By Nicholas Kulish
Wednesday, December 10, 2008
BERLIN: One of the two men behind a failed terrorist attack on commuter trains here received a life sentence from a German court on Tuesday.
The man, Youssef Muhammad el-Hajdib, was convicted on multiple counts of attempted murder for leaving two suitcase bombs on the trains in Cologne in July 2006 that failed to explode. The unsuccessful attack, reminiscent of the train bombing that killed 191 people in Madrid in 2004, deeply rattled Germany, which had just finished hosting some two million visitors for the World Cup soccer tournament.
Hajdib, 24, and his lawyers argued that the propane gas devices were never meant to explode and the attack was staged to incite fear.
The regional superior court in Düsseldorf agreed instead with prosecutors that Germany "never stood closer to an Islamist attack."
"The fact that it did not result in a devastating bloodbath with a multitude of dead was only thanks to a construction error by the culprit and his accomplice in building the detonation devices," said Ottmar Breidling, the presiding judge in the case. "It was their explicit aim to kill as many nonbelievers as possible."
Germany has not suffered a successful Islamist terror attack, as Britain, Spain and the United States have, but security officials say there have been several narrow misses. The September 11, 2001 attacks in New York and Washington were planned and organized in part in Hamburg.
Police found the two unexploded suitcase bombs on trains in Dortmund and Koblenz. Hajdib was arrested in Kiel several weeks later after police released video from surveillance cameras showing el-Hajdib and his accomplice, Jihad Hamad, boarding trains with large suitcases at a Cologne train station.
German officials credited Lebanon's military intelligence agency for intercepting a panicked phone call Hajdib made to his family after the footage of him was broadcast here. Hamad surrendered to police in Tripoli.
A Lebanese court last year convicted Hamad and sentenced him to 12 years in jail for the failed bombing. The two men were motivated in part by anger over the publication in 2005 of cartoons in Denmark depicting the Prophet Muhammad, according to an investigator in the case. More Articles in World »
By William J. Broad
Tuesday, December 9, 2008
In 1945, after the atomic destruction of two Japanese cities, J. Robert Oppenheimer expressed foreboding about the spread of nuclear arms.
"They are not too hard to make," he told his colleagues on the Manhattan Project at Los Alamos, New Mexico. "They will be universal if people wish to make them universal."
That sensibility, born where the atomic bomb itself was born, grew into a theory of technological inevitability. Because the laws of physics are universal, the theory went, it was just a matter of time before other bright minds and determined states joined the club. A corollary was that trying to stop proliferation was quite difficult if not futile.
But nothing, it seems, could be further from the truth. In the six decades since Oppenheimer's warning, the nuclear club has grown to only nine members. What accounts for the slow spread of atomic weapons? Can anything be done to reduce it further? Is there a chance for a future that is brighter than the one Oppenheimer foresaw?
Two new books by three atomic weapons insiders hold out hope. The authors shatter myths, throw light on the hidden dynamics of nuclear proliferation and suggest new ways to reduce the threat.
Neither book endorses the view held by Oppenheimer that bombs are relatively easy to make. Both document national paths to acquiring nuclear weapons that have been rocky and dependent on the willingness of spies and politicians to divulge state secrets.
Thomas Reed, a veteran of the Livermore weapons laboratory in California and a former secretary of the air force, and Danny Stillman, former director of intelligence at Los Alamos, have teamed up in "The Nuclear Express: A Political History of the Bomb and its Proliferation" to show the importance of moles, scientists with divided loyalties and - most important - the subtle and not so subtle interests of nuclear states.
"Since the birth of the nuclear age," they write, "no nation has developed a nuclear weapon on its own, although many claim otherwise."
Among other things, the book details how secretive aid from France and China helped spawn five more nuclear-armed states.
It also names many conflicted scientists, including luminaries like Isidor Rabi. The Nobel laureate worked on the Manhattan Project in World War II and later sat on the board of governors of the Weizmann Institute of Science, a birthplace of Israel's nuclear arms.
Secret cooperation extended to the secluded sites where nations tested their handiwork in thundering blasts. The book says, for instance, that China opened its sprawling desert test site to Pakistan, letting its client test a first bomb there on May 26, 1990.
That alone rewrites atomic weapons history. It casts new light on the reign of Benazir Bhutto as prime minister of Pakistan and helps explain how the country was able to respond so quickly in May 1998 when India conducted five nuclear tests.
"It took only two weeks and three days for the Pakistanis to field and fire a nuclear device of their own," the book notes.
In another disclosure, the book says China "secretly extended the hospitality of the Lop Nur nuclear test site to the French."
The authors build their narrative on deep knowledge of the arms and intelligence worlds, including those outside the United States. Stillman has toured heavily guarded nuclear sites in China and Russia, and both men have developed close ties with foreign peers.
In their acknowledgments, they thank American Cold Warriors like Edward Teller as well as two former CIA directors, saying the intelligence experts "guided our searches."
Robert Norris, an atomic weapons historian and author of "Racing for the Bomb," an account of the Manhattan Project, praised the book for "remarkable disclosures of how nuclear knowledge was shared overtly and covertly with friends and foes."
The book is technical in places, as when detailing the exotica of nuclear arms. But it reads like a labor of love built on two lifetimes of scientific adventure. It is due out in January from Zenith Press.
Its wide perspective reveals how states quietly shared complex machinery and secrets with one another.
All trails of atomic-weapons information stem from the United States, directly or indirectly. One began with Russian spies that deeply penetrated the Manhattan Project. Stalin was so enamored of the intelligence haul, Reed and Stillman note, that his first atom bomb was an exact replica of the weapon the United States had dropped on Nagasaki.
Moscow freely shared its atomic-related intelligence thefts with Mao Zedong, China's leader. The book says that Klaus Fuchs, a Soviet spy in the Manhattan Project who was eventually caught and, in 1959, released from jail, did likewise. Upon gaining his freedom, the authors say, Fuchs gave the mastermind of Mao's weapons program a detailed tutorial on the Nagasaki bomb. A half-decade later, China surprised the world with its first blast.
The book, in a main disclosure, discusses how China in 1982 made a policy decision to flood the developing world with atomic weapons know-how. Its identified clients include Algeria, Pakistan and North Korea.
Alarmingly, the authors say China created one bomb designed as an "export design" that nearly "anybody could build." The blueprint for the simple plan has traveled from Pakistan to Libya and, the authors say, Iran. That path is widely assumed among intelligence officials, but Tehran has repeatedly denied the charge.
The book sees a quiet repercussion of China's proliferation policy in the Algerian desert. Built in secrecy, the reactor there now makes enough plutonium each year to fuel one atom bomb and is ringed by anti-aircraft missiles, the book says.
China's deck also held a wild card: its aid to Pakistan helped A.Q. Khan, a rogue Pakistani metallurgist who sold nuclear gear on the global black market. The authors compare Khan to "a used-car dealer" happy to sell his complex machinery to suckers who had no idea how hard it was to make fuel for a bomb.
Why did Beijing spread its atomic weapons knowledge so freely? The authors speculate that it either wanted to strengthen the enemies of China's enemies (for instance, Pakistan as a counterweight to India) or, more chillingly, to encourage nuclear wars or terrorism in foreign lands from which Beijing would emerge as the "last man standing."
A lesser pathway involves France. The book says it drew on Manhattan Project veterans and shared intimate details of its bomb program with Israel, with whom it had substantial commercial ties. By 1959, the book says, dozens of Israeli scientists "were observing and participating in" the French program of weapons design.
The book adds that in early 1960, when France detonated its first bomb, doing so in the Algerian desert, "two nations went nuclear." And it describes how the United States turned a blind eye to Israel's own atomic weapons developments. It adds that, in the autumn of 1966, Israel conducted a special, non-nuclear test "2,600 feet under the Negev desert." The next year it built its first bomb.
Israel, in turn, shared its atomic weapons secrets with South Africa. The book discloses that the two states exchanged some key ingredients for the making of atom bombs: tritium to South Africa, uranium to Israel. And the authors agree with military experts who hold that Israel and South Africa in 1979 jointly detonated a nuclear device in the South Atlantic near Prince Edward Island, more than 1,000 miles, or 1,600 kilometers, south of Cape Town. Israel needed the test, it says, to develop a neutron bomb.
The authors charge that South Africa at one point targeted Luanda, the capital of neighboring Angola, "for a nuclear strike if peace talks failed."
South Africa dismantled six nuclear arms in 1990 but retains much expertise. Today, the authors write, "South African technical mercenaries may be more dangerous than the underemployed scientists of the former Soviet Union" because they have no real home in Africa.
"The Bomb: A New History," due out in January from Ecco Books, an imprint of HarperCollins, plows similar ground less deeply but looks more widely at proliferation curbs and diplomacy. It is by Stephen Younger, the former head of nuclear arms at Los Alamos and former director of the Defense Threat Reduction Agency at the Pentagon.
Younger disparages what he calls myths suggesting that "all the secrets of nuclear weapons design are available on the Internet." He writes that France, despite secretive aid, struggled initially to make crude bombs - a point he saw with his own eyes during a tour of a secretive French museum that is closed to the public. That trouble, he says, "suggests we should doubt assertions that the information required to make a nuclear weapon is freely available."
The two books draw on atomic weapons history to suggest a mix of old and new ways to defuse the proliferation threat. Both see past restraints as fraying and the task as increasingly urgent.
Reed and Stillman see politics - not spies or military ambitions - as the primary force in the development and spread of nuclear arms. States repeatedly stole and leaked secrets because they saw such action as in their geopolitical interest.
Beijing continues to be a major threat, they argue. While urging global responses like better intelligence, better inspections and better safeguarding of nuclear materials, they also see generational change in China as a great hope in plugging the atomic weapons information leaks.
"We must continue to support human rights within Chinese society, not just as an American export, but because it is the dream of the Tiananmen Square generation," they write. "In time those youngsters could well prevail, and the world will be a less contentious place."
Tuesday, December 9, 2008
What if by sea? With security tightening on the land routes into the United States from Canada and Mexico, and with new warnings that the United States could face a nuclear or biological attack within five years, could the next outrage come through America's largely unguarded ocean frontiers?
The distance from Karachi to Mumbai is about the same as from Haiti to Miami, Tampico to Houston, Halifax to Boston, and Baja, California, to Los Angeles, says an old shipmate from my Navy days. Wouldn't it be simple for terrorists to acquire a ship, perhaps a fishing trawler, and sail it into any number of ports virtually undetected?
"There is now no routine surveillance of the broad oceanic approaches to the homeland," he says. "Only in the close approaches to major U.S. ports does the Coast Guard maintain the type of active radar coverage essential to the control of shipping, and this surveillance is focused on the relatively large commercial ships ..."
Because he is still involved with government work he asked that I not use his name.
Much thought has been given to the possibility that mass death could arrive in a closed container aboard a container vessel, and be shipped directly from its port of entry to anywhere in the United States. Efforts are made to inspect ships in their ports of departure, with the cooperation of foreign governments, but even so only a tiny fraction get inspected.
But my friend argues that terrorists, having gone to great effort to acquire their death-dealing devices, might not be willing to consign them to commercial shipping systems.
"There is no system in place for detecting and investigating the larger number of ocean-going, noncommercial vessels plying our coastal waters that are capable of carrying weapons of mass destruction," he says.
A yacht could slip into Miami from the Caribbean virtually undetected and blow the city to smithereens. A small freighter offshore could launch smaller attack boats, as the Somali pirates do, and as was done in Mumbai, and remain undetected until too late.
The same would be true of any number of European ports, especially in the Mediterranean with close proximity to the discontent of North Africa. It wouldn't have to be nuclear to do great damage. One remembers the French ammunition ship that blew up by accident in Halifax harbor during World War I, devastating the city. Port cities everywhere are vulnerable to what would be powerful, maritime truck bombs.
Stephen Flynn, a former Coast Guard officer, now at the Council on Foreign Relations, points out that in addition to our sea ports, most of America's inland cities are located along waterways, "and the level of patrols is next to none. We are very exposed to water-borne attack."
My ex-Navy friend thinks we need a sea-traffic control system, "analogous to the one that manages all air traffic. But, politically, this is proving to be very hard. Commercial and general aviation grew up under the eye of government air traffic control systems. Seafaring has been unregulated and uncontrolled since the beginning of time," he says. There is no mandatory identification system for smaller boats entering U.S. waters.
The Coast Guard does have a "Marine Domain Awareness" program, and a volunteer auxiliary in which civilians donate their time, their boats, and sometimes planes, to patrol U.S. coasts and harbors looking out for anything unusual. According to Flynn, this is probably the best way to thwart an attack because terrorists like to carry out surveillance and make dry practice runs. People who work U.S. waterfronts and in coastal waters are in the best position to notice something strange.
Flynn thinks this should be greatly expanded, with Homeland Security "engaging with the maritime public, yacht clubs, fishermen, coastal home owners, dock workers, and the like, telling them what to look for." He says the British are much better at alerting communities than we are.
Drug runners now use semi-submersible submarines to avoid detection. Terrorists could follow suit with something much worse than heroin aboard. The 9/11 attacks came from the air from America's own airports. The fire next time could come undetected, as my Navy friend says, from the "great anonymity of the ocean."
The snow's coming. Bad day. Make things white, I need it.
Knee not good, computer crashed out on me; back to bed; drugs, sleep; back to computer; drugs, sleep.
Where are you? Where are you?
Nearly 1 billion people hungry
Tuesday, December 9, 2008
By Silvia Aloisi
High food prices helped push another 40 million people into hunger this year, the U.N.'s food agency said on Tuesday, raising the number of undernourished people in the world to 963 million.
A report by the Food and Agriculture Organisation (FAO) that said fewer and fewer people can afford decent meals, especially in Asia and Africa, despite a fall in food prices, gave a hollow ring to pledges to cut world poverty.
"High food prices have had a devastating effect on the most vulnerable and insecure part of the world's population," Kostas Stamoulis, head of FAO's agricultural and development economics division, told a news conference presenting the report.
He said unreplenished food stocks, price volatility and the global financial crisis continue to hurt food security, while food prices on domestic markets remain at record high levels.
The cost of food staples began rocketing in 2006 because of a spike in commodity prices, and reached a peak in June 2008.
While the global economic downturn has pushed prices of food items down since then, the FAO's food price index was still 28 percent higher in October than two years earlier.
But even before the food price surge and this year's financial turmoil, the number of hungry people kept rising steadily, despite a U.N. Millennium Development Goal to halve the proportion of the world's undernourished people by 2015.
Some 923 million people were suffering from hunger in 2007, up from 848 million in 2003-05 and 842 million in 1990-1992.
FAO preliminary estimates are that 14 percent of the world's population was undernourished this year, up from 12.9 percent in 2003-05 and only slightly lower than 15.8 percent in 1990-92.
The head of FAO, Jacques Diouf, has been sounding alarm bells for years about the lack of progress in the fight against hunger.
"In 2006, I said that at this rate we would achieve the Millennium Goal not by 2015, but by 2150," he said on Tuesday.
The vast majority -- 907 million people -- of the world's hungry live in developing nations. Of these, 65 percent live in just seven 7 countries: India, China, the Democratic Republic of Congo, Bangladesh, Indonesia, Pakistan and Ethiopia.
In June, Diouf hosted a global food summit and said $30 billion a year were needed to boost farm output in developing countries. He said that represented just 8 percent of what more developed nations spent to support their agriculture sectors.
That conference produced no firm political commitments or policy changes, and since then the world's richest countries have poured hundreds of billions into their economies to fight a fast-spreading international recession.
Diouf acknowledged that the goal of halving the number of hungry people by 2015 looked increasingly difficult to achieve, also because the global economic slump is cutting aid flows to poor countries, but he refused to throw in the towel.
Calling the situation "morally unacceptable," he said he had asked U.S. President-elect Barack Obama to take the lead in the fight against hunger and hold a food summit next year.
"Obama started his campaign with the simple words 'Yes, We Can', and I hope that will help us make it happen. I say 'Yes, We Can' but only if everybody plays their role."
(additional reporting by Svetlana Kovalyova in Milan)
(Editing by Richard Balmforth)
Hong Kong reports bird flu outbreak
The Associated Press
Tuesday, December 9, 2008
HONG KONG: Three dead chickens tested positive for bird flu in Hong Kong, prompting the city to suspend poultry imports for 21 days and begin slaughtering 80,000 birds, an official said Tuesday.
"We feel that Hong Kong is facing a new alert for bird flu," said York Chow, secretary for food and health.
Chow said the chickens, found Monday at a farm with 60,000 birds, had the H5 virus and further tests were being done to see if they had the deadly H5N1 strain.
The farm and neighboring poultry operations were declared part of an infected zone, and about 80,000 birds in the area would be killed to prevent the spread of the disease, Chow said.
He added that the 21-day ban on poultry imports would last through the Christmas holiday, a time when chicken is an important dish in celebratory dinners.
Hong Kong's biggest bird flu outbreak was in 1997, when the H5N1 strain jumped to humans and killed six people. That prompted the government to slaughter all 1.5 million poultry in the territory.
In 2001, the government also carried out a massive poultry slaughter, killing 306,000 birds in wholesale and retail markets and 951,000 in local farms to eradicate an outbreak of bird flu. The city now has 600,000 birds, Chow said.
At least 245 people have died of bird flu worldwide since 2003, according to the World Health Organization.
Hong Kong's government has been encouraging retailers to stop selling live birds, and the majority of shops have given up their licenses to sell live poultry. But eating fresh chicken is an important part of the culture and many shoppers still want freshly slaughtered birds.
Irish tests find dioxins in cattle
The Associated Press
Tuesday, December 9, 2008
DUBLIN, Ireland: Irish officials confirmed Tuesday that cattle at three farms have tested positive for dioxin the cancer-causing chemical that has contaminated its pork industry but insisted the country's beef posed no real risk to health.
Ireland has already ordered the withdrawal and destruction of all pork products produced since Sept. 1, a sweeping move the government says should reinforce not undermine international confidence in Ireland's food exports.
But Agriculture Minister Brendan Smith said the government decided not to recall any Irish beef products at home or abroad because, unlike the contamination of pork products, the level and extent of dioxin found so far in cattle is much lower.
Smith said the cattle with excessive dioxin levels were "technically noncompliant, but not at a level that would pose any public health concern." Still, he said Ireland would prevent the movement of any cattle or beef from the three farms in question.
Alan Reilly, deputy director of the Food Safety Authority of Ireland, stressed that the dioxin levels found in the most contaminated cattle were just two to three times European Union safety limits, whereas pigs at nine dioxin-threatened Irish farms recorded dioxin levels 80 to 200 times too high.
"There's a huge difference between 200 times above a legal limit, and two to three times," Reilly said.
The government declined to say whether any cattle from the three farms had produced beef that went to foreign markets. Reilly said most of the beef produced since September was still in storage, being aged to improve its tenderness and taste.
A recall of Irish beef would do even greater damage to Ireland's recession-hit economy than its emergency shutdown Saturday of the pork industry. Ireland has 69,000 beef farms but just 400 pig farms.
Ireland exports 85 percent of its beef to about 35 other countries, chiefly in Europe, a trade valued at more than 1.5 billion ($2.2 billion). Irish pork generates only a third as much money and reaches 25 other countries. In both cases, neighboring Britain is Ireland's major customer.
Irish investigators have traced the source of the contamination to a single animal-food maker, Millstream Power Recycling Ltd., which used an oil-fired burner to dry out-of-date bread, dough and confectionary.
The Agriculture Department says Millstream which has been shut down pending investigations by the government and police was using a kind of oil that should never be used around food, creating fumes that infused the food with dioxins. It also failed to get the appropriate oil-burning permit from the Irish Environmental Protection Agency.
Authorities say Millstream supplied oil-tainted feed to at least nine pig farms and 45 cattle farms in the Republic of Ireland, and nine pig farms and 10 cattle farms in the British territory of Northern Ireland.
Tuesday's test results that confirmed too-high levels of dioxin in cattle at three Irish farms also cleared eight others of contamination. The Irish government declined to specify when results on the 34 other cattle farms would be confirmed.
But Reilly said he expected the number of total positive results to be in similar proportion to Tuesday's findings. This would mean about a quarter, or nine, more cattle farms could test positive for excessive dioxin.
He noted the cattle ate much less of the Millstream product than the pigs, because cows still eat mostly grass in the fall while pigs rely on man-made fodder.
In Northern Ireland, meanwhile, authorities announced Tuesday that none of the pig farms that received the Millstream product actually used it, which means its pork products can return immediately to store shelves and export markets. But Northern Ireland's agriculture minister, Michelle Gildernew, said she was still awaiting test results later this week on the 10 suspect cattle farms.
International research shows that dioxins, a family of chemicals that can accumulate and be retained for years in body fat, can lead to an increased risk of cancer.
Irish authorities, however, point to Europe's last major dioxin scare in Belgium in May 1999, when thousands of farms were closed after dioxin-contaminated animal feed tainted meat, eggs and dairy products to show that short-term exposure should not pose a risk.
"We're dealing in broad terms with the same exposure levels as in Belgium, where the follow-up showed no impact on public health," said Ireland's chief medical officer, Dr. Tony Holoran.
He stressed that, even if anyone ate both the dioxin-tainted beef or pork daily for the past three months, it still wouldn't be enough to cause a health problem.
"The risks are extremely low from any exposure that may occur. People do not need to seek any direct medical advice. We do not expect to see symptoms occurring as a result of this," Holoran said.
Researchers put a microscope on food allergies
By Karen Ann Cullotta
Tuesday, December 9, 2008
CHICAGO: For 5-year-old Sean Batson, even a grandmother's kiss is to be feared.
"My mother was wearing lipstick, and when she kissed Sean's cheek, it broke out in hives," said his mother, Jennifer Batson.
At his first birthday party, Sean had a severe allergic reaction — hives, swollen eyes, vomiting and wheezing — to his first nibble of cake. And when a toddler with an ice cream cone touched Sean's arm with sticky hands during a play date, the arm erupted in hives.
The daily struggle of living with Sean's allergies to nearly unavoidable foods and food products — soy, eggs and milk, traces of which can turn up even in nonfoods like lipstick — prompted Batson and her husband, Tim, to participate in a project that scientists are calling the most comprehensive food allergy study to date.
The international study, led by Xiaobin Wang and Jacqueline A. Pongracic of Children's Memorial Hospital here, is searching for causes of food allergy by looking at hundreds of families in Boston, Chicago and Anhui Province in China.
Using questionnaires and interviews, the investigators are gathering data on a broad range of environmental, genetic and health factors, among them diet, hygiene, number of pets and the children's prenatal and postnatal medical histories.
Wang says the study's multicenter design allows researchers to look at startling variations in the prevalence and types of food allergies across diverse populations and regions.
In China, for example, skin-prick testing found that large percentages of one rural population were sensitive to shellfish (16.7 percent) and peanuts (12.3 percent). Yet actual food allergies in that population, as diagnosed by physicians, were all but unheard of: less than 1 percent.
In the United States, by contrast, 12 million people (4 percent of the population) suffer from food allergies, according to the Food Allergy and Anaphylaxis Network, a nonprofit information and advocacy group.
"We found something unexpected," said Wang, director of the Smith Child Health Research Program at Children's Memorial. "The apparent dissociation between high allergic sensitization and low allergic disease in this Chinese population is not seen in our two U.S. study populations.
"What can explain the U.S. and China difference?" she asked. "Is it urban versus rural exposure? Diet and lifestyle? Or genetic susceptibility? These are all questions we are trying to find some clear answers for."
For Sean Batson and his family, a recent clinical evaluation at the hospital included a skin-prick test to establish baseline data for Sean's sister, Audrey, 1, who does not seem to have food allergies. (Neither do their parents, Tim Batson, 38, a computer programmer, and Jennifer Batson, 36, a copy editor.)
Sean was given a fresh skin-prick test, too. The mild discomfort was tempered by an episode of "SpongeBob SquarePants" playing on a minimonitor affixed to a cushy reclining chair.
Wang said her own awareness of food allergies was heightened after her twin sons started kindergarten in Boston and began bringing home an abundance of notes warning of severe food allergies among their classmates.
"Going back 10 to 15 years ago, during my pediatric residency training, there was very little education about food allergies," said Wang, one of 12 principal investigators who were recently awarded grants by the National Institutes of Health to conduct innovative research on food allergies.
Indeed, with recent data showing a marked increase in the number of food allergies, which cannot be explained by a lack of detection in years past, the institutes have begun an initiative to address food allergies as an emerging health challenge.
Although it is possible to be allergic to any food, eight foods account for 90 percent of all reactions — milk, eggs, peanuts, fish, shellfish, soy, wheat, and tree nuts like cashews and almonds.
Up to 200 deaths each year are attributed to the most severe reaction, food-induced anaphylaxis, which also results in 30,000 trips to the emergency room. Some experts suggest that children in a culture smitten with antibacterial detergents and hand sanitizers are exposed to fewer germs, depriving the immune system of its germ-fighting job and leading it to misidentify certain foods as foreign.
But that is still just a hypothesis, and many researchers say the causes of food allergies are highly complex, and the "hygiene hypothesis" cannot be the sole explanation.
Pongracic, who has been treating children with food allergies for 17 years, says even trace amounts of allergens can cause life-threatening reactions.
"Ultimately, we hope that our research will lead to the discovery of ways to predict which child is likely to outgrow food allergy," she wrote in an e-mail message, adding that doctors hoped to develop therapies "that can lessen the severity of an allergic reaction, and even protect against the reaction in the first place."
Frustration over the lack of financing for food allergy research led one Chicago-area couple, David and Denise Bunning, to donate $3 million to the study at Children's Memorial. As the parents of two sons with life-threatening food allergies, they say they hope to convince lawmakers that food allergies deserve as much public attention as other chronic childhood diseases like asthma and Type 1 diabetes.
"At first I thought, 'O.K., you have this one-in-a-million kid with severe food allergies, and you just have to cope,' " said Bunning, a financial trader. "But when we learned that both Bryan and Daniel had severe food allergies, there was a lot of disbelief. It felt like we were hiding from a phantom."
Bunning, a former teacher, added: "Now, we're pretty excited about the future findings of the allergy study. We need to start looking at food allergies not as something you pick and choose as a parent, but as a childhood disease with potentially life-threatening reactions, even death."
Tesco may become world No.2 retailer by 2012
Tuesday, December 9, 2008
LONDON: Tesco will overtake France's Carrefour within the next five years to become the world's second-biggest retailer by turnover behind U.S. group Wal-Mart , according to a report on Tuesday.
Grocery market researchers IGD forecast Tesco would achieve compound annual growth of 11 percent between 2007 and 2012, led by expansion in China, the United States and India, and boosting its annual turnover to $157.1 billion (106.5 billion pounds) by the end of the period.
That would just overtake Carrefour which, with forecast compound annual growth of 7 percent, would reach turnover of $157 billion by the same date, it said.
Wal-Mart, however, would remain way ahead, with annual turnover expected to rise over $100 billion to $476.2 billion.
"Emerging markets will not be immune to the global economic slowdown, yet the pace of growth will continue to outstrip that of the developed world," said Jonathan Gunz, senior business analyst at IGD.
"We estimate that in grocery, retail markets in China and India will each grow at a compound annual rate of 13.2 percent between 2008 and 2012, exceeding any other country in the top ten. Other emerging markets to watch include Indonesia, Ukraine and Vietnam," he added.
Obama meets with Gore for talks on environment
By Brian Knowlton
Tuesday, December 9, 2008
With President-elect Barack Obama poised to fill some cabinet positions with major environmental responsibilities, he met Tuesday with the best-known American advocate of greener practices, former Vice President Al Gore, and said they agreed that "the time for delay is over."
