Secretary of State Condoleezza Rice met last week with the finance ministers of Britain and Germany, where, according to a U.S. Treasury study, Iranian-government banks operate branches to handle funds generated by the oil trade. The U.S. wants non-Iranian banks to stop facilitating Tehran's money flow. A senior official involved in devising the strategy told TIME, "It's about convincing financial institutions not to deal with bad guys, because they're worried about their own reputations."

Iran has shifted some accounts from Europe to Persian Gulf countries in anticipation of a squeeze. So Under Secretary of State Robert Joseph traveled to seven countries in the Middle East earlier this month to talk with officials about "what we can do together to disrupt the proliferation activities," he said. Financial restrictions "can have an effect on Iran's ability to acquire more technology and expertise from the outside."

Another possible move is a disinvestment campaign similar to that used against apartheid-era South Africa. A study by the Conflict Securities Advisory Group, a Washington consultant hired by the State Department, found that 124 publicly traded European companies have ties to Iran and that European banks are financing significant energy and telecom projects there. A disinvestment campaign could be tough to pull off. But U.S. officials hope that while conscience may not get those firms to quit Iran, the threat of bad p.r. might.

Speaking at the IMF's Washington headquarters on Saturday night, Mr Brown said the new strategy for the IMF, which was established 60 years ago at the post-war Bretton Woods conference, had won a consensus of all 184 country members.

"This is not simply the IMF accepting responsibility for multilateral surveillance. This is about individual economies of the world ... accepting that we have responsibilities to each other and that they have to be addressed."

He said it was a time of "profound change" thanks to globalisation and of risk from high and volatile oil prices and the dangers of protectionism. "Faced with this challenge members of the committee decided that 2006 would be a year of reform for the global economy and to make the IMF more fit for purpose and address the challenges that are quite different from 1945 when the IMF was created."

The medium-term strategy drawn up by the IMF's managing director, Rodrigo de Rato, and approved by the committee, will lead to a wholesale reform of the institution including; a new focus on surveillance of multilateral issues and the spillovers and linkages between countries or groups; greater independence of the IMF's surveillance work in exchange for more direct accountability; an ad hoc revision of voting shares to give representation to small countries; and the launch of a review of the whole voting structure of the IMF that could see China and other Asia nations vastly increase their voice at the world table at the expense of Europe.

Experts believe one of the first issues to be addressed will be links between record current deficits in the US, massive surpluses in Asia and oil-producing countries, and China's currency peg with the dollar.

Asked how this would work in practice, Mr de Rato said: "This is a system by which ... the authority of the fund and the consultation process are able to discuss and implement analysis and decisions with relevant countries related to spillover and linkages."

There was fresh evidence of a new attitude to global imbalances as China said it was adopting further measures to expand domestic demand, encourage consumption, open its markets and "improve" the exchange rate regime.

Zhou Xiaochuan, governor of the People's Bank of China said the reforms meant its currency could "probably" begin to appreciate a bit more quickly. "Chinese economic reform always follows the philosophy of gradualism (but) probably it can be a little bit faster."

Meanwhile, Mr de Rato said the IMFC had given him a clear mandate to propose changes to the voting shares of some countries, including some emerging market economies, by September. His proposal would give ad hoc increases to a small number of countries like China, South Korea and Mexico. Other nations that may also qualify include Malaysia, Thailand and Singapore, which will host the annual meetings in September where Mr de Rato said he would publish "concrete proposals".

This could be the most significant change to the IMF since 1971, when the Bretton Woods agreement that obliged countries to fix their exchange rates to gold was abandoned.

Observers noted last week marked the 60th anniversary of the death of John Maynard Keynes, the British economist seen as the architect of Bretton Woods.

"You know and I know that the reason the price is where it is is not from a shortage of (crude oil) supply," he said.

Oil raced to an all-time high above $75 last week as
Iran continued to defy world pressure to halt its nuclear program, a quarter of Nigeria's output lay idle after rebel attacks and Iraq's once considerable oil industry was mired in crisis.

Consuming nations -- from top energy user the United States to poor African nations -- are afraid high energy costs will snuff out economic growth. Producers fear a price collapse.

OPEC ministers, meeting on the final day of global energy talks here, had little enthusiasm for a Kuwait proposal to offer up all the organization's spare capacity of two million bpd as they did in September when oil spiked above $70 a barrel.

Then, as now, a lack of motor fuel in the United States, consumer of over 40 percent of the world's gasoline, was partly to blame for the price surge. At that time hurricanes had damaged U.S. refineries. Now the introduction of new, cleaner U.S. gasoline may disrupt supplies in the short term.

