Date: 15 November 2008 11:44
To: Ian Walthew
Subject: Soutien à Jean Hugues le chevrie
Suite aux innombrables violences faites à Jean-Hugues Bourgeois lors de son installation agricole sur le commune de Teilhet dans le Puy-de-Dôme, une association de soutien vient de voir le jour.
Elle a été montée par une vingtaine d'habitants du village (les autres ne voulant pas adhérer "par peur de représailles", selon la présidente, Christine Albert-Gauthier).
Cette association appelle toutes les personnes qui ont déjà soutenue Jean-Hugues ou toutes celles qui comptent le faire à rejoindre le mouvement en adhérant à l'association.
Objectif : faire masse pour continuer la mobilisation citoyenne déjà commencée par les associations bios de la région et par la Confédération paysanne du Puy-de-Dôme en permettant à des personnes, agriculteurs ou non agriculteurs, de rejoindre le mouvement.
Rappel des faits : (que l'on retrouve sur le blog de l'association Jean-Hugues le Chevrier,http://www.cda-blog-asso.com/jeanhugueslechevrier)
Depuis que Jean-Hugues Bourgeois a accepté de reprendre les quelques 50 hectares de terres appartenant à Georges Message, agriculteur proche de la retraite, son quotidien a viré au cauchemar.
Dans la nuit du 31 mars au 1er avril 2008, une dizaine de ses chèvres ont été abbatues. Sur le mur une inscription " La Boge ( le nom du lieu-dit de l'exploitation) aux paysans! Va-t'en!".
Grâce à la solidarité et au soutien d'amis, il réussit à redémarrer.
Mais le harcèlement ne s'arrête pas . S'en suivent les rumeurs ( il cultiverait du cannabis) et les actes de malveillance : rat mort dans le boîte à gants de sa voiture, saccage de clôtures électriques, fers à bétons dans sa prairie pour crever les pneus du tracteur,...
En août 2008 les intimidations continuent :
- dans la nuit du 8 au 9, un bâtiment est incendié : son stock de foin est parti en fumée et sa voiture est partiellement détruite.
- Le 22 , Jean-Hugues Bougeois trouve, déposée dans son tracteur, une lettre en forme de cercueil contenant des menaces de viol sur sa fille, des menaces sur sa compagne et des menace de mort à l'encontre de monsieur Message.
Après un mois de septembre plus calme, le mois d'octobre a apporté son lot d'actes inqualifiables :
- La nuit du 3 au 4 octobre, sa grange est incendiée : son stock de foin et sa récolte de grains sont complètement détruite ainsi que le bâtiment. Jean-Hugues Bourgeois reçoit des menaces de mort par voie postale.
- Et début novembre, nous venons de découvrir qu'une de ses brebis est morte empoisonnée et que d'autres avortent.
Vous comprendrez que Monsieur Bourgeois soit complètement anéanti . Il a le courage de rester mais plus de ressources. Nous laissons à la justice le soin d'enquêter et de punir les auteurs de ces actes innommables mais mettons tout en oeuvre pour aider Jean-Hugues.
Vous êtes touchés ou révoltés par ce qui arrive à Jean-Hugues : Vous pouvez l'aidez :
-Soit en faisant un don : Libellez votre chèque à : Association Jean-Hugues Le Chevrier, La Boge, 63560 TEILHET
-Soit en adhérant à l'association : cotisation de soutien de 5 euros (même ordre, même adresse) Tel : 06.79.09.54.80
Communiqué de l'association Jean Hugues le chevrier
Merci de diffuser l'information le plus largement possible, dans vos réseaux
In fighting wildfires, concerns about chemicals
By William Yardley
Saturday, November 15, 2008
The red clouds of fire retardant dropped onto the flames near Santa Barbara, California, on Friday were a welcome sight for owners of the hillside homes there.
"Critical," Bill Payne, deputy chief of aviation for the California Department of Forestry and Fire Protection, said of the retardant's role in helping to steer the fire away from populated areas, including the exclusive enclave of Montecito. "I mean, this is almost downtown Santa Barbara we're talking about. We're trying to keep it away from the town. We're trying to herd it back into the forest."
Retardant, whether released by small planes that sweep low through smoky canyons or by DC-10s in 12,000-gallon bursts, has become an increasingly common tool for fighting wildfires. Yet while many residents praise — and even demand — the use of retardant to protect their homes and neighborhoods, the potent mix of chemicals in the most common type can leave scars of its own, hurting watersheds and the fish and other animals that live in them.
Increasing concerns over retardant are prompting opposition to its use in certain situations and further stirring the debate in the West over how much is too much when it comes to fighting wildfires.
"It's fairly well known that it's toxic to aquatic organisms, to fish," said Sue Husari, the fire management officer for the Pacific West region of the National Park Service. "In a lot of cases, we prefer to limit its use, but it's definitely one of the tools we use."
The use of the most common type of retardant, a fertilizer-like, phosphate-based compound, can vary by state or by who oversees the land where a fire is spreading. Among U.S. agencies, the Park Service is relatively cautious with retardant because part of its mission is to protect natural and cultural resources for public use. The State of California, however, has the largest aviation fire operation of any state and uses retardant aggressively not only to contain fires — retardant's intended purpose — but also to try to extinguish them before they reach populated areas.
The Forest Service, which oversees the largest share of the nation's wildfire-fighting operations, has a laboratory devoted to testing retardant produced by private companies. In a sign of how contentious the issue has become, the agency is being sued in U.S. court in Montana by a group that says retardant threatens endangered species, including salmon, a claim the agency rejects.
"We have the same environmental concerns as anybody," said Tory Henderson, branch chief for equipment and chemicals at the Forest Service. "We always are looking for a more environmentally friendly product."
Airplanes and helicopters have long worked in concert with ground crews to fight big wildfires. When used effectively, retardant draws a chemical line in the landscape that can keep a fire from spreading while ground crews work to get it under control. But it can also be little more than a red streak of false reassurance, coating hillsides and the occasional house in what critics say is too often an ineffective, expensive public relations effort to appease the increasingly dense populations living in wildfire-prone areas.
Government budgets for fighting wildfires have soared in recent years, reflecting a more assertive approach that critics say places too much emphasis on putting out fires that occur naturally in arid parts of the West.
"It's just bombs away," said Timothy Ingalsbee, a former wildland firefighter who now heads Firefighters United for Safety, Ethics and Ecology.
Still, many people who fight wildfires say that some of the resources that people are concerned will be damaged by retardant could potentially be lost to fire. Even in national parks, where some officials have called off the use of retardant to protect historic structures or wildlife from the chemicals, others have requested more retardant. And in more developed areas, particularly in California, the loudest critics of fire policy are those who want more use of retardant, not less, fire officials say.
"The second we don't, they're calling us: 'Where are you?' " said Payne, of the state fire department. Speaking of the environmental threats of retardant, he said, "It's the people whose houses are not on fire that are concerned about it."
In the federal lawsuit in Montana, the Forest Service is being sued by a group of current and former employees and others who are demanding that the agency conduct a comprehensive environmental study of the impact of retardant under the Endangered Species Act. The suit cites a 2002 retardant drop on a river in central Oregon that killed 20,000 fish.
Current federal policy encourages pilots not to drop retardant within 300 feet of a body of water, but it allows for exceptions if flying conditions require it or if lives or property are in danger. By 2011, according to officials with the Forest Service in Montana, the most common type of retardant will have lower amounts of ammonia and will therefore be less harmful to fish and aquatic environments. Private companies have also used other chemicals to develop gels and foams that are popular among some firefighting agencies, though retardant is used by most.
The Forest Service says that the number of cases it has found where retardant affected waterways is so small — 14 out of thousands of retardant drops since 2000 — that mitigation measures already in place suffice.
In January, the judge in the Montana case, Donald Molloy, threatened to jail the head of the Forest Service, Mark Rey, and to halt its use of retardant because it did not respond to court orders on time. After a hearing the next month, Judge Molloy decided against jailing Rey and allowed the use of retardant to continue. But Judge Molloy let the case proceed, and last month the plaintiffs asked him to make a decision in the case.
"The chance of some stream being hit by retardant is virtually certain, and so, of course, you have to consider the consequences," said Andy Stahl, executive director of the group that brought the suit, Forest Service Employees for Environmental Ethics. "It's already happened 14 times."
In California in September, retardant-dropping planes were called in when the 3,700-acre Hidden Fire rushed toward a ridge above a complex of caves in Sequoia National Park. Then a cave expert and others in the park warned that the retardant could seep into underground streams that were home to rare spiders and isopods. The drops were stopped, and last month the Park Service approved a study of whether the retardant affected the cave streams.
"Fire is not new," said Joel Despain, the cave expert. "We know that these animals and these caves must have been through fires in the past, because there were fires here in the 1920s. But the retardant is something new. That's something these animals have not seen before."
Saturday, November 15, 2008
PARIS: French airports faced more weekend disruption after Air France pilots rejected a proposal on Saturday to break off a four-day strike.
The airline cut up to a third of long-haul flights and half its other services, causing severe airport disruption on the second day of a strike against proposed retirement age reforms.
There had been hopes of a breakthrough after the government offered to guarantee the right to retire at 60 in talks with unions, but pilots voted against ending the strike, unions said.