Joined in the Chicago meeting by Vice President-elect Joseph Biden, Obama said that he would work with lawmakers, businesses and consumers to try to forge a consensus on an aggressive approach to global warming.
"This is a matter of urgency and of national security and it has to be dealt with in a serious way," Obama said.
There were no signs that Obama planned to offer Gore a position in his cabinet, though he said during the presidential campaign that he would rely heavily on the former vice president's advice.
Gore, who was awarded the Nobel Peace Prize a year ago for his work on global warming, has denied any interest in a cabinet post. Headed this week to the international climate conference in Poznan, Poland, he has said that he believes he can be a more effective advocate for change from a position outside government.
Gore campaigned for Obama, notably in Florida - the state where Gore fell 537 votes short of winning the presidency in 2000, but which Obama carried by about 200,000.
Environmental groups are hoping for a more receptive attitude in the new administration, and have been trying to weigh in as Obama prepares - possibly this week - to nominate secretaries of energy and the interior, and perhaps a top administrator for the Environmental Protection Agency.
Obama has said he will spend billions, as part of a broad economic stimulus package, to increase energy efficiency in American homes, offices and factories, protect the environment and create "green" jobs.
That objective sounds not unlike a goal Gore set in an op-ed article last month. "We can make an immediate and large strategic investment to put people to work replacing 19th-century energy technologies that depend on dangerous and expensive carbon-based fuels with 21st-century technologies that use fuel that is free forever: the sun, the wind and the natural heat of the earth."
Gore's Alliance for Climate Protection issued a challenge just two days after Obama's election Nov. 4 to aggressively convert all U.S. energy users to non-polluting sources within 10 years by investing substantially in wind, geothermal and solar technology, promoting efficient plug-in cars and creating a unified nationwide power grid to make it easier to shift power where it is needed.
Obama elected not to send a delegate to the climate talks that Gore will attend as they wind up this week in Poland, but has said he will ask U.S. lawmakers at the conference to report back to him.
"Once I take office," he said in a statement last month, "you can be sure that the United States will once again engage vigorously in these negotiations, and help lead the world toward a new era of global cooperation on climate change."
EU carbon trading system brings windfalls for some, with little benefit to climate
By James Kanter
Tuesday, December 9, 2008
BRUSSELS: The European Union started with the most high-minded of ecological goals: to create a market that would encourage companies to reduce greenhouse gases by making them pay for each ton emitted into the atmosphere.
Four years later, the carbon trading system has created a multibillion-euro windfall for some of the continent's biggest polluters, with little or no noticeable benefit to the environment so far.
The lessons learned are coming under fresh scrutiny now, both in Europe and abroad. EU leaders will meet Thursday and Friday to work on the next phase of their system, seeking, they say, both to extend its scope and correct its flaws. And in the United States, President-elect Barack Obama has pledged to move quickly on a similar program.
As originally envisioned in Europe, companies would buy most if not all of the permits needed to cover their projected carbon dioxide emissions for a year, one permit good for each metric ton of CO2, the main greenhouse gas. If they produced more gases than expected, they would have to buy more permits; if they came in below target, they would be able to profit by selling their extra permits to companies that were polluting over their limit.
The initiative also included another, quieter goal: to raise the price of electricity by letting utilities pass along permit costs, thereby encouraging energy efficiency and innovation among customers as well.
But the system that emerged was far from that model.
After heavy lobbying by giant utilities and smokestack industries, who argued their competitiveness could be impaired, the EU all but scrapped the idea of selling permits. It gave them out for free, in such quantities that the market came close to collapsing because of a glut.
But in line with the original strategy, utilities in countries from Spain to Britain to Poland still put a "market value" on their books for the permits and added some of that putative cost to the prices they charged industrial customers for electricity. And they did not stop there. In one particularly contentious case, regulators in Germany accused utilities of charging customers for far more permits than they were entitled to.
Nowhere was this behavior more evident than at RWE, a major German power company, which has acknowledged that it is the biggest carbon dioxide emitter in Europe. Bank analysts and environmental advocates estimate RWE had received a windfall of roughly €5 billion, or $6.5 billion at current exchange rates, in the first three years of the system, concluding in 2007 - more than any other company in Europe.
In a confidential summary of its findings, obtained by the International Herald Tribune, the German cartel office in late 2006 accused RWE of engaging in "abusive pricing," piling on costs for industrial clients that were "completely out of proportion" with its own costs. It called for cuts of up to 75 percent.
RWE settled the case last year while denying any wrongdoing. It says price increases from 2005 to 2007 predominantly reflected higher costs for hard coal and natural gas.
Europe's overall experience with carbon trading has been a sobering one.
Its implementation has been marked by maneuvers and adjustments to the original framework that have yielded significant cost benefits to many of the continent's biggest polluting industries. Meanwhile, the amount of CO2 emitted by plants and factories participating in the system rose 0.4 percent in 2006 and an additional 0.7 percent in 2007.
The United States is now considering a system of its own, with Obama proposing to make industries buy all of their permits. He has said he would devote $150 billion from the sale of those permits over 10 years to energy efficiency and alternative energy projects.
Many of the framers of the European plan, meanwhile, have thought hard about the way the legislation evolved as they prepare to take up the next phase. But they face the prospect of trying to close numerous lucrative loopholes while confronting the same tug of war between lofty environmental goals and their immediate economic costs - a challenge made even more difficult by the onset of recession.Lofty goals at the outset for curbing CO2 emissions
During long negotiations on the landmark Kyoto climate treaty more than a decade ago, the United States, through the administration of Bill Clinton, was the loudest in insisting on including a reference to "emissions trading" in the treaty.
Americans had pioneered such markets in the 1970s and used them on a broader scale during the 1990s to reduce emissions from power plants blamed for acid rain.
U.S. officials argued that markets were the most effective way of encouraging innovative, emission-reducing technologies.
The European Union initially opposed emissions trading in favor of direct taxes on polluting industries, but later agreed to trading as the price for ratification.
The United States, however, ended up failing to either ratify Kyoto or to require U.S. companies to enter a carbon trading market outside of the Kyoto accord. But the European Commission, the EU executive body, began working on plans to start such a system in Europe.
"We ourselves had invested so much in the Kyoto Protocol in choosing a global deal," Margot Wallstrom, who was the European Union environment commissioner at the time, said during a recent interview. "I was eager to put it in place as soon as possible."
Today, the EU system represents about 75 percent of global carbon trading - a market worth about €60 billion in 2008, according to Andreas Arvanitakis, an analyst with Point Carbon, a research company.
Yet from the start, Wallstrom, who is now a vice president of the European Commission, said she was lobbied heavily by governments and by companies, seeking to limit the financial burden. She would not comment on any specific contacts. But Eurelectric, the main electricity industry lobby group, and its German affiliate met often with EU environment officials to discuss the shape of the emissions trading system.
A decision was made to limit the initial scope to some of the most energy-intensive sectors of the economy: electricity, glass, steel, cement, and pulp and paper. They were chosen primarily because their stationary factories were easier to regulate quickly than moving targets like transport or aviation.
The original idea of charging for all or even most of the permits never gained traction.
Many politicians said they feared that burdening European industries would undercut their global competitiveness, since rivals in Asia or the United States would not have such extra costs imposed on them.
In addition, Europe's energy market for industrial customers was opening to cross-border competition almost simultaneously.
Wallstrom and other at the commission describe the decision to give away the vast majority of permits as having been a necessary concession to get all the players in Europe on board - especially at a time when the Kyoto climate treaty was under attack from the administration of President George W. Bush.
Still, lawmakers at the European Parliament initially sought to require industry to pay for at least 30 percent of its permits, then 15 percent. (The actual trading price on the futures market at the time ranged from €5 to €13.)
But after long negotiations with EU governments, the Parliament enacted a law on July 2, 2003, allowing up to 100 percent of permits to be given away until 2013. Governments could sell some of the permits, up to 5 percent, but only Denmark, Ireland, Lithuania and Hungary did.
Denmark sold the full 5 percent, earning 226 million Danish kroner, or more than €30 million at current exchange rates. Had all the Danish permits been sold at the same price, the government could have reaped more than €600 million for the national budget.Debate turns to arguments of jobs vs. the environment
The EU system is highly decentralized, reflecting the political reality of a bloc that now numbers 27 countries. Thus, the lobbying did not stop in Brussels, but moved on to national capitals, where governments were left in charge of setting emissions levels and distributing the permits to companies within their borders, often with deep political connections.
Germany provided a stark example of what happened next. The cross-fire between environmental advocates and politicians who expressed concern about German competitiveness - and jobs - only intensified. The Greens, a political party, was in the federal government for the first time, as junior partner with the Social Democrats of Chancellor Gerhard Schröder. But the issues were resolved in an arena where energy companies have long wielded enormous political clout, and here they benefited greatly.
After World War II, German energy companies were largely state-controlled. Today, following years of privatization and consolidation, the four energy giants, E.ON, RWE, Energie Baden-Württemberg and Vattenfall, own 70 percent of German capacity and produce an even greater share of the electricity.
Jürgen Trittin, a former Greens leader who was environment minister from 1998 to 2005, recalled being heavily lobbied by executives from power companies, and by politicians from eastern Germany seeking special treatment for burning lignite, a soft brown coal that is common around central Europe and which is highly polluting.
The EU system put the government in the position of behaving like "a grandfather with a large family deciding what to give his favorite grandchildren for Christmas," Trittin said by telephone.
RWE was a special case, he said. The company was "perfectly integrated into the Ministry of Economy, with no clear border," Trittin said.
Wolfgang Clement, the economics minister from 2002 to 2005, had, since 1998, been premier of North Rhine-Westphalia state, where RWE is based. He joined the supervisory board of RWE Power in 2006.
His deputy, Georg Wilhelm Adamowitsch, was, from 1996 to 1999, the representative for federal and European affairs at another energy company, VEW, which in 2000 merged with RWE. At least three other top government officials, including Schröder himself, went to work for energy companies after leaving office.
Trittin recalled a five-hour "showdown" with Clement on the night of March 29, 2004, in which he lost a battle to lower the overall limit on emissions from plants and factories to 488 million tons of CO2 each year, from the level then in force of 501 million tons. Trittin said he was overruled by Clement, who, with Schröder's backing, secured a reduction of just two million tons, to 499 million.
Trittin said Clement accused him of "wanting to de-industrialize Germany."
Environmental groups were disappointed, but industry leaders were relieved. "With this compromise, steel makers can apparently now continue to sustainably produce steel in Germany," Dieter Ameling, the president of the German steel makers' association WV Stahl, was quoted at the time as saying. "The steel industry thanks minister Clement for his input."
The Federation of German Electricity Companies, representing utilities like RWE, expressed its "relief"' as well. "Good sense triumphed in the end," the federation chief, Eberhard Meller, was quoted as saying.
In a recent e-mail message, Clement did not challenge Trittin's account of the meeting, but called his claims of industry influence on the ministry "just nonsense."
Clement said that, during his time in government, he had "many very serious and complicated discussions" with Trittin and other Greens politicians about climate change and the economic costs of fighting it. "I reproached them - and I'm doing this still today - that at the end of their policy there is the de-industrialization of Germany," Clement reiterated. "That's our conflict."
Adamowitsch said by phone that he was not an "ambassador for the German energy industry" while in government or at VEW.
Now an independent consultant working with the Austrian government and the European Commission, Adamowitsch said that the EU emissions system had meant much greater burden for industrial companies making products like cement, where up to one-fifth of the final cost is for energy.
"We are in an industrial battle in the middle of a period of globalization and high energy prices mean we have a real problem in Germany," he said.
Schröder declined to comment for this article.Big winners emerge in ranks of German power companies
The benefits won by German industry were substantial. Under the German national plan, electricity companies were supposed to receive 3 percent fewer permits than they needed to cover their total emissions from 2005 to 2007. The aim was to encourage them to make technical improvements that would reduce emissions and help the country meet its commitment under the Kyoto treaty.
Instead, the companies got about 103 percent of their annual needs, according to the German Emissions Trading Authority, which oversees the system in Germany. That surplus could have been sold for about €290 million at the peak of the market.
German lawmakers also approved scores of combinations of exemptions and bonuses allowing companies to gain additional free permits for things they had done years earlier, or that might only be done in the future. Among them:
Utilities could base their claim for permits at coal and gas-fired plants on emissions levels from as far back as 1994, even if improvements had been made to the plants since then.
Utilities were guaranteed free permits for 18 years to cover any newly built coal or gas plants (a perk that provoked such a reproach from Brussels that it was later revoked).
Utilities could forecast how many permits they needed for each of their plants, despite a history of conflict with regulators over projections used to set tariffs.
"It was lobbying by industry, including the electricity companies, that was to blame for all these exceptional rules," said Hans-Jürgen Nantke, the director of the German trading authority, which is part of the Federal Environment Agency. The exemptions "enabled companies to get allowances that did not reflect the real situation of their emissions."
Jürgen Frech, chief spokesman for RWE, said that policy makers had sought input from all parties affected in creating what was an unprecedented system, and that all the national plans had to be subsequently approved by the European Commission in Brussels. "For industries like electricity production with long investment cycles, it is crucial to have a stable regulatory environment," he added.
RWE received 30 percent of all the permits given out, more than any other company in Germany.
The company said it transferred some of them among its plants - including those in other EU countries - but still found itself running short, and thus did not sell any.
But there was even greater revenue to be found elsewhere.Outrage from customers as electrical bills shot up
Major power consumers in Germany began receiving bigger electricity bills shortly after the system officially started in 2005, amounting to increases of about 5 percent each year. The biggest effect was on heavy users of power in industries like steel that - unlike households - buy power wholesale at prices that are less regulated.
Those customers were enraged, and they asked the German cartel office to investigate.
RWE justified its prices to the cartel office by saying the permits, although received for free, had a value in the marketplace. By not selling them and producing electricity instead, the argument went, it was losing an opportunity for revenue that should be charged to its customers.
In a summary of its preliminary findings, sent to RWE lawyers in December 2006, the cartel office agreed that the company was justified in passing through genuine "opportunity costs." But it accused RWE of charging for more permits than it should have - and suggested that this had been done at a third of all power plants in Germany.
This was what led the cartel office to accuse RWE of "abusive pricing." Investigators said RWE lacked any real opportunity to sell many of its permits because it already had committed to providing substantial amounts of electricity. And they said RWE admitted as much at a closed-door hearing.
Frech, at RWE, said that putting a price on the carbon permits - thereby encouraging everyone to be more efficient - was "beyond reproach."
The company said it was "unable to quantitatively estimate what proportion of the end customer price" was attributable to the carbon permits, mainly because the final price was determined in part by supply and demand.
But the cartel office said RWE should reduce the amount it charged for the permits by 75 percent. At this point the case could have moved toward litigation. The company, however, agreed to a settlement involving auctions that should provide industrial customers in Germany with lower electricity costs from 2009 through 2012.
"Customers will have the CO2 allowances RWE receives for the auctioned product credited to them free of charge," the company said, referring to its permits. "This newfound understanding is preferable to protracted legal battles through several courts."
Selling power without the cost of the CO2 permits also has a downside, however. It undermines the EU goal of curbing emissions and encouraging conservation by raising the cost of electricity to consumers.No smooth path for overhaul as EU economies deteriorate
RWE's net profit jumped 73 percent, to €3.85 billion, in 2005, the first year of the system. RWE does not detail in its financial statements what percentage of net profits is attributable to the carbon system, and the company said it was not able to do so.
Seb Walhain, the global head of environmental markets at Fortis, said that RWE earned up to €5 billion from 2005 to 2007 from the EU system. Felix Matthes at the Institute for Applied Ecology, a German environmental research group, estimated that RWE benefited from windfall profits of €2.2 billion to €3.3 billion annually in 2005 and 2006. Matthes and Walhain said very little, or no, windfall profits occurred in 2007 as a result of the EU system because the price of CO2 permits had fallen virtually to zero.
But emissions have risen steadily at the German operations of RWE since the trading system began. RWE was responsible for nearly 158 million tons of CO2 in 2007, compared with about 147 million tons in 2006 and 120 million tons in 2005, according to its annual reports.
Frech said emissions rose "slightly" in 2007 in part because one of its nuclear power stations "was off line for quite a while." Nuclear-fueled power plants emit no carbon dioxide.
The company also said it was investing €32 billion over the next five years in projects including renewable energy and developing cleaner techniques for generating electricity from hard coal and lignite, which RWE mines in Germany.
"Every investment we make is linked to climate protection," Frech said.
Yet so far there are few signs the system is cutting emissions. The amount of CO2 emitted by plants and factories participating in the system rose marginally in 2006 and 2007, according to the European Environment Agency. (Neither it nor the European Commission made any forecast before the system started about how it would perform.)
Even so, the EU environment commissioner, Stavros Dimas, said in May that emissions would "most likely have been significantly higher" without the carbon trading system.
He called the 2005 to 2007 period a "learning by doing" phase, and noted that limits on emissions have been tightened for the 2008 to 2012 trading period, and the glut of free permits lessened, meaning the price should rise.
But negotiations on how to meet even more ambitious targets after 2012 are in danger of coming undone as the economy worsens.
Prime Minister Silvio Berlusconi of Italy has led the assault on the package, saying that he was not in office last year when it was agreed on. "We don't think this is the moment to push forward on our own like Don Quixote," he said at a summit meeting in October. "We have time."
Poland - which depends on coal-fired plants for 95 percent of its electricity - has threatened to block the package at another summit meeting Thursday and Friday if a compromise is not found to lessen the burden on its energy sector.
RWE, meanwhile, insists that having to pay for all its permits, starting in 2013, with no phase-in period, would distort competition across Europe, which has recently opened up to cross-border energy sales. "Companies such as ours that are giving coal a future and rely on coal-powered generation will find themselves at a distinct disadvantage vis-à-vis companies like Électricité de France, which rely solely on nuclear and have virtually no CO2 to deal with," Frech said.
Industrial customers in Germany are issuing dire warnings of ballooning electricity prices they say are sure to come if utilities try to maintain their profit margins while complying with costly new rules.
The French president, Nicolas Sarkozy, who is leading the political horse trading, continues to push for an agreement. "Europe must be an example for others," he was quoted as saying Saturday in Poznan, Poland.
Nicholas Stern, one of the world's foremost authorities on the economics of climate change since presenting a report for the British government in 2006, said during a recent interview that the United States should draw lessons from Europe's example. He recommended that Obama move quickly toward charging industry for the permits, to avoid such repeated, drawn-out battles.
"Everybody will fight their own corner," he said. "That's why it's so important to have a clear conception from the start."
Jeff Jacoby: Skepticism on climate change
Tuesday, December 9, 2008
The mail brings an invitation to register for the 2009 International Conference on Climate Change, which convenes on March 8 in New York City. Sponsored by the Heartland Institute, a Chicago-based think tank, the conference will host an international lineup of climate scientists and researchers who will focus on four broad areas: climatology, paleoclimatology, the impact of climate change, and climate-change politics and economics.
But if last year's gathering is any indication, the conference is likely to cover the climate-change waterfront. There were dozens of presentations in 2008, including: "Strengths and Weaknesses of Climate Models," "Ecological and Demographic Perspectives on the Status of Polar Bears," and "The Overstated Role of Carbon Dioxide on Climate Change."
Just another forum, then, sounding the usual alarums on the looming threat from global warming?
Actually, no. The scientists and scholars Heartland is assembling are not members of the gloom-and-doom chorus. They dispute the frantic claims that global warming is an onrushing catastrophe; many are skeptical of the notion that human activity has a significant effect on the planet's climate, or that such an effect can be reliably measured or predicted. Some point out that global temperatures peaked in 1998 and have been falling since then. Indeed, several argue that a period of global cooling is on the way.
Nearly all would argue that climate is always changing, and that no one really knows whether current computer models can reliably account for the myriad of factors that cause that natural variability.
They are far from monolithic, but on this they would all agree: Science is not settled by majority vote, especially in a field as young as climate science.
Skepticism and inquiry go to the essence of scientific progress. It is always legitimate to challenge the existing "consensus" with new data or an alternative hypothesis. Those who insist that dissent be silenced or even punished are not the allies of science, but something closer to religious fanatics.
Unfortunately, when it comes to climate change, far too many people have been all too ready to play the Grand Inquisitor. For example, The Weather Channel's senior climatologist, Heidi Cullen, has recommended that meteorologists be denied professional certification if they voice doubts about global-warming alarmism. James Hansen, director of the Goddard Institute for Space Studies, wants oil-company executives tried for "crimes against humanity if they continue to dispute what is understood scientifically" about global warming. Al Gore frequently derides those who dispute his climate dogma as fools who should be ignored. "Climate deniers fall into the same camp as people who still don't believe we landed on the moon," Gore's spokeswoman told The Politico a few days ago.
But as the list of confirmed speakers for Heartland's climate-change conference makes clear, it is Gore whose eyes are shut to reality.
Among the "climate deniers" lined up to speak are Richard Lindzen, the Alfred P. Sloan Professor of Meteorology at MIT; the University of Alabama's Roy W. Spencer, a pioneer in the monitoring of global temperatures by satellite; Stephen McIntyre, primary author of the influential Climate Audit blog; and the meteorologist John Coleman, who founded the Weather Channel in 1982. They may not stand with the majority in debates over climate science, but - Gore's dismissal notwithstanding - they are far from alone.
In fact, what prompted The Politico to solicit Gore's comment was its decision to report on the mounting dissent from global-warming orthodoxy. "Scientists urge caution on global warming," the story was headlined; it opened by noting "a growing accumulation of global cooling science and other findings that could signal that the science behind global warming may still be too shaky to warrant cap-and-trade legislation."
Coverage of such skepticism is increasing. The Cleveland Plain Dealer's Michael Scott reported last week that meteorologists at each of Cleveland's TV stations dissent from the alarmists' scenario. In the Canadian province of Alberta, the Edmonton Journal found, 68 percent of climate scientists and engineers do not believe "the debate on the scientific causes of recent climate change is settled."
Expect to see more of this. The debate goes on, as it should.
Higher risk of asthma found among children born in fall
By Tara Parker-Pope
Tuesday, December 9, 2008
How, when and where a child is born may all play a role in lifetime asthma risk, new studies suggest.
Asthma occurs when airways in the lungs spasm and swell, restricting the supply of oxygen. The incidence of asthma in the United States has risen steadily for more than two decades, and about 6 percent of children now have asthma, up from less than 4 percent in 1980, according to the Centers for Disease Control and Prevention.
The reasons for the increase are not entirely clear. Genetics probably plays a role in the risk for asthma, but an array of environmental factors - pollen, dust, animal dander, mold, cockroach feces, cigarettes, air pollution, viruses and cold air - have all been implicated in its development.
This month, The American Journal of Respiratory and Critical Care Medicine is reporting that children born in the fall have a 30 percent higher risk for asthma than those born in other seasons. The finding is based on a review of birth and medical records of more than 95,000 children in Tennessee.
A possible explanation is that autumn babies tend to be about 4 months old at the peak of cold and flu season. By that age, many babies are in day care and regularly exposed to the outside world.
And while their lungs are still developing, they have yet to develop strong immune systems. As a result, fall babies are at particular risk to contract a severe winter virus, which may in turn increase their risk for asthma.
The lead researcher, Dr. Tina Hartert, director of the Center for Asthma Research and Environmental Health at Vanderbilt University, says some parents with a high familial risk for asthma may want to consider timing conception to avoid a fall birth.
But since that is impractical for many people, Hartert says, all parents should take precautions to reduce a baby's risk of a respiratory infection.
"It's premature to say you should time conception so children aren't born in the fall," she said. "But it's good sense to use typical hygienic measures to try and prevent illness."
As for how a baby is born, Swiss researchers are reporting in the journal Thorax this month that a Caesarean delivery is linked to a much higher risk for asthma compared with babies born vaginally.
In a study of nearly 3,000 children, the researchers found that 12 percent had been given a diagnosis of asthma by age 8. In that group, those born by C-section were nearly 80 percent more likely than the others to develop asthma. The explanation may be that a vaginal birth "primes" a baby's immune system by exposing it to bacteria as it moves through the birth canal.
Finally, researchers at Tufts reported last month in The Journal of Asthma that a baby's place of birth also influences asthma risk. In a study of black families in Dorchester, Massachusetts, they found that babies born in the United States were more likely to have asthma than black children born outside the country.
The reason for the disparity is not clear, but the sterile conditions under which American babies are born may be a factor.
Babies in developing countries encounter more infections, so they may be better equipped to withstand less serious assaults associated with asthma, like mold and dust mites.
Primal, acute and easily duped: Our sense of touch
By Natalie Angier
Tuesday, December 9, 2008
Imagine you're in a dark room, running your fingers over a smooth surface in search of a single dot the size of this period. How high do you think the dot must be for your finger pads to feel it? A hundredth of an inch above background? A thousandth?
Well, take a tip from the economy and keep downsizing. Scientists have determined that the human finger is so sensitive it can detect a surface bump just one micron high. All our punctuation point need do, then, is poke above its glassy backdrop by 1/400,000th of an inch the diameter of a bacterial cell and our fastidious fingers can find it. The human eye, by contrast, can't resolve anything much smaller than 100 microns. No wonder we rely on touch rather than vision when confronted by a new roll of toilet paper and its Abominable Invisible Seam.
Biologically, chronologically, allegorically and delusionally, touch is the mother of all sensory systems. It is an ancient sense in evolution: even the simplest single-celled organisms can feel when something brushes up against them and will respond by nudging closer or pulling away. It is the first sense aroused during a baby's gestation and the last sense to fade at life's culmination. Patients in a deep vegetative coma who seem otherwise lost to the world will show skin responsiveness when touched by a nurse.
Like a mother, touch is always hovering somewhere in the perceptual background, often ignored, but indispensable to our sense of safety and sanity. "Touch is so central to what we are, to the feeling of being ourselves, that we almost cannot imagine ourselves without it," said Chris Dijkerman, a neuropsychologist at the Helmholtz Institute of Utrecht University in the Netherlands. "It's not like vision, where you close your eyes and you don't see anything. You can't do that with touch. It's always there."
Long neglected in favor of the sensory heavyweights of vision and hearing, the study of touch lately has been gaining new cachet among neuroscientists, who sometimes refer to it by the amiably jargony term of haptics, Greek for touch. They're exploring the implications of recently reported tactile illusions, of people being made to feel as though they had three arms, for example, or were levitating out of their bodies, with the hope of gaining insight into how the mind works.
Others are turning to haptics for more practical purposes, to build better touch screen devices and robot hands, a more well-rounded virtual life. "There's a fair amount of research into new ways of offloading information onto our tactile sense," said Lynette Jones of the Massachusetts Institute of Technology. "To have your cellphone buzzing as opposed to ringing turned out to have a lot of advantages in some situations, and the question is, where else can vibrotactile cues be applied?"
For all its antiquity and constancy, touch is not passive or primitive or stuck in its ways. It is our most active sense, our means of seizing the world and experiencing it, quite literally, first hand. Susan Lederman, a professor of psychology at Queen's University in Canada, pointed out that while we can perceive something visually or acoustically from a distance and without really trying, if we want to learn about something tactilely, we must make a move. We must rub the fabric, pet the cat, squeeze the Charmin. And with every touchy foray, Heisenberg's Uncertainty Principle looms large. "Contact is a two-way street, and that's not true for vision or audition," Lederman said. "If you have a soft object and you squeeze it, you change its shape. The physical world reacts back."
Another trait that distinguishes touch is its widespread distribution. Whereas the sensory receptors for sight, vision, smell and taste are clustered together in the head, conveniently close to the brain that interprets the fruits of their vigils, touch receptors are scattered throughout the skin and muscle tissue and must convey their signals by way of the spinal cord. There are also many distinct classes of touch-related receptors: mechanoreceptors that respond to pressure and vibrations, thermal receptors primed to sense warmth or cold, kinesthetic receptors that keep track of where our limbs are, and the dread nociceptors, or pain receptors nerve bundles with bare endings that fire when surrounding tissue is damaged.
