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Fallujah Leaders Talk of Negotiating To Forestall U.S. Invasion

By Edward Wong

The New York Times CAMP FALLUJAH, Iraq

Tribal sheiks and clerics in the insurgent stronghold of Fallujah met Thursday to discuss reopening negotiations with the interim Iraqi government to forestall an expected U.S. invasion.

The leaders released a statement demanding that the interim government led by Prime Minister Ayad Allawi arrange a halt to the almost daily U.S. air strikes in the city and to help families who have fled Fallujah return to their homes. If the government met those conditions, the leaders said they would continue talks.

But around 4 p.m., witnesses said explosions were heard in the southern districts of Fallujah while aircraft flew overhead. The attack lasted about an hour. No casualties were reported immediately.

Violence also flared in Baghdad, 35 miles to the east, when gunmen opened fire on a bus carrying female employees of Iraqi Airways to the airport, killing at least one person and injuring 14 others, a hospital official and an airline employee said.

The attack took place in the morning on the highway to the Baghdad airport, one of the most dangerous stretches of road in Iraq. The sound of a nearby explosion caused the driver of the bus, which was carrying two dozen women, to stop. Men wearing scarves over their faces then pulled up in a Toyota sedan and opened fire.

Judge Rejects IRS Case Against Black & Decker

By Lynnley Browning

The New York Times

A federal judge has ruled against the Internal Revenue Service in its bid to force the Black & Decker Corp. to pay $140 million in additional taxes tied to a financial transaction that the agency says is questionable.

The IRS can appeal the ruling, which also requires the agency to refund $57 million in taxes paid by Black & Decker. The company had sued for the return of the money, citing what it deemed to be the legitimate tax-reducing aspects of the disputed transaction.

The decision was made Wednesday by Judge William D. Quarles of the U.S. District Court for the northern district of Maryland. Black & Decker is based in Towson, Md. The ruling is a setback to the government in its war against questionable tax shelters, said Lee Sheppard, a tax authority in New York and frequent contributor to Tax Analysts, a trade publication.

The decision contrasts with one handed down by a Connecticut federal judge in August favoring the government in its civil case against Long-Term Capital Management, a giant hedge fund that collapsed. That ruling upheld a $106 million tax bill against the fund.

Purchase Of Gun Company May Be Based On Fraud

By Fox Butterfield

The New York Times

Money used to defeat an effort by a California teenager paralyzed by a defectively designed handgun to buy the manufacturer out of bankruptcy and dismantle it came from the family that owned the supposedly bankrupt company, according to bank records and the young man’s lawyer.

The lawyer, Richard Ruggieri, said he would ask the federal bankruptcy court in Jacksonville, Fla., to invalidate the sale of Bryco Arms, since the records suggested it was based on fraud.

Ruggieri, the lawyer for Brandon Maxfield, contended when the bankruptcy court approved the sale in August that the winning bidder, a former employee of Bryco, did not have the financial resources to buy the company. Instead, Ruggieri said, the employee, Paul Jimenez, was simply acting as a front man for Bryco’s founder, Bruce Jennings.

In a telephone interview on Thursday, Ruggieri said, “We now have definitive proof that the Jenningses were financing Jimenez and that they lied to the court to conceal the connection between them.”

Ruggieri pointed to a series of bank transfers showing that on Aug. 12, the same day that the bankruptcy court named Jimenez the winning bidder for Bryco, a company owned by Jennings’ former wife, Janice Jennings, wired Jimenez $430,000 to make the purchase.

British Troops To Free U.S. Forces For Fallujah Assault

By Patrick E. Tyler

The New York Times LONDON

Defense Secretary Geoff Hoon announced on Thursday that 850 British troops in southern Iraq would advance toward Baghdad to replace American fighting units that are expected to mount an assault on Iraqi insurgents west of the capital, near Fallujah.

“The government has decided that we should accept the U.S. request for assistance,” Hoon told Parliament. He said that the deployment would take “a matter of weeks, not months,” and that it would be “limited in scope, time and space.”

Hoon’s announcement ended weeks of speculation about the role of British forces in American-led efforts to suppress an insurgency that is threatening to delay and disrupt Iraq’s first national elections, planned for January.

“After careful evaluation, the chiefs of staff have advised me that U.K. forces are able to undertake the proposed operation, that there is a compelling military operational justification for doing so, and that it entails a militarily acceptable level of risk for U.K. forces,” Hoon told the House of Commons.

Opposition members of Parliament have asked why the United States, with 130,000 troops in the Iraq theater, needs 850 British troops for the Fallujah mission. Hoon said on Thursday that the number of armored combat troops in Iraq was a small fraction of the total deployment. He added that British troops would be drawn from the Black Watch Regiment, whose soldiers are among the most experienced and best equipped.