his case, it was Pitney Bowes, the producer of postal meters and other mailing equipment, that acquired MailCode, a maker of large automated postal sorting machines, in 2001 for more than $20 million.

As part of the deal, Mr. Baker, now 41, continued to run MailCode for 18 months out of his hometown, West Lafayette, Ind. Then he moved to the Pitney Bowes headquarters in Stamford, Conn.

Although he said he was thrilled with the sale, he worried about what lay ahead -- especially since he decided to take a position with the new owner. ''Any time you sell you have mixed emotions,'' said Mr. Baker, who was until recently the president of Pitney Bowes Group 1 Software, in Lanham, Md. ''You're about to get a huge payday, but you have no idea what the future holds for you.''

Most entrepreneurs share the same vision: to sell their darling for big money and watch it flourish in its next incarnation. According to Mitchell Schlimer, the founder and chief executive of the Let's Talk Business Network, a support community for chief executives and entrepreneurs in the New York area, about 90 percent of small business owners who sell their companies remain with the acquiring company, at least for a few years.

''They often don't stay longer than that because most entrepreneurs are not good soldiers,'' Mr. Schlimer said. ''Not to say that some can't be, but most entrepreneurs are all about the initial journey -- that's where their strengths are, making something from nothing and all the creativity that goes along with it.''

Indeed, like stepfamilies trying to blend together, the transition from single household to Brady Bunch is often harder than most entrepreneurs anticipate. Either the former owners have trouble giving up control, or they find the new office culture radically different from what they were used to, or they simply cannot bear to see what the new owners are doing to their creations. It can be wrenching even in the best of circumstances.

''It's like giving up a child,'' said Tova Borgnine, the founder and chief executive of the Tova Corporation, a cosmetics and fragrance company now owned by the televised home shopping company QVC. In March 1977, Ms. Borgnine, who is married to the actor Ernest Borgnine, started a mail-order company in Los Angeles selling a perfume called Tova Signature.

By 1987, she had 65 skincare products and 80 employees. In 1990, she began selling her wares on QVC, and 12 years later QVC bought the Tova brand for a seven-figure sum. Tova Signature is QVC's top-selling perfume.

It was, she said, an accomplishment she was proud of, but still an adjustment. ''In a massive corporate structure you have bureaucracy that you must be able to get through,'' said Ms. Borgnine, who divides her time between Beverly Hills and Malvern, Pa., near QVC's headquarters. ''All of the products are the same as when I created my company; I'm in on every strategy meeting, but now there's a collective voice. That's a luxury, but you've also got to be able to let go.''

Jerry L. Mills, the founder and chief executive of B2B CFO, with headquarters in Phoenix that offers business advisory services, has helped hundreds of clients through the business acquisition process. Most wrestle with the fact that they still have the responsibility, but not the authority. ''They make decisions that are sometimes reversed by their boss. It's embarrassing,'' Mr. Mills said.

It can also be upsetting, especially when the new owners drive the business into the ground and the founder has to watch. In 1995, for example, Christopher J. Asterino, the co-owner of Asterino Associates, a medical billing management firm in Albany, sold his 10-year-old company for more than $1 million and moved to Scottsdale, Ariz., to be vice president for acquisitions for the new owner, National Medical Financial Services.

He had a terrible time of it. For starters, he said he found the relationship with his new boss ''weird.''

''The person who became my boss was the man I was negotiating with when I was selling my company,'' said Mr. Asterino, 46. ''You're trying to maximize the value of your company when you're selling it -- and then when the transaction closes, that individual is your boss. It was very difficult.''

Mr. Asterino said he was disappointed at how the new owners ran the business and dealt with clients. Eventually, he said, he could no longer bear to watch it and left the business in 2000, and started another medical billing firm, Asterino & Associates. ''The great lesson that came out of that five-year period was how not to do it,'' he said. ''It was a very expensive lesson to learn.''

Mr. Baker, who is currently taking a leave of absence from Pitney Bowes, also has a failed merger under his belt. In 1996, he sold MailCode to Postal Soft, a privately held company in La Crosse, Wis.

At first it seemed ideal, but soon the new owner ran into financial difficulties. ''They needed us to stop spending on R&D and focus all of our energies on existing products,'' he said. He refused, and bought the company back a year later for the same price for which he had sold it. Three years later, he sold it to Pitney Bowes, where he is happy, although he, too, had an adjustment period.