The signals from the various touch receptors converge on the brain and sketch out a so-called somatosensory homunculus, a highly plastic internal representation of the body. Like any map, the homunculus exaggerates some features and downplays others. Looming largest are cortical sketches of those body parts that are especially blessed with touch receptors, which means our hidden homunculus has a clownishly large face and mouth and a pair of Paul Bunyan hands. "Our hands and fingers are the tactile equivalent of the fovea in vision," said Dijkerman, referring to the part of the retina where cone cell density is greatest and visual acuity highest. "If you want to explore the tactile world, your hands are the tool to use."
Our hands are brilliant and can do many tasks automatically button a shirt, fit a key in a lock, touch type for some of us, play piano for others. Lederman and her colleagues have shown that blindfolded subjects can easily recognize a wide range of common objects placed in their hands. But on some tactile tasks, touch is all thumbs. When people are given a raised line drawing of a common object, a bas-relief outline of, say, a screwdriver, they're stumped. "If all we've got is contour information," Lederman said, "no weight, no texture, no thermal information, well, we're very, very bad with that."
Touch also turns out to be easy to fool. Among the sensory tricks now being investigated is something called the Pinocchio illusion. Researchers have found that if they vibrate the tendon of the biceps, many people report feeling that their forearm is getting longer, their hand drifting ever further from their elbow. And if they are told to touch the forefinger of the vibrated arm to the tip of their nose, they feel as though their nose was lengthening, too.
Some tactile illusions require the collusion of other senses. People who watch a rubber hand being stroked while the same treatment is applied to one of their own hands kept out of view quickly come to believe that the rubber prosthesis is the real thing, and will wince with pain at the sight of a hammer slamming into it. Other researchers have reported what they call the parchment-skin illusion. Subjects who rubbed their hands together while listening to high-frequency sounds described their palms as feeling exceptionally dry and papery, as though their hands must be responsible for the rasping noise they heard. Look up, little Pinocchio! Somebody's pulling your strings.
The pain may be real, but the scan is deceiving
By Gina Kolata
Tuesday, December 9, 2008
Cheryl Weinstein's left knee bothered her for years, but when it started clicking and hurting when she straightened it, she told her internist that something was definitely wrong.
It was the start of her medical odyssey, a journey that led her to specialists, physical therapy, Internet searches and, finally, an M.R.I. scan that showed a torn cartilage and convinced her that her only hope for relief was to have surgery to repair it. But in fact, fixing the torn cartilage that was picked up on the scan was not going to solve her problem, which, eventually, she found was caused by arthritis.
Scans more sensitive and easily available than ever are increasingly finding abnormalities that may not be the cause of the problem for which they are blamed. It's an issue particularly for the millions of people who go to doctors' offices in pain.
The scans are expensive Medicare and its beneficiaries pay about $750 to $950 for an M.Rhode Island scan of a knee or back, for example. Many doctors own their own scanners, which can provide an incentive to offer scans to their patients.
And so, in what is often an irresistible feedback loop, patients who are in pain often demand scans hoping to find out what is wrong, doctors are tempted to offer scans to those patients, and then, once a scan is done, it is common for doctors and patients to assume that any abnormalities found are the reason for the pain.
But in many cases it is just not known whether what is seen on a scan is the cause of the pain. The problem is that all too often, no one knows what is normal.
"A patient comes in because he's in pain," said Dr. Nelda Wray, a senior research scientist at the Methodist Institute for Technology in Houston. "We see something in a scan, and we assume causation. But we have no idea of the prevalence of the abnormality in routine populations."
Now, as more and more people have scans for everything from headaches to foot aches, more are left in a medical lurch, or with unnecessary or sometimes even harmful treatments, including surgery.
"Every time we get a new technology that provides insights into structures we didn't encounter before, we end up saying, 'Oh, my God, look at all those abnormalities.' They might be dangerous," said Dr. David Felson, a professor of medicine and epidemiology at Boston University Medical School. "Some are, some aren't, but it ends up leading to a lot of care that's unnecessary."
That was what almost happened with Weinstein, an active, athletic 64-year-old who lives in London, New Hampshire And it was her great fortune to finally visit a surgeon who told her so. He told her bluntly that her pain was caused by arthritis, not the torn cartilage.
No one had told her that before, Weinstein said, and looking back on her quest to get a scan and get the ligament fixed, she shook her head in dismay. There's no surgical procedure short of a knee replacement that will help, and she's not ready for a knee replacement.
"I feel that I have come full circle," she said. "I will cope on my own with this knee."
In fact, Weinstein was also lucky because her problem was with her knee. It's one of only two body parts the other is the back where there are good data on abnormalities that turn up in people who feel just fine, indicating that the abnormalities may not be so abnormal after all.
But even the data on knees comes from just one study, and researchers say the problem is far from fixed. It is difficult to conduct scans on people who feel fine most do not want to spend time in an M.Rhode Island machine, and CT scans require that people be exposed to radiation. But that leaves patients and doctors in an untenable situation.
"It's a concern, isn't it?" Dr. Jarvik said. "We are trying to fix things that shouldn't be fixed."
As a rheumatologist, Dr. Felson saw patient after patient with knee pain, many of whom had already had scans. And he was becoming concerned about their findings.
Often, a scan would show that a person with arthritis had a torn meniscus, a ligament that stabilizes the knee. And often the result was surgery orthopedic surgeons do more meniscus surgery than any other operation. But, Dr. Felson wondered, was the torn ligament an injury causing pain or was the arthritis causing pain and the tear a consequence of arthritis?
That led Dr. Felson and his colleagues to do the first and so far the only large study of knees, asking what is normal. It involved M.Rhode Island scans on 991 people ages 50 to 90. Some had knee pain, others did not.
On Sept. 11, Dr. Felson and his colleagues published their results in The New England Journal of Medicine: meniscal tears were just as common in people with knee arthritis who did not complain of pain as they were in people with knee arthritis who did have pain. They tended to occur along with arthritis and were a part of the disease process itself. And so repairing the tears would not eliminate the pain.
"The rule is, as you get older, you will get a meniscal tear," Dr. Felson said. "It's a function of aging and disease. If you are a 60-year-old guy, the chance that you have a meniscal tear is 40 percent."
It is a result that paralleled what spine researchers found over the past decade in what is perhaps the best evidence on what shows up on scans of healthy people. "If you're going to look at a spine, you need to know what that spine might look like in a normal patient," said Dr. Michael Modic, chairman of the Neurological Institute at the Cleveland Clinic.
After Dr. Modic and others scanned hundreds of asymptomatic people, they learned abnormalities were common.
"Somewhere between 20 and 25 percent of people who climb into a scanner will have a herniated disk," Dr. Modic said. As many as 60 percent of healthy adults with no back pain, he said, have degenerative changes in their spines.
Those findings made Dr. Modic ask: Why do a scan in the first place? There are some who may benefit from surgery, but does it make sense to routinely do scans for nearly everyone with back pain? After all, one-third of herniated disks disappear on their own in six weeks, and two-thirds in six months.
And surgeons use symptoms and a physical examination to identify patients who would be helped by operations. What extra medical help does a scan provide? So Dr. Modic did another study, this time with 250 patients. All had M.Rhode Island scans when they first arrived complaining of back pain or shooting pains down their leg, which can be caused by a herniated disc pressing on a nerve in the spine. And all had scans again six weeks later. Sixty percent had herniated disks, the scans showed.
Dr. Modic gave the results to only half of the patients and their doctors the others had no idea what the M.Rhode Island's revealed. Dr. Modic knew, though.
In 13 percent of the patients, the second scan showed that the herniated disk had become bigger or a new herniated disk had appeared. In 15 percent, the herniated disk had disappeared. But there was no relationship between the scan findings at six weeks and patients' symptoms. Some continued to complain of pain even though their herniated disk had disappeared; others said they felt better even though their herniation had grown bigger.
The question, though, was whether it helped the patients and their doctors to know what the M.Rhode Island's had found. And the answer, Dr. Modic reported, is that it did not. The patients who knew recovered no faster than those who did not know. However, Dr. Modic said, there was one effect of being told patients felt worse about themselves when they knew they had a bulging disk.
"If I tell you that you have a degenerated disk, basically I'm telling you you're ugly," Dr. Modic said.
Scans, he said, are presurgical tools, not screening tools. A scan can help a surgeon before he or she operates, but it does not help with a diagnosis.
"If a patient has back or leg pain, they should be treated conservatively for at least eight weeks," Dr. Modic said, meaning that they take pain relievers and go about their normal lives. "Then you should do imaging only if you are going to do surgery."
That message can be a hard sell, he acknowledged. "A lot of people are driven by wanting to have imaging," Dr. Modic said. "They are miserable as hell, they can't work, they can't sit. We look at you and say, 'We think you have a herniated disk. We say the natural history is that you will get better. You should go through six to eight weeks of conservative management.' "
At the Partners Healthcare System in Boston, spine experts have the same struggle to convince patients that an M.Rhode Island scan is not necessarily desirable, said Dr. Scott Gazelle, director of radiology there.
"The consensus is that you are a surgical candidate or not based on your history and physical findings, not on imaging findings," he said.
Dr. Gazelle had a chance last year to test his own convictions. He had the classic symptoms of a herniated disk shooting pains down his left leg, a numb foot and difficulty walking.
Dr. Gazelle went to see his primary-care doctor but, he said, "I didn't get an M.Rhode Island" That decision, he added, "was the right thing to do."
About three months later, he had recovered on his own.
In 1998, two medical scientists, writing in The Lancet, proposed what sounded like a radical idea. Instead of simply providing patients and their doctors with the results of an X-ray or an M.Rhode Island scan, he said, radiologists should put the findings in context. For example, they wrote, if a scan showed advanced disk deterioration, the report should say, "Roughly 40 percent of patients with this finding do not have back pain so the finding may be unrelated."
It is an idea that only would work for back pain, because that is the one area where radiologists have enough data. But it made eminent sense to Dr. Jarvik. "It gives referring physicians some sort of context," he said.
So, a few years ago, with some trepidation, his radiology group starting including epidemiological data in their reports. "We thought, 'What's going to be the reaction among referring physicians?' " Dr. Jarvik said. Their fear was that doctors would start choosing other places for M.Rhode Island's and that Dr. Jarvik's group would lose business.
Because of the way the university's records are kept, it's hard to know whether the new reporting system had that effect, Dr. Jarvik said. But he was heartened by the responses of some doctors, like Dr. Sohail Mirza, who recently moved to Dartmouth Medical School.
"We often see patients who have already had M.Rhode Island scans," Dr. Mirza said. "They are fixated on the abnormality and come to a surgeon to try to get the abnormality fixed. They'll come in with the report in hand."
The new sort of report, Dr. Mirza said, was "very helpful information to have when talking to patients and very helpful for patients to help them understand that the abnormalities were not catastrophic findings."
Others, like Dr. Modic, are hesitant about reporting epidemiology along with a patient's scan findings.
"It's an interesting idea," he said. But, he added: "The problem isn't what happens after they get their imaging. It's that they get the imaging in the first place."
That was what happened with Weinstein.
When she started looking up her symptoms on the Internet, she decided she probably had a meniscus tear. "I was very forceful in asking for an M.Rhode Island," she said.
And when the scan showed that her meniscus was torn, she went to a surgeon expecting an operation.
He X-rayed her knee and told her she had arthritis. Then, Weinstein said, the surgeon looked at her and said, "Let me get this straight. Are you here for a knee replacement?"
She said no, of course not. She skis, she does aerobics, she was nowhere near ready for something so drastic.
Then the surgeon told her that there was no point in repairing her meniscus because that was not her problem. And if he repaired the cartilage, her arthritic bones would just grind it down again.
For now, Weinstein says she is finished with her medical odyssey.
"I continue to live with this, whatever they call it, this arthritic knee," she said.
More Articles in Health » A version of this article appeared in print on December 9, 2008, on page D1 of the New York edition.
Winter and economy chilling China quake zone
Tuesday, December 9, 2008
DUJIANGYAN, China: Seven months after the Sichuan earthquake levelled wide swathes of southwest China, millions of victims are battling biting cold and a fast-cooling economy to rebuild their shattered lives.
A rapid slowdown in Chinese tourism amid the global financial crisis only compounds the pain in Dujiangyan, a city surrounded by ancient waterworks but reduced to rubble by the May 12 quake which killed more than 80,000 people.
The downtown of Dujiangyan, a once thriving commercial hub popular with tourists and weekend visitors, is now eerily quiet, especially at night.
Many of the buildings here still stand, albeit at an angle, but most are empty. More than half the kerbside stores are shut, and shoppers are few and far between in the ones that are open.
"There are many fewer tourists here than before," said a gatekeeper at a local scenic spot surnamed Teng. "Partly because of the earthquake, partly because of the economic crisis.
"People will not go out for fun if they have no money."
Yang Tingxiu and her husband, both in their 50s, ran a business before the disaster, but now scratch out a living doing cleaning jobs around their temporary housing community.
"We lost everything in the earthquake except our lives," said Yang, who lives with her husband in a portable dwelling furnished with an old, donated television and a gas cylinder.
"We just scrape along. The only way for us to survive in winter is to put on more clothes."
BLACK YEAR FOR TOURISM
It has been a black year for China's tourism industry, hit by unseasonably cold weather last winter, by restrictions on travel to Lhasa and other Tibetan areas following a Tibetan uprising in March, and by the Olympics, when many Chinese stayed at home to watch the Games rather than travel in August.
China's National Tourism Administration has pledged to return up to 70 percent of travel agencies' deposits -- funds kept in reserve to compensate tourists in case of accidents and other claims -- to stem the flow of red ink in the sector, the China Daily said on Tuesday.
But in the quake zone, despite China's plans to spend 1 trillion yuan (98 billion pounds) on rebuilding, the fiscal stimulus package remains cold comfort for millions still living in tents and temporary housing.
A Siberian cold front lashed China last week, plunging temperatures in quake zones to below freezing. Officials forecast another cold winter this year.
Conditions in the temporary communities are spartan but livable, with communal kitchens, supermarkets, schools and even massage parlours. Some residents have grumbled online that the government has not provided enough assistance and the high price of vegetables is a recurring gripe.
"Dujiangyan's economy has shrunk to the level of the very beginning of China's reform and opening up," said Teng, referring to economic reforms launched 30 years ago this month.
Quake-hit families in Dujiangyan have been offered 140,000 yuan or a new 70-sq-m apartment on the condition they give up their property rights to their past homes.
For Teng, the gatekeeper, the rebuilding shows the government has done a good job.
"The relief is working and welfare is better than before."
Xiang'e, a nearby town that lost nearly all its children when the school collapsed, is now a massive construction site, complete with billboards showing the blueprints of "our new hometown."
"The construction needs some time," said a young bulldozer driver at Xiang'e. "But as we are working, it will be done soon."
(For more information on humanitarian crises and issues visit www.alertnet.org)
(Reporting by Beijing newsroom; Writing by Ian Ransom and Lucy Hornby; Editing by Bill Tarrant)
Termites studied in quest for green fuels
By Carolyn Y. Johnson
The Boston Globe
Tuesday, December 9, 2008
Researchers have scooped soil near a reservoir in Massachusetts, visited a Russian volcano, and scoured the bottom of the sea looking for microbes that hold the key to new biofuels. Now, they are investigating termites more deeply.
The otherwise dreaded insect is a model bug bioreactor, adept at the difficult task of breaking down wood and turning it into fuel.
Learning the secret of that skill could open the door to creating a new class of plant-based fuels to offset a reliance on petroleum products.
What scientists have learned so far, however, suggests that it will not be easy to duplicate nature.
Over the past year, several studies elucidating termite innards have appeared in mainstream science journals. Last month, Japanese researchers added their own report on just how termites digest wood. A key, they said, can be found within termites' bodies like nested Russian dolls - a bacteria that lives within a microorganism that lives within the termite gut.
It is an intriguing, and complicated, symbiosis.
"We only need to look to nature to get a clear sign this is not going to have a simple solution," said Jared Leadbetter, associate professor of environmental microbiology at the California Institute of Technology, who was not involved in the study. "With 100 million years-plus to streamline this process, you have species living within species, living within species. So we better embrace the fact this is going to have a complex answer."
In a study published last year, Leadbetter and others explored a small sample of termite gut bacteria genes, and found 1,000 involved in breaking down wood.
The new study, which focuses on one of the most voracious of the 2,600 termite species, illustrates yet more complexity. The work, published in the journal Science, shows how a partnership within termite guts helps explain wood digestion.
The microorganism, called P. grassi, breaks down cellulose, a component of wood. A bacteria that lives inside that microorganism provides nitrogen, which is necessary for life, but scarce in wood. Researchers have sequenced the genes of the bacteria and some of the protozoa and are now analyzing the ones involved in digesting cellulose in hopes of better understanding the secrets of the digestion process.
"As a team, we are aiming to find out factors useful for making a novel biofuel," one of the authors, Yuichi Hongoh, of the Ecomolecular Biorecycling Science Research Team at Riken, a research institute in Wako, Japan, wrote in an e-mail.
The challenge of making fuel from rigid plants, like trees, is that they lock away energy in complex molecules.
"Cellulose is a very, very tough molecule. You can hit it with acid - fairly concentrated acid - and it will just sit there," said Alexander DiIorio, director of the bioprocess center at Worcester Polytechnic Institute in Massachusetts. He is looking at everything from termites to rotting wood foraged from local forests in the search for ways to make cellulosic ethanol. His work is funded by the California biofuels company EdenIQ.
Adding to the difficulty is that a rigid material called lignin is woven in with the cellulose. Researchers are looking for a variety of solutions to these problems. In another scourge-turned-science moment, Pennsylvania State University researchers reported this summer that a fungus harbored in the gut of the Asian longhorned beetle that is ravaging maples in the United States could help degrade lignin.
But even when promising enzymes and microbes have been identified, the work is not straightforward.
For example, a microbe discovered in a soil sample from the Quabbin Reservoir in Massachusetts can convert woody plant matter directly into ethanol, according to Sue Leschine, a professor of microbiology at the University of Massachusetts, Amherst. But Qteros, the company she co-founded to work on the microbe, is untangling problems, like how to prepare the raw materials for microbe digestion more cheaply and speed up the process.
Entrepreneurs are moving forward. Mascoma, a cellulosic ethanol company based in Boston, announced in October that it had raised $49.5 million toward building a plant in Michigan.
Verenium, in Cambridge, Massachusetts, built a demonstration plant in Louisiana and is working to extract fuel from materials like bagasse, the remnants of sugar cane.
Verenium, like other companies, is interested in termite innards, but ultimately is taking a much broader approach. It is scanning the great microbiological diversity of the world, agnostic to whether it is from a termite or the rainforest floor.
To see the biofuel problem as a matter of scientific breakthroughs is itself misleading, Leadbetter said, considering the challenges posed by logistical issues like building plants, distribution networks and a supply chain of biomass.
Divided Kosovo city mines a dream of riches
Tuesday, December 9, 2008
By Adam Tanner
MITROVICA, Kosovo (Reuters) -- Nazmi Mikullovci puts the value of minerals beneath the ground here at 10 billion euros (8.7 billion pounds). But a river running through the area marks a rift so deep they cannot help the Balkans' newest state.
The Trepca mines are a loss-making mountain of debt, environmental damage and legal tangles straddling a disputed border between Serbia and Kosovo, the Albanian majority republic which declared independence from Serbia in February.
The muddied brown of the Ibar River marks that border.
On Tuesday, a mission of 1,900 European and American officials starts arriving to foster peace and stability under a United Nations plan.
Such stability could help revive the mines, a vast complex of lead, zinc and silver that in the past was a font of Yugoslav export revenue and employed 23,000 people.
With mining operations mostly halted during the 1998-99 Kosovo war, many of its factories and warehouses now lie abandoned, a jumble of rusted conveyer belts, pipes and cracked windows where weeds grow tall.
Across the river, half the complex lies in similar disrepair in the northern half of Mitrovica, run by Serbs. Albanian Kosovars rarely venture there to face the Serbs' bitter opposition to independence.
Mikullovci, a 65-year-old Albanian who directs the south side, has not crossed to the northern section in six years.
"It is strange," Mikullovci said. "In 2002, the last time I was in the north part of Trepca, I had problems, and they asked me so as to avoid future problems not to come again."
In the past Serb and Albanian miners cooperated, and experts say they could do so again if the mission -- overseen by the European Union in Kosovo up to the Ibar River and by the United Nations in Serbian areas -- helps ease tensions.
"Given the right circumstances they can work together," said Michael Palairet, an honorary fellow at the University of Edinburgh who has written a history of the Trepca mines.
Finding a legal and political basis for the mines would be a significant step for the country, recognized by 53 countries so far but not Russia or Serbia.
Wedged between Serbia, Macedonia, Albania and Montenegro, its main exports are scrap metal and minerals along with food. Unemployment is around 45 percent and with corruption widespread, Kosovars make just $1,800 (1,200 pounds) per person annually -- a third less than their cousins in neighbouring Albania, according to the U.S. State Department.
$13 BILLION HEADACHE
Economically, the timing for Trepca could hardly be less propitious. Industry experts say it is the world's third largest mining region for lead, zinc and silver, but as the world economy slows prices for metals have slumped.
Silver has more than halved from its peak, zinc has fallen more than 60 percent this year, and lead is worth less than a third of its value at the height of the commodities boom.
"This year we have faced many problems because of the prices on the world market," Mikullovci said, adding the Trepca mines face a 1.2 million euro loss in 2008, excluding labour cost subsidies. "The situation at the moment is not sustainable."
Last year the mines broke even thanks to a three-million euro Kosovo government subsidy; the north side gets Serbian subsidies, said Mikullovci.
The south mines are running at a fraction of former capacity, extracting 7,000 tons of zinc concentrate a month, 4,000 tons of lead concentrate, and 4,000 kg of silver a year, Mikullovici said. The north side produces similar amounts.
Mikullovci estimates the mines' debt at 50 to 250 million euros, a hazy number as many past claims are disputed.
Environmental clean-up costs could add another 120 to 180 million euros, according to international officials based in Kosovo. Updating technology for major future operations could cost another 100-500 million euros.
Its ownership is tangled too. A socially owned firm under Yugoslav-era designation, the company is under government protection as it reorganizes. Even its name, "Trepca Under UNMIK Administration" is a reference to the local U.N. force.
"It's like a Latin American telenovella on television -- it's a very long story," said Mikullovci.
WORK FOR LAWYERS
"You've got, obviously, economic problems ... technical and engineering problems ... and political problems," said historian Palairet. "It's going to be a wonderful job for lawyers."
For the mine itself, some see no immediate hope.
"This global economic crisis discourages potential investors," south Mitrovica Mayor Bajram Rexhepi, Kosovo's first elected post-war prime minister, told Reuters. "I don't think Trepca has a perspective for more than five or 10 years.
"They try to present it as a success story but in reality it was not. People live with the illusion and dream that Trepca would be profitable again," he said.
Over on the Serb side of the river, Marko Jaksic, an influential Serb nationalist hospital director, is equally blunt: "If I were a businessman, it would be the last place I would invest my money."
Mikullovci acknowledges the difficulty but -- as he must -- sees a way forward. He believes a swift privatization would help, saying Trepca could be in private hands by end-2010.
One plan under consideration would be to sell off Trepca's assets while separating its debts and legal liabilities such as the future cost of environmental clean-up. Sale proceeds would fund a debt and legal settlement for past creditors.
"Our idea in the near future is for either a concession or privatization in 2009," Deputy Prime Minister Hajredin Kuci told Reuters.
Whoever would take on such headaches would make a big difference to the 2,500 or so people who work in the complexes. More than half of them are in the south and earn around 236-325 euros monthly.
As they head in thick rubber boots and helmet lamps for an elevator ride down, the ageing workforce entering the south mines pass under a large sign in Albanian: "Good Luck."
(Additional reporting by Branislav Krstic; Editing by Sara Ledwith)
EU mission deploys in Kosovo
Tuesday, December 9, 2008
By Branislav Krstic
The European Union began a long-delayed police and justice mission in Kosovo Tuesday as international peacekeepers stepped up security in the north where Serbs oppose the move.
The first of a 1,900-strong force of European and American police, customs agents, judges and prosecutors began deployment in mainly Albanian Kosovo which seceded from Serbia in February.
"Today marks an important new step in the ever closer relationship between the EU and Kosovo," said Pieter Feith, the top EU official who oversees implementation of Kosovo's independence.
In the Serb-controlled part of the divided flashpoint town of Mitrovica, EU policemen arrived wearing black flak jackets with red badges from the mission, known as EULEX, pinned on their shoulders.
In February, the European Union decided to send a mission to take over from the U.N. mission running the province since 1999 when NATO bombing drove Serb forces out. But its deployment has been delayed due to Serb opposition which sees the effort as a symbol of Kosovo independence.
"Today is an special day, a day in which Kosovo is opening a new chapter with EULEX deployment throughout its territory," Kosovo Prime Minister Hashim Thaci told reporters.
Kosovo's minority Serb population of about 120,000 refuse to deal with Pristina institutions, leaving them in an uncertain legal status between Kosovo and Serbia authorities.
The situation is especially stark in Mitrovica, where Serbs live on one side of the river and Albanians on the other with little interaction. Younger residents rarely speak each other's language.
"The mission needs to perform its task on the basis of the full national support of all communities, of all the people here in Kosovo," the EU's Feith said.
EULEX spokesman Victor Reuter said about 100 police, border control and customs officers and advisers would be deployed in the Serb-controlled north.
The EU hopes its new mission will help build government institutions in the poorest corner of the Balkans, a region still recovering from the 1990s wars when Yugoslavia collapsed.
French KFOR troops stepped up security in the Serb-held north to prevent violence; no incidents were reported.
French Colonel Herve Messiot, in charge of EULEX command in the area, said his policemen in Mitrovica would have an advisory role. The mission will deal with organised crime, ethnic-based crime and war crimes, as well as when local authorities have unsolved cases.
The 27-nation EU won Serbia's consent by amending the deployment plan to enable police, judiciary and customs officers in Serb-held areas to report to the remaining U.N. administration. Albanian counterparts will work within Kosovo's ministry of interior and with EULEX.
Pristina's leadership opposed the deployment plan which said it would lead to a de facto partition of Kosovo. Several thousand ethnic Albanians have staged two protests against EULEX in Pristina in the past two weeks.
(Additional reporting by Shaban Buza in Pristina; Writing by Ivana Sekularac; editing by Myra MacDonald)
German commuters to get a windfall
By Judy Dempsey
Tuesday, December 9, 2008
BERLIN: German commuters can expect a tax windfall in the coming months after the Constitutional Court ruled Tuesday that a government decision to curtail subsidies for commuters last year was illegal.
The decision means that Chancellor Angela Merkel's coalition government of conservatives and Social Democrats will now have to find 7.5 billion, or about $9.7 billion, to reimburse commuters in a move that could further strain the government's attempts to reduce the national debt as Germany faces its worst recession in 14 years.
Merkel, who had come under strong pressure even from her own conservative bloc to reintroduce the allowances as a way to spur the economy and increase consumer spending, said commuters would be reimbursed. "It is absolutely right, given the economic situation, to give the people back this money," Merkel said in Warsaw, where she was meeting with Prime Minister Donald Tusk.
Merkel has been criticized abroad and by the business community at home for not taking sufficient action to protect Germany from the global financial crisis. So far she has kept all options open with regard to cutting taxes as a way to bolster spending, prevent unemployment from increasing and reduce the impact of the recession.