The carrier had said it would be able to operate 65-70 percent of long-haul flights and around half of its planned short and medium-haul flights at the weekend.
The strike was called over proposals to allow pilots to retire at 65 rather than the current final retirement age of 60, a measure being discussed in parliament as part of wider social security reforms.
The company and the government say the planned change would be voluntary and pilots would not be forced to work until 65, but unions believe it is the thin end of a wedge that will force staff to work longer or accept lower pensions.
The strike started at 11 p.m. Thursday and is due to last until midnight local time Monday and will likely cost the airline 100 million euros (84 million pounds), Chairman Jean-Cyril Spinetta said Thursday.
Air France is the French flag carrier network operated by Franco-Dutch airline group Air France-KLM . (Reporting by Veronique Tison) .
By Mark Landler
Saturday, November 15, 2008
WASHINGTON: With 20 world leaders in town for 24 hours, there wasn't much time for grand gestures or bold promises at Saturday's summit meeting on the global financial crisis. But that did not stop the leaders from bringing 20 different agendas, some more ambitious than others.
There was the French president, Nicolas Sarkozy, without his glamorous wife, Carla, but with a raft of proposals to "change the rules of the game," as he said last week after a meeting of European leaders.
There was Hu Jintao, the president of China, heading a delegation of 100 people and wielding a fat checkbook — nearly $2 trillion in foreign exchange reserves — that Beijing could lend to distressed countries.
There was Prime Minister Gordon Brown of Britain, emboldened by his much-praised response to the banking crisis at home, and fresh from criticizing the proposed bailout of American carmakers in a speech in New York on Friday.
And finally, there was President George W. Bush, the reluctant host in his waning months in office. "The crisis was not a failure of the free-market system," Bush said in his weekly radio address on Saturday, trying to dial back expectations. "The answer is not to try to reinvent that system."
How world leaders approached the Summit on Financial Markets and the World Economy — as Bush called the meeting — had a lot to do with how the financial crisis affected their political fortunes.
For Bush, the upheaval delivered a final blow to an administration staggering under an unpopular war in Iraq and a weakening economy. With President-elect Barack Obama watching from Chicago, Bush was not even the most sought-after American at the meeting he organized, a meeting that was the idea of Sarkozy's. Instead, leaders from Mexico to Turkey lined up to meet two emissaries sent by Obama.
Sarkozy, on the other hand, only became president of France last year, after the seeds of the crisis had been planted. His call for greater regulation plays into France's historical preferences for a robust state role in the market, making Sarkozy an ideal point man for the effort.
"Sarkozy is in a very strong position of not owning the crisis, as other leaders do," said Kenneth Rogoff, a professor of economics at Harvard. "Like Obama, he can take a more detached view."
The French leader's high profile was not without risks. "This was his idea," said Simon Johnson, a former chief economist of the International Monetary Fund.
Besides Sarkozy and Bush were the leaders from Argentina, Australia, Brazil, Britain, Canada, China, Germany, India, Indonesia, Italy, Japan, Mexico, Russia, Saudi Arabia, South Africa, South Korea, Spain, and Turkey.
Angela Merkel, the German chancellor, and President Cristina Fernández de Kirchner of Argentina were the only two women in the Group of 20 meeting — and neither, analysts said, brought a very strong hand.
The German economy just slipped into recession, and its government was slow to accept the need to recapitalize its banks, which purchased a lot of toxic mortgage-related assets from the United States.
Argentina, meanwhile, announced it would nationalize $26 billion of private pension funds, raising fears that the government was short on cash and putting Kirchner into an economic dog house with foreign investors, who are pulling their money out of the country.
The Russian president, Dmitri Medvedev, also came with arguably reduced influence, partly for economic reasons: as the price of oil has plummeted, so has Russia's economy, its foreign exchange reserves and perhaps some of its political muscle.
None of this has stopped Medvedev from striking a combative tone toward the United States.
"They let this currency bubble grow in the interests of stimulating domestic growth," he declared in a recent speech. "They did not listen to the numerous warnings from their partners, including from us. As a result they have caused damage to themselves and to others."
For Brown of Britain, the crisis has been a mixed bag. As chancellor of the Exchequer under Tony Blair, Brown is identified with the economic policies that gave Britain years of growth but brought some of the same excesses as in the United States.
However, by moving quickly to recapitalize the British banking system, Brown appeared decisive and won praise from economists. He also stopped, at least for now, a stream of political obituaries suggesting he would soon be ousted by the Tory leader, David Cameron.
On Friday, Brown was introduced at a breakfast at the Council on Foreign Relations in New York by Robert E. Rubin, the former Treasury secretary, with lavish praise for his role during the crisis.
"Not only the U.K. but the entire world has been very fortunate to have you as a leader," Rubin said.
Brown, smiling broadly, responded that he was "pleased to say that a large number of governments around the world have recognized" that injecting capital into banks is the best way to restore stability.
The prime minister felt confident enough to offer the United States some unsolicited advice, obliquely criticizing proposals supported by Obama to bail out the Big Three automakers.
Without referring to the companies by name, he warned against calls to save jobs in industries that were facing an irreversible decline in the face of global competition. The right response, he said, would be to say, "We can't help you keep your old job, but we can help prepare you for your next job."
To help countries hurt by the crisis, Brown is pushing for the resources of the International Monetary Fund to be expanded. The fund, he said, should function like an "international central bank."
The trouble with this idea is that there are only a handful of candidates with enough cash to pour money into the IMF — China, Japan, and oil producers like Saudi Arabia. The Japanese prime minister, Taro Aso, pledged up to $100 billion in additional lending to the fund.
To persuade these countries to increase their contributions would require giving them a larger role in the governance of the fund. And that would mean reducing the influence of Britain and other European countries.
China staked its claim to a significant role in another way: It announced a $586 billion stimulus package a week ago, allowing President Hu to seize the initiative on economic policy.
For leaders of emerging-market countries who have been clamoring for a seat at the summit meeting table, even being here was something of a victory. For the president of Brazil, Luiz Inácio Lula da Silva, it was partly a simple matter of protocol: Brazil currently leads the Group of 20, which gave da Silva some say over the agenda.
Beyond that, he has been outspoken about how developing countries are victims of a crisis not of their own making.
"No country is safe," da Silva said last weekend, opening a preparatory meeting of finance ministers in São Paulo. "They are all being infected by problems that originated in the advanced countries."
Pakistan Agrees to IMF Loan
KARACHI, Pakistan (AP) — Pakistan has agreed to borrow $7.6 billion from the International Monetary Fund to try to avoid an economic crisis, an official said on Saturday.
The official, Shaukat Tareen, Pakistan's finance chief, said the IMF had agreed "in principle" to the bailout after vetting government plans to tackle Pakistan's budget and trade deficits.
The loan will shore up Pakistan's foreign currency reserves and help alleviate the prospect of a run on the rupee and a default on international debt.
By Ashlee Vance
Saturday, November 15, 2008
The technology industry, which resisted the global economy's growing weakness over the last year as customers kept buying laptops and iPhones, has finally succumbed to the slowdown.
In the span of just a few weeks, orders for both business and consumer technology products have collapsed, and technology companies have begun laying off workers. The plunge is so severe that some executives are comparing it with the dot-com bust in 2001, when hundreds of companies disappeared and Silicon Valley lost nearly one-fifth of its jobs.
October "was like turning a switch," said Robert Barbera, chief economist at the Investment Technology Group, a research and trading firm. "Everything pretty much shut down."
After industry leaders like Intel and Nokia warned of slowing sales this week, investors aggressively sold technology stocks. On Friday, the Nasdaq composite index, which is full of technology names, fell 5 percent. Advanced Micro Devices and eBay both dropped more than 10 percent.
Technology companies directly account for about 4 percent of employment in the United States. And globally, companies and governments spend about $1.75 trillion on technology a year, according to Forrester Research. But the industry's importance to the world economy is larger than its size might suggest. Technology has fueled many of the productivity gains of the two decades. And about half of the capital spending by corporations goes toward technology products, according to Moody's Economy.com.
As cash-strapped businesses cut back on spending of all kinds, a slowdown in technology proved inevitable.
During the dot-com crash, technology companies were victims of Internet hype that they helped create. Once the enthusiasm faded, so did the boom-era sales on software and infrastructure equipment. However, consumer enthusiasm for products like video games, wireless phones and high-definition televisions helped the industry recover.
This time around, the technology sector finds itself at the mercy of a double-barreled slump in both corporate and consumer spending caused by the housing decline and the crisis on Wall Street. Technology companies are also feeling the impact of frozen credit markets as business and government customers struggle to finance computer and software purchases that can run to millions of dollars.
"We have never seen anything like this in history," said William Coleman 3rd, a Silicon Valley veteran who founded the software maker BEA Systems and is now chief executive at Cassatt, a startup.
Best Buy, the leading U.S. electronics retailer, declared this week that "rapid, seismic changes in consumer behavior" had fostered the worst conditions in its 42-year history, and its main rival, Circuit City Stores, filed for bankruptcy protection. Nokia, the world's largest maker of cellphones, predicted Friday that global sales of handsets would fall in 2009, which would be only the second decline ever.
Technology giants like Intel, which makes chips for personal computers and servers, and Cisco Systems, which makes network equipment, warned that revenue was plummeting at rates last seen in 2001.