''The culture shift wasn't hard, but every one of my peers wondered why I wasn't on the beach drinking a Mai Tai,'' he said. ''They knew I had the money in the bank. I wasn't one of them. I had to work as hard as everyone else. If an entrepreneur joins a company with an open mind to learning, there's an incredibly valuable experience there with powerful rewards. But if you don't have that mindset, you won't make it a year.''

As for Mr. Asterino, he has no intention of selling until he is ready to retire. ''It would take an extraordinary unique set of circumstances to allow me to change my quality of life, my entrepreneurial business thinking and my ability to make decisions based off of relationships and not profits,'' he said.
URL: http://www.nytimes.com
SUBJECT: ENTREPRENEURSHIP (90%); OFFICE EQUIPMENT MFG (90%); NONSTORE RETAILERS (83%); SMALL BUSINESS (78%); CORPORATE CULTURE (78%); PERFUMES & COLOGNES (78%); MAIL ORDER RETAILING (78%)
COMPANY: PITNEY BOWES INC (57%); GROUP 1 SOFTWARE INC (55%)
TICKER: PBI (NYSE) (57%)
INDUSTRY: NAICS333313 OFFICE MACHINERY MANUFACTURING (57%); SIC3579 OTHER OFFICE MACHINES (57%)
PERSON: MICHAEL MCMAHON (55%)
GEOGRAPHIC: CALIFORNIA, USA (71%); INDIANA, USA (71%); CONNECTICUT, USA (56%); MARYLAND, USA (55%) UNITED STATES (71%)
LOAD-DATE: July 10, 2008
LANGUAGE: ENGLISH
GRAPHIC: PHOTO: Tova Borgnine said she had to adjust to work within the large corporate bureaucracy at QVC. (PHOTOGRAPH BY MIKE MERGEN FOR THE NEW YORK TIMES)
PUBLICATION-TYPE: Newspaper

Copyright 2008 The New York Times Company



600 of 1231 DOCUMENTS

The New York Times
July 10, 2008 Thursday

Correction Appended

Late Edition - Final
Spy Cases Raise Concern on China's Intentions
BYLINE: By NEIL A. LEWIS
SECTION: Section A; Column 0; National Desk; Pg. 1
LENGTH: 1703 words
DATELINE: WASHINGTON
Gregg W. Bergersen was a Navy veteran who liked to gamble on occasion but spent far more time worrying about how to earn some serious money after he left his career as an analyst at the Defense Department.

At 51 and supporting a wife and a child in the Virginia suburbs, he wondered how he could get himself cast in that distinctly Washington role many Pentagon types dream of: a rewarding post-retirement perch at one of the hundreds of military-related companies that surround the capital and flourish off lucrative government contracts and contacts.

Mr. Bergersen believed he had found what he was seeking when he was introduced to Tai Shen Kuo, a native of Taiwan, who had lived in New Orleans for more than 30 years. Mr. Kuo, an entrepreneur who imported furniture from China, was active enough in civic affairs to have been named to a state advisory board on international trade. He told Mr. Bergersen that he was developing a defense consulting company.

Now, Mr. Bergersen and Mr. Kuo, along with a third accomplice, are awaiting sentencing in a federal court for their involvement in one of many cases brought in the last year involving the illegal transfer of information to China.

The cases have intensified the evaluation in intelligence and law enforcement circles about the breadth of the threat from Beijing. Many have been similar to the one involving Mr. Bergersen, in that prosecutors describe them as carefully planned intelligence operations run by the Chinese government intended to steal national security secrets. Other cases, however, are less clear in their nature; some seem to be closer to violations of commercial export laws, with the transferred information intended to provide Chinese companies a technological benefit.

According to court papers and interviews, Mr. Kuo and his Chinese handlers ran what intelligence professionals call a ''false flag'' operation on Mr. Bergersen, a weapons systems analyst, making him believe that the information he was providing was going to Taiwan, an American ally, not Beijing.

Nonetheless, surveillance tapes made by the Federal Bureau of Investigation showed that Mr. Bergersen understood he was engaged in a serious crime.

While sitting in a rental car on July 10, 2007, Mr. Bergersen pleaded with Mr. Kuo not to tell anyone that he was the source of the information he was providing, which included anticipated American arms sales to Taiwan. ''I'd get fired for sure on that,'' he said. ''Well, not even get fired, go to [expletive] jail.''