The government has allocated 500 billion in guarantees for banks and a 32 billion program of stimulus measures. In practice, as Merkel recently acknowledged, it means that the government's attempt to balance the budget by 2011 has been deferred until 2013.
Finance Minister Peer Steinbrück, a Social Democrat, agreed that the government had no alternative but to give the money back. "Now that we have to raise debt for the repayment of the commuter subsidy anyway," he said in a statement, "the reimbursement should be made as quickly as possible, not only in the interests of commuters but also to hopefully give an additional impetus to spending."
About 3 billion could be returned to 20 million commuters in the first quarter of 2009, the Finance Ministry said in a statement. The total sum of the payments could be spread out over three years and could help bolster spending, it added. The ministry said the average taxpayer who lived about 20 kilometers, or 12 miles, from the workplace would be eligible for about 350.
The powerful car-industry lobby, VDA, welcomed the ruling, saying the tax break would help to tackle "a dramatic recession."
Merkel and Steinbrück introduced the restrictions on commuter subsidies in January 2007 in a bid to cut the deficit. As of 2007, the tax break - 30 euro cents a kilometer - was available only to commuters who lived more than 20 kilometers from their workplace. The measure had previously applied to all taxpayers, regardless of distance from work.
The Constitutional Court said in a statement Tuesday that "the goal of budget consolidation, which was mentioned almost exclusively during the legislative procedure, cannot justify the abolition."
The government was sharply criticized for the measure, particularly in northern and eastern Germany where commuters tend to travel longer distances to work. At the same time, the government raised the sales tax from 16 percent to 19 percent to compensate for reductions in social welfare contributions by employers.
Paris gem heist reward offered
Tuesday, December 9, 2008
PARIS: Insurers are prepared to pay a $1 million (675,000 pound) reward for information leading to the recovery of gems stolen from a luxury Paris jewellers last week in one of the biggest hold-ups in French criminal history.
"We're hoping to hear from someone who has heard something and we will pay the first person who brings us valid information that allows us to find the jewels," John Shaw, of Paris loss adjustors SW Associates, told France Info radio on Tuesday. "That person will get $1 million."
A gang of armed men, some disguised as women, stole around 85 million euros (73 million pound) worth of gems on Friday from jewellers Harry Winston's on the exclusive Avenue Montaigne just off the Champs Elysees.
The robbery, described in local media as the most lucrative ever in France and reminiscent of the old-style heists beloved of generations of French thrillers, garnered wide media interest and the insurers are expecting to have to field a wave of calls.
"I imagine that with a reward of that amount we're going to have a lot of calls from people who are curious and it's not worth sending us pieces of advice or general tips," Shaw said. "It's a reward that's worth it."
Mumbai attackers were part of a larger group, Indian police say
By Jane Perlez and Salman Masood
Tuesday, December 9, 2008
ISLAMABAD, Pakistan: The Mumbai police said Tuesday that the 10 men who carried out the terrorist attacks here belonged to a group of 30 recruits of the Lashkar-e-Taiba Pakistani militant organization who had been selected for suicide missions, and that the whereabouts of the other 20 were unknown.
It was the first time that that the Indian police had disclosed the larger number of suicide recruits, and while they said there was no reason to believe that the other 20 were in India, they expressed concern about such a possibility.
"Another 20 were ready to die," said Deven Bharti, a Mumbai Police deputy commissioner, in an interview. "This is the very disturbing part of it."
The Indian police have consistently maintained that only 10 gunmen participated in the Nov. 26-29 attacks in Mumbai that left 171 people dead and raised tensions between the nuclear-armed neighbors India and Pakistan to the the highest in years.
Bharti said the information about the other recruits came from the sole surviving attacker, Mohammed Ajmal Kasab, who was arrested during the attacks and has been in police custody ever since.
The deputy commissioner also said that based on the questioning of Kasab, the 30 recruits were provided with highly specialized training, including learning marine combat skills.
Once Kasab and his nine fellow attackers were selected by Lashkar leaders, they were kept sequestered in a house for three months, the deputy commissioner said. Here they were further divided into two-man teams, each team assigned a different target within Mumbai to attack, information that they were forbidden from sharing with one another. They never saw the other 20 trainees again, the deputy commissioner said, according to the information provided by Kasab.
The Indian police also on Tuesday provided further names and photographs of the Mumbai attackers, and supplied new details of the weaponry and communications and navigation equipment that they used during their assault.
The authorities had already identified two of the Mumbai gunmen, including Kasab, the lone survivor from the attacks, from the village of Faridkot, and Ismail Khan, from Deira Ismail Khan.
Each of the men had aliases, and they knew each other only by those aliases during their training, the police said. Only in the final few days before the attack, while they traveled by boat from the port of Karachi in Pakistan across the Arabian Sea to Mumbai, did they learn each others' true names, said Rakesh Maria, Mumbai's joint police commissioner.
At a news conference in Mumbai, Maria said the attackers carried a dozen grenades, a 9 mm handgun with two 18 round clips and an AK-47, along with seven to nine 30 round magazines, in addition to more than 100 rounds of loose ammunition. Maria had said previously that each terrorist also carried an 8 kilogram bomb. Three of these bombs were recovered and diffused, while the others exploded at various locations around the city, according to the police.
As the Indian police gave more information about the attackers, the Pakistani government publicly confirmed for the first time on Tuesday that its forces had seized two militant leaders, including the operational commander of Lashkar-e-Taiba.
The confirmation of the arrest of the Lashkar leader, Zaki ur-Rehman Lakhvi, was made by Pakistani Defense Minister Ahmad Mukhtar in an interview on Indian television. It was the furthest the authorities in Pakistan have yet gone in publicly acknowledging the possible complicity of Lashkar-e-Taiba in the Mumbai attacks.
Mukhtar identified the second militant leader arrested as Masood Azhar, head of Jaish-e-Muhammad, another banned militant group based in Pakistan.
Azhar, who was freed in 1999 in exchange for hostages on a hijacked Indian Airlines plane in Kandahar, Afghanistan, was on a list presented to Pakistan by the Indian government days after the attacks in Mumbai. The list contained the names of 20 suspects wanted in connection with other terrorist attacks and pending criminal cases.
Lakhvi "has been picked up," Mukhtar said, according to the television channel, CNN-IBN. "About Masood Azhar, I don't think we had decided yesterday to pick him up but our president is determined that we remove all irritants and as a small irritant he has been picked up." He said that President Asif Ali Zardari of Pakistan was "determined that we must cooperate with India."
Zardari himself, in an op-ed article published in the Tuesday edition of The New York Times, said Pakistan feels India's pain and that Pakistan "is committed to the pursuit, arrest, trial and punishment of anyone involved in these heinous attacks." But Zardari also cautioned India against what he called "hasty judgments and inflammatory statements."
After mounting pressure from the United States and India, Pakistani authorities on Sunday raided a camp run by Lashkar-e-Taiba, the militant group, in Muzaffarabad, the capital of Pakistani-administered Kashmir, Pakistani and American officials said.
That operation appeared to be Pakistan's first concrete response to the demands from India and the United States to take action against the militants suspected in the attacks.
Since then, the authorities have carried out raids on at least five more offices of Lashkar-e-Taiba, the Associated Press reported Tuesday, citing an unidentified senior Pakistani security official. The official said that 20 more people had been arrested.
It was unclear from the defense minister's remarks whether Lakhvi was detained in the first raid on Sunday. Lashkar-e-Taiba was founded 20 years ago with the help of Pakistan's intelligence agencies as a proxy force to challenge Indian control of part of Muslim-dominated Kashmir.
American intelligence and counterterrorism officials told The New York Times that Pakistan's spy agency, Inter-Services Intelligence, continued nurturing the group, even after 9/11, when the Pakistani government pledged to sever its ties with militant groups.
While investigators and intelligence officials say there is no hard evidence linking Pakistan's spy agency to the Mumbai attacks, they have pointed to Lashkar as the likely culprit.
Mumbai attackers used sophisticated technology
By Jeremy Kahn
Tuesday, December 9, 2008
MUMBAI: The terrorists who struck this city in November stunned the authorities not only with their use of sophisticated weaponry but also with their comfort with modern technology.
The terrorists navigated across the Arabian Sea to Mumbai from Karachi, Pakistan, with the help of a global positioning system handset. While under way, they communicated using a satellite phone with those in Pakistan believed to have coordinated the attacks. They recognized their targets and knew the most direct routes to reach them in part because they had studied satellite photos from Google Earth.
And, perhaps most significantly, throughout the three-day siege at two luxury hotels and a Jewish center, the Pakistani-based handlers communicated with the attackers using Internet phones that complicate efforts to trace and intercept calls.
Those handlers, who were apparently watching the attacks unfold live on television, were able to inform the attackers of the movement of security forces from news accounts and provide the gunmen with instructions and encouragement, the authorities said.
Hasan Gafoor, Mumbai's police commissioner, said Monday that as once-complicated technologies - including global positioning systems and satellite phones - have become simpler to operate, terrorists, like everyone else, have become adept at using them. "Well, whether terrorists or common criminals, they do try to be a step ahead in terms of technology," he said.
Indian security forces surrounding the buildings were able to monitor the terrorists' outgoing calls by intercepting their cellphone signals. But Indian police officials said those directing the attacks, who are believed to be from Lashkar-e-Taiba, a militant group based in Pakistan, were using a Voice over Internet Protocol (VoIP) phone service, which has complicated efforts to determine their whereabouts and identities.
VoIP services, in which conversations are carried over the Internet instead of conventional phone lines or cellphone towers, are popular with people looking to save money on long-distance and international calls. Many such services, like Skype and Vonage, allow a user to call another VoIP-enabled device anywhere in the world free of charge, or to call a standard telephone or cellphone at a deeply discounted rate.
But the same services are also increasingly popular with criminals and terrorists, a trend that worries some law enforcement and intelligence agencies. "It's a concern," said one Indian security official, who spoke anonymously because the investigation was continuing. "It's not something we have seen before."
In mid-October, a draft U.S. Army intelligence report highlighted the growing interest of Islamic militants in using VoIP, noting recent news reports of Taliban insurgents using Skype to communicate. The unclassified report, which examined discussions of emerging technologies on jihadist Web sites, was obtained by the Federation of American Scientists, a nonprofit group based in Washington that monitors the effect of science on national security.
VoIP calls pose an array of difficulties for intelligence and law enforcement services, according to communications experts. "It means the phone-tapping techniques that work for old traditional interception don't work," said Matt Blaze, a professor and computer security expert at the University of Pennsylvania.
An agency using conventional tracing techniques to track a call from a land line or cellphone to a VoIP subscriber would be able to get only as far as the switching station that converts the voice call into Internet data, communications experts said. The switch, usually owned and operated by the company providing the VoIP service, could be located thousands of miles from the subscriber.
The subscriber's phone number would also probably reveal no information about his location. For instance, someone in New York could dial a local phone number but actually be connected via the Internet to a person in Thailand.
In Mumbai, the authorities have declined to disclose the names of the VoIP companies whose services the Lashkar-e-Taiba handlers used, but reports in the Indian news media have said the calls have been traced to companies in New Jersey and Austria. Yet investigators have said they are convinced that the handlers who directed the attacks were actually sitting somewhere in Pakistan during the calls.
One senior Lashkar-e-Taiba leader who U.S. officials believe may have played a key role in planning the Mumbai attacks is Zarrar Shah.
Shah, known to be a specialist in communications technology, may have been aware of the difficulties in tracing VoIP.
To determine the location of a VoIP caller, an investigating agency has to access a database kept by the service provider. The database logs the unique numerical identifier, known as an Internet Protocol (IP) address, of whatever device the subscriber was using to connect to the Internet. This could be a computer equipped with a microphone, a special VoIP phone, or even a cellphone with software that routes calls over the Internet using wireless connections as opposed to cellular signals.
It would then take additional electronic sleuthing to determine where the device was located. The customer's identity could be obtained from the service provider as well, but it might prove fraudulent, experts said.
Getting the IP address and then determining its location can take days longer than a standard phone trace, particularly if service providers involved are in a foreign country.
"Ultimately, we can trace them," said Gafoor, referring to VoIP calls. "It takes a little longer, but we will trace them."
Washington is assisting the Indian authorities in obtaining this information, according to another Indian police official who also spoke anonymously because of the continuing investigation.
Further complicating this task is the fact that IP addresses change frequently and are less tied to a specific location than phone numbers.
Computer experts said that while these challenges were formidable, none were insurmountable. And they cautioned that security services and police forces might be disingenuous when they complain about terrorists' use of new technologies, including VoIP.
The experts said that VoIP calls left a far richer data trail for investigators to mine than someone calling from an old-fashioned pay phone.
Blaze, the computer security expert at the University of Pennsylvania, also noted that 15 years ago the Mumbai attackers would probably not have had the capacity to make calls to their handlers during the course of their attacks, depriving investigators of vital clues to their identities.
"As one door closes - traditional wire line tapping - all these other doors have opened," Blaze said.
Pakistan raids militants in push after Mumbai
Tuesday, December 9, 2008
By Simon Cameron-Moore
Pakistan has arrested militants following several raids to show its intent to hunt down anyone who was behind the attack on the Indian city of Mumbai that killed at least 171 people, President Asif Ali Zardari said.
"As was demonstrated in Sunday's raids, which resulted in the arrest of militants, Pakistan will take action against the non-state actors found within our territory, treating them as criminals, terrorists and murderers," Zardari wrote in an article published on The New York Times' website on Tuesday.
India has pressed Pakistan to take action, or risk deepening a crisis in relations between the two nuclear-armed states.
Islamabad has promised to cooperate in the investigation but has vowed that anyone caught in Pakistan would be tried there.
The tensions have already put a four-year-old peace process in jeopardy, and the United States has advised India to act with restraint while saying the onus was on Pakistan to take action against any groups involved in last month's Mumbai attack.
Zardari did not name the location of the raids or who had been arrested, and a military spokesman also declined to say.
Among those being held was one of the men who Indian officials say controlled the 10 gunmen sent from Pakistan to carry out the attack, according to an intelligence official and militant-linked sources.
Zaki-ur-Rehman Lakhvi, an operations chief of Islamist group Lashkar-e-Taiba, was caught during a raid on Sunday by security forces on one of the jihadi organisation's camps in the hills outside Muzaffarabad, the capital of Pakistani Kashmir.
Reuters has not confirmed any other raids, but a Pakistani daily reported on Tuesday that the offices of the Jamaat-ud-Dawa charity, widely regarded as a front for Lashkar, were targeted.
The News said arrests were made and records seized during raids on the charity in the Mansehra and Chakdra districts of North West Frontier Province.
NO HANDING OVER
Whether Pakistan's action will satisfy India is uncertain.
"Those who are Pakistani, there is no question of handing them over to India," Foreign Minister Shah Mehmood Qureshi reiterated to journalists in Multan city, in the central province of Punjab.
"And if any allegations are proved against them, Pakistan has its own laws, Pakistan has its own courts and its own regulations and action will be taken against them within these regulations."
Several jihadi groups that have sprung out of Punjab to fight Indian rule in Kashmir have had ties with Pakistani intelligence in the past, analysts say, raising apprehension over whether any investigation would be transparent.
The News also reported that Maulana Masood Azhar, the head of the Jaish-e-Mohammad group and one of the most wanted men in India, had also been detained, but there was no official word.
Jaish and Lashkar were blamed for the attack on the Indian parliament in 2001, which almost caused a fourth war between the uneasy neighbours.
Both organisations have been banned by Pakistan and Azhar and Hafiz Saeed, the founder of Lashkar who now heads the JuD charity, both have been detained from time to time.
Zardari was adamant that militants had nothing to do with the Pakistani state.
"Not only are the terrorists not linked to the government of Pakistan in any way, we are their targets and we continue to be their victims," he said in The New York Times article.
"The best response to the Mumbai carnage is to coordinate in counteracting the scourge of terrorism," he wrote.
He said nearly 2,000 Pakistanis had been killed in militant-related violence this year alone, including 1,400 civilians and 600 security personnel.
As the Muslim nation celebrated the Eid al-Adha festival on Tuesday, a suicide bomber blew himself up and wounded three children in the Buner district of North West Frontier Province.
(Additional reporting by Asim Tanveer in MULTAN and Augustine Anthony in ISLAMABAD; Editing by Paul Tait)
Bomber wounds three Pakistani children
Tuesday, December 9, 2008
MINGORA, Pakistan: A suicide bomber killed himself and wounded three children in a northwestern Pakistani town Tuesday as people elsewhere in the Muslim nation celebrated the Eid al-Adha festival, military officials said.
The attack was in the Buner district, next to the troubled Swat valley, where Pakistani troops have killed hundreds of militants in the past year.
"The bomber got out of the car and blew himself up and wounded three children, but there has been no other fatalities," said a military intelligence official, speaking on the condition of anonymity.
More than 30 people were killed and many more maimed and wounded in two car bomb attacks in northwest Pakistan last week.
Security has been beefed up for the Muslim holiday of Eid al-Adha across Pakistan for fear of attacks by al Qaeda-linked and Taliban militants who have unleashed a wave of suicide attacks in response to military operations against them.
Forty-eight people were killed in a suicide attack during Eid in the northwestern town of Charsadda in December last year.
The surge in violence has raised concern about nuclear-armed Pakistan's stability as its civilian government struggles with a sharp economic downturn and pressure from India to widen its campaign against jihadi organizations in the wake of the militant attack that killed at least 171 people in Mumbai late last month.
(Reporting by Junaid Khan; Writing by Augustine Anthony; Editing by Simon Cameron-Moore and Valerie Lee)
Plea by Blackwater guard helps indict 5 others
By Ginger Thompson
Tuesday, December 9, 2008
WASHINGTON: In the first public airing of an investigation that remains a source of international outrage, the Justice Department unsealed its case against five private security guards, built largely around the chilling testimony of a sixth guard about the 2007 shootings that left 17 unsuspecting Iraqi civilians dead at a busy Baghdad traffic circle.
In pleading guilty to manslaughter, the sixth security guard, Jeremy Ridgeway of California, described how he and the other guards used automatic rifles and grenade launchers to fire on cars, houses, a traffic officer and a girls' school. In addition to those killed, at least 20 people were wounded.
The six guards were employed by Blackwater Worldwide, the largest security contractor in Iraq; the company, based in North Carolina, has not been charged in the case.
Ridgeway said in the court documents unsealed Monday that the episode in Nisour Square on Sept. 16, 2007, started when the guards opened fire on a white Kia sedan "that posed no threat to the convoy."
He told investigators that although he could not clearly see the front passenger in the Kia, he noticed that the passenger was moving his arms, according to the documents.
"Defendant Ridgeway then fired multiple rounds from his M-4 assault rifle into the front passenger's side windshield of the white sedan, killing the passenger," the documents read. The statement went on to say that even after it was clear the driver of the sedan had been killed, several others in the convoy continued to fire on the car, and at least one of them launched a grenade.
After the car was in flames, according to the statement, "Defendant Ridgeway recognized that there had been no attempt to provide reasonable warnings to the driver of that vehicle."
The five guards named in the indictment rejected those assertions, and, in a legal move aimed at challenging the venue for the case, they surrendered to U.S. authorities in Salt Lake City, Utah, which is considered a more conservative, pro-military part of the country than Washington, where the Justice Department made public its case.
The indictments and the defendants' cross-county legal maneuver set the stage for the first test of the government's ability to hold private security contractors accountable for what it considers crimes committed overseas. They are also likely to produce protracted arguments on technical matters aimed at scuttling the case well before a jury has the opportunity to evaluate the guards' actions.
The shooting by Blackwater guards that day ignited outrage about the use of private security contractors in war zones and severely strained relations between the United States and the fledgling Iraqi government.
The case remained a sore point during the Bush administration's negotiations with Iraq for an agreement setting new rules for the continuing presence of U.S. troops. Ultimately, a major provision of the agreement ended immunity for private contractors working in Iraq.
U.S. officials restated the government's commitment to pursue justice in the Nisour Square shootings.
Echoing the findings of previous investigations by the Iraqi and U.S. authorities, prosecutors said Monday that they had found no evidence that any of the Iraqis killed had posed a threat to the guards.
Instead, prosecutors accused the guards of acting with blatant disregard for human life and the rule of law.
Some military law specialists said the court of public opinion was likely to weigh as heavily in this case as the legal issues, which is why Ridgeway's testimony - the first time a guard has admitted to crimes while on duty - was so important to the prosecution, and why the venue was so important to the other defendants.
Mark Hulkower, a lawyer for one of the guards, said the lawyers believed Salt Lake City would provide a jury pool "where people are more sympathetic to the experiences of coming under enemy fire."
The five guards charged in the indictment were Paul Slough, 29, of Keller, Texas; Nicholas Slatten, 24, of Sparta, Tennessee; Evan Liberty, 26, of Rochester, New Hampshire; Dustin Heard, 27, of Maryville, Tennessee; and Donald Ball, 26, of West Valley City, Utah.
At a news conference in Washington, the prosecutors said the indictments were the culmination of one of the most complicated investigations in the history of the FBI, involving 10 agents who interviewed hundreds of witnesses during at least four trips to Iraq.
According to the indictments, the Blackwater guards disobeyed orders by leaving their base to respond to reports of a car bomb. Upon arriving at Nisour Square, the indictments said, the guards moved into the circle against the flow of traffic and, without warning, began firing.
The shootings were without provocation or justification, said Patrick Rowan, the assistant attorney general for national security. "The consequences were devastating," he said.
Blackwater has not publicly said whether it is paying the legal fees of the guards charged in the case, although a company spokeswoman said last week that Blackwater did cover legal expenses in some instances.
Music and peace
Tuesday, December 9, 2008
Music and peace
The sovereign independent republic of the West-Eastern Divan, as I like to call the orchestra I founded with Edward Said to promote dialogue between Israelis and Palestinians, began as an unpredictable experiment in 1999.
Over the years, it has grown into an example of how Middle Eastern society could function under the best of circumstances. Our musicians have gone through the painful process of learning to express themselves while simultaneously listening to the narrative of their counterparts. I cannot imagine a better way of implementing the first and most fundamental article of the United Nations' declaration of human rights: that all human beings are born free and equal in dignity and rights, that they are endowed with reason and conscience and should act toward one another in a spirit of brotherhood.
Unfortunately, today in the Middle East, not all human beings are granted the same freedom and equality in dignity and rights. The West-Eastern Divan Orchestra is a musical organization, not a political one, but for the approximately six-week duration of its annual existence it is able to provide its members with one basic need: equality.
The same two young people who might encounter each other at a checkpoint in the roles of border guard and citizen under occupation sit next to one another in this orchestra, equally striving for perfection of musical expression and equally responsible for the result of their striving.
Music, unlike any other art, requires the ability to express oneself with absolute commitment and passion while listening carefully and sensitively to another voice that may even contradict one's own statement. This is the essence of musical counterpoint and a limitless source of inspiration to us in our extramusical dialogues.
Before a Beethoven Symphony we are all equal. Regardless of our origins, we must all approach the music with the same humility, curiosity, knowledge and passion. Music makes it possible for the subjects of mutually hostile governments to support one another because it engenders a true and effortless spirit of creativity and brotherhood.
This year I carry the title of United Nations Messenger of Peace, which I believe gives me both the right and the responsibility to work toward abolishing ignorance, and to contribute in whatever modest way I can toward real equality. Without equality there can be no justice, and without justice there will be no peace.
Daniel Barenboim, New York
They want to destroy Pakistan, too
By Asif Ali Zardari
Tuesday, December 9, 2008
ISLAMABAD, Pakistan: The recent death and destruction in Mumbai, India, brought to my mind the death and destruction in Karachi on Oct. 18, 2007, when terrorists attacked a festive homecoming rally for my wife, Benazir Bhutto. Nearly 150 Pakistanis were killed and more than 450 were injured. The terrorist attacks in Mumbai may be a news story for most of the world. For me it is a painful reality of shared experience. Having seen my wife escape death by a hairbreadth on that day in Karachi, I lost her in a second, unfortunately successful, attempt two months later.
The Mumbai attacks were directed not only at India but also at Pakistan's new democratic government and the peace process with India that we have initiated. Supporters of authoritarianism in Pakistan and non-state actors with a vested interest in perpetuating conflict do not want change in Pakistan to take root.
To foil the designs of the terrorists, the two great nations of Pakistan and India, born together from the same revolution and mandate in 1947, must continue to move forward with the peace process.
Pakistan is shocked at the terrorist attacks in Mumbai. We can identify with India's pain. I am especially empathetic. I feel this pain every time I look into the eyes of my children.
Pakistan is committed to the pursuit, arrest, trial and punishment of anyone involved in these heinous attacks. But we caution against hasty judgments and inflammatory statements.
As was demonstrated in Sunday's raids, which resulted in the arrest of militants, Pakistan will take action against the non-state actors found within our territory, treating them as criminals, terrorists and murderers. Not only are the terrorists not linked to the government of Pakistan in any way, we are their targets and we continue to be their victims.
India is a mature nation and a stable democracy. Pakistanis appreciate India's democratic contributions. But as rage fueled by the Mumbai attacks catches on, Indians must pause and take a breath. India and Pakistan - and the rest of the world - must work together to track down the terrorists who caused mayhem in Mumbai, attacked New York, London and Madrid in the past, and destroyed the Marriott Hotel in Islamabad in September. The terrorists who killed my wife are connected by ideology to these enemies of civilization.
These militants did not arise from whole cloth. Pakistan was an ally of the West throughout the Cold War. The world worked to exploit religion against the Soviet Union in Afghanistan by empowering the most fanatic extremists as an instrument of destruction of a superpower. The strategy worked, but its legacy was the creation of an extremist militia with its own dynamic.
Pakistan continues to pay the price: the legacy of dictatorship, the fatigue of fanaticism, the dismemberment of civil society and the destruction of our democratic infrastructure. The resulting poverty continues to fuel the extremists and has created a culture of grievance and victimhood.
The challenge of confronting terrorists who have a vast support network is huge; Pakistan's fledgling democracy needs help from the rest of the world. We are on the frontlines of the war on terrorism.
We have 150,000 soldiers fighting Al Qaeda, the Taliban and their extremist allies along the border with Afghanistan - far more troops than NATO has in Afghanistan.
Nearly 2,000 Pakistanis have lost their lives to terrorism in this year alone, including 1,400 civilians and 600 security personnel ranging in rank from ordinary soldier to three-star general.
There have been more than 600 terrorism-related incidents in Pakistan this year. The terrorists have been set back by our aggressive war against them in the Federally Administered Tribal Areas and the Pashtun-majority areas bordering Afghanistan. Six hundred militants have been killed in recent attacks, hundreds by Pakistani F-16 jet strikes in the last two months.
Terrorism is a regional as well as a global threat, and it needs to be battled collectively. We understand the domestic political considerations in India in the aftermath of Mumbai. Nevertheless, accusations of complicity on Pakistan's part only complicate the already complex situation.
For India, Pakistan and the United States, the best response to the Mumbai carnage is to coordinate in counteracting the scourge of terrorism. The world must act to strengthen Pakistan's economy and democracy, help us build civil society and provide us with the law enforcement and counterterrorism capacities that will enable us to fight the terrorists effectively.
Benazir Bhutto once said that democracy is the best revenge against the abuses of dictatorship. In the current environment, reconciliation and rapprochement is the best revenge against the dark forces that are trying to provoke a confrontation between Pakistan and India, and ultimately a clash of civilizations.
Asif Ali Zardari is the president of Pakistan.
U.S. chief says Mumbai attacks reveal Pakistan challenges
Tuesday, December 9, 2008
By Phil Stewart
The attacks that killed 171 people in Mumbai spoke volumes about the security challenges in neighbouring Pakistan, U.S. General David Petraeus said on Tuesday.