Dozens of startups, from the messaging service Twitter to the electric-car maker Tesla Motors, have been slicing staff members as they prepare for a slow economy.
And on Friday, Sun Microsystems, a leading maker of computers used by financial services companies, announced that it would lay off as many as 6,000 employees, or 18 percent of its work force.
The turnaround has been as sudden as it is severe. Up until late September, a number of large technology companies maintained an optimistic stance, despite the obvious distress in the global economy.
Cisco was the first large technology company to reveal its sales data from October, noting a 9 percent fall in sales compared with the same month last year. On Nov. 5, Cisco, which is based in San Jose, California, cautioned that because of a "completely different environment," revenue in its current quarter could plummet as much as 10 percent - a major reversal from the 7 percent growth that Wall Street had been expecting.
Intel, the world's largest chip-maker, followed this week, warning that sales in the fourth quarter could fall as much as 19 percent compared with the same period last year.
Even Google, an advertising juggernaut that many analysts said they believed would weather a downturn better than other companies, is feeling the impact.
About eight weeks ago, the company's chief executive, Eric Schmidt, told reporters, "My guess is that the drama is in New York and not here." A month later, Google surprised Wall Street when it reported strong financial results for the quarter that ended Sept. 30, sending its shares up 10 percent.
But Google's stock has dropped 16 percent since, as the same analysts who were upbeat about its results have since cut their revenue and profit forecasts. This week, the shares dipped below $300 for the first time in three years, well before their $742 peak. And the company, known for its torrid hiring and free-spending on employee perks, has begun the most serious belt-tightening in its 10-year history.
"We don't know as managers how long the crisis goes," Schmidt said last week.
For all the gloom, the technology industry is still far healthier than Wall Street. Unlike the banks, many technology companies are flush with cash. Cisco has close to $27 billion, Google, $14 billion, and Apple, $24 billion. It is likely that some of these funds will go toward acquiring struggling competitors. "The guys that aren't as strong will be good pickings," Coleman said.
Fueled by technology, Silicon Valley has stood out as a bright spot for jobs in the United States, with employment growing at about 2 percent a year while national employment slowed. Through 2007, the region continued to add 20,000 jobs, although that positive trend has started to change.
"With this now having become a worldwide event, it's clear that the job losses will come," said Stephen Levy, director of the Center for Continuing Study of the California Economy.
Given the unpredictability of the current economy, the industry's past experience will only go so far, said Chris Cornell, an economist with Economy.com. "It would be a tragic mistake for CEOs who did a great job fighting the last recession to think the same tactics will work this time," he said.
Miguel Helft contributed reporting.
By Joe Nocera
Saturday, November 15, 2008
The U.S. Congress has an endless capacity to disappoint. A scandal erupts, and it rushes to pass legislation full of unintended consequences. Then, when no one is looking, it strips away regulations the country needs. Ideology too often trumps common sense. Partisanship too often gets in the way of practical solutions. It's an old story, I know.
And then there is a week like this one, a week that's almost enough to restore your faith in Congress.
Around 9:45 on Wednesday morning, William Frey took a seat in the hearing room of the House Financial Services Committee.
Frank was livid. For months, he has been jawboning lenders to do more to prevent foreclosures, and it has been like whistling in the wind. Yet as slow as banks have been to get with the program (which they are finally starting to do), Wall Street has been worse, doing virtually nothing about the $2 trillion worth of mortgages trapped in securitized mortgage pools, those so-called toxic assets. Indeed, Frey's letter seemed to suggest that the big boys on Wall Street actually wanted people to lose their homes.
Within hours of reading the Times article, Frank and several other Democrats put out a news release demanding the scalp of both Frey and a second hedge fund manager mentioned in the Times article. Frank also demanded that Frey appear at a hearing to explain why he was unwilling to allow mortgage modification.
At the hearing, however, Frey was not at the witness table. He was in the audience. At the last minute, Frank had decided to withdraw his invitation. Most people would view such a reprieve as a gift from the gods, but not Frey.
When I met him not long ago, Frey explained that he wasn't really trying to stand in the way of preventing foreclosures. In fact, he had devised a plan months ago to deal with securitized mortgages, by having Fannie Mae and Freddie Mac buy them at face value and then refinance them. This of course would cost the Treasury tens of billions of dollars, but as Frey saw it, it was the only possible solution. Anything else would have the effect, he believed, of violating the contract between the servicer and the investors, which never anticipated the housing meltdown and lacked language that would allow for mortgage modification. And interfering with contracts is bad business — that's the road to Russia or Venezuela.
Frey also believes that he is the only person in the business willing to speak this painful truth. When he learned that the other hedge fund manager called on the carpet by Frank, Harvey Allon of Braddock Financial, was now saying he'd been misunderstood, Frey was contemptuous. He wanted to testify, he said, because somebody needed to give the committee some straight talk about securitized mortgages.
Having gotten to know him these past few weeks, I couldn't help suspecting another motive, however: since that original Times article, he had discovered that he liked being in the newspaper. A juicy confrontation with a sharp-tongued committee chairman would surely provoke a headline or two.
At first, I couldn't understand why Frank wouldn't want a foil like Frey on the panel of witnesses. Instead, he had invited four milquetoasts, including representatives from Bank of America and JPMorgan Chase, whose primary goal was to present their institutions as the homeowners' best friends. (To give them their due, both institutions have mortgage modification efforts under way that are better than anything the government has going.) A third witness was a lobbyist for the hedge fund industry who said things like, "Bold, proactive steps need to be taken." (Zzzzzz.)
And then there was Tom Deutsch, a lobbyist for the securitization industry. His job, not surprisingly, was to play down the problem. There were eight times more securitized mortgages being modified today than there were a year ago, he said. The fear of lawsuits was wildly overblown, he insisted. "Industry participants have been and will continue to deploy aggressive and streamlined efforts to prevent as many avoidable foreclosures as possible," he said.
Frank wasn't buying it. Nor should he have been. Yes, some securitization contracts allow for mortgage modifications, but most do not. At IndyMac, for instance, which the Federal Deposit Insurance Corporation has taken over, the agency has sent letters to 9,000 people who hold securitized mortgages it believes it can modify. But it has also found another 20,000 it can't touch.
"I would like to believe what you are saying," a skeptical Frank told Deutsch. "But as Chico said to Groucho, 'Who are you going to believe, me or your own eyes?' "
In response, Deutsch told the committee that his organization, the American Securitization Forum, was working on a solution to the problem by bringing "all the parties together that own mortgage-backed securities to create a streamlined process." In other words, all the investors were going to get in a room together and figure out how to redo the contracts to make mortgage modifications possible. Or so Deutsch seemed to be promising.
That was exactly what Frank had been waiting for. He pounced. "Tell them that if they are worried we will intrude legislatively, they can make us go away. But only if their effort works, and is meaningful," he said.
And that is when I realized Frank's intent. Earlier in his career, perhaps, he might have enjoyed a confrontation with Frey. But now, as the most powerful Congressional Democrat grappling with the financial crisis, he had more important things on his mind. He had called this hearing to deliver a message to the securitization industry. Deutsch was his appointed messenger.
Afterward, surrounded by reporters, Frank sent the message again, even more strongly. "We cannot interfere with existing contracts," he said. "And we are not going to spend a penny of taxpayers' money buying up loans that should never have been made in the first place. But preventing foreclosures is at the top of the agenda. We'll see if Deutsch can do what he says he can do. If not, we are poised to introduce legislation that they won't like."
If that doesn't move the securitization industry to do something to help homeowners, nothing will.
The next day, the scene shifted to the House Committee on Oversight and Government Reform, headed by Congress's grand inquisitor, Henry Waxman of California. As a general rule, I don't have much patience for Waxman's accusatory style. He calls a hearing to investigate the cause of the cataclysmic bankruptcy at Lehman, and then spends the whole time berating the former chief executive, Richard Fuld, over his compensation. Hearings to him are blood sport, not fact-finding missions.
Waxman's hearing on Thursday was supposed to be an inquiry into the role of unregulated hedge funds in the credit crisis. To that end, Waxman had assembled five hedge fund billionaires, including Ken Griffin, head of the Citadel Investment Group; John Paulson, who made billions betting against mortgage-backed securities; and George Soros.
With the exception of Soros, who arrived with a smile on his face and copies of his latest book under his arm, the hedge fund managers approached the witness table with expressions ranging from trepidation to dread. James Simons, who runs the hedge fund firm Renaissance Technologies, seemed to visibly shrink as the cameramen crowded around him.
At first, it looked like Waxman was going to use the hearing the way he usually does: to hammer his unfortunate witnesses. Twice in his short opening statement, he pointedly mentioned that each of the five hedge fund managers had made more than $1 billion in 2007. But then Waxman asked his first question, and suddenly the tenor changed.
"Do you believe that the collapse of large hedge funds pose systemic risk?" he began. "And does this justify greater federal regulation?" That question, in turn, provoked one of the most amazing hearings I've ever attended, not because sparks flew but because the hedge fund managers responded with answers I never thought I would hear in my lifetime.