While Mr. Bergersen may have convinced himself that the offense was attenuated because the information was going to Taiwan, the recordings show he took the risk mainly because Mr. Kuo regularly dangled a promise that he would eventually take him in as a partner in a defense consulting firm after he retired from the Pentagon and pay him $300,000 to $400,000 a year. In the meanwhile, Mr. Kuo gave him small gifts and took him to Las Vegas, where he treated him to expensive shows and paid for his wagering, all of which were observed by F.B.I. agents.

Beyond the case of Mr. Bergersen, prosecutors in the last year have brought about a dozen cases involving China's efforts to obtain military-grade accelerometers (used to make smart bombs), defense information about Taiwan, American warship technology, night-vision technology and refinements to make missiles more difficult to detect.

In interviews, current and former intelligence and law enforcement officials demonstrated uncertainty as to the precise scope of the problem of Chinese espionage. But many officials offered a similar description of the pattern of the cases: Chinese government and state-sponsored industries have relied on the Chinese diaspora -- using immigrants, students and people of second- and third-generation Chinese heritage -- and regular commercial relations to operate a system in which some people wittingly or unwittingly participate.

One senior law enforcement official involved in prosecuting such cases said the Chinese had ''a game plan of sending out lots of tiny feelers in hopes of getting back small bits of seemingly unrelated information in hopes of creating a larger picture.''

David W. Szady, who as an assistant director of the F.B.I. ran its counterintelligence division until retiring in 2006, said the Chinese had ''mastered the use of multiple redundant collection platforms'' by looking for students, delegates to conferences, relatives and researchers to gather information.

Federal investigators have come to believe, Mr. Szady said in an interview, that while the collection system may appear haphazard, even random, the Chinese ''have become very focused on what they want.''

Officials said that several other nations, notably Iran and Russia, had aggressively engaged in espionage aimed at the United States. But Joel F. Brenner, the intelligence community's top counterintelligence official, said China was by far the leading practitioner.

In an interview, Mr. Brenner described China's information-gathering efforts as ''a full-court press and relentless.'' As a result, he said, few professional analysts ''really think that what's going on is anything other than an orchestrated, deeply thought-out, strategic campaign.''

But, Mr. Brenner said, not all the information-transfer cases involving China are part of that suspected government-led espionage effort. ''Some instances are purely commercial and just involve greed,'' he said.

On the military side, Mr. Brenner said, China is especially interested in improving its naval capability against any threat from the United States and obtaining intelligence that might be important in a military confrontation in the Taiwan Strait.

In one case, he noted, China was trying to obtain technology to help its submarines run quieter and avoid detection.

One clue as to the degree of coordination of some of the operations is buried in court papers in the Bergersen case. According to one F.B.I. document, the mastermind was an unnamed Chinese government official based in both Hong Kong and Guangzhou, an industrial center formerly known as Canton. The official, identified only as ''PRC official A,'' is described by people familiar with the case as a senior Chinese intelligence official who had been a central figure in two other recent Chinese espionage operations.

PRC official A, these people said, had also helped coordinate the activities of Chi Mak, a Chinese-born engineer who was sentenced in March to more than 24 years in prison for selling naval secrets to China. The information was not classified, Mr. Mak's lawyers argued at trial, although it was illegal to provide it to China.

Mr. Brenner noted testimony showing that Mr. Mak was a ''sleeper agent'' who worked his way up in the military contracting industry, an ascent he said ''bespeaks a patience that the Chinese are especially good at.''

At the trial, prosecutors presented a ''tasking list'' from Chinese government handlers that set forth a catalog of naval information Mr. Mak was to obtain. ''You can get to know the dragon by its claw, and the list was a clear picture of the dragon's claw,'' Mr. Brenner said.

Mr. Mak and PRC official A also figure in a third major case, the one involving Dongfan Chung. Mr. Chung, a former Boeing engineer known as Greg, was convicted on economic espionage charges for providing China with company trade secrets related to several aerospace programs, including the space shuttle.

The documents say Mr. Chung decided to spy for China partly out of patriotic sentiment. A letter from a Chinese official to Mr. Chung read in part, ''It is your honor and China's fortune that you are able to realize your wish of dedicating yourself to the service of your country.''

The appeal to ethnic loyalty raises the sensitive issue of whether the authorities have reason to be more suspicious of Chinese researchers and students. Wen Ho Lee, a former scientist at Los Alamos National Laboratory was arrested in 1999 on 59 counts involving espionage and China. All but one of the charges was dropped after a judge found significant problems with the government's case.