"There are those that have said this may be more of a 9/11 moment for Pakistan than it is for India, in fact. And that is not to say that it is anything but horrific for India," said Petraeus, head of U.S. Central Command, during a trip to Italy.
"But I think it really highlights the extent of the challenges that Pakistan faces."
India has blamed Islamist militants based in Pakistan for the three-day assault on India's commercial capital and U.S. Secretary of State Condoleezza Rice has said there was no doubt the militants behind the attacks operated from Pakistani soil.
Petraeus said it was "heartening" to hear that Pakistan was trying to capture militants behind the attacks.
But, speaking to a gathering at the American Studies Centre in Rome, he flagged militant safe havens in Pakistan's tribal areas as a "significant concern."
Petraeus, the top commander in Iraq from February 2007 to September 2008, took over U.S. Central Command on October 31.
"On November 1, my team and I got on a plane and our first stop was Pakistan ... because of the challenges that are there," said Petraeus, who now oversees U.S. military strategy in 20 countries in the Middle East and Central and South Asia.
On Afghanistan, Petraeus confirmed news last month that the U.S. aimed to send "somewhere around" 20,000 extra troops there over the next 12 to 18 months to quell rising Taliban violence.
"We are working these issues -- some of them are dependent on the possibility of drawing down, continuing the draw down that has taken place in Iraq," he said.
"It could be again somewhere around 20,000 or so over the course of the increase on the U.S. side (in Afghanistan)."
There are some 70,000 Western troops in Afghanistan, including 32,000 U.S. troops -- 14,500 under NATO command and 17,500 under U.S. command.
Petraeus declined to answer a question about a possible increase in NATO allies' forces, saying: "If you could ask that question in Brussels, we would be very grateful to you."
He was due to meet Italian Prime Minister Silvio Berlusconi later Tuesday. In closed-door talks with Italy's defence minister, Petraeus raised the need for more joint civilian and military efforts in Afghanistan, a top Italian military official told reporters.
(Reporting by Phil Stewart, editing by Tim Pearce)
NATO sees no serious disruption of Afghan supplies
Tuesday, December 9, 2008
BRUSSELS: NATO said on Tuesday militants could not seriously disrupt its supply routes to Afghanistan, despite a weekend attack on a Western supply convoy in Pakistan that destroyed close to 100 military vehicles.
"They should be under no illusion that they can seriously disrupt the lines of communication for NATO because we have alternatives," NATO Secretary-General Jaap de Hoop Scheffer told a news briefing.
Pakistani militants attacked a parked convoy of trucks carrying military vehicles for Western forces in Afghanistan near the northwestern town of Peshawar early on Sunday, destroying 96 trucks, police said.
NATO and U.S. officials have been pursuing alternative supply routes that would make Western forces in Afghanistan less dependent on the overland route via Pakistan.
NATO already transports supplies across Russia using an air bridge and in April signed a deal allowing it to use Russian land transit of non-lethal supplies. However talks are still going on with Afghanistan's neighbours Turkmenistan, Uzbekistan and Tajikistan for the goods to reach the Afghan border.
Separately, Afghanistan's Interior Minister Mohammad Hanif Atmar, who will visit NATO on Wednesday, called on the European Union to step up its police training and reform mission EUPOL ahead of presidential elections due next year.
"We are here to advocate additional support and resources for EUPOL so it can live up to expectations," he told a joint news conference with EU Special Representative for Afghanistan Ettore Sequi. "With a view to the elections, some of these programmes will have to be accelerated," he said.
EU ministers agreed in May on a long-term objective of doubling the size of the mission to around 400 trainers. It currently numbers 169 international and 91 local staff.
Western backers of the Afghan government see police reform as crucial to combating a worsening Islamist insurgency and the ultimate aim of handing over all security duties to Afghan forces.
The EU approach to police reform has been criticised, particularly in the United States, as being too slow in bringing law and order to a country faced with endemic corruption and insurgency.
Bush told Pakistan that U.S. will protect Americans
Tuesday, December 9, 2008
By Jeremy Pelofsky
The United States has made clear to Pakistan it will do whatever is necessary to protect American soldiers and civilians, U.S. President George W. Bush said Tuesday.
Bush told cadets at the U.S. Military Academy at West Point that one of the most important challenges they would face is helping allies assert control over largely ungoverned territory such as the border area between Pakistan and Afghanistan.
Tensions between Washington and Islamabad have flared over U.S. drone strikes aimed at militants along Pakistan's border with Afghanistan, where al Qaeda leader Osama bin Laden and some of his followers are believed to be hiding.
Pakistan has protested U.S. air attacks on its territory and in June summoned U.S. Ambassador Anne Patterson to the foreign ministry to lodge a complaint about a strike in which Pakistani soldiers were killed.
"One of the most important challenges we will face and you will face in the years ahead is helping our partners assert control over ungoverned spaces," Bush said. "The problem is most pronounced in Pakistan, where areas along the Afghanistan border are home to Taliban and to al Qaeda fighters."
Pakistan understands the terrorism threat, Bush said, but added: "We have made it clear to Pakistan and to all our partners that we will do what is necessary to protect American troops and the American people."
The recent attacks in Mumbai, where militants killed 171 people, including six Americans, has further complicated ties between the United States and Pakistan.
India has said the attackers came from Pakistan and demanded Islamabad take immediate action. Pakistan has promised to cooperate with the investigation but denied the government was involved in the attack on its nuclear-armed rival.
"They're working to enforce the law and fight terror in the border areas," Bush said of Pakistan. "And our government is providing strong support for these efforts."
The United States has about 31,000 troops in neighbouring Afghanistan.
As Bush enters the final weeks of his presidency, he offered a laundry list of improvements his administration has made to the U.S. military to respond to an evolving enemy. While he did not name his successor, Democrat Barack Obama, he urged him to stay on the offensive.
"In the years ahead, our nation must continue developing the capabilities to take the fight to our enemies across the world," Bush said. "We must stay on the offensive. We must be determined and we must be relentless to do our duty to protect the American people from harm."
(Reporting by Jeremy Pelofsky in West Point, N.Y. and Tabassum Zakaria in Washington; Editing by John O'Callaghan and Cynthia Osterman)
Iraqi police arrest 30 in fatal truck bombing
The Associated Press
Tuesday, December 9, 2008
BAGHDAD: Iraqi police have arrested 30 members of an al-Qaida cell, including the alleged mastermind of truck bombings that killed 17 people in the former insurgent stronghold of Fallujah, officials said Tuesday.
Tariq al-Karbouli, the alleged leader of the cell, was picked up Monday in the Abu Ghraib area west of Baghdad, Iraqi officials said. The other members of the cell were apprehended in a series of raids that ended early Tuesday, the officials added.
They spoke on condition of anonymity because they were not authorized to release the information.
Two bomb-laden trucks exploded Thursday at police stations in Fallujah, 40 miles west of Baghdad, killing 17 people and leveling buildings, police reported.
The brazen attacks in the most heavily guarded city in Iraq raised questions about the ability of Iraqi security forces to ensure security as the U.S. scales down its combat role under the newly ratified U.S.-Iraqi pact, which calls for an American pullout within three years.
One of the Iraqi officials said al-Karbouli, who works for a government-owned yogurt company, said explosives used in the attacks were smuggled into the city over a period of time hidden under bananas and other foodstuffs.
The official said al-Karbouli had confessed to his role in the bombings, but that the 11 other people directly involved were still at large.
Fallujah is located in Anbar province, the mostly Sunni area of western Iraq that had been the main theater of the war until Sunni tribes there broke with al-Qaida last year and joined forces with the Americans.
The city has been under intense security since U.S. forces drove out al-Qaida and other Sunni extremists in November 2004 during the fiercest urban fighting of the Iraq war.
With a drop in violence, the U.S. transferred security control of the province to the Iraqis last September.
Although violence is down 80 percent nationwide since early this year, U.S. officials say the security situation remains tenuous, and some areas of the country are still dangerous.
Those areas include Diyala province north of Baghdad. On Tuesday, a local official there called for a six-month delay in regional elections in Diyala because the security situation is too fragile.
Ibrahim Bajilan, head of the Diyala provincial council, said parts of his province are still under the influence of insurgents and are no-go areas for certain religious groups.
Bajilan also said voting would be skewed because thousands of people displaced by sectarian violence have not returned to their homes.
Voters in 14 of Iraq's 18 provinces will choose members of ruling provincial councils on Jan. 31.
Bajilan said voters in Diyala could face intimidation and candidates could be assassinated ahead of the January balloting. The U.S. military also has warned it expects attacks to rise ahead of the elections.
"There will be a wave of killings against the candidates due to an absence of law and real protection for them," Bajilan said.
U.S. and Iraqi officials hope the elections will redress problems created by the last regional balloting in January 2005, when Sunnis largely stayed away from the polls.
As a result, Kurds and Shiites won a disproportionate share of the power, including in areas such as Diyala which has a large Sunni population.
Qassim al-Aboudi, an official in the electoral commission, declined to comment on the postponement request but said the elections law included no provision for a delay.
In Karbala, Prime Minister Nouri al-Maliki urged a big turnout in the January ballot, saying it would help reconcile the country's rival religious and ethnic communities.
He urged people to vote according to the interest of the country.
"During the election contest, I hope that you will not bow to any pressure or any other calculations," al-Maliki, a Shiite, said.
Associated Press reporter Sameer N. Yacoub contributed to this report.
Iraq violence seen at at 5-1/2 year low
Tuesday, December 9, 2008
ROME: Violence in Iraq has in the past few weeks fallen to its lowest level since summer 2003 and security gains, while still at risk of reversal, are less fragile than before, U.S. General David Petraeus said on Tuesday.
Petraeus, who leads the U.S. Central Command, said the past two weeks in particular had shown impressive gains for security in Iraq.
"I think that no one disputes at this point that there has been anything but very significant progress in Iraq," he said, addressing a gathering at the American Studies Centre in Rome.
"The situation, despite this progress, does remain fragile and it is reversible, but it is less fragile than it was, for example, when ... I last testified before the U.S. Congress back in May."
U.S. President-elect Barack Obama has said he believes U.S. combat troops could be withdrawn from Iraq in 16 months.
Petraeus was the top U.S. commander in Iraq from February 2007 to September 2008.
Leading Central Command since October 31, he oversees U.S. military operations and strategy in a volatile swathe of the world that covers 20 countries, from the Middle East to Central and South Asia, including Iraq and Afghanistan.
(Reporting by Phil Stewart, editing by Tim Pearce)
U.S. declines to free Reuters photographer in Iraq
Tuesday, December 9, 2008
BAGHDAD: The U.S. military in Iraq is not obliged to obey an Iraqi court order to release a freelance photographer working for Reuters news agency and will hold him into 2009, a spokesman said on Tuesday.
The Iraqi Central Criminal Court ruled on November 30 that there was no evidence against Ibrahim Jassam Mohammed, and ordered the U.S. military to release him from Camp Cropper prison near Baghdad airport, where he has been detained since September.
"Though we appreciate the decision of the Central Criminal Court of Iraq in the Jassam case, their decision does not negate the intelligence information that currently lists him as a threat to Iraq security and stability," said Major Neal Fisher, spokesman for the U.S. military's detainee operations in Iraq.
"He will be processed for release in a safe and orderly manner after December 31st, in the order of his individual threat level, along with all other detainees," Fisher said in an email to Reuters.
"Since he already has a decision from the CCCI, when it is his turn for release he will be able to out-process without having to go through the courts as other detainees in his threat classification will have to do."
Jassam was detained in early September in a raid on his home in Mahmudiya by U.S. and Iraqi forces. His photographic equipment was also confiscated. Jassam works for other Iraqi media, in addition to Reuters News, a Thomson Reuters company.
Mahmudiya, 30 km (20 miles) south of Baghdad, was once one of the most violent areas of Iraq as sectarian bloodshed raged in the aftermath of the 2003 U.S.-led invasion, but security there and elsewhere has improved markedly in recent months.
"I am disappointed he has not been released in accordance with the court order," Reuters News Editor-in-Chief David Schlesinger said on Tuesday.
In the ruling issued by the Iraqi court at the end of last month, Iraqi prosecutors said they had asked the U.S. military repeatedly for the evidence it had against Jassam but that U.S. forces had failed to provide any material.
Fisher said that the U.S. military was "not bound" to provide military intelligence to Iraqi courts.
The legal situation changes next year when a security pact with the United States enters into force, replacing a U.N. mandate governing the presence of foreign troops and paving the way for U.S. forces to withdraw from Iraq by end-2011.
Under the pact, the U.S. military will no longer be able to detain people.
Most of the more than 15,000 detainees currently held in Iraq by U.S. forces will have to be set free as a result. Others who are subject to Iraqi arrest warrants will be transferred to Iraqi prisons. The pact gives no timeline for that process to happen but says it should be conducted in an orderly manner.
Fisher declined to arrange a meeting between Reuters and the U.S. commander of the prisons operations, Brigadier General David Quantock, to discuss Jassam's continuing detention.
"I will not ask him to make this detainee more important than the other 15,800 detainees, when he has already made his decision," Fisher said.
Reuters and international media rights groups have criticized the U.S. military's refusal to deal more quickly with suspicions apparently arising from the legitimate activities of reporters covering acts of violence.
In August, the U.S. military freed a cameraman working for Reuters after holding him for three weeks without charges. It had been the third time Ali al-Mashhadani, who also conducts freelance work for the BBC and Washington-based National Public Radio, had been detained.
(Reporting by Michael Christie; Editing by Samia Nakhoul)
Voters want people, not parties in Iraq's Basra
Tuesday, December 9, 2008
By Mohammed Abbas
For the first time since the fall of Saddam Hussein, Iraqis could be seeing election candidates kissing babies and canvassing neighbours when a new polling system comes into force in January.
Provincial polls slated for January 31 will allow voters to pick people, not just parties, potentially thrusting individual candidates into the spotlight.
A dramatic fall in violence in Iraq over the past year has made it safer for people to publicly declare their candidacy, marking a degree of maturity in a long-thwarted democracy.
In previous polls in 2005 -- the first since the fall of Hussein in 2003 -- people could only vote for parties, a system known as closed-list. Now Iraqis are ready to move on.
"We have experience now, we know who's who. We're going to vote for people, not parties," said trader Faris Kadhim in the oil-rich city of Basra, which until recently was torn apart by gangs and militias vying for control.
The January elections will be the first to be organized and run by Iraq -- not the United States or United Nations -- since the fall of Saddam, making them a milestone.
How Basra, Iraq's second largest city, fares in January will be a key indicator of Iraq's ability to steer the struggle for power away from bullets to the ballot box.
The nationwide elections are for seats in Iraq's powerful provincial councils, whose responsibilities include local investment, utilities, education, and infrastructure.
Some 2.5 million people live in Basra, which like no other city highlights the years of wasted opportunity and devastation wreaked by incompetence and violence.
The capital of Basra province in the south, it sits on a sea of oil -- historically, two-thirds of production came from the region -- and has the country's only ports.
It is blessed with rich palm groves and picturesque canals and waterways and is close to marshland thought to be the biblical Garden of Eden, a contender for world heritage status.
Yet it is heaving with garbage and unemployment is rife. Waterways are clogged with waste, and the stench in even some genteel areas is overpowering. Most streets are potholed.
Until a government crackdown in late March, militias and gangs ruled the city, and even now some of Basra's elite go shopping with an escort of soldiers and armoured cars.
People are reluctant to venture out at night, when Basra largely becomes the preserve of packs of stray dogs, their barks echoing in the darkness.
VOTE FOR PEOPLE
Basra's potential has contributed to its decay as rival groups in Iraq's Shi'ite south fought for control, scaring away foreign investment and expertise.
Allegations of oil-smuggling and corruption abound, and bickering among the incumbent local politicians has held up development. Desperately needed cash has been returned to the central government because of delays in spending it.
Basra's citizens have had enough, and some 25 interviewed by Reuters vowed to vote only for candidates they know and trust, not parties or coalitions.
Voters now relish being able to pick named candidates, a demand the United Nations -- which is advising on the polls -- said it had heard loud and clear from Iraq's people.
"The problem with the past election was the closed list. We need to pick someone we know," said shopper Fattah al-Moussawi.
"We want to vote for people ... A list might have one only good person in it," said another shopper Farhan al-Hajaj.
Violence is down sharply from 2005, mostly because of a surge in U.S. troops, a shift against al Qaeda by Sunni tribal leaders once allied with the Islamist group, and a cease-fire by militia leader and Shi'ite cleric Moqtada al-Sadr.
With increased security, competition is set to be fierce. Some 1,286 candidates on about 80 lists are competing for just 35 seats on the provincial council.
The Sunni-dominated Iraqi National Dialogue political bloc said better security had allowed it open a base in mainly Shi'ite Basra. The two sects were once slaughtering each other.
More independents are competing. Three years ago, it would have been dangerous to stand as a candidate without the security a well-funded political party could provide.
"The security now is much better, and it is very encouraging for people who did not take part in politics before to do so now," said independent candidate and teacher Assad Attiya.
The ability to pick single candidates could force election hopefuls onto the streets to make themselves known, a Western-style of campaigning virtually unknown in Iraq.
Tribal sheikhs, local notables and pillars of the community could have a better chance of office without party affiliation.
"This is a big change in the politics of Iraq," said Ahmed al-Hilali, head of a group fielding 17 independent candidates.
More independents will make it easier to hold individual politicians to account, said group members who were planning election campaigns in each of their local districts.
Even if voters choose established parties over independents, the chance to pick single candidates could change party make-up.
None of Basra's ruling parties could outline their campaign plans when Reuters visited, but all were busily filtering their membership to find individual candidates acceptable to voters.
The Islamic Fadhila Party was subjecting would-be candidates to a legal and political examination.
Prime Minister Nuri al-Maliki's Dawa Islamic Party said it had spent "many long nights" screening candidates. The Supreme Islamic Iraqi Council had committees to sift through hundreds of applicants.
"A clean record is paramount; otherwise they don't run," said a leader of Dawa in Basra Shiltagh al-Myyah.
Fadhila dominates Basra's provincial council, considered by many in Basra as a failure. Its current leader, who will not run in January, declined to give an interview to Reuters.
"Many see us as aloof, having no constituents or base," his deputy Nusaif al-Ibadi said when asked about campaign goals.
"We want to show that we do."
(Additional reporting by Aref Mohammed; Editing by Catherine Bosley and Sara Ledwith)
Spain's hard times squeeze immigrants' toehold
By Victoria Burnett
Tuesday, December 9, 2008
MADRID: When Camelia Condurat could not muster the change to buy bread for her three young daughters, she found some flour and yeast in the cupboard and made it herself.
"If you do not even have 50 cents to buy a loaf of bread, what can you do?" she said. "You scrape by."
Getting by has become a grueling daily mission for Condurat, a 24-year-old Romanian. When her husband, Costel, lost his job as a bricklayer in October, she sought work for the first time since coming to Spain four years ago. She prepares food and cleans at a local restaurant, working 12-hour shifts, seven days a week, for €700 a month, or about $900.
Half her wages pay the rent for the tiny three-bedroom apartment her family shares with two lodgers. What is left does not cover the family's needs, so she spends rare free moments queuing for handouts at the government welfare office, the Red Cross and the local church. Costel Condurat, 39, a former Romanian policeman who earned about €1,000 a month before he was laid off, stays home with their children.
"It is so, so hard," she said in fluent Spanish, looking down at her calloused hands as her girls, aged 3, 5 and 6, clambered onto her lap. "I'm ashamed to ask for help. But I have three girls, so I leave my pride at home."
In Coslada and other working-class suburbs with large immigrant populations on the outskirts of Madrid, stories like this have become common in the economic slide.
Spain created more jobs and drew more immigrants than any country in Europe over the past decade, largely because of a construction boom.
As the economy shrinks, companies are disgorging workers at an alarming rate - unemployment soared above 11 percent in the third quarter - and immigrants in low-skilled jobs have been hit hardest.
The once-permissive Spanish government is rolling up the welcome mat, even encouraging immigrants to return home on lump-sum welfare payments.
During its economic boom, Spain epitomized Europe's hunger for low-cost labor, but now, it could become a laboratory for strains that emerge when those people are unemployed, yet stay put.
Spain has not yet suffered the outbursts of xenophobia seen in Italy, and Spaniards say their own years as a nation of émigrés helps them sympathize.
The Condurats, for instance, said their elderly Spanish landlord had let them fall behind with the rent and popped by most days with bread or biscuits for the girls, who call him Grandpa.
But hospitality may wear thin. Spain's unemployment rate is now the highest in the European Union, up from 8 percent at the end of 2007.
Among immigrants, unemployment is estimated at 17 percent. About five million immigrants are registered as living in Spain, a country of 46 million, with Moroccans, Romanians and Ecuadorians topping the list.
Interviews with more than a dozen immigrants and leaders of migrants' associations and charities in Madrid revealed a picture of growing desperation among the million-strong community of foreign workers in and around Madrid. Many are living on unemployment benefits, but thousands do not qualify because they worked illegally or were self-employed, like Costel Condurat.
Many said life had become a grinding trail of employment centers, soup kitchens and local charities. Some are months behind on rent or mortgage payments and have racked up debts.
For René Bonilla, 33, a painter and decorator from Colombia, the economic crisis crushed a life he had built over seven hard years. In November last year, Bonilla began the process of bringing his wife, Iuli, and their daughter, Arancha, 2, from Colombia. He was earning €1,100 a month and was confident he could support them.
By the time they arrived in September, Bonilla had been out of work for a month. He had spent his €4,000 in savings bringing them to Madrid. Now the three spend their days cooped up in a room in an apartment in Alcorcón, a tough suburb with a high proportion of Latin American immigrants. Their one bed serves as a table to eat and a place to watch television and play with Arancha. They are surviving on loans from their landlord, an elderly Spaniard.
"Now I am back to where I started," said Bonilla, his eyes puffy from lack of sleep. "Actually, I am worse off. I am seven years older and now there are three of us to feed."
The authorities have cracked down on businesses that employ undocumented workers and immigrants say plain-clothed police prowl commuter trains, arresting those without papers. Prime Minister José Rodríguez Zapatero has said he supports the European Union's tough Return Directive, which would allow illegal migrants to be held for up to 18 months.
The government in November began a return program, under which immigrants can take unemployment benefit in a lump sum provided they go home and give up the right to return to Spain for three years.
Early next year, the government will curb the number of relatives who can join legally employed migrants after one year. Spouses and children under 18 will still be able to come, but not parents and parents-in-law.
"Spain saw really strong growth over the past five years and we could not have done this with our own citizens. But now we're in a very different situation," Labor Minister Celestíno Corbacho said in an interview.
Unable to send money home or support themselves, some immigrants are leaving. About 600 entered the government return program in the first three weeks, of an estimated 87,000 who would qualify. The Red Cross, which offers financial assistance to those who want to leave but cannot afford to, said it had helped about 900 people this year, double last year's figure. Immigrants said some are going home unassisted; there are no figures, either official or unofficial.
Corbacho admitted he did not expect "a huge exodus." "If you have a family that has kids in school, where one partner is working and the other is not - to break with all this, that is a decision that the family will take only after they have no other hope," he said.
Despite the cooler reception and grim job climate, most immigrants seem determined to stay. In interviews, some immigrants or leaders of immigrants' association said they feared the humiliation of returning empty handed, others that they had sacrificed too much to give up and leave.
Camelia Condurat was separated for four years from her two eldest daughters.
"When I went to fetch them from Romania, they cried, and I said: 'I'm your mom,"' she recalled, perched on a floral sofa in the narrow living room that also serves as the girls' bedroom.
"If we went back to Romania, we would start from zero, all over again," she said, adding, "People would say, 'After five years in Spain, have you come back with nothing?"'
As riots continue, Greece faces political crisis
By Rachel Donadio and Anthee Carassava
Tuesday, December 9, 2008
ATHENS: Thousands of mourners turned out here Tuesday for the funeral of a 15-year-old boy whose shooting death by police officers has tipped the country into its worst riots in decades, exposing the government's fragile hold on a deeply divided society.
The authorities said more than 100 people were arrested for looting Tuesday, as roving bands of militant youths threw gasoline bombs and smashed shop windows in central Athens for a fourth day, clashing with riot police who did not seem able to contain the violence.
The two largest Greek labor unions said they would push ahead with a planned 24-hour strike Wednesday to demand more state social spending. But they cancelled a protest march in an attempt to avoid further violence. Flights and ferry links are expected to be cut and train services severely limited. The governments of the United States, Britain and Australia warned citizens to avoid traveling to Athens.
Overall, the clashes Tuesday were seen as less intense than those Monday, when after dark hundreds of self-described anarchists broke the windows of upscale shops, banks and five-star hotels in central Athens and burned a large Christmas tree in the plaza in front of Parliament.
On Tuesday, rioters also fought with the police for the fourth day in a row in Salonika, the second-largest city in Greece, while in the port city of Patras, citizens trying to protect their shops came into conflict with rioters.
That the shooting death of a teenager, however tragic, could bring an entire country to its knees speaks to the deep political, social and economic unrest in Greece.
The center-right government of Prime Minister Kostas Karamanlis hangs by a one-vote majority in Parliament and is roiled by a corruption scandal in which two senior ministers have already resigned. Unemployment is high and the global recession hitting hard.
For the second day in a row Tuesday, students, teachers and workers used the demonstrations inspired by the death of Alexandros Grigoropolos, 15, to protest everything from school reforms to the grim economic situation.
On Tuesday, the Socialist party leader, George Papandreou, renewed his call for early elections. Yet it remained unclear whether the riots would cause the government to fall.
"What I foresee is a prolonged political crisis with no immediate results for two or three years," said George Kirtsos, a political commentator and the publisher of City Press, an independent newspaper. "In that time, the country will be going from bad to worse."
On Tuesday, as youths scuffled with the police outside Parliament, Karamanlis met with his cabinet council and opposition leaders in an effort to get their backing for security operations.
He said that there would be no leniency for the rioters. "No one has the right to use this tragic incident as an alibi for actions of raw violence, for actions against innocent people, their property and society as a whole, and against democracy," Karamanlis said after an emergency meeting with President Karolos Papoulias.
Yet even Karamanlis's closest advisers conceded that the government did not have the security situation under control. "He's seriously troubled," said Nicholas Karahalios, a strategy adviser to the prime minister. "Whereas before we were dealing with a political and economic crisis, now there's a third dimension attached to it: a security crisis."
The authorities seem to fear that cracking down on the militants might lead to other unintended deaths and provoke more rioting. Asked why they had not contained the riots, a spokesman for the national police, Panayiotes Stathis, said "violence cannot be fought with violence."
Some questioned that approach. "They chose to show tolerance, which backfired," said Nikos Kostandaras, the editor of the Greek daily Kathimerini. The riots, he added, "were radicalizing every sector of the population."
Indeed, on Tuesday, schools and universities were closed, and thousands of teachers and students joined generally peaceful protests through Athens. George Dimitriou, 22 and a member of the agriculture students' union, said the teenager's death was an opportunity to protest other economic issues.
"Our generation is facing a tougher future than our parents," Dimitriu said as he stood outside Athens University. "This is unheard of, because normally things get better."
Demonstrations, even violent ones, are nothing new in Greece, which has a long tradition of political protest and has been relatively tolerant of the self-described anarchist groups that routinely hold anti-government demonstrations.
Ever since the country shed its seven years of military dictatorship to became a democracy in the mid-1970s, the police have been seen as a throwback to the era of the military junta. Although Greece has a comparatively high ratio of more than 45,000 police for 10 million people, in the popular imagination, they are seen as ineffective and corrupt.
To some, the instability reflects deeper problems. "These riots are a symptom of a deep cultural problem rather than a social one," said Stathis Kalyvas, a political science professor at Yale University. Since the mid-1970s, Kalyvas said, civil disobedience has been seen as "almost always justified."