They all agreed with Waxman, and with the other Congressional questioners, that in certain cases hedge funds could indeed pose systemic risk. All but Griffin said they would favor at least some regulation of hedge funds. They all agreed on the need for more disclosure. They said they had no problem turning over now-hidden information about their portfolios to a federal regulator. Simons and several others (though, again, not Griffin) said that if Congress changed the tax laws in ways that caused them to have to pay more taxes, they would be O.K. with that. I almost fell out of my chair.
As the hearing approached its end, Waxman happily ticked off all the things they had agreed to. Though they may all wake up tomorrow and wonder what had come over them during their testimony, what's done is done. They can't take their words back.
And next year, as a new Congress and a new president begin the task of coming up with better regulations for the financial system, you can bet that the words of those hedge fund managers will be cited again and again. In fact, if you want to point to the day when hedge fund regulation became a foregone conclusion, it was this Thursday.
Later, after the hearing was over, Waxman shook hands with Simons. "Thank you," he said. "It was a good hearing." Then he broke into a wide grin. "Very substantive," he added.
He sounded surprised.
Saturday, November 15, 2008
By Bill Rigby
Europe officially fell into recession on Friday and the U.S. economy suffered thousands more layoffs and the biggest retail sales dip on record as world leaders met in Washington to address the worst financial crisis in 80 years.
Leaders of the Group of 20 advanced and emerging economies said they were working on plans to counter the growing economic threat and prevent future crises, but big breakthroughs were not expected at their meeting in the U.S. capital, given the absence of U.S. President-elect Barack Obama, whose involvement will be key to any global initiatives.
The financial crisis continues to wreak havoc on the world's major economies, with official data showing the 15-nation euro zone economy had shrunk by 0.2 percent for the second quarter in a row, meaning it is technically in recession.
The United States is probably already in recession, most economists agree, but official data showing that will not come out until January.
"Frankly, we at Dow are looking at an '09 that looks like a pretty protracted global recession, probably going into 2010," Andrew Liveris, the chief executive of Dow Chemical Co, the largest U.S. chemical maker, told Reuters.
Signs for the U.S. economy worsened on Friday. Retail sales fell 2.8 percent in October, according to government data, the biggest decline since comparable numbers were first collected in 1992.
Citigroup Inc, one of the hardest-hit financial companies, will soon announce job cuts of up to 10 percent of its staff, according to a source familiar with the matter. That could affect more than 30,000 employees.
Sun Microsystems Inc said it would slash up to 6,000 jobs, or 18 percent of its workforce, as it looks to save money while demand wanes for its high-end business computers.
Fidelity Investments, the world's biggest mutual fund company, told employees it will cut a further 1,700 jobs on top of 1,300 already announced.
Freddie Mac, the second-largest provider of U.S. home loan financing, reported a $25 billion (16.8 billion pound) quarterly loss as the housing slump worsened, forcing it to draw on a $100 billion Treasury Department lifeline.
Meanwhile, approval of a bailout for the big U.S. automakers was in doubt, increasing the possibility of a wave of mass layoffs at General Motors Corp, Ford Motor Co and Chrysler LLC.
The U.S. Senate plans on Monday to take up a bill that would provide emergency aid to automakers, but it remained unclear if there was enough support for it to pass.
The only glimmer of optimism was that U.S. consumer sentiment rose slightly, helped by lower gasoline prices.
Confidence might be raised further by moves to reduce skyrocketing home foreclosures by modifying borrowers' loans, but a proposal along those lines by the Federal Deposit Insurance Corp met opposition from the U.S. Treasury and the White House.
More help is on the way for ailing banks. Friday was the deadline for public banks to apply for funds under a U.S. capital injection program that is part of the $700 billion bailout plan passed by Congress last month.
Treasury expects to approve federal funds for another 20 banks, an official told a U.S. House of Representatives committee.
U.S. stocks closed lower, the Dow losing nearly 4 percent after flirting briefly with positive territory following Thursday's strong gains and a winning session in European and Asian stock markets. Oil fell below $57 a barrel.
U.S. Federal Reserve Chairman Ben Bernanke said central banks worldwide were ready to do more to support faltering growth and European Central Bank policy-makers signalled further interest-rate cuts were likely.
"Policy-makers will remain in close contact, monitor developments closely, and stand ready to take additional steps should conditions warrant," Bernanke said at an ECB conference in Frankfurt.
With Europe as well as parts of Asia and North America suffering, leaders of the G20 nations opened a two-day summit with a dinner at the White House in a search for ways to resolve the crisis, started by a U.S. housing market crash, and avoid another one.
But agreement among the G20, which represents 85 percent of the world's economy and two-thirds of its population, may be elusive amid divisions over whether more regulation of markets can protect consumers, savers and companies from the fallout.
The administration of U.S. President George W. Bush says there should be no return to greater state control of financial markets. Much of Europe says that without greater regulation, a repeat of the last year's turmoil is inevitable.
(Additional reporting by Reuters bureaus worldwide; Editing by Brian Moss, Gary Hill)
Saturday, November 15, 2008
SAN FRANCISCO: A man laid off recently from his job in Silicon Valley shot and killed three people, believed to be former co-workers, at an office park on Friday, police in the ailing U.S. technology hub said.
The 47-year-old suspect, identified by police as Jing Wu, was still at large after gunning down two men and a woman shortly before 4 p.m. local time (12 a.m. on Saturday), Santa Clara, California, police told local media.
Police did not identify the firm, which had employed the suspect, local radio and television reported.
An online business directory listed a man with the suspect's name working at Siport, a semiconductor company at the address of the killings. Siport was not immediately available for comment.
As the U.S. economy has weakened, technology companies have joined the rush to cut costs and lay off workers.
Sun Microsystems, one stalwart of the industry, said on Friday it would cut up to 6,000 jobs, 18 percent of its workforce.
(Reporting by Peter Henderson and Anupreeta Das; Editing by Peter Cooney)
By Elisabeth Malkin
Saturday, November 15, 2008
MEXICO CITY: The pilot of a small government jet that crashed last week, killing Mexico's interior minister, flew too close to a jumbo jet that it was following and lost control of the plane in the turbulence created by the larger plane, the authorities said Friday.
A preliminary report of the investigation pointed to pilot error as the most likely cause of the crash, which killed all nine people aboard the plane and five on the ground. The plane was approaching the Mexico City airport when it encountered the turbulence and slammed into evening rush-hour traffic in an upscale business district here.
The pilot and co-pilot appeared to have been confused about how to operate the Learjet's controls and failed to follow the air traffic controller's order to slow down as they approached the airport, Transportation Minister Luis Téllez said at a news conference that he called to release and explain the investigation's early findings.
Since the crash on Nov. 4, speculation in the local news media and on the streets has revolved around the theory that the crash was caused by sabotage, even though the authorities said last week that no explosives had been found in the plane's wreckage.
Mexico's government is engaged in a battle against violent drug trafficking cartels. The interior minister who was killed, Juan Camilo Mouriño, oversaw security issues in the Cabinet. Among the others killed in the crash was José Luis Santiago Vasconcelos, a longtime organized crime prosecutor who used to lead the agency that captured and extradited several major drug traffickers earlier in the decade.
"There was no indication of any sabotage whatsoever," Téllez said.
The evidence showed that the Learjet 45 "approached a Boeing 767-300, a heavy plane, at a distance that was less than the norm," Téllez said. Just before the crash, the Learjet was 4.15 nautical miles, or 7.7 kilometers, behind the jumbo jet. Standard flight procedures require a separation of five nautical miles.
"We also have preliminary evidence that the crew was not sufficiently familiar with operating the Learjet 45," he said. The flight's voice recorder showed that the crew felt the turbulence just before pilot lost control.
It will be several months before the final investigation will be completed, Téllez said.
The plane, which belonged to the Interior Ministry, was operated by a private company that employed the pilot, Martín de Jesús Oliva Pérez, and the co-pilot, Álvaro Sánchez y Jiménez. Both were certified to fly the Learjet model.
The authorities released a transcript of the flight voice recorder, which showed what Téllez called the pilots' "anguish, impotence and frustration" as they tried to regain control of the plane. The last word from one of the pilots was, "Dear God."
The government asked for help in the investigation from two U.S. agencies, the Federal Aviation Administration and the National Transportation Safety Board, and from a British one, the Air Accidents Investigation Branch. The U.S. ambassador to Mexico, Tony Garza, said Wednesday that U.S. investigators had found no evidence of sabotage, prompting angry responses from Mexican legislators who said he had spoken out of turn.
By Floyd Norris
Saturday, November 15, 2008
Feeling bad about how much you have been hurt by the stock market plunge? At least you don't have a lot of stock options.
A survey of the paper losses suffered by 175 chief executives of American companies shows that they lost a total of $52.3 billion through Oct. 27, when the stock market hit lows that were tested this past week.
To be sure, $15.9 billion, or nearly a third of the total amount, was lost by the richest man in America, Warren Buffett, whose stock in Berkshire Hathaway was still worth $45.8 billion.
The survey, by Steven Hall and Partners, a compensation consulting firm, looked at the reported holdings of stock and stock options by chief executives of the Fortune 200 companies, generally the companies with the most sales, both at the end of the company's most recent fiscal year and at the close Oct. 27. Executives whose companies had been acquired, or who had announced retirement dates, were excluded, leaving 175.