Dr. Lee and many supporters contended that he had been unfairly singled out because of his Chinese heritage. He eventually received a settlement from the government and from several news outlets, including The New York Times, that had reported the early suspicions.

Steven W. Pelak, the export enforcement coordinator in the counterespionage section of the Justice Department, said there was an inherent protection against resorting to profiling or stereotyping. Almost all of the department's cases involving suspected Chinese espionage, Mr. Pelak said, come from companies that report a commercial inquiry or request that seems suspicious and not through surveillance because someone has Chinese heritage or connections.

It is also impracticable to keep close track of Chinese visitors to the United States, since they number about 600,000 a year, in addition to 60,000 students here at any one time. Chinese intelligence officials apparently believed that the Kuo-Bergersen channel had enough potential to assign a professional intelligence officer to live in New Orleans to act as a ''cut-out,'' or intermediary, between Mr. Kuo and PRC official A. That person was Yu Xin Kang, a 33-year-old woman who was the third accomplice charged in the case.

Mr. Kuo was provided $50,000 by his Chinese handlers, which he used largely to get close to Mr. Bergersen by paying for trips, restaurant meetings and small gifts. At one point, according to F.B.I. surveillance tapes, Mr. Bergersen recounted how his wife discovered a large wad of cash he had received from Mr. Kuo. Thinking quickly, Mr. Bergersen told her it was gambling winnings from a European trip. To his dismay, she said she was entitled to half and took it. After Mr. Bergersen related this bit of ill fortune, Mr. Kuo offered to compensate him for the difference, but Mr. Bergersen declined.

Mr. Bergersen faces up to 10 years in prison at his scheduled sentencing Friday in Alexandria, Va. Mr. Kuo and Ms. Kang, scheduled for sentencing later this summer, face life in prison.
URL: http://www.nytimes.com
SUBJECT: ESPIONAGE (90%); LAW ENFORCEMENT (87%); DEFENSE DEPARTMENTS (78%); MILITARY WEAPONS (78%); DEFENSE INDUSTRY (78%); JUSTICE DEPARTMENTS (77%); INDUSTRY ANALYSTS (77%); INTELLIGENCE SERVICES (77%); ENTREPRENEURSHIP (75%); CONTRACTS & BIDS (73%); ARMS TRADE (73%); EXPORT TRADE (73%); INTERNATIONAL TRADE LAW (73%); IMPORT TRADE (73%); EXPORT & IMPORT LAW (73%); SENTENCING (72%); CONSULTING SERVICES (72%); VIOLENT CRIME (72%); NATIONAL SECURITY (72%); RETIREMENT & RETIREES (71%); SPECIAL INVESTIGATIVE FORCES (71%); LAW COURTS & TRIBUNALS (71%); PUBLIC CONTRACTING (70%); INVESTIGATIONS (69%); INTERNATIONAL TRADE (68%); EXPORT CONTROLS (65%)
COMPANY: CNINSURE INC (93%)
TICKER: CISG (NASDAQ) (93%)
GEOGRAPHIC: BEIJING, CHINA (91%); NEW ORLEANS, LA, USA (79%) LOUISIANA, USA (92%); NORTH CENTRAL CHINA (91%); CALIFORNIA, USA (79%) CHINA (95%); UNITED STATES (94%); TAIWAN (94%)
LOAD-DATE: July 10, 2008
LANGUAGE: ENGLISH
CORRECTION-DATE: July 15, 2008

CORRECTION: An article on Thursday about cases involving the illegal transfer of sensitive information to China misstated the legal status of Dongfan Chung, a defendant in one case. Mr. Chung, a former Boeing engineer known as Greg, has been indicted on economic espionage charges, which he has denied. He has not been convicted.
GRAPHIC: PHOTOS: Dongfan Chung, center, leaving a California court in February, was convicted of espionage involving aerospace programs. (PHOTOGRAPH BY CHRISTINA HOUSE/THE ORANGE COUNTY REGISTER, VIA ASSOCIATED PRESS) (pg. A15)

In February, an investigation of Chinese espionage took federal agents to Houma, La. (PHOTOGRAPH BY MATT STAMEY/THE COURIER, VIA ASSOCIATED PRESS) (pg. A15)