Indeed, Grigoropolos was shot Saturday night in the Athens neighborhood of Exarcheia, where youths routinely fight the police. The police have said Grigoropolos died when officers encountered a mob. But one officer has been charged with premeditated manslaughter in the case and another has been charged as an accomplice.
On Tuesday, thousands lined the street outside the cemetery and small, whitewashed chapel where Grigoropolos was buried in Paleo Faliro, a middle class residential neighborhood where he grew up. His father is a bank manager and his mother a jeweler.
Although the funeral passed peacefully, dozens of militants fought afterward with the police and smashed car windows, though no one was injured.
Earlier on Tuesday, two demonstrations of teachers, students and workers wound their way largely peacefully through central Athens. Once they neared the Parliament building, some students shouted "Down with the government of murderers" and "Let it burn, let it burn, the brothel, the Parliament." Other militants fought the police.
Before the rioting, Karamanlis was popular, even if his government was less so. He won by a wide margin in 2004, promising change after two decades of Socialist rule. He was re-elected in 2007, but his center-right party's lead fell to two votes in Parliament.
But in the autumn of 2008, the government was stung by a corruption scandal in which it was accused of selling a monastery that is prime Athens real estate before the 2004 Olympics in exchange for cheaper land elsewhere.
Last month, two top ministers resigned over reports of more than 250 land swaps and lawmakers unanimously agreed to start a special investigation. The scandals have deeply weakened Karamanlis's government and curbed his chances of implementing changes.
Picking Obama successor puts spotlight on governor
By Monica Davey
Tuesday, December 9, 2008
CHICAGO: This article was first published Nov. 12.
The task of filling President-elect Barack Obama's seat in the Senate offers Governor Rod Blagojevich of Illinois a rare chance to wield influence in Washington.
It also offers Blagojevich, a Democrat in his second term, the rare chance to focus public attention on something other than his litany of problems a federal investigation into his administration, his icy standoffs with the Democratic-controlled State Legislature and his dismal approval rating (which, according to a Chicago Tribune survey last month, has sunk to 13 percent, worse even than some approval marks for President George W. Bush).
"Compared to everything else, this is good publicity," said Kent Redfield, a political scientist at the University of Illinois at Springfield. "Now it's a matter of doing something on it that helps him politically. He needs to."
Since Election Day, Blagojevich's decision, assigned to him under Illinois law, has become this state's political parlor game, one buried in layers deeper than just which Democrat will best guard the seat until the 2010 election.
Among the many political concerns: Should another African-American finish the term of Obama? Should the replacement be a caretaker with no expectations of re-election, or someone who dreams of staying on? And how might Blagojevich navigate the choice in such a way that might shore up some specks of support for his own political future?
Under state law, the governor has wide discretion in coming up with a successor. He need only pick someone who is a resident of the state, is at least 30 years old and has been a United States citizen for at least nine years.
The list of those rumored to be under consideration (including some, it seems, who have blatantly offered themselves up to the governor) grows longer each day. Blagojevich, who is turning to a group of close advisers for guidance, is expected to make a decision around Christmas.
Meanwhile, the calls keep coming.
"It's unbelievable what this has become; he is hearing it from all sides," said Lucio Guerrero, Blagojevich's spokesman, who described some of the inquiries to the governor as amounting to people essentially dreaming aloud, "Boy, I'd be a good senator."
Most often, political analysts here mention names like Representative Jesse Jackson Jr., long a Democratic congressman from Chicago's South Side and the city's southern suburbs and son of the civil rights activist; Tammy Duckworth, a veteran of the war in Iraq who lost her legs when her helicopter came under fire and who is now director of the state's Department of Veterans Affairs; Valerie Jarrett, a close adviser to Obama and longtime ally of Mayor Richard Daley of Chicago (she told The Chicago Tribune on Wednesday that she was not interested in the appointment); and several other members of Congress from in and near Chicago, including Melissa Bean, Danny Davis, Luis Gutierrez and Jan Schakowsky.
Many of the most-discussed names on the list are loathe to discuss the possibility publicly, instead staying silent or issuing brief, generic statements.
"Now that Senator Obama has won the presidency, I would be honored and humbled to be appointed to succeed him in the U.S. Senate," Jackson said in a statement. "But, in the end, the decision rests with Governor Blagojevich, and I'm confident that he'll make an appointment in the best interest of the state as well as the nation."
That said, Jackson's camp also commissioned and made public a poll that looked at what likely voters in Illinois thought about possible replacements for Obama. It showed Jackson, who has one of the most recognized names in Illinois politics, topping the list.
Duckworth, who was appointed to the veterans' affairs job by Blagojevich after she lost a bid for Congress in 2006, said in an interview that she had not spoken to him about the Senate opening.
"If I were to be considered, I'd be deeply honored," said Duckworth, who added that she would also be perfectly happy to stay put, "taking care of Illinois veterans."
Duckworth, who remains a major in the Illinois National Guard, has also been mentioned as someone who might be offered a role in the Obama administration. She and Obama have not discussed such a possibility, she said, but she noted that whenever a commander in chief had summoned her, "I have grabbed my boots and headed over."
While influential Democrats might usually weigh in as the governor makes such a decision, Obama has suggested that he will stay out of the matter. Blagojevich is also something of a loner in the political world here, having clashed over the years with Democratic leaders and wrestling with his public image.
Though Blagojevich came into office portraying himself as a reformer, his administration has come under federal scrutiny; by last month, 13 people had been indicted in a corruption probe into influence peddling. Blagojevich, who has left open the possibility of running for a third term in 2010, has not been charged with wrongdoing.
Blagojevich has indicated that he does not intend to appoint himself to the Senate seat, a seemingly far-fetched option, but one some of his severest critics seemed to think was possible. Some analysts still suggest he might consider appointing one of his potential rivals to remove them from a governor's race for example, Lisa Madigan, the state attorney general and daughter of Michael Madigan, the longtime speaker of the Illinois House; or Daniel Hynes, the state comptroller and son of Thomas Hynes, another powerful Illinois Democrat.
Some critics, only half jokingly, suggest that Blagojevich might want to consider Patrick Fitzgerald, the United States attorney here for the past seven years who has overseen investigations into the administrations of Blagojevich and his predecessor, City Hall, the county jail and former Chicago police officers, among others.
Guerrero, his spokesman, said Blagojevich was focused on finding someone who would be a strong advocate for the residents of Illinois on matters like health care and jobs.
"The other stuff I don't think is weighing on him as much as people make it out to be," Guerrero said, chalking up Blagojevich's low approval ratings to the bleak economic times. "When your name is on the door, you're the one people are going to be talking about."
Illinois governor charged in scheme to sell Obama's former Senate seat
By Monica Davey
Tuesday, December 9, 2008
CHICAGO: Governor Rod Blagojevich of Illinois was arrested Tuesday by the federal authorities and charged with corruption, including an allegation that he conspired to effectively sell President-elect Barack Obama's former seat in the U.S. Senate to the highest bidder.
Blagojevich, a Democrat, called his sole authority to appoint Obama's successor "golden," and he sought to parlay it into a job as an ambassador, as secretary of health and human services, or into a high-paying position at a nonprofit group or an organization connected to labor unions, prosecutors said.
He also suggested, they said, that in exchange for the Senate appointment, his wife could be placed on corporate boards where she might earn as much as $150,000 a year, and he tried to gain promises of money for his campaign fund.
At a news conference, Patrick Fitzgerald, the prosecutor, said that Blagojevich had gone on a "political corruption crime spree," and that his actions had "taken us to a truly new low."
In a state that already had a long reputation as one of the more corrupt in the United States, the allegations were "staggering" and "appalling," Fitzgerald said.
"The conduct would make Lincoln roll over in his grave," Fitzgerald said, referring to another president from Illinois whom Obama often cites as a model.
But asked repeatedly about any knowledge or involvement by Obama, Fitzgerald was clear, saying, "The complaint makes no allegations about the president-elect whatsoever." He later added, "We make no allegations that he's aware of anything."
Blagojevich was arrested at the governor's home in an early-morning visit by two FBI agents that caught him by surprise. Fitzgerald said he was arrested Tuesday and not later in order to avoid possible further damage. The implication was that Blagojevich was close either to concluding another dubious deal or announcing his Senate pick in a way that would later be difficult to unravel. The governor has said he would announce his choice within weeks.
Blagojevich, who turns 52 on Wednesday and is in his second term, had portrayed himself as a reformer after the governorship of George Ryan, who was convicted of racketeering and fraud in 2006.
Under Illinois law, Blagojevich has sole authority to fill the seat being vacated by Obama, and the events Tuesday did not strip him of that power, Fitzgerald made clear. Obama's resignation from the Senate took effect Nov. 16.
But if the governor's arrest delays the appointment of Obama's replacement in the Senate, it would temporarily trim the Democratic total there from 58 to 57 seats and make it harder to round up sufficient centrist Republicans to pass controversial legislation.
A 76-page affidavit from the U.S. Attorney's office in the Northern District of Illinois quotes Blagojevich as saying in a secretly recorded conversation that if he could not secure a deal to his liking, he was willing to appoint himself to the Senate.
"I'm going to keep this Senate option for me a real possibility, you know, and therefore I can drive a hard bargain," Blagojevich said, according to the affidavit.
The complaint says Blagojevich was heard on wiretaps over the last month planning to "sell or trade Illinois' United States Senate seat vacated by President-elect Barack Obama for financial and personal benefits for himself and his wife."
The authorities also say Blagojevich threatened to withhold state assistance from the Tribune Company, the publisher of the Chicago Tribune and Los Angeles Times, which filed for bankruptcy Monday. According to the authorities, Blagojevich wanted members of the Tribune's editorial board, who had criticized him, to be fired before he extended any state assistance. No one was fired, Fitzgerald said.
Tribune Company has been negotiating with the Illinois Finance Authority over the sale of Wrigley Field, home of the Chicago Cubs baseball team, which the company owns.
Fitzgerald said the Chicago Tribune had honored a rare request to withhold publishing a story about the investigation that might have derailed it.
The charges are part of a five-year investigation into public corruption and allegations of "pay to play" deals in the clubby world of Illinois politics. Federal officials said Blagojevich's chief of staff, John Harris, was also indicted Tuesday.
Obama said Tuesday that he was "saddened and sobered by the news that came out of the U.S. attorney's office."
He made the comment to reporters before he held a meeting on climate change at his transition offices in Chicago with former Vice President Al Gore. As reporters were ushered out of the room, Obama was asked about his former Senate seat.
"I had no contact with the governor or his office, so I was not aware of what was happening," Obama said. "And as I said, it is a sad day for Illinois. Beyond that, I don't think it's appropriate to comment."
For more than a year, members of Blagojevich's administration have been under investigation. But few here have imagined that the decision on replacing Obama might have resulted in criminal charges.
In addition to the charges related to Obama's Senate seat, Blagojevich is accused of crimes related to past behavior. As part of the charges, he is accused, prosecutors said, of working to gain benefits for himself, his family and his campaign fund in exchange for appointments to state boards and commissions.
According to the indictment, while talking on the telephone about the Senate seat replacement with his chief of staff and an adviser, Blagojevich said he needed to consider his family and their financial struggles.
"I want to make money," he said, according to prosecutors. He then added, they allege, that he wanted to make $250,000 to $300,000 a year.
According to the affidavit, Blagojevich told an adviser last week that he might get some money "upfront, maybe" from one of the candidates hoping to replace Obama. That person was identified only as "Candidate 5." In an earlier recorded conversation, prosecutors say, Blagojevich said he had been approached by an associate of Candidate 5 with an offer of $500,000 in exchange for the Senate seat.
Jack Healy contributed reporting from New York, Jeff Zeleny from Chicago and Brian Knowlton from Washington.
Edward Kennedy agitates for Caroline Kennedy
By David M. Halbfinger
Tuesday, December 9, 2008
While Caroline Kennedy is maintaining her silence about whether she wishes to succeed Hillary Rodham Clinton as senator for New York state, her uncle, Senator Edward Kennedy of Massachusetts, has been working behind the scenes on her behalf, according to Democratic aides.
In recent days, the Massachusetts senator has called Governor David Paterson and Senator Charles Schumer of New York and Senator Robert Menendez of New Jersey, who took over last month as head of the Democratic Senatorial Campaign Committee when Schumer stepped down.
Kennedy's message, said Democratic aides who were not authorized to discuss the conversations, was that Caroline Kennedy - backed by her family's extensive fundraising network - would have the wherewithal to run back-to-back costly statewide races without having to seek help from Paterson or Schumer.
The ability to raise significant money is a key concern for Paterson, who has been deluged from every direction by politicians interested in the seat, which the governor is expected to fill early next year. Whoever is chosen will have to run in 2010 and again two years later.
Efforts to reach Caroline Kennedy on Monday were unsuccessful. A spokesman for Senator Kennedy declined to comment.
The governor has sought to downplay the frenzy over Caroline Kennedy's potential interest in the Senate seat. The mere suggestion that she might be Clinton's replacement has made headlines around the world.
On Sunday night, Paterson met with senior advisers, Schumer, and Representatives Charles Rangel, Nita Lowey and Gregory Meeks to discuss the process for making the appointment. Those gathered urged the governor to go slowly, Meeks said.
Asked about Caroline Kennedy, Meeks acknowledged her appeal. "Does she know politics?" he said. "Absolutely. Could she be a great senator? I don't see why not."
An aide to another official at the meeting said that those present also weighed the pros and cons of other contenders, including Attorney General Andrew Cuomo and Representative Kirsten Gillibrand from upstate New York.
But some influential Democrats have privately suggested that given the buzz set off by Kennedy's emergence, the governor would have little choice but to appoint her if she decided she truly wanted the job.
Some people close to Paterson, however, are trying to quash that notion.
"Governor Paterson is in charge; he is going to make the decision," Meeks said, adding that he would not be swayed by "pressure from the press or anyone else."
Meanwhile, Representative Carolyn Maloney announced that she had hired the political consulting firm of Bill Lynch, a sometime adviser to the governor, to promote her for the seat.
In what could be read as a dig at the waiting game for Kennedy, Maloney said in a statement: "This is no time for people to be coy about whether or not they are up to the job of stepping into Senator Clinton's big shoes."Republican wants to run
Peter King, a New York Republican congressman, said Tuesday that he is preparing for a run for the seat, even if that means facing off against Kennedy in two years, The Associated Press reported from Washington.
"I am seriously considering the race for Hillary Clinton's seat," King said. "I'm very serious about it." He is an eight-term lawmaker from Long Island.
"Obviously it would be a challenge to run against Caroline Kennedy," King said, adding: "Nothing in life is easy. If anything, that makes the adrenaline pump a little harder."
Tempting the thieves with the pocketables
By Joe Sharkey
Tuesday, December 9, 2008
My air travel miseries have included being canceled, delayed, cramped, discombobulated, disturbed, price gouged, hassled, hustled and, on one occasion, nearly killed. So far, though, I have not been robbed.
I do everything the experts recommend to minimize the possibility of having something stolen when I check a bag. Mostly that means that I try not to put easily filched valuables in the bag.
Kathleen Kemper, of Kirkland, Washington State, an experienced domestic and international traveler, usually takes the same precaution.
But on a recent flight from Albuquerque through Phoenix to Seattle, Kemper casually slipped her Apple iPod into a zip pocket in a suitcase she was checking. When she got to Seattle, the iPod was gone. Inside her suitcase was one of those notes from the Transportation Security Administration, saying that a TSA inspector had opened the bag.
Kemper said that it had not occurred to her that putting a little iPod into an easily opened pocket made an easy target. "I thought, 'Oh, what a stupid thing to do,' " she said. "It made it just so easy for someone to slip a hand in there and palm something out."
Kemper said that losing a $250 iPod was less of an issue than the feeling of "personal violation." She added, "My perception is that the TSA is the government, and, therefore, your things will be safe."
After Kemper contacted the agency and filed a report on its Web site (www.tsa.gov), she said she received a "gracious reply" that apologized for the problem. Her next step is to file a claim.
The last time I wrote about theft from checked bags was in 2004, when there had been numerous reports of problems. I received hundreds of e-mail messages from travelers who told of having things like jewelry, electronics, prescription medicine, Swiss Army knives and even designer shirts and underwear filched.
(By the way, I learned that stashing expensive jewelry in a shaving case is not a good deterrent. It is one of the first places thieves look.)
Ellen Howe, a spokeswoman for the TSA, said Monday that the agency has fired 465 officers for theft since the spring of 2003. That is "a minuscule fraction of the work force," she said.
She also said incidents were down sharply. In 2005, she said, the agency paid $3 million in claims for missing possessions or damaged bags. "This year it has been less than $1 million," she said.
The agency has installed closed-circuit cameras in airport bag screening areas. In major airports that handle over half of originating passenger traffic, the agency uses what it calls in-line baggage systems that enable officials "to pinpoint exactly which bags are physically inspected and by whom," she said.
"The biggest way we catch thieves," she said, is through a "neighborhood watch" program in which the huge majority of honest inspectors are expected to report the dishonest ones.
In the small percentage of bags inspected by the TSA, a notice tells the owner that the bag was opened, as was the case with Kemper's bag. In most instances of reported theft, however, arrest records show that the pilferage was by airline baggage handlers, and not by agency inspectors.
Kemper said that she had a "TSA-approved" lock on her bag, and that the lock was in place when she got the bag back. The locks, sold widely in stores, are supposed to be opened only by TSA inspectors with master keys or combination codes.
When speaking with Kemper and her husband, Gary Smith, a commercial photographer, I joked that you used to get your checked bags pilfered free, but now most airlines charge you $15 for the honor.
Kemper, however, was traveling first class, where passengers can check bags without additional charges.
In fact, that might have been a tip-off for an alert thief, Smith speculated.
"Since we were traveling first class, our bags had a priority handling tag on them that may have made them stand out to a thief," he said.
Cybercrime rises as economy sinks
Tuesday, December 9, 2008
SAN FRANCISCO: Cybercriminals around the world are taking advantage of the recession by recruiting lawbreakers and enticing nervous consumers into divulging confidential data, according to a study released Tuesday.
Governments, distracted by the economic crisis, are not paying enough attention to cybercrime and allowing illegal networks expand, McAfee, the Internet security company, said in an annual assessment, the Virtual Criminology Report. McAfee described current laws as "outdated and ill prepared" to fight Internet fraud.
"Service providers, law enforcement and private industry all need to work together to stop these crimes," said Pamela Warren, a cybercrime strategist with McAfee. "Cybercriminals don't let international boundaries get in their way."
McAfee, the second-largest maker of security software, after Symantec, found that cash-strapped consumers were responding to e-mail messages and Web links that appear to be legitimate work-from-home advertisements. The ads promise a percentage of money transferred between bank accounts.
McAfee also uncovered instances where Web site owners were, for a fee, adding software that would trap computers in networks called botnets. Hackers form botnets by taking control of other people's PCs without their knowledge and using them to send spam or wage Internet attacks.
Venezuelan given 15 months in suitcase of cash scandal
By Alexei Barrionuevo
Tuesday, December 9, 2008
A Venezuelan businessman who testified against his friend and former business partner in a South American political scandal involving a suitcase of cash was sentenced Monday by a Miami judge to 15 months in prison on a conspiracy charge.
The businessman, Carlos Kauffmann, 36, was the second government witness in the case to be sentenced. Moisés Maiónica, a Venezuelan lawyer, was sentenced to two years in prison last week after providing what Judge Joan Lenard of United States District Court called "substantial assistance" in the case.
Both men testified against Franklin Durán, a Venezuelan businessman convicted in November of conspiracy and of acting as an unregistered agent of the Venezuelan government. Durán is scheduled to be sentenced on Jan. 12.
Prosecutors dropped a second charge against Kauffmann, of acting as an unregistered agent. Counting time served, he could be free by March.
Kauffmann and Maiónica each pleaded guilty and testified at Durán's trial. They detailed an elaborate plot by Venezuelan and Argentine officials to cover up the origin and destination of a suitcase containing $800,000, which prosecutors said had been sent by Venezuela's state oil company, Petróleos de Venezuela, to the campaign of Cristina Fernández de Kirchner two months before she was elected Argentina's president.
The case has been a scandal in Argentina and Venezuela since August 2007, when Guido Alejandro Antonini Wilson, a Venezuelan-American businessman, was caught with the suitcase in a Buenos Aires airport.
The accusations by American investigators have tested relations between the United States and both countries. Kirchner and President Hugo Chávez of Venezuela have accused the United States of political motivation in bringing the case, an accusation American officials have denied.
Days after he was caught with the suitcase, Antonini Wilson sought help from the FBI in Florida. Investigators there soon began secretly recording Kauffmann, Maiónica and Durán as they tried to persuade Antonini Wilson to help cover up the details of the cash shipment.
Kauffmann and Maiónica testified that they were working on behalf of Venezuela's spy agency and that Chávez himself had directed his spy chief to pay up to $2 million in hush money to Antonini Wilson.
Four men, including Kauffmann and Maiónica, were charged in the case. Three have pleaded guilty; only Durán elected to go to trial. A fifth suspect, José Canchica, a high-level official with Venezuela's spy agency, remains a fugitive.
BMW Oracle refuses to drop America's Cup suit
By Christopher Clarey
Tuesday, December 9, 2008
The America's Cup dispute between the defender Alinghi and the would-be challenger BMW Oracle Racing looks increasingly likely to be settled in court.
Recent developments had increased expectations that the 17-month stalemate would be resolved, but Golden Gate Yacht Club, the San Francisco club that BMW Oracle represents, released a letter Monday saying it would not be dropping its lawsuit against Alinghi and the Swiss yacht club it represents, Société Nautique de Genève.
The letter said Oracle would not meet the Dec. 15 deadline for entering a provisional Cup competition planned by Alinghi, because it had not been allowed to examine putative rules.
The New York State Court of Appeals has set a date of Feb. 10 for oral arguments in the case in which the Golden Gate Yacht Club is appealing a ruling earlier this year that restored Spain's Club Náutico Español de Vela as the challenger of record.
"Given the stakes involved for the future of the America's Cup, we do not believe a few more months represent an unreasonable delay," Marcus Young, commodore of Golden Gate Yacht Club, wrote in the letter.
Alinghi and its billionaire owner and crew member Ernesto Bertarelli retained the Cup, the most prestigious prize in sailing, last year in Valencia. Alinghi then named CNEV as its lead challenger and released a controversial set of rules for the next Cup, planned for 2009. In response, BMW Oracle and its billionaire owner and crew member Larry Ellison initiated legal proceedings to make their team the challenger of record.
BMW Oracle prevailed last year in the New York Supreme Court. That ruling was overturned by the court's Appelate Division in July.
In the expectation of winning in court, Alinghi has pushed ahead with plans for a conventional, multi-team America's Cup in 2010 and has been writing a revised set of rules in concert with prospective challengers.
BMW Oracle had not been part of that process. Its skipper, Russell Coutts, requested formal copies of those rules by Monday to examine them before the Dec. 15 deadline. Alinghi skipper Brad Butterworth said last week that the rules were not expected to be finalized until after a meeting Friday in Geneva.
In a statement Monday, Alinghi said that Oracle's decision to proceed with legal action "shows a tremendous arrogance and lack of respect for the teams involved in the process."
These sailors embrace risk for reward
By Carlos H. Conde
Tuesday, December 9, 2008
MANILA: Under the shade of the tall trees that line the sidewalk at Rizal Park, Marlon Arguelles scanned the job notices posted on the recruiting booths, a jumble of laser printouts marked with huge U.S. dollar signs.
Rizal, just off Manila Bay, is where Filipino sailors go seeking the best job offers, and where recruiters bid for the best sailors. On any given day, between 700 and 1,000 Filipino men try their luck in this sailors' market.
There has always been an element of risk in the seafaring life, but these days, with piracy resurgent off the Horn of Africa, the dangers have seldom been more glaring. Nevertheless, in the Philippines, whose citizens make up nearly a third of the world's commercial sailors, economic considerations trump concerns for personal safety. Recruiters say they've seen little falloff in demand for jobs on even the most dangerous routes.
Arguelles, 28, was looking for a job as a ship's cook. Many of the agencies were offering between $1,000 and $2,000 a month for the position. But he said he needed more money than that to help care for his mother, who suffers from hypertension.
And so he was interested when he heard that one recruiter was looking for crewmen for an oil tanker that would pass through the Gulf of Aden. According to the International Maritime Bureau, 63 of the 199 incidents of piracy or attempted piracy that were reported worldwide from January to September occurred in the Gulf of Aden off the coast of Somalia.
"I know it's dangerous but the agency is offering twice the salary," said Arguelles, who sometimes helps out in his parents' shop back home in Quezon, in the northern Philippines. "Besides, think about it: the pirates haven't killed any crew members so far, so it could be harmless."
Indeed, according to reports of some Filipino sailors who were freed late last month by Somali pirates, it could even be fun. The all-Filipino crew of the Greek-owned tanker Centauri, which was hijacked in September, told news agencies that the pirates treated them well, even playing cards with them and sharing meals.
Arguelles was in the park less than 15 minutes before a man in a white nautical uniform, carrying a sign advertising jobs, sidled up to him and spoke a few words. Arguelles nodded and, with a broad smile, walked away with the recruiter.
In late November, 134 of about 300 sailors held captive by Somali pirates were Filipinos, according to the Philippine Department of Foreign Affairs. Twenty-six of them were from the Centauri. The other 108, taken captive while aboard a total of seven ships, are still in the hands of the pirates.
While some legislators in the Philippines have called for restrictions on the maritime recruiting market, Salvador Santos, assistant general manager of the Luneta Seafarer's Center, a private organization that offers counseling and other assistance to sailors and is located next to the recruiting booths, said he did not think the men were being exploited.
"It's up to the sailor whether to accept the offer," Santos said. "The important thing is he knows what he's getting into."
News reports of pirate attacks in the Gulf of Aden apparently had not deterred sailors from seeking jobs on oil tankers and other commercial ships.
"We haven't seen any change in the number of people who come here," Santos said. "On the contrary, perhaps because of what is happening in Somalia, we've heard that more sailors are seeking to be deployed there because the money is good."
A sailor who boards a ship bound for Somali waters gets double pay plus hazard pay, Santos said. That could mean more than $3,000 a month for a cook, more than a minimum wage-earner in the Philippines would make in a year.
What compels sailors like Arguelles to sign up despite the risk is not thrill-seeking or adventure, but the same motive that drives so many Filipinos to seek employment overseas: the responsibility of caring for families back home, Santos said. In the case of Arguelles, he hopes to cover not just his mother's medical expenses, but his three younger siblings' education.
Arguelles said he had always wanted to be a teacher, but teaching is one of the lowest-paid jobs in the Philippines.
"One hundred thousand pesos," or about $2,000 - roughly the monthly wage on a non-Somalia bound ship - "is a lot of money for a single man like me," Arguelles explained. "But I didn't become a sailor because I wanted to sail. It's because that's what would provide us the money and it's what many of my relatives have been doing."
Amid the global economic crisis, the government continues to pin its hopes on the more than eight million overseas Philippine workers who send back remittances equivalent to 10 percent of the country's gross domestic product.
The Philippine Overseas Employment Administration says that 30 percent of the world's merchant sailors, about 270,000, are Filipinos. They are likely to continue to find themselves in pirate-threatened waters for some time to come.
"The Philippine government is doing its best to protect its sailors, whom we consider heroes," said Crescente Relacion, executive director of the Office of Migrant Workers Affairs at the Department of Foreign Affairs. "We are in constant communication with the ship owners, with foreign authorities and with the families of the sailors who remain in captivity."
Santos, of the Luneta Seafarer's Center, said it should not surprise anyone that Filipino sailors are enthusiastic about sailing despite the dangers.