The bulk of the loss went to a handful of chief executives who were also company founders and therefore owned a lot of stock. On average, the richest 10 percent of bosses - just 18 people - lost $2.2 billion each. That was only a 33 percent drop, however - much smaller losses proportionately than their less wealthy colleagues'.
For those executives whose company holdings were largely in stock options, rather than stock, the decline in wealth has been huge. Options allow holders to buy shares at a fixed price, and thereby multiply profits on the way up. But options also multiply losses on the way down. Over all, the options have lost 76 percent of their value.
These losses are far more widespread than in the last bear market, the one that ended in 2002. Then the biggest declines were in a handful of industries. But this year, the losses have hit virtually every company. And of course, they have hit executives down the ranks.
The Hall survey also covered chief financial officers, who have lost 54 percent of their wealth in their company's securities.
The accompanying chart looks at the average wealth of chief executives in three groups. Besides the top group, the others are the 10 percent of chief executives with the least wealth before the plunge, who suffered losses of 59 percent, and the 80 percent in the middle, whose holdings are down 55 percent.
The figures do not show total wealth, of course, because they do not reflect holdings of other securities or of real estate, although it is likely that those holdings have also lost value. Nor do the figures reflect any money the bosses might owe. Those who borrowed against the value of their securities may be hurting much more than the figures indicate.
The charts show the value of four types of holdings - company stock that is owned outright; shares that have not yet vested but will do so in future years; options that could have been exercised but were not; and options that have not yet vested.
By Lydia Polgreen
Saturday, November 15, 2008
BISIE, Congo: Deep in the forest, high on a ridge stripped bare of trees and vines, the colonel sat atop his mountain of ore. In track pants and a T-shirt, he needed no uniform to prove he was a soldier, no epaulets to reveal his rank. Everyone here knows that Colonel Samy Matumo, commander of a renegade brigade of army troops that controls this mineral-rich territory, is the master of every hilltop as far as the eye can see.
Columns of men, bent double under 110-pound sacks of tin ore, emerged from the colonel's mine shaft. It had been carved hundreds of feet into the mountain with Iron Age tools powered by human sweat, muscle and bone. Porters carry the ore nearly 30 miles on their backs, a two-day trek through a mud-slicked maze to the nearest road and a world hungry for the laptops and other electronics that tin helps create, each man a link in a long global chain.
On paper, the exploration rights to this mine belong to a consortium of British and South African investors who say they will turn this perilous and exploitative operation into a safe, modern beacon of prosperity for Congo. But in practice, the consortium's workers cannot even set foot on the mountain. Like a mafia, Matumo and his men extort, tax and appropriate at will, draining this vast operation, worth as much as $80 million a year.
The exploitation of this mountain is emblematic of the failure to right this sprawling African nation after many years of tyranny and war, and of the deadly role the country's immense natural wealth has played in its misery.
Despite a costly effort to unite the nation's many militias into a single national army, plus billions of dollars spent on international peacekeepers and an election in 2006 that brought democracy to Congo for the first time in four decades, the government is unable or unwilling to force these fighters — who wear government army uniforms and collect government paychecks — to leave the mountain.
The ore these fighters control is central to the chaos that plagues Congo, helping to perpetuate a conflict in which as many as five million people have died since the mid-1990s, mostly from hunger and disease. In the latest chapter, fighting between government troops and a renegade general named Laurent Nkunda has forced hundreds of thousands of civilians here in eastern Congo to flee and pushed the nation to the brink of a new regional war.
The proceeds of mines like this one, along with the illegal tributes collected on roads and border crossings controlled by rebel groups, militias and government soldiers, help bankroll virtually every armed group operating in the region.
No roads lead to Bisie. This hidden town of 10,000 lies about 30 miles down a winding, muddy footpath through dense, equatorial forest. Built entirely for the mine, it is a cloistered world of expropriation and violence that mirrors the broad crisis in Congo.
This is Africa's resource curse: Its wealth is unearthed by the poor, controlled by the strong, then sold to a world largely oblivious of its origins.
Under Matumo, Bisie is a Darwinian place where those with weapons and money leach off a desperate horde.
The chokehold begins far from the mine. At the trailhead, a burly soldier demands 50 cents from each person entering the narrow trail to the mine. A clamoring crowd hands wrinkled bills to the soldier, who opens the wooden gate a crack to let in those with cash.
At the other end of the trail, at the base of the mountain, another crowd forms at the gate into Bisie. Porters exhausted from the two-day trek sprawl on felled trees, waiting for soldiers to inspect their loads and extract another tribute. The price is usually 10 percent of entering merchandise and cash.
The men at the checkpoints describe these payments as taxes. But the people of Bisie do not get much in return. The village is a filthy warren of mud huts. Hundreds of haphazard latrines flood narrow, trash-filled alleyways. Disease courses through the town, carried by water from a river that is used for everything from washing clothes to cleaning ore. Jawbones of slaughtered cows and goats stud the riverbed. When it rains, the river overflows, spreading cholera and dysentery.
In some ways, Bisie is a thriving commercial town. It has makeshift theaters showing bootleg kung fu movies on televisions powered by sputtering generators. Its bars are stocked with Johnnie Walker whiskey and Primus beer, each bottle carried through the jungle. There is no telephone service, but a ham radio system passes messages between the mine and the outside world. It has hotels that double as brothels. There is even a clapboard church.
But these meager comforts do not come cheap. A bowl of rice and beans costs $3 here, six times the price along the main road. Mud huts rent for $50 a month or more, in part because opportunism is the town ethos.
A History of Plunder
The saga of Bisie is merely another chapter in Congo's epic tragedy. Though blessed with an incomparable endowment of minerals and water and abundant fertile land, this vast nation in the heart of Africa has known little but domination and war since its founding as a colony under King Leopold II of Belgium in the 19th century.
The bloodshed and terror have always been driven in part by the endless global thirst for Congo's resources, "the vilest scramble for loot that ever disfigured the history of human conscience," as the novelist Joseph Conrad put it.
Just as the pneumatic tire was invented, King Leopold began sucking every last drop of rubber from Congo's jungles, his militia killing or maiming anyone who stood in his way. Generations later, the country's vast reserves of cobalt, a mineral essential for building fighter jets, helped the longtime ruler of the nation then known as Zaire, Mobutu Sese Seko, keep the United States firmly behind him during the cold war despite his obstinately kleptocratic and repressive ways.
Congo's riches have played a starring role in the conflict that has unfolded in the past decade. The war began in the aftermath of the Rwandan genocide, when the perpetrators of that slaughter fled into neighboring Congo. Rwanda backed an effort to flush out the killers in 1996, but it soon led to a huge regional conflict that descended into a war of plunder by half a dozen nations and countless homegrown rebel groups.
A peace deal officially ended the war in 2003, and elections in 2006 brought Congo its first democratically chosen leaders in more than four decades. And in many parts of the nation, which covers an area the size of Western Europe, life is slowly returning to normal. International investors, especially China, have begun pouring billions into Congo's economy.
But here on Congo's eastern edge, the war never really ended. The unfinished battles over the Rwandan genocide play out on Congolese soil among armed groups fueled by lucrative mines like the one in Bisie and by other mines controlled by the Hutu militias that carried out the genocide. Those fighters have been hiding in the jungles of eastern Congo for more than a decade, sowing terror and reaping profits from the nation's minerals. Other rebel groups, including Nkunda's largely Tutsi militia, have gleaned profits from illegal taxes levied when valuable minerals and other resources pass through territory they control, according to analysts and government officials in the region.
The Discovery of Tin Ore
In 2002, a hunter discovered chunks of tin ore, known as cassiterite, lying on the slopes of a mountain deep in the jungle in eastern Congo. Almost overnight, hordes of miners arrived, driven by fevered reports of piles of ore lying around waiting to be carted away. But civilians were not the only ones interested. Armed groups fought pitched battles over who would control the area. In 2004, a group of Mai Mai fighters allied with the government took control.
Under the terms of the peace agreement that ended the war, the militia was absorbed into the national army and became the 85th Brigade. The fighters were supposed to be sent for military training and then deployed around the country to dilute the influence of regional militias.
But the 85th refused to disband. Its commander, Matumo, is known as a ruthless warrior with a keen eye for business who believes, like most Mai Mai, that he has special powers connected to water that make him all but invincible. During the war these fighters would wear drain plugs dangling from their bulging biceps as amulets of their potency. These days the brigade's members have mostly abandoned this practice in favor of the more practical army greens.
They violently enforce a system of illegal taxation of every worker, merchant and mineral trader who comes to the mine.
That system has ensured that they and their allies have skimmed millions of dollars in the years the militia has controlled the mine — a costly, lost opportunity for a nation desperately in need of development.
Tin has replaced lead content in the solder used to make many electronics. And as the price shot up in recent years, to a high of $25,000 a ton in May, Matumo and his men staked out a whole ridge of the mine complex as their personal property. Senior commanders of the brigade have built large houses and opened businesses, like hotels and bars, with the proceeds from the mine.
A company called Mining and Processing Congo bought the rights to search for tin ore at the mine in 2006. But the militia has effectively barred the company, which is owned by a consortium of South African and British investors, shooting at its helicopter and chasing its representatives from the premises.
When the company started working on a road to link the mine to the main road, local officials blocked the route. When it began working on a campsite for its geologists to begin prospecting, soldiers opened fire on the workers, injuring several, according to company officials.