Some OPEC delegates also blame U.S. foreign policy.

Libya's top oil official said fears of a U.S. strike on Iran, the world's fourth biggest crude exporter, had added $15 to the cost of a barrel of oil. Kuwait's oil minister reckoned another $7 had been added by consumers' sense of vulnerability.

Top exporter Saudi Arabia, a close U.S. ally, also spoke of international tension. "There is nothing that can be done about the tension that has been created and until that tension abates the price will continue to be high," Naimi said.

Investors agreed OPEC, supplier of a third of the world's oil, could do nothing to steer oil from its highest level in real terms since 1980, the year after the Iranian revolution.

"OPEC can't do anything about the upside to the market. They don't have much scope left for managing," said Michael Coleman, managing director of hedge fund Aisling Analytics.

DIVISIONS

Energy consumers and producers here for the International Energy Forum agreed there was an urgent need to bring down prices. But they were split over how to do it.

Consumers want greater access to oil and gas in the Middle East, Russia and Africa. Producers want to be sure investing in new fields will pay off. Both sides criticize major oil firms for failing to build new refineries.

"The objectives are different. Nobody is sharing anything," said a delegate who declined to be named.

The meeting brought together ministers from 59 countries and the chief executives of major oil companies.

OPEC members point out they have raised oil output by over 10 percent since 1999. Saudi Arabia alone will spend $50 billion over the next five years on new fields and refineries.

In contrast, the United States, which uses a quarter of the world's oil, has not built a refinery on its soil for decades.

A conciliatory Bodman said he would not ask OPEC to pump more even though U.S. gasoline has reached $3 a gallon

"We have encouraged producing nations to keep oil markets well supplied -- I think they've done that," he said.

An OPEC statement after Monday's talks said "crude volumes entering the market are currently well in excess of actual demand, as levels of stocks in OECD countries demonstrate."

Also Sunday, OPEC President Edmund Maduabebe Daukoru predicted that oil prices would fall from their current high of just over $75 a barrel to stabilize in the "upper fifties to lower sixties."

Crude-oil prices hit a new record Friday, fueled by concerns about
Iran's nuclear ambitions and tight U.S. gasoline supplies.

The Organization of Petroleum Exporting Countries president said the solution to high prices lies in a calmer international environment and boosting refining capacity - not increasing output which would only clog the market.

"If we do the right things by lowering international tensions, oil prices will definitely stabilize," said OPEC President Edmund Maduabebe Daukoru said in Doha, Qatar.

In the Lundberg Survey, mid-grade hit $3 a gallon, up from $2.76, while premium climbed to an average of $3.10, from $2.86 two weeks ago.

The survey covered the period from April 7 through April 21.

Among the stations surveyed, the lowest average price in the country for regular unleaded was in Boise, Idaho, at $2.54 a gallon.

Drivers in San Diego were paying the most for gas, at an average of $3.12 a gallon for regular.

Some others benefited "by intentional misrepresentation" or the mistaken belief that secondary residences qualified for payments, he said.

More people could get repayment notices as more applications are reviewed, Brezany said. Recipients could have received $2,000 to $26,200.

People who get the form letter have 30 days to respond. If they don't meet the four-month deadline, the U.S. Treasury will attempt to collect the money, Brezany said.

James McIntyre, FEMA spokesman for Louisiana, could not immediately provide figures for his state or others hit by Katrina. Aaron Walker, the agency's chief spokesman, said in an e-mail he also could not immediately respond.

The form letter sent to the aid recipients said that they could appeal the charges. Even so, it said, "FEMA strongly encourages" them to pay the debt or set up a repayment plan to avoid being charged penalties or interest in case the appeal fails.

Federal auditors have faulted FEMA for much of the benefit abuse after last fall's hurricanes, citing an inadequate accounting system. The federal Government Accountability Office has said thousands of inappropriate payments were made because people could repeatedly apply for and collect benefits.

In February, audits by the General Accounting Office and the Department of Homeland Security found that as many as 900,000 of the 2.5 million applicants who received aid under FEMA's emergency cash assistance program - which included $2,000 debit cards given to evacuees - were based on duplicate or invalid Social Security numbers, or false addresses and names.

Also in February, the Justice Department said federal prosecutors charged 212 people with fraud, theft and other counts in scams related to Gulf Coast hurricanes.

The Senate passed its bill in November; the House approved its version in December. They opened negotiations last month on a compromise but immediately hit a wall over a Senate plan to make companies with poor credit ratings pay more into their pension plans.

That proposal was part of the overall theme of the legislation: ensuring that companies honor their promises to retirees and restore health to a single-employer pension system now underfunded by an estimated $450 billion.

