Justice Department Memo

Said Torture 'May Be Justified'

In August 2002, the Justice Department advised the White House that torturing al Qaeda terrorists in captivity abroad "may be justified," and that international laws against torture "may be unconstitutional if applied to interrogations" conducted in President Bush's war on terrorism, according to a newly obtained memo.

If a government employee were to torture a suspect in captivity, "he would be doing so in order to prevent further attacks on the United States by the Al Qaeda terrorist network," said the memo, from the Justice Department's office of legal counsel, written in response to a CIA request for legal guidance. It added that arguments centering on "necessity and self-defense could provide justifications that would eliminate any criminal liability" later.

Bush said that he expects U.S. authorities to follow the law when interrogating prisoners abroad, but he declined to say at a news conference Thursday in Savannah, Ga., whether he believes torture is permitted under the law. Pressed repeatedly during a news conference at the end of the Group of Eight summit about the Justice Department memo, Bush said only that U.S. interrogators had to follow the law.

The legal reasoning in the 2002 memo, which covered treatment of al Qaeda detainees in CIA custody, was later used in a March 2003 report by Pentagon lawyers assessing interrogation rules governing the Defense Department's detention center at Guantanamo Bay, Cuba.

Bush administration officials say flatly that international conventions barring torture have been abided, and that detainees at Guantanamo and elsewhere have been treated humanely, except in the cases of abuse at Abu Ghraib prison in Iraq for which seven military police soldiers have been charged.

-- Dana Priest, Dana Milbank

and R. Jeffrey Smith

Many U.S. Troops to Withdraw

From S. Korea by End of 2005

The United States plans to withdraw a third of its 37,000 troops stationed in South Korea before the end of next year, South Korean officials said.

The withdrawal underscores a broader move by the Pentagon to transform troops stationed at traditional, fixed bases into more mobile forces for rapid global deployments. Defense officials also have proposed pulling two armored Army divisions out of Germany and repositioning some fighter aircraft and Navy command staff in Europe to make it easier to deploy forces to the Middle East, Central Asia and other potential hot spots.

In the case of South Korea, the planned move would mark the largest U.S. troop withdrawal from the peninsula since the Korean War, while shifting a greater burden of defense to the South Koreans themselves.

The Pentagon has already announced plans to redeploy 3,600 troops this summer from South Korea to Iraq. The new proposal greatly expands the number of troops to be withdrawn -- involving about 12,500 by December 2005, Kim Sook, head of the Foreign Ministry's North America bureau, told reporters.

It was not immediately clear which U.S. forces would be going -- or where.

-- Anthony Faiola

and Bradley Graham

Individuals, Small Firms to Feel

Effects as Phone Rules Expire

Rules that govern how telephone companies compete for local customers will expire next week under a decision announced by the Bush administration, throwing into question how much residential customers and small businesses will pay for service and what choices they will have.

The Justice Department announced Wednesday that it would not appeal a federal court's rejection of government rules requiring regional phone companies to lease their networks to rivals at a discount. The rules are now set to expire on Tuesday.

The Justice Department's decision is a huge blow to struggling long-distance companies such as AT&T Corp. and MCI Inc., which used the regulations to launch their own brands of local service. It also adds confusion to an industry already roiled by technological changes, as wireless phones proliferate and Internet phone service becomes a reality.

About 19 million telephone lines -- about 14 percent of the local phone market -- are served by companies that relied on the government regulations. AT&T said that the decision could lead it to raise rates and possibly abandon local service in some markets.

-- Christopher Stern

Justices Uphold Opening Roads

To Traffic From Mexican Trucks

The Supreme Court ruled that the Bush administration can open U.S. roads to Mexican trucks as soon as it wants, overruling a lower court judgment that the government must first study the environmental effects.

The high court decision clears the way for the administration to take the final procedural steps needed to allow Mexican rigs to carry freight deep inside the United States. Labor and environmental activists who have fought to block the trucks from U.S. highways said Congress might still erect more obstacles.

The groups that lost the case contended that the court's decision would lead to increased pollution and road congestion, especially in states along the U.S.-Mexican border, where most of the Mexican truck traffic is expected to go.

But the administration praised the ruling as eliminating one of the last hurdles before the border is opened much more widely than it is now, in accord with the North American Free Trade Agreement.

-- Paul Blustein

Fed Plans to Raise Rates

In Attempt to Slow Inflation

Federal Reserve Chairman Alan Greenspan said that the central bank will raise interest rates as aggressively as necessary to keep inflation under control.

Greenspan said Fed officials continue to believe they can raise rates at a "measured" pace because of their economic forecasts. But he acknowledged that they might be wrong and have to shift their strategy, which would mean raising rates more quickly or in larger steps than previously envisioned.

Although inflation remains low by most measures, it has jumped in recent months by a degree that has surprised many at the Fed.

Greenspan and other Fed policymakers have signaled repeatedly that they will start raising their benchmark short-term rate from its very low 1 percent level when they meet later this month and will continue to raise it for some time after that. Analysts and investors generally anticipate an increase of a quarter-percentage point at that meeting but have been divided over the likely pace and size of increases to follow.

Fed officials said after their last meeting in early May that they believed they probably could raise rates at a "measured" pace. Many analysts have interpreted a "measured" pace to mean quarter-point increases spread over many months or even a few years, gradually raising the benchmark rate, called the Fed funds rate -- the rate charged between banks for overnight loans -- to a level that neither stimulates nor puts the brakes on economic growth.

Greenspan's remarks were the latest of many by Fed officials that have appeared aimed at guiding financial market expectations about the central bank's intentions, to help investors adjust gradually to the higher interest rates that will come with a stronger economy. Fed policymakers also want to tamp down any potentially self-fulfilling expectations that inflation might take off because the central bank is too complacent.

-- Nell Henderson