"We have all our documents and permits in order," said Brian Christophers, the weary managing director of the company. "We have written to the head of the military, the minister of mines and even the president. But there are no rules in Congo, just the rule of the gun."
Christophers said his company was prepared to help pay not just for a road to the mine but also schools, clinics and a hydroelectric power station. It also promised to invite government agencies to enforce labor standards. But none of them have had the chance.
Indeed, some workers are suspicious of the company's plans, fearing that a road would put thousands of porters out of work and that mechanized mining would drastically reduce employment here. The militia has tapped this unease to convince some workers and local officials that the company will simply abscond with the minerals and leave locals emptyhanded.
The militia levies a tax on every enterprise here. For the small-time peddlers who sell tiny packets of laundry soap, cooking oil and powdered milk, the tax is usually $20 a week, a hefty slice of profits. From prosperous brothels, bar owners and mineral traders, the soldiers usually take a percentage, businesspeople here say.
One Congolese intelligence official estimated that the militia took in $300,000 to $600,000 a month in illegal taxation alone, not including the money it made from mining tin.
The workers preyed on by the militia toil in hand-dug tunnels as deep as 600 feet that are held up precariously by wooden pillars. Some of the workers are children, especially during the summer, when desperate parents send boys here to earn cash for the next year's school fees.
The tunnels are pitch-black and suffocatingly narrow. They often fill with dangerous fumes. Miners sometimes spend 48 hours straight working in the tunnels. The open pits are dangerous too: heavy rains cause mudslides and collapses. Cave-ins, mudslides and gases kill and maim an unknown number of workers every year.
On a late-summer afternoon at the mine, a tunnel collapsed and crushed a miner's leg. Another worker carried the man on his back as the miner moaned in agony, his eyes darting wildly. Blood carved tracks down his forehead and cheeks.
"My wife is pregnant," the miner moaned. "Jesus, mama, please."
The man had broken his leg, and his left shoulder was sliced open. He grimaced as health workers with only minimal training worked to fashion a splint from sticks and vines.
Musamaria Luseke, 22, is what passes for a doctor here. He is one of a handful of health workers who have basic first aid training and earn cash by selling medicine to sick and injured miners.
"These kinds of injuries happen all the time," he said.
Luseke had painkillers in his metal box, but he was charging 25 cents a tablet.
"I have to eat too," he said.
Solidarity is in short supply here. An argument broke out over who would pay a porter $20 to carry the injured miner down the mountain.
"I didn't tell him to go work," shouted the owner of the tunnel, who nevertheless ponied up the $20.
Hard-rock miners who work deep in the tunnels say the money they can earn on a productive day makes up for the risk. A young man who gave his name as Pypina said he made $200 on a good shift.
But his friend Serge said such days were rare.
"We have some days where we find nothing, where we dig and dig for nothing," he said.
Both of the young men are high school dropouts who came to the mine to work for the summer but quickly found themselves trapped in a web of debt. Serge said he hoped to go back to school, but already he had been at the mine for a year and had saved nothing.
Pypina had given up on college.
"I'll buy a car," Pypina said, flexing his biceps to admire the dollar sign tattooed there.
But he is a long way from buying that car. When he makes a bit of money he has to pay his debts first. With anything left, he tries to salve the loneliness of life.
"First, you need a woman," he said. Pypina said he paid $100 to have a woman with him for 24 hours. They go on dates to the clapboard bars in the market, and he shells out $100 or more for whiskey, beer and gin. She cooks for him.
"She is like a wife for a day," he explained.
"I am a man," he said, describing why he spent so much on pleasure-seeking. "I cannot live without a woman. And only God knows what tomorrow will bring."
One of Many Problems
Matumo declined to be interviewed for this article. But he made no effort to conceal his control over the mine, openly supervising the production and the sale of dozens of sacks of ore. A hotel he owns doubles as an ore depot, and each morning porters arrived to carry his latest load to the main road for sale.
A major who said he had been sent by Congo's top military brass to assess the situation said the government wanted the militia to leave but had too many other security problems to contend with. Nkunda, the renegade Tutsi, has been waging a fierce insurgency in another part of eastern Congo, and the army has so far been unable to defeat him.
"Samy is just one of many problems," the major, who refused to give his name, said of Matumo. "If we can't deal with Nkunda, how can we force Samy to go when he does not want to leave?"
Bisie might be the middle of nowhere, but the ore it produces is tightly linked to the global market. After porters bear the loads, often heavier than the men themselves, the ore reaches middlemen along the main road. One such middleman, Bakwe Selomba, said he did not mind paying the militiamen because the payment guaranteed his investment.
"To be honest, it is better for us that they are there," he said. "I can send my buyers walking through the jungle with lots of money, but nobody will touch them as long as we pay the tax. It protects us."
The ore is then trucked a few miles down a stretch of pavement to the village of Kilambo. There, on a slightly curved stretch of road, Soviet-era cargo planes take off and land, as many as two dozen times a day. The carcasses of two planes that presumably botched this tricky maneuver lay strewn to one side of the makeshift runway, covered in black and green mold.
The flights land in Goma, the provincial capital, where other middlemen buy and process the ore for export. Alexis Makabuza's Global Mining Company is one of these buyers. Amid the sorting and cleaning equipment of his rudimentary processing plant sit dozens of barrels of tin ore. On each is stenciled the address of Malaysian Smelting Company Berhad, a major tin smelter. Makabuza said he sold to the company via a minerals broker.
In a handwritten contract between a local government official and a representative of Makabuza's company signed in 2006, then operating under a different name, the company agreed to pay a large percentage of its earnings from the mine in exchange for a guarantee of security. Matumo's militia is the only force operating in the area, and most of this money ended up in his hands, according to security officials in the region.
Makabuza shrugged off questions about his business dealings with the militia.
"We follow all the rules," he said. "I am just a buyer like anybody else."
Debating a Solution
Congo's tin ore represents a relatively small slice of the world market, but in recent years supplies have been so tight that efforts to stop mining at Bisie have caused price spikes. Earlier this year the government tried to shut down the mine, but it was quickly reopened by local authorities who feared the economic and political costs of putting thousands of miners out of work and cutting off the cash flow to a volatile renegade military commander.
Indeed, many fear banning exports of tin ore from Congo would cause more problems than it would solve.
"A blanket ban on tin from Congo is nonsense because it penalizes the millions dependent on the sector the most," said Nicholas Garrett, a mining expert who has written reports on Congo for the World Bank and other institutions. Putting those people out of work would simply invite another rebellion, he said.
The government has repeatedly asked Matumo's men to leave the mine. In a written order issued in August 2007, Colonel Delphin Kahimbi, deputy commander of the army in North Kivu, the province here, admitted that elements of the armed forces were profiting from the mine and laid out a plan to replace the renegade brigade with loyal soldiers. But the orders were never followed up, and the militia's grip on the mine seems tighter than ever.
Julien Paluku, North Kivu's governor, said the government must move cautiously. Already faced with a renegade Tutsi general who has large swaths of the region under siege, the government can scarcely afford to pick a fight with another armed group, he said.
"Solving this problem will take time," Governor Paluku said.
Some analysts say the situation in Bisie is so blatant that its very persistence is evidence of collusion between the militia and powerful politicians.
"Unless immediate action is taken to transfer these soldiers out of Bisie mine and to prosecute those responsible for the large-scale looting of minerals, we can only conclude that these activities are sanctioned at the highest levels," Patrick Alley of the anticorruption organization Global Witness, based in London, said in a statement.
In May, Senators Sam Brownback of Kansas and Richard J. Durbin of Illinois introduced a bill to require certifying minerals from Congo. "Without knowing it, tens of millions of people in the United States may be putting money in the pockets of some of the worst human rights violators in the world, simply by using a cellphone or laptop computer," Senator Durbin, a Democrat, said at the time.
Here in Bisie, daily life offers few clues that such information age technology exists. Isolated and indebted, almost none of the town's workers have any clue what tin is actually used for.
"It is for weapons," suggested Djuma Assualani, 21. "Kalashnikov, bombs. They make war with it."
"It's gold," shouted Makami Kimima, 18, who came to the mine to earn money to go back to school but ended up in debt instead. His fellow miners jeered at his ignorance.
"It is something like gold," he said, chastened. "It goes to America. And China. It makes people rich."
Saturday, November 15, 2008
KABUL: Troops of the U.S.-led coalition killed 10 militants in eastern Afghanistan on Friday, U.S. and Afghan officials said.
Coalition troops said they had been targeting leaders of the Pakistan-based Jalaluddin Haqqani network when they came under fire in Zadran, a district of Paktia Province.
Those killed in the attack were Haqqani militants and foreign fighters, said Lieutenant Commander Walter Matthews of the U.S. forces in Kabul. He said the coalition troops had also destroyed a large weapons cache that included rocket-propelled grenades and mines.
Ruhullah Samoon, a spokesman for the governor of Paktia, confirmed the attack. He added that air strikes had occurred in Sori Khiel, an area he said was not residential and was void of civilians.
The United States has accused the Haqqani network of organizing some of the most serious recent attacks in Afghanistan against U.S. and NATO forces and of masterminding a failed assassination attempt against President Hamid Karzai.