The idea was opposed by senators with ties to the auto industry, and faces strong resistance in the House.

Also crying foul is General Motors Corp., laboring under a junk bond rating and high health and pension costs.

GM says its pension plan, with $95 billion in assets, is overfunded by $6 billion. To be penalized for its weak credit rating "with more pension obligation is obviously not a favorable situation. We think the two issues should be decoupled," GM spokesman Christopher Preuss said.

The chairman of the Senate Finance Committee, Republican Sen. Charles Grassley of Iowa, says the provision is needed to prevent massive defaults that would add to the financial woes of the Pension Benefit Guaranty Corp.

The federal agency, financed by premiums paid by companies with pension plans, insures employer-based plans worth $2 trillion and covering 44 million workers. It has taken over paying current and future benefits to more than 1 million workers in more than 3,400 terminated defined benefit plans.

Last fall, the agency concluded that GM was $31 billion short of what it would need to fulfill all its pension obligations if its plan was suddenly ended and its assets transferred to the agency. GM objected, saying the agency's calculations did not indicate GM's ability to continue putting money into the plan.

The agency is already running a $22.8 billion deficit. A GM bankruptcy could add up to $20 billion, according to some Senate estimates.

The AFL-CIO and other unions are worried that companies will go broke and renege on their pension obligations. The labor federation has come out against a credit rating link.

That dispute alone played a role in delaying for three months the start of House-Senate talks on a compromise. They did not begin until Republicans bowed to Democrats' demand that both Sens. Barbara Mikulski of Maryland, with ties to the auto industry, and Tom Harkin of Iowa, a close ally of unions, join the Senate's negotiating team.

Businesses and unions are balking at tougher funding rules that they say will drive more companies to file for bankruptcy or abandon their pension plans. The White House, on the other side, has threatened to veto any bill that weakens funding requirements and pushes the pension agency closer to a fiscal crisis that might require a taxpayer bailout.

"The focus has shifted a lot of times to what would be good for the PBGC, not what would be good for plan participants," said Lynn Dudley, vice president of the American Benefits Council, which represents companies with pension plans. If companies terminate or freeze plans, she said, "not much else matters."

The White House also opposes a Senate plan to give Delta Air Lines and Northwest Airlines - both in bankruptcy - 20 years to make up a combined $16.3 billion underfunding in their pension plans.

Senate Democrats say airline relief must be part of the final package and negotiators. In a move that could further displease the White House, they are considering extending industry-specific relief to others, including the auto and steel industries.

The pension agency wants to avoid a repeat of last year's takeover of the pension plans of bankrupt United Airlines, which added $10 billion to the agency's liabilities.

Senate aides say a separate issue - hybrid, or cash balance, plans - could be tougher to resolve than the credit rating dispute. Under cash balance plans, companies set aside money each year for employees and generally make a lump sum payment when a worker retires or leaves the company.

The pension legislation tries to clarify the law in the aftermath of a lawsuit against IBM by employees who said the company committed age discrimination when it switched to a cash balance plan. That case was settled in 2004 but with two pending claims that could push the cost of the settlement to IBM to $1.4 billion.

Businesses are pushing hard for this part of the House bill, including making it retroactive. The House, however, has passed a resolution saying the final bill should use Senate language to protect older workers' pension benefits when their companies switch to cash balance plans.

Congress' Government Accountability Office concluded in a study in November that employees whose companies switch to cash-balance plans generally lose benefits regardless of age.

According to CAN regulations, if it chooses to exit, Caracas must respect for the next five years all customs and trade agreements signed with other member states.

Venezuelan President Hugo Chavez said the nation's decision to leave CAN was irrevocable, and CAN's collapse had been caused by Colombia and Peru, both of which have signed free trade agreements with the United States.

On his Sunday radio and television program Alo Presidente, Chavez said he had made "a strategic decision to safeguard Venezuela's national interests," adding that his country could compete with "subsidized U.S. products."

U.S. products would enter Venezuela through Colombia because of the CAN free trade pact, wrecking Venezuela's domestic development plans, Iglesias said.

Venezuela has been promoting a trade pact called The Bolivarian Alternative, which Caracas says is based on socialist ideals. The country has also been seeking to join the Southern Common Market, which is made up of Brazil, Argentina, Paraguay and Uruguay.

CAN member nations will meet on Wednesday to discuss the consequences of Venezuela's withdrawal.

CAN was created by Bolivia, Colombia, Ecuador, Peru and Chile in 1969, but Chile left five years later. Venezuela joined the regional trade bloc in 1978.