PUBLICATION-TYPE: Newspaper

Copyright 2008 The New York Times Company



601 of 1231 DOCUMENTS

The New York Times
July 9, 2008 Wednesday

Late Edition - Final


INSIDE THE TIMES: July 9, 2008
SECTION: Section A; Column 0; Metropolitan Desk; Pg. 2
LENGTH: 2349 words
INTERNATIONAL

JAPANESE POLICE OUTNUMBER G-8 PROTESTERS

Two hundred anti-globalization marchers, demonstrating against world leaders at the Group of 8 meeting on Japan's northernmost island, Hokkaido, quickly found themselves outnumbered by the police as Japan deployed one of the heaviest security operations in its history. Whether this has helped the meeting escape the violence of previous venues is a matter of debate, with many in Japan criticizing the police presence as excessive and very expensive. PAGE A13

IRAQI OFFICIALS STRESS TIMETABLE

Iraqi officials continued to insist that a timetable for the withdrawal of coalition troops must be included in any security agreement with the United States. And in Ramadi, 22 bodies were found at an elementary school that was undergoing construction. Twenty of them were buried in the playing fields, apparently over a lengthy period of time, a local police official said. PAGE A10

QUESTIONS ON IRAN'S MISSING

Iran, sharpening its image contest with Israel amid the standoff over Iran's nuclear program, has resurrected questions about the fate of four of its citizens who disappeared in Beirut in 1982 while Israeli forces occupied the city. Officials in the office of the United Nations secretary general, Ban Ki-moon, said that a letter that the Iranian Mission had released, asking him to intervene to determine the fate of the men, had yet to arrive. PAGE A10

G-8 SANCTIONS ON ZIMBABWE

The leaders of the Group of 8 industrialized powers agreed to impose tough sanctions against Zimbabwe after its violence-marred elections, taking a hard line against the nation despite resistance from leaders of the African Union. PAGE A12

CHANGES TO TESTIMONY ON WARMING

Vice President Dick Cheney's office was involved in removing statements on health risks posed by global warming from a draft of a health official's Senate testimony last year, a former senior government environmental official said. The former official, Jason K. Burnett, made the assertion and described similar incidents in a three-page letter to Senator Barbara Boxer, a California Democrat who is the chairwoman of the Senate Environment and Public Works Committee. PAGE A12

A NATIONAL COUPLES THERAPY DAY

A park bench with a back shaped like outstretched angel wings and a curved seat that encourages couples to slide closer together is one of many measures taken across Russia for the first Day of Family, Love and Fidelity. The holiday is the government's latest attempt to help halt Russia's population loss. PAGE A13

NATIONAL


OBAMA REJECTS ASSERTIONS

That He Has Moved to the Center

Some of Senator Barack Obama's recent statements have alarmed some of his supporters, who say he's trying to move to the center as the general election campaign heats up. Mr. Obama pointedly rejected those assertions at a town hall-style meeting in Powder Springs, Ga., saying he plans to end the Iraq war as president, and added that his recent comments about faith were consistent with previous statements and were not changes in his approach. PAGE A19

FRAUD REPORTED AT MEDICARE

Medicare paid millions of dollars to suppliers improperly using the identification numbers of doctors who died years ago, according to Congressional investigators. In one case, Medicare paid more than 2,000 claims totaling $479,000 for services provided from 2002 to 2007, even though the doctor had died in 1999. ''Scam artists have treated Medicare like an automated teller machine, drawing money out of the government's account with little fear of getting caught,'' said Senator Norm Coleman of Minnesota. PAGE A16

RECONSIDERING PRESIDENTIAL POWERS

Former Secretaries of State James A. Baker III and Warren Christopher, above, proposed a new system of closer consultation between the White House and Congress before American forces go into battle. Their plan would require the president to consult senior lawmakers before initiating combat lasting longer than a week, except for covert operations or rare cases requiring emergency action. PAGE A17

EMBEZZLING FROM NONPROFITS

Two prominent national nonprofit groups were rocked by disclosures of financial misappropriation by employees and contractors. One group, Points of Light, abruptly stopped auctioning off travel packages through its online store after finding ''abnormalities'' in the business practices of the contractor hired to run it. Meanwhile, Acorn, the community organizing group, said that a former finance director had embezzled almost $1 million from it and related charities. PAGE A16

