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"After decades of deficits, we have put America's fiscal house in order again."

--President Clinton, on July 29, referring to a new five-year plan to balance the budgetEDITED BY PAT WECHSLERReturn to top


THE AMERICAN BAR ASSN., AT its annual meeting Aug. 6, is expected to condemn municipal-bond lawyers who contribute to local campaigns in the hope of snagging lucrative business. That's good, says SEC Chairman Arthur Levitt Jr., but a mere statement doesn't go far enough.

Levitt has been vigorously lobbying for the ABA to prohibit the so-called "pay to play" practice. He would settle for a two-year ban on doing muni bond deals after making a campaign gift. But he has run into a roadblock: ABA Ethics Chairman Lawrence J. Fox. A Philadelphia lawyer, Fox says he agrees pay-to-play is bad, but thinks Levitt is overreacting.

Both men are active in politics. Fox raised funds to help his brother, Republican Jon D. Fox, win two House elections. Levitt raised more than $1 million for President Clinton's 1992 campaign, "and that in part is why he appeared on Clinton's radar screen" in his search for an SEC chairman says Fox. "That is such nonsense," says a Levitt aide. Levitt, he says, had

40 years of Wall Street experience backing his appointment.EDITED BY PAT WECHSLER By Paula DwyerReturn to top


JAPAN'S BIGGEST BROKERAGE firm, Nomura Securities International, is taking the first step toward spinning off its successful U.S. commercial real estate division, run by whiz kid Ethan Penner.

Right now, the real estate unit is buried in bureaucracy: It is a mere division of a U.S. subsidiary of a Japanese public company. The plan is to break it out as a stand-alone company that is majority owned by its U.S. parent, Nomura Holding America, with its own name. Penner will be joined by Michael Berman, who will resign as NHA's chairman effective Aug. 15 to become the real estate division's chairman. (NHA's new co-CEOs will be William Wraith IV and Atsushi Yoshikawa, NHA employees.) The real estate unit could be spun off as an initial public offering. This would allow Nomura to recoup some of the major capital investments it has made in the unit, which did $6 billion in commercial real estate financings last year. And it would provide an opportunity for Penner, Berman, and other execs, who will own a piece of the new stand-alone, to make some money.

In 1996, Penner, 36, collected a cool $46 million for his work. Says Penner: "This is a better alignment of management incentives with Nomura's."By Leah Nathans Spiro EDITED BY PAT WECHSLERReturn to top


LOOKS LIKE THE CHINESE are moving from Mao jackets to off-the-rack. China's formerly state-owned enterprises, or "red chip" companies, are showing a particular flair for buying stakes in and setting up joint ventures with Hong Kong clothes retailers.

Most recently, China Resources Enterprises, the Hong Kong subsidiary of state-controlled China Resources Holdings, formed a joint venture with Michael Ying's Esprit Holdings. Ying's company owns a chain of midprice clothing stores in Asia and Europe that use the Esprit name popularized as a U.S. casual-wear chain. The latest deal would open 100 Esprit outlets in China.

Esprit is not unique. A subsidiary of the State Council's China Everbright IHC Pacific bought a 20% stake in Theme International, a Hong Kong fashion retailer for working women.

Analysts predict this is just the start. "Everyone wants the red influence," says Jensen Chow of Hong Kong's ING Barings. The mainland market for casual and upscale clothes, now 100 million people, is growing. And with such Western names as Benetton and the Gap not much of a factor, Hong Kong brands seem set to dominate.EDITED BY PAT WECHSLER By Bruce EinhornReturn to top

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