Saturday, November 15, 2008
By Mohammad Aziz
A victim of an acid attack on schoolgirls in Afghanistan said Saturday she was determined to stay in school and finish her education even if that meant risking death.
The girl, who gave her name as just Shamsia, was the most seriously injured of a group of girls attacked outside their school by unidentified men in the southern city of Kandahar on Wednesday.
"I'll continue my schooling even if they try to kill me. I won't stop going to school," Shamsia said from her bed at Afghanistan's main military hospital in Kabul.
Shamsia, 17, suffered damage to one of her eyes when the men pulled off the girls' head scarves and threw acid in their faces. She has been brought to hospital in the capital for treatment.
There was no claim of responsibility for the attack but it bore the hallmarks of the Taliban, who banned girls from school during their hardline rule from 1996 to 2001.
The insurgents have attacked and destroyed hundreds of schools across the country since they were forced from power in 2001, after the September 11 attacks on the United States.
While some teachers and school caretakers have been killed, most of the attacks on schools have been at night and violence against children has been rare.
The attack on the schoolgirls has shocked a country long used to violence. President Hamid Karzai said the men responsible were the enemies of education.
Shamsia, much of her face covered in a yellow ointment, said she had to finish her lessons to help the country.
"I'll continue going to lessons. I'm studying to be able to build our country," she said.
Senior education official Najiba Nuristani, who was visiting Shamsia in hospital, was also defiant.
"These incidents, these suicide attacks, can not stop education in Afghanistan, especially for girls," she said.
Shamsia's doctor, Mohammad Wali, said the girl had suffered damage to an eye but was in good condition. A medical panel would decide if she needed to be sent to India for treatment, he said.
(Writing by Robert Birsel; Editing by Jeremy Laurence)
Saturday, November 15, 2008
TEHRAN: Iran detained 10 spies carrying $500,000 in cash who had entered the Islamic Republic illegally from neighbouring Pakistan, state television said on Saturday.
Modern espionage cameras and maps of sensitive regions in Iran were found when the group was detained in Iran's south-eastern Sistan-Baluchestan province bordering Pakistan, the report said.
Television did not give any details on their nationality or say when they were detained.
Sistan-Baluchestan is a volatile province known for frequent clashes between security forces and well-armed drug smugglers.
Iran has in the past accused the United States and Britain of trying to destabilize the country by supporting ethnic minority rebels operating in sensitive border areas.
The United States is leading efforts to isolate Iran over its nuclear programme, which the West fears is a cover for a drive to build nuclear bombs. Tehran says it wants only to generate electricity.
(Reporting by Hossein Jaseb and Hashem Kalantari; Writing by Fredrik Dahl)
Saturday, November 15, 2008
By Sahar Ahmed
Pakistan has agreed with the International Monetary Fund (IMF) on a $7.6 billion (5.1 billion pound) emergency loan to stave off a balance of payments crisis and pave the way for a broader economic rescue plan.
The IMF said on Saturday its executive board was expected to meet shortly on the 23-month standby credit, after IMF staff and Pakistan agreed on a reform program.
"This support is part of a broader package that includes financing from other multilateral institutions and regional development banks," IMF Managing Director Dominique Strauss-Kahn said in a statement.
The international community is concerned that an economic meltdown in the nuclear-armed state could play into the hands of al Qaeda and allied Islamist militant groups seeking to destabilise the Muslim nation of 170 million.
The eight-month-old civilian government is banking on good will towards Pakistan during its transition to democracy after more than eight years under former army chief Pervez Musharraf, who quit as president in August to avoid impeachment.
World leaders were meeting in Washington at the weekend to discuss the worst global economic turmoil since the 1930s and consider reforms to world financial institutions such as the
Shaukat Tarin, the recently appointed adviser to the prime minister, said the formalities should be concluded next week.
"We are expecting it this month," he told a news conference in Karachi when asked when the first tranche might arrive.
"We have requested IMF to give as much as they can."
The interest rate on the credit facility would vary between 3.51 and 4.51 percent with changes according to market conditions, and would be payable between fiscal 2011/12 and 2015/16, Tarin said.
The IMF did not disclose details. But it said the credit under its emergency funding facility would be tied to Pakistani economic reforms, including higher official interest rates and tighter fiscal policies, plus a well-funded social safety net to protect the poor.
Pakistan expects the World Bank and other lenders to step forward with several billion dollars of additional loans, and steadfast ally China to pitch in with $500 million. But other multilateral lenders and friendly governments were waiting for the IMF accord before acting, in order to bring some discipline to Pakistan's economic management, analysts said.
Other potential donors are gathering in Abu Dhabi on Monday for a "Friends of Pakistan" conference.
State Bank of Pakistan Governor Shamshad Akhtar said the IMF money would be used to build up the central bank's foreign currency reserves, which Tarin said should be equivalent to more than three months import cover.
The central bank's reserves stood at $3.5 billion on November 8, equivalent to just nine weeks worth of imports, and Pakistan faced defaulting on international debt obligations in February next year unless it received a multi-billion dollar infusion.
The rupee has lost 23 percent in value against the dollar since the start of the year, and foreign investors have fled a stock market which is down around 35 percent.
Stocks would have fallen further but for an artificial floor authorities placed under the Karachi market's benchmark index at the end of August, and almost certainly will fall further once the floor is removed.
FRIENDS IN THE WINGS
Tarin said the IMF had endorsed Pakistan's own strategy to bring about structural adjustments needed to correct unsustainable current account and fiscal deficits.
The strategy included reducing excessive government borrowing from the central bank to zero, and boosting the tax base, but did not involve a cut in defence spending, one of the heaviest items on the budget, Tarin said.
The only point of difference with the IMF, according to Tarin, was the fund's desire to see higher interest rates. But a 200 basis point hike in State Bank's policy discount rate to 15 percent announced on Wednesday partially met those concerns.
With headline inflation running above 25 percent and core inflation at 18.3 percent, real interest rates are still in negative territory.
Tarin's statement came a day after Standard & Poor's cut its ratings on the nation's sovereign debt deeper into junk bond territory, eight rungs below investment grade.
S&P highlighted Pakistan's tardiness in raising funds it badly needs to avoid defaulting on its debt liabilities.
Pakistan had been in talks with the IMF for months, but officials had been coy about admitting they were seeking an IMF package, because of the harsh conditions the fund often imposes.
(Additional reporting by Stella Dawson in Washington and Augustine Anthony; Writing by Simon Cameron-Moore; Editing by Andrea Ricci)
By David D. Kirkpatrick
Saturday, November 15, 2008
WASHINGTON: President-elect Barack Obama has imposed stricter conflict-of-interest restrictions on his White House transition team than any president before him. But a newly released list of transition team members includes a complicated tangle of ties to private influence-seekers.
Among the roster of about 150 staff members being assigned to government agencies between now and Inauguration Day are dozens of former lobbyists and some who were registered as recently as this year. Many more are executives and partners at firms that pay lobbyists, and former government officials who work as consultants or advisers to those seeking influence.
After campaigning on promises to end the influence of lobbyists in the White House, Obama has imposed rules that bar officials on his transition team from handling any issues in areas of policy where they have lobbied over the last 12 months, or from seeking to influence the same agencies for the next 12 months.
The rules also bar officials from working on matters where family members or recent business associates may have a direct conflict of interest. In cases where there is even an "appearance of conflict," officials must seek a waiver from the transition's executive director, an Obama Senate aide and law school classmate, Christopher Lu.
At least one official initially involved in the transition appears to have been reassigned because of concern about his lobbying or legal work. Henry Rivera, a former Democratic commissioner on the Federal Communications Commission who was involved in planning for the agency's transition, has dropped out of that role because he had represented clients on communications policy in the last year, the newsletter Communications Daily reported Friday.
Instead, on the transition team list, which was made public on Friday, Rivera was listed on the team handling science, technology, space and the arts. The rules permit people who have lobbied in one area to join an Obama transition team in another. (With Rivera is Jim Kohlenberger, executive director of an advocacy group for Internet companies.)
Representatives of the transition team declined to comment on the reassignment, and Rivera did not return a phone call seeking comment.
Transition officials said that their policy went further than any previous White House to avoid self-dealing or influence-trading in the formation of the new administration, and that in the modern Washington it would be foolish to try to eliminate anyone who had worked in public policy for a private interest - or who had a family member in that business - from contributing to the transition.
Stephanie Cutter, a spokeswoman for the transition, said in a written statement that the transition team reflected what she called Obama's "commitment to change the way Washington does business and curb the influence of lobbyists on our government."
"While these rules disqualify many well-qualified professionals from participating in the transition as a result, they also put in place the right safeguards to prevent any potential conflicts of interest," Cutter said.
Some appear to skirt the edges of the ban on working in areas of the transition where they have recently lobbied. Handling some Interior Department issues is Keith Harper, who lobbied earlier this year for Native American tribes. Overseeing the Consumer Product Safety Commission is Pamela Gilbert, a former executive director of the agency who as recently as two years ago lobbied for a consumer advocacy group. Within the last year she has lobbied for Barr Laboratories, for an investor group and for an antitrust enforcement group.
Among the group handling the Justice Department and civil rights areas of the transition is Theodore Shaw, a litigator for an arm of the NAACP. He has registered as a lobbyist for the group in the past, but NAACP officials say he has not lobbied in the last 12 months.