ABUSE IN ONLINE MEDICATION SALES

A new study found that at least 310 Web sites illegally sold controlled medications by mail without a proper prescription. And the Drug Enforcement Administration found that 85 percent of Internet drug sales involved controlled medicines -- compared with 11 percent of prescriptions filled through brick-and-mortar pharmacies -- suggesting that online sales are largely for misuse. PAGE A16

Lawmakers Try to Tackle Energy A14

NEW YORK REPORT

A BILLIONAIRE INSERTS HIS MONEY

Into Legislative Races

Tom Golisano, the unpredictable Rochester billionaire, shook up an already-chaotic election year even further after he said he would pour at least $5 million into state legislative races. His aim: To throw a scare into -- and maybe even replace--Albany's political elite. ''Those elected officials on either side of the aisle who are not focused on Tom's issues should be focused on them now,'' one assemblyman said. PAGE A22

THE HISTORICAL SOCIETY'S PLAN B

The New-York Historical Society is scrapping its plans for a $100 million, 23-story luxury condominium tower after facing intense opposition by preservationists and neighborhood groups. Instead, the society will concentrate on renovating its current building. The tower plan's opponents considered the abandonment of the project as a victory -- and a precedent. PAGE A23

The Celebrity Court Escape A22

BUSINESS


AD SPENDING OUTLOOK

Gets Even Less Rosy

A bad year for advertising spending may actually be worse than originally thought, according to Robert J. Coen, whose job it is to forecast such things. But, he says, the second half of 2008 should be better, thanks to aggressive pushes from Olympic marketers and political candidates. PAGE C7

A RETAILER'S UNCERTAIN FUTURE

Steve & Barry's, the clothing chain that sold celebrity fashion and shoes for less than $10, may be preparing to file for bankruptcy protection. The company's management had held discussions over the Fourth of July weekend with Sears Holdings Corporation about a possible bailout or an acquisition of some of its labels. PAGE C1

MORE BAD NEWS FOR SIEMENS

Siemens, one of the largest exporters in Germany, announced that it would lay off 16,750 workers -- about 4 percent of its global work force. It is a rare bit of bad economic news for the country, which has witnessed a steady decline in unemployment . But the bad news isn't so odd for Siemens, which is also laboring to put an extensive corruption scandal behind it and has seemed to lurch from problem to problem. PAGE C3

G.M.'S LOOMING CASH CRISIS

G.M.'s stock is at its lowest point in 50 years, and it may soon have to raise new operating capital to offset a steep drop-off in auto sales. For his part, Rick Wagoner, G.M.'s chairman, has kept mum on the automaker's funding plans since announcing a series of plant closures last month. PAGE C1

DINING


RESTAURATEURS IN BROOKLYN: FROM PIONEERS TO SCOURGE

Alan Harding and his partner Jim Mamary have opened dozens of restaurants in Brooklyn. And as rents in some once-dicey neighborhoods climb, the local climate has changed and such once-intrepid entrepreneurs have been bedeviled by residents seeing their eating establishments as nothing more than chains. Page D1

SWEETS OF A DIFFERENT CALIBER

Be warned, Good Humor Man: the new competition in town is wearing a cravat with its chef's whites. Purveyors of high quality sweets are on the move, and like guerrilla fighters for your taste buds, they arrive in trucks at favored New York locales. But they're not selling rocket pops and sundaes. No, instead you will find Belgian waffles, creme brulee, and jam-stuffed oatmeal cookies. Page D1

AND WHY NOT INDEED?

It has incarnations all across the world, from India to Southern China, from savory to sweet; but wherever you go it all means the same thing: ''fried milk.'' It is not created by some arcane process of molecular rearrangement. Rather, milk is turned into some form of a custard and then deep fried. Now this delicacy makes the rounds in the kitchens of New York. Page D5

Avocado Soup, Quick and Cold D3

ARTS


A GUMBO OF PUNK,

And Lots of Skateboards

The Fourth Annual Afro-Punk Festival in Brooklyn was the largest yet -- 10 days, 40 bands, 15 films-- and Jon Caramanica says that the growth has taken its toll. ''A bigger umbrella leaves more room for huddling,'' he writes. And so each day's performance is a little too neatly divided among genres. Still, it was the many skateboarders who made the most noise. PAGE B5

A 'GISELLE' WITH ADDED BUZZ

The announcement that 2009 will be Nina Ananiashvili's last with the American Ballet Theater has added even more buzz to the company's season-ending production of ''Giselle.'' Alastair Macaulay says the production is the Ballet Theater's best production of a 19th-century ballet classic. ''In one crucial sense, 'Giselle' is the classic of all ballet classics,'' he writes. ''Why? Its drama is about dance itself.'' PAGE B1