"Given how hard it is to find a job in the Philippines that pays as much as a sailor would get abroad, I think it's not surprising that sailors would take some risks," he said.
Santos noted that Filipino workers have even smuggled themselves into war-torn Iraq because of the high pay offered there.
"About the only thing we can do," Santos added, "is make sure that the sailor's needs are met and he is equipped with all the knowledge and information he must know before he embarks on a dangerous assignment."
Cruise liner to evacuate clients to avoid piracy
The Associated Press
Tuesday, December 9, 2008
BERLIN: A cruise ship will evacuate passengers before sailing past the Somali coast and fly them to the next port of call to protect them from possible pirate attacks, the German cruise operator Hapag-Lloyd said Tuesday.
An official with the European Union's anti-piracy mission said separately that it would station armed guards on vulnerable cargo ships, the first such deployment of military personnel during the international anti-piracy operations in the Gulf of Aden.
The Columbus cruise ship will drop off its 246 passengers Wednesday at the port of Hodeidah, Yemen, before the ship and some of its crew sail through the Gulf, the cruise company said. The passengers will take a charter flight to Dubai and spend three days at a hotel waiting to rejoin the 150-meter, or 490-foot, vessel in the southern Oman port of Salalah for the remainder of a round-the-world tour that began in Italy.
Hapag-Lloyd said the detour was a "precautionary measure," given rampant piracy off the coast of lawless Somalia that recently has targeted cruise ships as well as commercial vessels.
Pirates last week fired on the Nautica - a cruise liner carrying 650 passengers and 400 crew members - but the ship outran its assailants. Pirates have attacked 32 vessels and hijacked 12 of them since NATO deployed a four-vessel flotilla on Oct. 24 to escort cargo ships and conduct anti-piracy patrols.
Hapag-Lloyd planned the detour for its passengers in response to a German Foreign Ministry travel warning, after the government denied the cruise company's request for a security escort through the Gulf, said a company spokesman, Rainer Mueller.
A U.S. Navy official said, however, that while the danger of a pirate attack was significant, the navy was not advising ships to avoid going through the Gulf.
"We are advising all ships to transit through the international traffic corridor within the Gulf of Aden," said Lieutenant Nathan Christensen, a spokesman for the U.S. Navy's 5th Fleet, based in Bahrain, referring to a security corridor patrolled by the international coalition since August.
The EU began its anti-piracy mission five days early on Tuesday, before it takes over for the NATO ships next Monday. The EU mission will involve six ships and up to three aircraft patrolling at any one time, and will station armed guards aboard the most vulnerable cargo vessels, such as ships transporting food aid to Somalia, according to the British naval commander in charge of the mission.
"We would seek to place vessel protect detachments on board World Food Program ships transiting to Somalia," British Rear Admiral Philip Jones said at a news conference in Brussels.
The NATO anti-piracy mission has also focused on escorting the UN aid agency's chartered vessels, helping about 30,000 tons of humanitarian aid reach Somalia since Oct. 24.
Tuesday, December 9, 2008
The 1980s and 1990s was America's era of the great dispersal. Forty-three million people moved every year, and basically they moved outward - from inner-ring suburbs to far-flung exurbs on the metro fringe. For example, the population of metropolitan Pittsburgh declined by 8 percent in those years, but the developed land area of the Pittsburgh area sprawled outward by 43 percent.
If you asked people in that age of go-go suburbia what they wanted in their new housing developments, they often said they wanted a golf course. But the culture has changed. If you ask people today what they want, they're more likely to say coffee shops, hiking trails and community centers.
People overshot the mark. They moved to the exurbs because they wanted space and order. But once there, they found that they were missing community and social bonds. So in the past years there has been a new trend. Meeting places are popping up across the suburban landscape.
There are restaurant and entertainment zones, mixed-use streetscape malls, suburban theater districts, farmers' markets and concert halls. In addition, downtown areas in places like Charlotte and Dallas are reviving as many people move back into the city in search of human contact. Joel Kotkin, the author of "The New Geography," calls this clustering phenomenon the New Localism.
Barack Obama has said he would start an infrastructure that will dwarf Dwight Eisenhower's highway program. If, indeed, we are going to have a once-in-a-half-century infrastructure investment, it would be great if the program would build on today's emerging patterns. It would be great if Obama's spending, instead of just dissolving into the maw of construction, would actually encourage the clustering and leave a legacy that would be visible and beloved 50 years from now.
To take advantage of the growing desire for community, the Obama plan would have to do two things. First, it would have to create new transportation patterns. The old metro design was based on a hub-and-spoke system - a series of highways that converged on an urban core. But in an age of multiple downtown nodes and complicated travel routes, it's better to have a complex web of roads and rail systems.
Second, the Obama stimulus plan could help localities create suburban town squares. Many communities are trying to build focal points. The stimulus plan could build charter schools, pre-K centers, national service centers and other such programs around new civic hubs.
This kind of stimulus would be consistent with Obama's campaign, which was all about bringing Americans together in new ways. It would help maintain the social capital that's about to be decimated by the economic downturn.
But alas, there's no evidence so far that the Obama infrastructure plan is attached to any larger social vision. In fact, there is a real danger that the plan will retard innovation and entrench the past.
In a stimulus plan, the first job is to get money out the door quickly. That means you avoid anything that might require planning and creativity. You avoid anything that might require careful implementation or novel approaches. The quickest thing to do is simply throw money at things that already exist.
Sure enough, the Obama stimulus plan, at least as it has been sketched out so far, is notable for its lack of creativity. Obama wants to put more computers in classrooms, an old idea with dubious educational merit. He also proposes a series of ideas that are good but not exactly transformational: refurbishing the existing power grid; fixing the oldest roads and bridges; repairing schools; and renovating existing government buildings to make them more energy efficient.
This is the federal version of "This Old House." And this is before the stimulus money gets diverted, as it inevitably will, to refurbish old companies. The auto bailout could eventually swallow $125 billion. After that, it could be the airlines and so on.
It's also before the spending drought that is bound to follow the spending binge. Because we're going to be spending $1 trillion now on existing structures and fading industries, there will be less or nothing in 2010 or 2011 for innovative transport systems, innovative social programs or anything else.
Before the recession hit, we Americans were enjoying a period of urban and suburban innovation. We could have been on the verge of a transportation revolution. It looks as if the Obama infrastructure plan may freeze that change, not fuel it.
And not to get all Rod McKuen on you or anything, but the larger point is this: Social change has a natural rhythm. The season of prosperity gives way to the season of economic scarcity, and out of the winter of recession, new growth has room to emerge. A stimulus package may be necessary, but unless designed with care, its main effect will be to prop up the drying husks of the fall.
Stocks slide as rush to bonds illustrates desperation
U.K. factory, retail and housing data show further weakness
A gloomy third quarter reinforces fears over Japanese economy
Airlines' outlook mixed for 2009
By Lynnley Browning
Tuesday, December 9, 2008
The hole at Fannie Mae may be even deeper than feared.
Three months after the mortgage finance giant and its sibling, Freddie Mac, were effectively nationalized, a number of analysts fear that Fannie Mae's vast holdings of risky home mortgages, some of which they say are designated as safer loans, are deteriorating rapidly along with the housing market.
The extent of the problem is likely to come to the fore on Tuesday, when a former Fannie Mae executive and several outside experts are scheduled to testify before the House oversight committee about the company's condition.
Of particular concern is how Fannie Mae accounts for subprime mortgages and so-called Alt-A home loans, which are technically a rung above subprime. Some critics say that Fannie Mae defines these loans loosely, which could expose the company to new, gaping losses.
Among those scheduled to testify on Tuesday are Edward Pinto, a former credit officer at Fannie Mae, and Charles Calomiris, a finance professor at Columbia who has studied the government-sponsored enterprises, or GSE's. "Fannie has a vast universe of junk loans," Pinto said.
Peter Wallison, a fellow at the American Enterprise Institute and a longtime critic of Fannie Mae and Freddie Mac who issued a critical report of Fannie Mae with Calomiris in September, said Fannie Mae's vague definitions for risky mortgages had masked its potential losses.
"Fannie is a much bigger and deeper hole than anybody has yet realized," Wallison, a former Treasury Department counsel, said.
Fannie Mae lost $29 billion in the third quarter. Most of that deficit — more than $21 billion — reflected write-downs of deferred tax assets, rather than ailing mortgages. Fannie said last month that it was bracing for additional losses and might need more than the $100 billion that the government had pledged.
But in an interview, Wallison said that Fannie Mae's losses could rise at least $100 billion because of "junk loans" that are obscured on its books.
Subprime loans, which are often defined as loans made to borrowers with FICO credit scores below 660, accounted for $8.7 billion, or about 0.3 percent, of Fannie Mae's total holdings of single-family mortgages, according to its third-quarter financial statement. But Fannie uses its own definition for subprime loans and does not disclose some of these definitions.
In a recent statement, Fannie Mae said it classified loans as subprime if they had been originated by lenders specializing in subprime mortgages or by subprime divisions of large lenders. Amy Bonitatibus, a spokeswoman for the company, declined to comment on Monday on whether its nonsubprime categories contained subprime loans, saying only that "we believe that credit scores alone do not provide sufficient information to determine whether a loan should be classified as subprime."
She also declined to comment when asked whether Fannie Mae had additional definitions.
A second gray area is Alt-A loans, which were often made without verifying borrowers' incomes or assets. During the third quarter, Fannie Mae held about $299 billion of Alt-A loans, which accounted for about 11 percent of all the loans it guaranteed. But the Alt-A loans accounted for nearly 48 percent of the company's losses that quarter, while subprime loans accounted for 2.1 percent.
Wallison said those figures suggested that Fannie Mae's Alt-A loans were subprimelike loans.
"Alt-A is prime, in Fannie's world," Pinto, Fannie Mae's chief credit officer from 1987 to 1989, said. "But these are junk loans."
A third gray area involves loans with FICO scores below 620, which Fannie Mae does not necessarily designate as subprime. The company holds $126 billion of these loans. It also discloses little of its portfolio of loans to borrowers with credit scores of 620 to 660. The company also holds tens of billions of dollars of potentially worrisome interest-only and negative-amortization loans.
While Fannie Mae says its subprime exposure amounts to about $8 billion, its ultimate exposure, including Alt-A loans and other nonprime loans, probably exceeds $500 billion, Wallison and Calomiris said in a September paper for the American Enterprise Institute, a conservative group in Washington. The figure reaches $619 billion when subprime loans bought as private-label securities are added.
Pinto said Fannie Mae's exposure on subprime and subprimelike mortgages was much higher, $960 billion.
In 2004, before Fannie Mae pushed into riskier loans, the Department of Housing and Urban Development suggested the definitions were becoming fuzzy.
"As the GSE's become more comfortable with subprime lending, the line between what today is considered a subprime loan versus a prime loan will likely deteriorate, making expansion by the GSE's look more like an increase in the prime market," the housing department said in a November 2004 report.
The Associated Press
Tuesday, December 9, 2008
WASHINGTON: Executives at the mortgage-finance companies Fannie Mae and Freddie Mac ignored warnings that they were taking on too many risky loans long before the housing market plunged, according to documents released Tuesday by a committee in the House of Representatives.
E-mail messages and other internal documents released by the House Oversight and Government Reform Committee show that the former chief executive of Fannie Mae, Daniel Mudd, and the former Freddie Mac chief, Richard Syron, disregarded recommendations that they stay away from riskier types of loans. The companies were seized by government regulators in September.
A month later, Freddie Mac asked for an injection of $13.8 billion in government aid after posting a massive quarterly loss. Fannie Mae has yet to request any government aid but has warned that it might need to do so soon.
By William K. Rashbaum and Alison Leigh Cowan
Tuesday, December 9, 2008
NEW YORK: His legal lineage was impeccable. A Yale man with a law degree from Harvard, he was a litigation powerhouse, a leader at some of the more prominent firms at the New York bar who then started a top-shelf practice of his own.
But when the lawyer, Marc Dreier, stepped off a flight from Canada on Sunday night, the federal authorities in New York arrested him in a $100 million fraud scheme, portraying his recent undertakings as more high-stakes grifting than high-end lawyering.
In brazen and carefully choreographed scams in New York and in Canada, Dreier, who in 1996 founded the 250-lawyer firm that bears his name, is said to have tried to take advantage of the current financial crisis by selling phony debt to hungry hedge funds looking for deals.
But in an era when high-tech frauds and inside information seem to dominate the world of white-collar crime, the square-jawed lawyer, known for his forceful personality and his penchant for high living, apparently did it the old-fashioned way.
Using little more than his position, poise and a kind of reckless bravado, he cajoled his way into accounting, real estate and pension fund offices where he had no real business, according to a criminal complaint unsealed Monday.
Once there, seated in conference rooms that lent credibility to his charade, he peddled forged promissory notes - utterly worthless paper - linked in some way to his unwitting hosts, the complaint said. He backed up his claims with the help of a few confederates, using phony financial statements and bogus audit opinions from a reputable accounting firm and correspondence on the stationery of the New York real estate developer who supposedly issued the debt, the U.S. government said in court papers.
With these tools and little more, he allegedly took hedge fund executives for $100 million in one instance alone, money that the authorities say remains unaccounted for.
Dreier, 58, is charged with stealing a total of $113 million since October, according to the complaint, although the case is developing. A spokesman for Lev Dassin, the acting U.S. attorney in the New York borough of Manhattan, whose office investigated the matter, would not say whether other alleged frauds are under scrutiny.
Indeed, Dreier was working on getting an additional $33 million last Tuesday, according to the complaint, when that plan unraveled in a bizarre tableau played out in the offices of a Toronto pension fund, court records and officials said. He was arrested in Canada and held by the local authorities for several days on relatively minor charges. But the disclosure of that arrest eventually sent the law firm, which is also named Dreier, reeling. As details of the strange doings in Canada began coming out, it became apparent that Dreier was also under investigation by the federal authorities in Manhattan.
Suddenly, the law firm could not make its payroll, people there said; the Christmas party at the Waldorf-Astoria Hotel was canceled; Dreier could not make the rent at his firm's Park Avenue offices; lawyers started packing up their belongings and paperwork; and what had once been a lucrative law practice - a conglomeration of several separate firms - began to collapse.
On Monday, a U.S. magistrate judge, Douglas Eaton, ordered Dreier detained until a bail hearing on Thursday. However, because the Securities and Exchange Commission has sought to freeze his assets and those of the Drier law firm in a parallel civil action, it is unclear how he might post bond.
Despite the efforts of the Toronto police, who placed Dreier in handcuffs last week, his efforts to enrich himself apparently did not end with his arrest, according to the authorities. In a hearing on the SEC action, which immediately followed the arraignment, a lawyer for the commission said to Miriam Cedarbaum, the U.S. District Court judge, that Dreier "did attempt and may have transferred assets" while he was incarcerated in Canada last week. But the lawyer, Nancy Brown, would not elaborate.
Raymond Lohier and Jonathan Streeter, the assistant U.S. attorneys who are prosecuting the criminal case, and Dreier's lawyer, Gerald Shargel, said little during the brief arraignment that preceded Cedarbaum's hearing.
Afterward, Shargel said, "This is a very complicated matter - the facts are beyond reach of a sound bite." In an e-mail message later, he said he might have more to say in the coming weeks.
Questions in the case abound. Why - and perhaps more importantly, when - did Dreier begin the multimillion-dollar con game detailed in the criminal complaint? How was it that sophisticated investors and his highly educated colleagues were so easily duped?
The criminal complaint tells a remarkable story of hubris.
The document, which was made public on Monday, details three schemes and charges Dreier with one count each of wire fraud and securities fraud.
In one scheme, it says, Dreier sought to sell a total of $146 million worth of bogus promissory notes that appeared to have been issued by a realty firm, unidentified in the complaint. But Dreier convinced a receptionist at the Manhattan offices of the firm (which people involved in the matter said was Solow Realty, a firm that had retained Dreier in the past), that the developer's chief executive had authorized him and three other people to use the New York office to meet with the executive.
In fact, the chief executive had not scheduled such a meeting. But he later happened to see Dreier conducting a meeting in Solow's conference room, where he was negotiating to sell the notes.
By Megan Davies and Karen BrettellReuters
Tuesday, December 9, 2008
NEW YORK: Debt-laden companies bought with cheap money during the private equity boom are under increasing stress as the U.S. economy worsens, and more are expected to follow the media company Tribune into bankruptcy.
The collapse of Tribune, owner of The Chicago Tribune and The Los Angeles Times, is the biggest yet among companies taken private in the leveraged-buyout boom that ground to a halt in mid-2007, but it is unlikely to be the last.
While not a private-equity deal, the buyout of Tribune by employees and the real estate mogul Sam Zell was one of those that epitomized the credit boom. The company took on about $8 billion of additional debt when it went private.
"This process of deleveraging America, whether financial institutions or Tribune, will be a long, slow and painful process," James Cox, a professor at Duke University Law School, said. "That's what's going to prolong this recession."
He said there were particular concerns over deals in industries whose fortunes rise and fall with the economy. "There are a lot of other deals, transactions, out there that tend to do well when the economy is expanding but really hit the floor when it's not," Cox said.
Retailers have been hit particularly hard. Linens 'n Things, acquired by the New York buyout firm Apollo Management, filed for bankruptcy in May; Mervyns, a department store chain acquired by Cerberus Capital Management and Sun Capital Partners, announced plans to liquidate in October.
"I think undoubtedly we will see more bankruptcies of private-equity-backed firms, but also regular operating firms, too," Josh Lerner, a professor at Harvard Business School, said.
"What's harder is to say whether the private-equity ones are more likely" to fail, he added. He cited a study he led this year showing that a small percentage of deals over the history of the private-equity industry worldwide had ended in a bankruptcy or a distressed reorganization. Failure rates appear to be far greater for megadeals concluded at the peak of buyout booms, Lerner said.
He cited a 1993 study concluding that of the 66 largest deals done at the peak of the 1980s buyout boom, 38 percent experienced financial distress and 27 percent defaulted on debt repayments, often in conjunction with a bankruptcy filing.
Loose loan covenants could help some private-equity firms stave off trouble, although these may simply prolong the pain. The deals, popular during the boom, lack the traditional restrictions on borrowers, while pay-in-kind deals allow firms to defer interest payments in favor of issuing more debt.
A number of private-equity firms' portfolio companies are trading at distressed levels in the credit-default-swap market, indicating concern in the market about their future.
Harrah's Entertainment, which operates nearly 40 casinos across the United States, was bought by Apollo Global Management and TPG Capital at the peak of the leveraged-buyout bubble. Now, Harrah's has put most of its development plans on hold as it grapples with a soft economy and a heavy debt load.
The cost of protecting Harrah's debt against default is 66.5 percent of the sum insured up front, or $6.65 million to insure $10 million in debt for five years. Swaps on the real estate firm Realogy, owned by Apollo Management, are trading around 76.5 percent. Swaps on Station Casinos are also trading at extremely distressed levels, costing 75 percent of the amount of debt insured.
These levels indicate high concerns that the companies risk bankruptcy if they are unable to reach agreement with their lenders to restructure their debt. TPG and Apollo declined to comment.
Realogy, which owns Century 21, ERA and Coldwell Banker, is being sued by the investor Carl Icahn over a debt deal announced last month. Icahn, whose investment vehicle, High River, owns Realogy bonds, thinks the deal unfairly pushes his senior bonds to the back of the repayment line, according to the lawsuit, filed in a Delaware court.
Station Casinos, purchased in a management-led-buyout, is trying to exchange its debt for longer maturities, though bondholders last week rejected the offer as "deficient." This leaves the company in a difficult situation, Barbara Cappaert, an analyst at KDP, said in a report last week, as it may not be able to afford to offer more compensation to bondholders without tripping terms in its bank loans, which Station is at risk of violating by year's end.
Tuesday, December 9, 2008
Bonuses for investment bankers need to come down. And today is a golden opportunity for the industry to do a hard reset on pay, and base remuneration at sharply lower levels.
Taxpayers are horrified at the idea that bankers could receive any bonus at all this year, at least in those banks that have benefited directly or indirectly from government bailouts. But the public clamor is not the only, nor even perhaps the primary, reason why banks should be resetting bonuses. The real issue is that the business model of investment banking is undergoing a structural shift.
Traditionally, bankers have taken home 50 percent of their employer's annual revenues in base salary and bonus. This so-called compensation ratio may dip in good years, leaving more for shareholders. The reverse applies in bad years: Morgan Stanley's comp ratio was 59 percent last year. The measure will be all over the place for 2008. Analysts are forecasting that the comp ratios of the worst-performing banks will skyrocket, as the gross-profit denominator in the fraction collapses.
When conditions stabilize, the world will look different. With lower leverage and smaller profits from proprietary trading, shareholders will need to be allocated a higher share of the gross cash flow in order to earn a respectable return on equity. That will leave less for workers.
The old 50 percent payout ratio will be too high - as long as shareholders stand up for their share. In effect, bonuses will account for a smaller share of lower profits.
This winter is an opportunity to start over. Banks have been cutting headcount, which will in itself help bring down compensation expenses. But revenues have been falling faster than headcount, and bankers have fixed base salaries too. So individual bonus payments will need to be squeezed disproportionately hard, although bankers will still be far from starving.
Merrill Lynch is reportedly preparing to cut bonuses by 50 percent, which still looks amazingly generous under the circumstances. Goldman Sachs and Morgan Stanley have just finalized their bonus awards, and hopefully they will set a good example for the industry to follow.
The good news is that many of the top brass of investment banking are forgoing bonuses altogether. This should make it easier to take a hard line with the middle ranks and so on down the line. If leaders are taking zero, then zero will look like the norm, and anything else will be, well, a bonus. - Christopher Hughes
Tuesday, December 9, 2008
Bankers, it appears, can show contrition - under the right amount of duress. Facing a storm of criticism over his reported desire for a $5 million to $10 million bonus, John Thain, the chief executive of Merrill Lynch, requested on Monday not to receive a bonus at all.
He joined the chief executives of Goldman Sachs and Morgan Stanley, Lloyd Blankfein and John Mack, respectively, in forgoing bonuses in a year in which banks have led the nation into a market meltdown.
Merrill has reported almost $12 billion in losses this year. The bank tapped the Federal Reserve for money, took advantage of government debt guarantees to survive and avoided disaster only by selling itself to Bank of America, which got $25 billion from taxpayers. Up to a fifth of Merrill's employees could soon lose their jobs.
Mack, whose firm got a $10 billion government rescue, decided not to ask for a bonus. Blankfein of Goldman Sachs gave up his bonus earlier. For a chief executive to seek a bonus after leading his bank to the taxpayer trough is not just unseemly. Performance-related pay was at the core of the meltdown. Top bankers were paid enormous sums for strategies that paid handsomely in the short term but saddled the institutions with piles of securities of dubious value. When the bets went bad, taxpayers had to pick up the tab.
The strategy that brought Merrill down was the work of Thain's predecessor, E. Stanley O'Neal, who was forced to resign in October 2007. Thain worked to unload toxic assets and raise capital. His sale of Merrill to Bank of America potentially saved it from going down the drain. And he has been handsomely rewarded. He got a $15 million cash bonus when he was hired and stock and options worth several million more. When Bank of America completes its acquisition of Merrill, he will run most of what used to be Merrill's businesses.
Bankers and financial regulators will ultimately have to design a pay structure that rewards bankers for the performance of their strategies over several years, not just the current year or quarter. In the meantime, bankers are right in not getting any bonus at all.
Tuesday, December 9, 2008
PARIS: The U.S. economy will need further injections of public money to help it pull out of trouble, the Organization for Economic Co-operation and Development said on Tuesday.
Beyond the short term, Washington not only needs to overhaul the financial sector, but also a system of health care provision that leaves 46 million people, or 16 percent of the population, unprotected, the OECD said in a report on the U.S. economy.
"The U.S. economy is going through an exceptionally difficult period," the Paris-based organization said in the report.
"Further fiscal stimulus will be desirable if financial conditions and economic prospects do not quickly improve."
The Paris-based think-tank did not revise its main economic forecasts in a report that primarily expands on policy advice to the world's largest economy, where the president-elect Barack Obama is promising to roll out the biggest infrastructure investment programme since the 1950s when he takes over as president on Jan. 20.
The report highlighted in particular the failings of health care insurance, saying the U.S. system compared poorly with most of the countries in the OECD's 30-country membership.
"With Mexico and Turkey, the United States is the only OECD country that does not get close to universal healthcare insurance," the report said.
"Making progress towards health insurance coverage for all Americans should be given a high priority."
Robert Ford, an OECD economist sent to Washington to present the report's findings at a seminar later on Tuesday, said this was the most important reform from a long-term perspective.
The OECD suggested replacing tax-breaks for job-related health insurance plans with some form of direct subsidy, since the current system did nothing for those not given insurance by their employers and also tended to favor higher earners.
Ford acknowledged that this was an option Obama had shunned during his election campaign.
The OECD also suggested insurance coverage should move away from being priced uniquely on the basis of an individual's health and more towards collective, community-rated pricing.
It urged greater cost efficiency given that Medicare, the health insurance programme catering to those of 65 and over as well as disabled people, currently accounted for about three percent of gross domestic product and was expected to rise sharply in future years.
"Some hospitals seem prone to high-cost procedures without additional benefits to patients," the report said.
The report repeated November OECD forecasts for U.S. GDP to drop 0.9 percent next year and expand again in 2010, by 1.6 percent, after a 1.4 percent rise in 2008, and reiterated the OECD's view that the U.S. economy was likely to need further fiscal stimulus to pull through the current sharp downturn.
Ford, the OECD economist, said infrastructure projects, while not always easy to roll out and wind up fast, could do the job, especially if the thrust was to advance programmes that would otherwise have been implemented at a later date.
If it is repairing a bridge and the plan was to do so in 2010 or 2011, doing so in 2009 was a good way of stimulating economic activity in the near term, Ford said by way of example.
"We have nothing against infrastructure per se," Ford told Reuters in a telephone interview. "Our concern is that the need is for stimulus that's immediate."
The OECD also recommended that the system of financial regulation and supervision be beefed up.
Tuesday, December 9, 2008
By Mark John
European Union leaders must show U.S. President-elect Barack Obama they are serious about tackling economic slowdown and climate change by agreeing firm action on both this week, the bloc's executive said on Tuesday.
European Commission President Jose Barroso said a two-day summit in Brussels starting on Thursday was the most important in years, with potential to set the stage for future European cooperation with a more like-minded U.S. president.
Barroso also voiced confidence the summit could pave the way for rules revamping the 27-nation EU's clunky decision-making structures by overcoming Ireland's veto of a reform treaty which backers say will give the EU more voice in the world.
With Obama announcing a recovery plan to create at least 2.5 million new jobs by 2011, Barroso said it was all the more vital that EU states overcame differences and agreed on a Commission plan to devote a total 1.5 percent of the bloc's 13 trillion euro (11.3 trillion pounds) output to reviving the economy.
"I will insist on that, that we have 1.5 percent as a sign that we mean business when we talk about fiscal stimulus," he told a pre-summit news conference of a plan many economists believe will not be enough to pull Europe out of recession.
Barroso refused to join calls on Germany -- Europe's largest economy -- to contribute more to the package but hinted that Berlin could at some point top up its 32-billion-euro scheme.
"I think Germany is doing and will do very important contribution to European efforts," he said.
Market reaction to the EU plan has been lukewarm, with analysts noting it will mostly incorporate national schemes that have already been announced by the bloc's main economies.
OUR WAY OF THINKING
The global economic downturn comes just as the EU wants to put itself in the vanguard of the fight against climate change before global talks next year, despite growing concerns by its industry over the cost of the schemes proposed.