David Hayes, part of the 12-member group overseeing the transition and a co-head of the team handling the areas of energy and natural resources, is the chairman of the environmental practice at the law and lobbying firm Latham & Watkins. He was registered as a lobbyist as recently as 2006, for clients including San Diego Gas and Electric.
Sally Katzen, another member of the supervisory group who is also on teams for the office of the president and government operations, was registered last year to lobby for the pharmaceutical company Amgen on Medicare reimbursements. Louisa Terrell, another of the 12 members of the top working group, is on leave from the public policy office of Yahoo. Tom Wheeler, another member, is on leave from a firm that invests in technology companies and before 2004 lobbied for the cable television and wireless industries.
John White, a former Clinton official charged with overseeing the new Defense Department, is a partner in a firm that invests in defense contractors. Michael Warren, charged with overseeing the Treasury, is chief operating officer of a firm that lobbies for clients including the U.S.-India Business Council.
Several of the officials have ties to the Fannie Mae, the government-backed mortgage financing giant whose implosion this fall contributed to the financial meltdown. Thomas Donilon, overseeing the State Department, is a partner in the law and lobbying firm O'Melveny and Myers who until three years ago lobbied for Fannie Mae. Wendy Sherman, the other official charged with reviewing the State Department, once headed Fannie Mae's charitable foundation. And James Johnson, a former top officer of Fannie Mae, is on the economics and international trade team, charged with reviewing the Commodities Futures Trading Commission.
Even Lu, the transition's executive director charged with policing potential conflicts of interest, may have his own appearance problems. His wife, Kathryn Thomson, is a lawyer who represents corporate clients dealing with federal environmental regulations, while his older brother, Curtis Lu, is a top lawyer for Fannie Mae. (Such family connections may not be disqualifying conflicts, depending on the nature of the transition job, ethics lawyers said.)
Lu has his work cut out for him in deciding which apparent conflicts may be of real concern, said Robert Walker, a Washington lawyer and former staff director of the Senate Ethics Committee. "I don't think it is the brightest of bright lines, and there is going to be a lot of time spent thinking about just where that line is," Walker said.
The people involved in the transition teams assigned to each federal department and agency have begun meeting with their current staff to collect information on budgets, pending issues and personnel matters. For now, the advisers assigned to each agency report back to the central 12-person working group, which coordinates the efforts.
The vast majority involved are second-tier officials of the Clinton administration, eager to help another Democrat take control of the White House. With the exception of a few academics, almost all of them spent the intervening eight years in the private sector, usually capitalizing on the connections and expertise they developed in the Clinton years.
For example, Sandy Berger, the Clinton national security adviser, founded Stonebridge International, a consulting and lobbying firm focused on helping clients resolve government issues here and overseas.
Berger took with him Warren, the former executive director of the president's economic council who became chief operating officer of Stonebridge and has become a major contributor to the transition in the pivotal areas of the Treasury Department and economic policy. Although not a registered lobbyist, Warren helped manage Stonebridge while it lobbied the U.S. government for clients including the U.S.-India Business Council within the last year as well as Dynergy International, Airbus and Conoco in earlier years. (More of Stonebridge's business involves using government expertise and connections to help corporate clients abroad.)
Some transition officials now work at firms that do business with the agencies they are examining. John O. Brennan, a former CIA official working on its transition, is president and chief executive of the Analysis Corp., an intelligence contractor.
On the NASA review board, Lori Garver is now president of a strategic consulting company, Capital Space LLC, and previously worked for a the aerospace company DFI International.
Among the transition officials charged with reviewing the Securities and Exchange Commission - likely to come under significant scrutiny amid the financial meltdown - is Mozelle Thompson, who runs a legal and policy consulting business for publicly traded companies. One name on the transition list comes unencumbered by potential conflicts but instead by bad luck. Jami Miscik, leading a review of American intelligence agencies, was the head of intelligence analysis at the CIA during its biggest embarrassment, the botched assessments about Iraq's weapons of mass destruction. Then she moved on to become a senior official managing risks in emerging markets for the investment bank Lehman Brothers, until its collapse this fall.
Kitty Bennett, Mark T. Mazzetti and Barclay Walsh contributed reporting.
Saturday, November 15, 2008
By Mitch Phillips
Australia gave error-strewn England a lesson in rugby basics on Saturday as assured flyhalf Matt Giteau kicked 20 points to help them to a 28-14 victory at Twickenham.
The flyhalf landed six penalties and converted Adam Ashley-Cooper's late try while captain Stirling Mortlock weighed in with a 50-metre penalty.
That shot came after England had been shoved backwards in a scrum - the area they were expected to dominate but which was littered with re-sets, free kicks and penalties and eventually went the Wallabies' way.
"I don't know what goes on in there but the forwards really stood up today," Giteau told Sky Sports.
England had plenty of ball but were too often static and crossed the line only once when number eight Nick Easter finished off a forward shove late in the first half.
"They've won away by 14 points but ultimately we let them off far too often, we took the pressure off them with our errors," England manager Martin Johnson said.
Australia were switched on from the start while England's ragged play allowed Giteau to notch two early penalties.
The flyhalf showed his defensive talents when he hauled down Mears in the corner after a sharp Danny Cipriani break, then slotted another two kicks to make it 12-3 after half an hour as England's indiscipline was heavily punished.
England scraped onto the scoreboard with an unexpected drop goal from fullback Delon Armitage but they were finding Australia's well-drilled defence a much harder nut to crack than the scratch collection of the Pacific Islanders last week.
They eventually got their forwards into the action with a drive after 34 minutes, though they fell foul of the video referee when Andrew Sheridan thought he had driven over.
Moments later they did score when they pounded the line for two minutes before Easter forced his way through.
Cipriani, who was badly off beam with his first two goalkicks, eventually slotted one and there was a point in it at 12-11 to the visitors at halftime after Giteau missed from wide out after another daft offence by the home side.
England briefly nosed in front with a Cipriani penalty four minutes into the second half but despite enjoying plenty of possession in the Australian half, they rarely looked dangerous.
More errors allowed Giteau to restore the lead and Mortlock landed his long pot after Sheridan, who struggled all day, was penalised at a scrum.
Australia then cut loose from deep to score the match-clinching try. England, ragged in defence, were stretched when quick passing set up fullback Adam Ashley-Cooper to dive over in the corner.
"The stats are there in terms of possession and territory but we didn't score the points - we got a bit frantic," Johnson said.
"They didn't have to do a lot to score, they didn't break us particularly. We made breaks and made the errors afterwards.
"When you are in test rugby you may only have three or four opportunities to score a try and you've got to take one or two of them. Ultimately we let them off far too often."
England face South Africa in a rematch of last year's World Cup final next week while Australia visit France.
(Editing by Padraic Halpin)
Saturday, November 15, 2008
By Alan Lorimer
South Africa survived a scare to come back from a 10-point halftime deficit to narrowly edge out Scotland 14-10 at Murrayfield on Saturday.
The world champions made it two wins from two on their tour of the home nations after last week's win in Wales thanks to Jaque Fourie's well worked second half try and three Ruan Pienaar penalties.
Scotland, who were delivered a blow early in the first half when goal kicker Chris Paterson left the field injured, also temporarily lost Phil Godman to a blood injury but the flyhalf returned to convert Nathan Hines' try and add a penalty.
The Scots had chances to win at the end but can be buoyed by a hugely improved performance from last weekend 32-6 loss to New Zealand.
"The game was there for the taking," Scotland coach Frank Hadden told a news conference.
"What disappointed me about our performance was the five free kicks or penalties at the beginning of the second half. We definitely lost momentum as a result.
"I was also disappointed that in the last ten minutes we had opportunities to close the game out and we failed to do so."
Arguably it was the early loss of Paterson that cost Scotland the match. In the Edinburgh man's absence Dan Parks and Godman missed four kicks at goal which in the end proved crucial.
After Parks twice shot wide early on, Godman opened the scoring with a 26th minute penalty but South Africa immediately showed their menace when a breakout from defence by Jean de Villiers almost resulted a try.
From the fiver-metre scrum that followed, the Springboks opted to move the ball wide but a brave tackle from Godman on winger JP Pietersen prevented a try.
Scotland replied when a sniping break from Mike Blair and side-stepping run from Godman brought them to within two metres of their opponents' line.
The Scots forwards then battered the South Africa line, ending with Hines barging over for a close range score converted by Godman and a 10-0 interval lead.
South Africa came straight back at the beginning of the second half with Pienaar making amends for an earlier penalty miss to register South Africa's first points, followed by a second ten minutes later.
The pressure quickly told as the Springboks shipped the ball left with finger-tip passing for replacement Fourie to squeeze in at the corner for an unconverted try, giving the visitors the lead for the first time in the match.
Godman had a chance to regain it but pulled his goal kick wide before Pienaar extended South Africa's advantage.
An audacious Scottish move from their own goal line allowed Godman another shot at goal but he was again off target much to the relief of the world champions.
South Africa visit England in a rematch of last year's World Cup final next week while Scotland host Canada.
"We can take a lot out of this match going into our next game especially after going into halftime 10-0 down," South Africa coach Pieter de Villiers said.
"We're confident about next week."
(Editing by Padraic Halpin)
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