fill-paragraph and latex mode

Greetings all:

I recently built cvs version 21.3.50.1.  Very nice!
Thanks for all the hard work Andrew.

I've a question (perhaps not specific to the mac port)
re the behavior of fill-paragraph in LaTex mode.

The function indents each line two spaces for every
level of nested quotes.  I give a sample paragraph below.

I seem to remember once having seen auctex do this. But I don't 
have it installed.  Nor did 21.1.30.1 do this.

I just spent the last hour trying to figure out how to disable
this feature. Without luck, alas.

Can anyone help this poor and confused medievalist?

Thanks
John L.

SAMPLE

An\mn{PG97:1504} an epistle on the undefiled Orthodox faith, sent by
the blessed father Thomas, the Patriarch of Jerusalem,\fn{The
  chronology of the patriarchate of Thomas, also known as
  Tumayr\={\i}q, is poorly attested.  He must have ascended the throne
  by 807, however. See Blake, ``Deux lacunes combl\'ees,'' 42--43, as
  well as the bibliography there cited.} to the heretics of Armenia,
but composed in Arabic by Theodore Ab\=u Qurrah, the Bishop of Haran,
and translated by me, the most humble\fn{Adding \emph{emou tou
    elachistou} after \emph{Micha\=el}, with~MO.}  Michael, presbyter
and syncellus of the apostolic throne of Jerusalem,\fn{Adding
  \emph{Ierosolum\=on} after \emph{thronou}, with~MO.} by whom also it
was delivered.\fn{Michael the Syncellus was born in Jerusalem in 761,
  appointed syncellus (assistant) to the Patriarch in 811, relocated
  to Byzantium ca.\ 812 (at which time he presumably also delivered
  the present letter), and died in 846, after many struggles in
  defense of the iconophile position. For an overview of his life, see
  the introduction to Mary B. Cunningham, \emph{The Life of Michael
    the Syncellus} (Belfast, 1991).}  In it it is clearly established
that the confession of faith in Christ our true God defined by the
Council of Chalcedon is without fault and [\ldots]\ of every
truth.\fn{Reading \emph{en h\=ei saph\=os apodeiknutai am\=omon kai
    pasas al\=etheias [\ldots]omenon \emph{[wear to the ms.\ has
	renendered roughly three letters illegible]} einai ton para
    t\=es en chalk\=edoni sugkekrot\=emen\=es sunodou peri t\=es eis
    christon ton al\=elinon theon h\=em\=on piste\=os horisthenta
    logon} for \emph{mon\=en \ldots logon}, with~O.}


-------------------------------------------------------
Sponsored by:
ThinkGeek at http://www.ThinkGeek.com/