A BOOST FOR ITALIAN CINEMA

Two Italian films won the top runner-up prizes at the Cannes Film Festival in May, sending the country's news media and intellectuals into a tizzy. Some people began pronouncing it the advent of a somewhat inartfully named new movement called neo-neorealism. ''At the heart is a way of looking at the world or a person or society for what it is,'' an Italian film executive said. PAGE B3

A. O. Scott:

'Full Battle Rattle' PAGE B7

SPORTS


A FAILED TEST TRAILS RIDER

As He Races Into Lead

In the latest stage of the Tour de France, Stefan Schumacher finished with a remarkable 18-second victory in the first of two time trials, and will wear the yellow jersey for the longest stage of the race. But last fall, after Mr. Schumacher crashed his car, he was found to be over the legal limit for alcohol and tested positive for amphetamines -- and the implications continue to hover over his performance. ''I'm a public person, and I have to be an example for others,'' he said. ''But I didn't take drugs.'' PAGE C13

THE EVOLUTION OF A RIVALRY

The epic match between Roger Federer and Rafael Nadal in the Wimbledon final nearly overshadowed the impressive showdown between Venus and Serena Williams the previous day. The common refrain about their matchups had always been that they resulted in less-than-riveting tennis, but what was once sisterly competition has become a full-fledged rivalry. ''I'll help her with anything,'' Venus said of Serena. ''I just won't give her tips on how to beat me.'' William C. Rhoden, Sports of The Times. PAGE C16

A THOROUGHBRED'S PLANS

Curlin's resume is impressive: Horse of the Year in 2007, victories in the Breeders' Cup Classic, the Dubai World Cup and the Preakness Stakes. But when he makes his turf debut Saturday in the Man o' War Stakes at Belmont, the goal will not necessarily be to win the race but to prove he belongs in the Prix de l'Arc de Triomphe, France's most prestigious race, in October. PAGE C15

THE UNIVERSAL LANGUAGE OF THE FIST

The Ultimate Fighting Championship is the leading brand of mixed martial arts in the United States, Canada and Britain. Dana White, the U.F.C. president, says the competition could succeed in Europe because fighting sports have a universal appeal and do not require fans to study rule books. PAGE C14

OBITUARIES

RUTH GREENGLASS, 84

Her damning testimony in the Rosenberg atomic-bomb spy case of the early 1950s -- which was later called into question -- helped lead to the execution of her sister-in-law Ethel Rosenberg. After the trial and execution, she and her husband lived in the New York metropolitan area under assumed names for more than four decades. PAGE C11

DORIAN LEIGH, 91

She may have been the first supermodel, and was certainly among history's most photographed models, gracing the cover of Vogue seven times in 1946, and in the next six years appearing on more than 50 more covers of various magazines. ''She instinctively knew what every photographer wanted, and she came alive just at the moment the shutter clicked,'' Eileen Ford, the doyenne of the modeling agency industry, once said. Page C11

EDITORIAL

ABOUT THOSE LOANS

The Federal Reserve is ready to issue new lending rules to restrict junk mortgages. But consumer advocacy has never been its strong suit. If the Fed won't protect consumers, Congress will have to. Page A22

WHEN 1,000 PEOPLE GET SICK

After last year's problems with tainted peanut butter and spinach, Congress and the White House pledged to ensure the safety of the nation's food. They still haven't. Page A22

IN JULY, PREPARING FOR SNOW

Even in midsummer's heat, residents of the eight million or so households with oil-fired furnaces are worried about winter. Page A22

NO DIALING FOR A DOLLAR

With gas prices at more than $4 a gallon, New York City taxi drivers want a $1 surcharge per trip. We say give the drivers the extra $1, and in exchange ask them to turn off their cellphones and pay attention to the road. Page A22

OP-ED


MAUREEN DOWD

An elusive first lady: the fictional Laura Bush is in some ways easier to know than the one we've been watching for the past eight years. Page A23

DOG EAT YOUR TAXES?

Leona Helmsley's multibillion-dollar bequest for the care and welfare of dogs may enable her estate to avoid paying as much as $3.6 billion in estate taxes. An Op-Ed contributor, Ray D. Madoff, argues that we should stop giving the wealthy a blank check for their charitable whims. Page A23


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