However, Barroso said he was confident that the summit would agree the main lines of the plan -- which aims to cut greenhouse gas emissions by a fifth by 2020 and boost renewable energy by the same amount -- and could form the basis of a consensus with the Obama administration on joint efforts.
"Americans are coming around to our way of thinking," he said of European hopes for Obama's climate policies, floating the idea of joint initiatives to cut carbon emissions blamed for the warming of the earth's temperature.
The main barriers to a successful agreement are Poland's worries that the plan will create heavy costs for its power sector, which is about 95 percent dependent on coal -- the most polluting source of energy.
Italy and Germany are worried it will increase costs for manufacturers and heavy industry, harming their ability to compete with rivals in less regulated areas.
Yet prospects of a final deal were given a boost on Tuesday as German Chancellor Angela Merkel and Polish Prime Minister Donald Tusk said after talks in Warsaw they both now expected a compromise deal of some kind from the summit.
Barroso was also upbeat about the chances of EU leaders agreeing to the reassurances Ireland is expected to seek in return for holding a new referendum aimed at ratifying the Lisbon Treaty of reforms its voters rejected in June.
He said the Commission would not oppose an Irish demand to guarantee the right to send one commissioner to Brussels if a deal hung on that. The Lisbon Treaty foresees slimming the EU executive from 27 commissioners now to around 18, prompting Irish concerns about a loss of influence in Brussels.
He also floated the idea that his Commission could agree to have its mandate -- normally due to end next November -- extended by "some weeks or months" to allow continuity until the Lisbon Treaty finally came into force.
(Additional reporting by Marcin Grajewski, Jan Strupczewski and Pete Harrison' editing by Ralph Boulton)
Stocks slide as rush to bonds illustrates desperation
U.K. factory, retail and housing data show further weakness
Bank of Canada cuts rate to 50-year low
A gloomy third quarter reinforces fears over Japanese economy
Airlines' outlook mixed for 2009
U.S. stocks down on weak outlooks as oil falls
ONGC goes ahead with bid for Imperial Energy
M&S and Debenhams cut prices again
EADS expects to lose some Airbus orders in 2009
Bank's Sentance sees deep recession
Wall Street lower after company warnings
Canada cuts key rate three quarters of a point
Bleak winter ahead as economy gloom grows
Pension fund deficits worsen
Industrial output falls sharply
Sony to cut 8,000 jobs
Sony to cut 16,000 jobs
Retail sales post sharpest fall in 3 years
Oil falls on forecast for shrinking demand
BHP's monthly iron ore shipments fall to 9-mth low
Tuesday, December 9, 2008
By Ian Ransom
While his father grew up wondering where his next meal would come from, Beijing resident Ran Zhao wonders whether he should buy a car, study in the United States or try to build up his fledgling snake medicine business.
The 25-year-old office worker is one of about 360 million Chinese born after 1978, when the Communist government officially launched economic reforms kicking off 30 years of spectacular growth and lifting hundreds of millions out of poverty.
Ran, like many of his city-dwelling friends, has vague childhood memories of family austerity, but for the most part has enjoyed privileges and freedoms his parents never dreamed of.
"My father said that when he was my age, he thought China could never be anything but poor," Ran said at a classy dim sum restaurant in Beijing. "Now he's amazed that there are millions of people who actually own cars."
The 30th anniversary of economic reforms is a landmark state media have used to praise the Communist Party's sound economic stewardship, and some academics have used to call for wider political reform in the one-party state.
For many young Chinese, however, the date remains an abstract notion for a generation raised in a relative era of plenty.
"For me, the anniversary is not a big deal because 10 years later there will be a 40th anniversary, and 20 years later there will be a 50th anniversary," said Sarah Lai, a business graduate studying for a Masters at a British university.
Decades of growth and the unwinding of China's monolithic nanny state has brought young Chinese new entertainments and, increasingly often, the spending power to consume them.
It has also created a dangerous expectation that the good times will roll on, even as growth slows and the job market tightens amid the fall-out from the global financial crisis, said Jeffrey Wasserstrom, a political analyst from the University of California, Irvine.
"The real challenge will come not from people being left behind in the short run, but if the sense disappears that there are still years of growth ahead from which those people may be able to benefit," said Wasserstrom.
"Young people frustrated by a sense that they won't have the opportunity to be part of a period of growth, that they missed out somehow on the good times, could become a volatile force."
China has warned that unemployment will rise next year as the global slowdown forces companies to shed staff and cut salaries, and has made finding jobs for the record 6.1 million university graduates a priority of social stability.
"The decrease of the youth share in the total population and the increase of the idle youth in the labour force are the two biggest contradictory factors of China youth employment," the Centre for China Study, at Beijing's prestigious Tsinghua University, said in a recent report.
University graduates have been told to lower their work and salary expectations, but have proved to have little tolerance when they have felt they have been duped.
A string of student riots has been recorded on Chinese campuses in recent years, sparked by disputes over qualifications and the classification of their diplomas.
Student-led protests, initially targeting foreign countries, have also turned against the government for being soft on perceived slights against China, as witnessed by anti-Japan demonstrations in 2005.
While the 30-year reform anniversary means little to most of the generation born after it, far more sensitive anniversaries lie in wait for the Communist Party, which has staked its legitimacy upon building and maintaining a "harmonious society."
In April, China passes the 20th anniversary of the start of student-led pro-democracy protests on Beijing's Tiananmen Square, that were ultimately crushed by army troops in June 1989.
Next year will also see the 90th anniversary of the May Fourth Movement, student-led demonstrations against foreign powers' transfer of colonial interests in China from Germany to Japan after the former's defeat in World War One.
The dates may provoke discussion on campuses and even some symbolic action, but the likelihood of frustrated, idle youth throwing down an open challenge to Party rule is unlikely, even amid rapidly worsening economic conditions, analysts have said.
"The level of helplessness that young people in China feel today compared with what they felt in the late 80s is of a very different kind of magnitude," said Rebecca MacKinnon, from the Journalism and Media Studies Centre of Hong Kong University.
"The frustrations are more akin to frustrations that people in any number of countries would feel during an economic downturn."
With rising numbers hooked up to the Internet, and increasingly aware of China's social ills -- ranging from rife official corruption to a cavernous gap between rich and poor -- the young would sooner blog about their gripes than try to march on city streets, said office worker Ran.
"In any case, for myself and most Chinese people, it's enough that our standard of living is becoming better," said Ran. "So I don't care about politics so much."
(Editing by Nick Macfie and Dean Yates)
Nobel peace honoree pushes case for Kosovo independence
Cooperation with China critical for Obama
Tuesday, December 9, 2008
An excellent way to show concern for wounded veterans is not to make so many of them. General Eric Shinseki knew this when, as the U.S. Army chief of staff, he told Congress on the eve of the Iraq invasion that several hundred thousand soldiers would be needed to handle the occupation.
We all know the result. The Bush administration went to war on the cheap. The defense secretary at the time, Donald Rumsfeld, and his deputy, Paul Wolfowitz, vilified and marginalized General Shinseki, who retired. Five years on, Iraq is still crawling toward stability. Rumsfeld is long gone, leaving among his legacies a growing cohort of wounded veterans. And the vindicated Shinseki is back as President-elect Barack Obama's choice to run the Department of Veterans Affairs.
General Shinseki, 66, who commanded the NATO peacekeeping force in Bosnia and is a Vietnam veteran with two Purple Hearts, has a solid reputation as someone committed to his troops. Running Veterans Affairs is daunting. Not only is the number of wounded veterans growing, but the type of suffering they endure - post-traumatic stress and traumatic brain injury, the two signature afflictions of Iraq and Afghanistan - is often difficult to diagnose and treat. The V.A. system has been marred by incompetence, inadequate funding and bureaucratic sloth.
"You must love those you lead before you can be an effective leader," Shinseki said at the time of his retirement in 2003. "You can certainly command without that sense of commitment, but you cannot lead without it." Those words were a rebuke to the Bush administration. It is heartening to know that the man who spoke them has been chosen to lead the agency charged with caring for America's veterans, who deserve far better treatment than the country has given them.
Tuesday, December 9, 2008
It is more undeniable than ever that TV fries the brain. It also attacks the body. In the most sweeping review yet, researchers at Yale, the National Institutes of Health, and California Pacific Medical Center examined 173 studies since 1980 and have tied media exposure - including video games and the Internet - to smoking, drugs, early sex, attention deficit, and physical ailments including obesity. American youth spend an average of 45 hours a week with media, compared with 30 hours in school and 17 with parents. Negative effects start with eight hours a week of exposure.
The NIH bioethics chairman Ezekiel Emanuel said in an interview that children should not sit in front of screens before age 2, and preferably not before reading age, 5 or 6. After that, exposure should be no more than one hour a day. Parents must compensate by encouraging imaginary play, sports, musical instruments, and crafts.
Emanuel raised his children, now ages 18 to 25, with no TV in the house. "When parents say they can't do this, it's time to ask if this is about the kids or you," he said.
There is a tantalizing chance such findings may finally go beyond pediatricians and children's advocates. Emanuel happens to be a brother of Rahm Emanuel, chief of staff for President-elect Barack Obama. A top applause line from candidate Obama was "government can't turn off the TV," and he is right. Obama and his government must make media overexposure a public health issue.
By William Ayers
Tuesday, December 9, 2008
CHICAGO: In the recently concluded U.S. presidential race, I was unwillingly thrust upon the stage and asked to play a role in a profoundly dishonest drama. I refused, and here's why.
Unable to challenge the content of Barack Obama's campaign, his opponents invented a narrative about a young politician who emerged from nowhere, a man of charm, intelligence and skill, but with an exotic background and a strange name. The refrain was a question: "What do we really know about this man?"
Secondary characters in the narrative included an African-American preacher with a fiery style, a Palestinian scholar and an "unrepentant domestic terrorist." Linking the candidate with these supposedly shadowy characters, and ferreting out every imagined secret tie and dark affiliation, became big news.
I was cast in the "unrepentant terrorist" role; I felt at times like the enemy projected onto a large screen in the "Two Minutes Hate" scene from George Orwell's "1984," when the faithful gathered in a frenzy of fear and loathing.
With the mainstream news media and the blogosphere in the pre-election excitement, I saw no viable path to a rational discussion. Rather than step clumsily into the sound-bite culture, I turned away whenever the microphones were thrust into my face. I sat it out.
Now that the election is over, I want to say as plainly as I can that the character invented to serve this drama wasn't me, not even close.
Here are the facts:
I never killed or injured anyone. I did join the civil rights movement in the mid-1960s, and I later resisted the draft and was arrested several times in nonviolent demonstrations. I became a full-time antiwar organizer for Students for a Democratic Society. In 1970, I co-founded the Weather Underground, an organization that was created after an accidental explosion that claimed the lives of three of our comrades in Greenwich Village. The Weather Underground went on to take responsibility for placing several small bombs in empty offices - the ones placed at the Pentagon and the United States Capitol were perhaps the most notorious - as an illegal and unpopular war consumed the nation.
The Weather Underground crossed lines of legality, of propriety and perhaps even of common sense. Our political effectiveness can be - and still is being - debated. It did carry out dramatic symbolic acts of extreme vandalism directed at monuments to war and racism, and the attacks on property, never on people, were a choice meant to respect human life and convey outrage and determination to end the war in Vietnam.
Peaceful protests had failed to stop the war. So we issued a screaming response. But it was not terrorism; we were not engaged in a campaign to kill and injure people indiscriminately, spreading fear and suffering for political ends.
I cannot imagine engaging in actions of that kind today. And for the past 40 years, I've been teaching and writing about the unique value and potential of every human life, and the need to realize that potential through education.
I have regrets, of course - including mistakes of excess and failures of imagination, posturing and posing, inflated and heated rhetoric, blind sectarianism and a lot else. No one can reach my age with their eyes even partly open and not have hundreds of regrets. The responsibility for the risks we posed to others in some of our most extreme actions in those underground years never leaves my thoughts for long.
The antiwar movement in all its commitment, its deep roots in the black freedom movement, all its sacrifice and determination, could not stop the violence unleashed against Vietnam. And therein lies cause for real regret.
We - the broad "we" - wrote letters, marched, talked to young men at induction centers, surrounded the Pentagon and lay down in front of troop trains. Yet collectively we did not do enough: we were inadequate to end the killing of 3 million Vietnamese and almost 60,000 Americans during a 10-year war.
The dishonesty of the narrative about Obama during the campaign went a step further with its assumption that if you can place two people in the same room at the same time, or if you can show that they held a conversation, shared a cup of coffee, took the bus downtown together or had any of a thousand other associations, then you have demonstrated that they share ideas, policies, outlook, influences and, especially, responsibility for each other's behavior. There is a long and sad history of guilt by association in our political culture, and at crucial times we've been unable to rise above it.
President-elect Obama and I sat on a board together; we lived in the same diverse and yet close-knit community; we sometimes passed in the bookstore. We didn't pal around, and I had nothing whatsoever to do with his platforms or positions. I knew him as well as thousands of others did, and like millions of others today, I wish I knew him better.
Demonization, guilt by association, and the politics of fear did not triumph, not this time. Let's hope they never will again. And let's hope we might now assert that in our wildly diverse society, talking and listening to the widest range of people is not a sin, but a virtue.
William Ayers, a professor of education at the University of Illinois at Chicago, is the author of "Fugitive Days: Memoirs of an Antiwar Activist" and a co-author of the forthcoming "Race Course: Against White Supremacy."
Tuesday, December 9, 2008
By Humphrey Malalo
Eastern Congo rebels and the government made progress and will meet again soon after the first face-to-face talks to defuse tension that has threatened to trigger another regional war, a mediator said on Tuesday.
Diplomats had cautiously welcomed the two days of talks in Nairobi, even though neither Congolese President Joseph Kabila nor General Laurent Nkunda, head of the rebel National Congress for the Defence of the People (CNDP), took part.
"They have made progress in their talks and they will continue," Olusegun Obasanjo, a former Nigerian president who is U.N. special envoy for the conflict in the east of the Democratic Republic of Congo, told reporters.
The talks were aimed at ending fighting in Congo's North Kivu province between the military and Nkunda's Tutsi rebels that has displaced a quarter of a million people since August.
Obasanjo said substantive discussions would take place before Christmas. He said no date or venue had been decided.
"The doors are not closed," he added, saying that "other parties" were welcome to join the talks. He did not elaborate.
At the weekend, the Kinshasa government invited some 20 other armed groups to the U.N.-hosted talks -- but the CNDP said it would not sit down with other insurgents. No other rebel groups turned up, and the two delegations held two days of private meetings.
The CNDP declared a cease-fire after reaching the gates of North Kivu's provincial capital Goma in late October. The truce has been generally respected by both the rebels and the army, leading to more than a month of relative calm in the area.
But clashes continue between Nkunda's fighters, Mai Mai militia and Rwandan Hutu rebels, who roam a region rich in gold, diamonds, coltan and tin and who often support Kabila's weak and chaotic army.
FRANCE: 'NO COMBAT TROOPS'
Congo and Rwanda agreed last week to disband a Rwandan Hutu militia, the Democratic Forces for the Liberation of Rwanda (FDLR), in eastern Congo. Congo's 1998-2003 war sucked in six neighbouring armies and caused more than 5 million deaths.
The FDLR includes in its ranks perpetrators of the 1994 genocide of Tutsis by Hutus in neighbouring Rwanda. Congo accuses Nkunda of receiving support from the Tutsi-led Rwandan government of President Paul Kagame.
The United Nations has a 17,000-strong peacekeeping mission in Congo, known as MONUC, and has asked for an EU "bridging force" to reinforce it until 3,000 more U.N. troops and police arrive next year. EU ministers are split on how to respond.
French Foreign Minister Bernard Kouchner said in Paris that it was "out of the question" for France to send combat troops to Congo to help MONUC because the conflict zone is too close to Rwanda, further dimming hopes that an EU force can be put together to intervene quickly.
Kouchner did not exclude French participation in a possible EU force, but said it would have to be in a non-combat role.
France and Rwanda have extremely tense relations because of mutual accusations of a role in the 1994 Rwandan genocide.
U.N. Secretary-General Ban Ki-moon on Friday repeated a call for an EU bridging force, saying it may take up to six months to deploy some 3,000 reinforcements for MONUC.
Hiroute Guebre Sellassie, head of MONUC's regional office in Goma, said at the U.N. headquarters in New York that MONUC was counting on Europe to come through with a bridging force.
Without one, MONUC would have to live with large areas of vulnerability for six months until the reinforcements arrive.
"The idea of a bridging force originally came from Europe and we would expect them to do something about it," she told Reuters. "This is not a luxury. MONUC needs those forces."
(Additional reporting by Clement Guillou in Paris and Louis Charbonneau at the United Nations; writing by Daniel Wallis and Louis Charbonneau; editing by Mohammad Zargham)
Tuesday, December 9, 2008
By Claudia Parsons
A high-level U.S. taskforce on preventing genocide said on Tuesday it expected President-elect Barack Obama to support its call for a $250 million (169 million pound) fund to back emergency action in high-risk countries.
The Genocide Prevention Task Force, co-chaired by former Secretary of State Madeleine Albright and former Secretary of Defence William Cohen, issued a report this week calling for prevention of genocide to be a top priority in the new U.S. administration that will take office in January.
Albright told reporters at the United Nations on Tuesday the United States should not bear the burden alone but should lead the way in taking responsibility to prevent mass atrocities and genocide wherever they may happen.
She called for the creation of a high level inter-agency mechanism to coordinate between various branches of the U.S. government to focus on early warning when the first signs of a problem occur. That should be backed by $250 million a year to finance specially tailored projects in countries at risk.
"This modest fund would give U.S. diplomats a potentially pivotal tool with which to avert catastrophe," Albright said.
Albright, who was secretary of state under U.S. President Bill Clinton, said the report was prepared with input from many people involved in Obama's transition team.
Cohen said the 34 recommendations in the report aimed to create the mechanisms to ensure early detection and preventative action to stop genocide before it was too late, retaining the option of military action as a last resort.
"We believe that president-elect Obama will support it, we don't know that for certain but we believe that to be the case," Cohen said.
Albright was U.S. ambassador to the United Nations during the Rwandan genocide in 1994. She said the report by the taskforce was not a historical analysis but it did take account of lessons learned when the international community failed to stop the slaughter of some 800,000 people in Rwanda.
"There's broad range of foreign policy options between standing aside and ordering in the Marines," Albright said, emphasizing the importance of early warning systems and international cooperation to exert diplomatic pressure.
Cohen said it was vital that the United States not appear to be "meddling" in a unilateral way.
He said preventing genocide was in the national security interest of all countries, since it could lead to failed states with the potential to breed terrorism.
(Editing by Philip Barbara)
By Marc Lacey
Tuesday, December 9, 2008
MEXICO CITY: Killings linked to Mexico's drug war have more than doubled this year compared with 2007 and are likely to grow even further before they begin to fall, Attorney General Eduardo Medina-Mora said Monday.
The prosecutor tied the sharp increase in deaths to a battle for control among cartels and a power vacuum created by a series of high-profile arrests and seizures.
The number of gangland killings reached 5,376 from the beginning of the year until Dec. 2, a 117 percent increase over the 2,477 killings in the same period in 2007, Medina-Mora said in a luncheon meeting with foreign correspondents.
The bulk of the killings have occurred in the border states of Chihuahua and Baja California, where traffickers have sought to wipe out rivals on the streets of Juárez and Tijuana, and in Sinaloa, where one of the country's most powerful cartels has its base.
"These criminal organizations don't have limits," said Medina-Mora, who previously served as Mexico's public safety director and spy chief. "They certainly have an enormous power of intimidation."
Even while acknowledging that there was a "significant increase" in drug-related homicides, Medina-Mora said the overall level of violence in Mexico remained moderate compared with that in other Latin American countries.
Mexico's overall homicide rate last year, 11 deaths per 100,000 people, was a small fraction of the rates in Colombia, Guatemala, El Salvador and Brazil, he said.
Even as he released the new statistics though, the number of killings in Mexico was climbing. At least 18 people were killed in two southern states on Sunday, The Associated Press reported. They include two people whose heads were left in plastic buckets near the office of the governor of Guerrero State, and 10 suspected drug traffickers and one soldier killed in a gun battle in Arcelia, Guerrero.
Taking on the cartels that supply most of the illegal drugs consumed in the United States has been a frustrating exercise for Mexico. Officials complain that the guns the criminals use are coming from the United States and that the billions of dollars in drug profits have corrupted many institutions in Mexico.
The attorney general's office itself recently found that numerous officials in its organized crime unit were working for traffickers, receiving cash payments to tip off the cartels about impending raids.
But Medina-Mora said that the arrests of those officials showed that Mexico was taking seriously its fight to root out criminals wherever they are found.
Tuesday, December 9, 2008
LONDON: Monday was the biggest online shopping day in Britain this year, with sales up 14 percent on the comparable day last year to 320 million pounds, Internet retail industry group IMRG said on Tuesday.
The second Monday in December has been dubbed "Mega Monday" by the online retail industry because it has traditionally marked the high point of Christmas shopping on the Internet.
But IMRG said that with delivery times improving, there was still time for a stronger performance.
"We may even see next Monday being bigger still, which would be the first time ever that the third Monday in December marked the year's peak," it said.
The rise in sales beat the previous Monday's performance by 20 million pounds and was accompanied by an 18 percent rise in sales volumes.
"Online sales are holding up well, considering the economic conditions," IMRG said.
However, it added that Monday was only the third-biggest day this year in terms of traffic to retail websites, suggesting shoppers are researching thoroughly, both in stores and online, before committing to a purchase.
(Reporting by Mark Potter, editing by Will Waterman)
By Jim Atkinson
Tuesday, December 9, 2008
I had my last drink nearly 16 years ago, so you'd think I would have assimilated pretty much every bit of unpleasantness associated with sober life in a society that remains thoroughly sodden with alcohol. But I still can't quite handle the holidays.
It's not that I'm driven to drink; just to a certain uncomfortable distraction that doesn't leave until the holiday season thankfully does. And it's not just that the holidays seem to have been invented for the express purpose of promoting - no, necessitating - irresponsible alcoholic consumption.
There's something in the alone-in-the-crowdness of the holiday party circuit, the forced pleasantries and laughter, the charge to be friendly and engaging - but only in a trivial and superficial way - that is very much like the existential condition of the alcoholic psyche. So the holidays not only remind me of drink; they remind me of how it felt to be a drunk.
In fact, I have frequently been overheard to explain to the sort of person who still finds it good sport to ask me how I came to be addicted to alcohol and what it's like now to be stone cold sober, "You know how you feel at Christmas at the umpteenth family gathering or company cocktail party. You really need that drink, right? That's the way I used to feel all the time."
And as with one's first adolescent love, a certain euphoric recall about the drinking life remains lodged in the psyche of any drunk no matter how many years he has remained sober. Even after 16 years, especially at holiday time, a tiny voice still occasionally visits, asking, "Why can't you just have one?"
Addiction scientists have puzzled over what distinguishes the alcoholic psyche from the "normal" one, or even, the mentally ill one. The best I can say from personal experience is that we all tend to be afflicted by a low-grade dysphoria, a sort of constant melancholy that causes feelings of unease, isolation and dissatisfaction with life - an "inexplicable ache," I once heard it called.
But is this nature or nurture? I personally have come to believe in a construction proposed by Dr. Mark Willenbring, director of the division of treatment and recovery research at the National Institute on Alcohol Abuse and Alcoholism, which says it's both. Willenbring argues that the main thing that alcoholics share is a natural tolerance for alcohol, which leads them to overindulge without knowing it. Repeated overindulgence, in turn, changes their brain chemistry and literally creates the inexplicable ache by altering the activity of two systems: The brain's "reward system," which sends the message that drinking feels good; and the excitatory and stress response systems, which become "recruited" and, over time, produce an elevated anxiety when one is without alcohol in his system.
This would pretty much track my personal experience. It always took more to get me drunk, and the irony is, I always thought that was a good thing. Particularly during my 20's, when everyone was drinking pretty heavily.
Over time, drinking twice as much just to "get there" took its toll. Without realizing it, I crossed over from mere psychological addiction (a problematic, but self-manageable condition) to physical addiction, which involves blackouts and dangerous withdrawal symptoms, and for which medical intervention is necessary.
So how about that one holiday drink? Should I?
If I decided to take a drink at a party, I might be able to tough it out for that night, but I know that the next day, another drink would be someplace in my mind. That someplace might be a manageable place, but would it be worth the considerable hassle of having to think twice every time I took a sip?
Besides, my newly wired brain doesn't really have the interest to try. I've worked too hard at this, learned too much, have too much pride in accomplishing something that a lot of folks with this problem don't - a solid sobriety that has lasted at least as long as my addiction did - to risk a relapse.
But what to do about the holidays? I rather like the view of radio talk show host Don Imus, himself a recovering alcoholic who has been sober 20 years. When the subject of parties came up on his radio show a few years back, Imus noted that he was invited to many but went to very few, for one simple reason: "I don't drink."
This seemed to me to be one of the more sensible things ever said about parties or alcoholism. So as the holiday season gets underway, I try to look at it this way. No one really wants to go to all those parties. I'm one of the lucky ones who has an excuse to beg off.
Jim Atkinson is a writer at large for Texas Monthly.
By Ellen Barry
Tuesday, December 9, 2008
TUHALA, Estonia: All day, people crunched through the frost-encrusted woods, in snowsuits, leather jackets and perilous heels, until they came to the spot where the water was churning.
According to legend, the witches of Tuhala were taking a sauna underground, beating each other vigorously with birch branches, oblivious to the commotion they were creating on the surface.
The famed Witch's Well of Tuhala erupted last week for the first time in three years, attracting pilgrims from all over Estonia.
Exhaling puffs of vapor in the slanting light, the visitors dangled pendants to test energy fields and held arthritic fingers perfectly motionless over stones.
"Estonia is full of natural magic," said Mari-Liis Roos, 37, a translator who had come to Tuhala with her husband and son. "It's hard to describe. Sometimes you don't want to explain these things, because it is so personal."
Estonia has been bullied into a series of belief systems over the centuries, from Catholicism to Lutheranism to Russian Orthodoxy and Soviet atheism. Seventeen years after gaining independence from the Soviet Union, Estonia is one of the world's most secular nations; in the 2000 census, only 29 percent of its citizens declared themselves followers of a particular faith.
That does not mean they are atheists. Craving an authentic national faith, Estonians have been drawn to the animistic religions that preceded Christianity: Taarausk, or Taaraism, whose god was worshiped in forest groves, and Maausk, which translates as "faith of the earth."
Ancient beliefs have survived in the form of folk tales. In stories, the sins of humans reverberate in nature - lakes fly away to punish greedy villagers, or forests wander off in the night, never to return. Trees demand the respect of a tipped hat and holes in the ground must be fed with coins.
In the case of Tuhala, the physical world begs for such explanations. The settlement, believed to be 3,000 years old, sits on Estonia's largest field of porous karst, where 15 underground rivers flow through a maze of caverns, audible but unseen by human inhabitants.
One result is sinkholes large enough to swallow horses - the Horse's Hole, as it is known, appeared in 1978 - or people, as in the Mother-in-Law's Hole. Streams appear and disappear like phantoms.
The most famous oddity is the Witch's Well. Geologists believe that after flooding rains, underground water pressure builds to the point that water shoots up out of the ground, usually for a few days. Each time it happens, people travel great distances to see it.
Ellu Rouk, 69, a thin woman with clear blue eyes, walked away slowly after a few moments by the well. She said she had a deep involvement with the natural world.
Her special ally is a birch tree in her yard, so powerful that a malicious neighbor has plotted to kill it, she said. When she cuts roses and sets them in a vase, she said, they sprout roots.
These dramas, she said, are an "inheritance" from her ancestors.
"There is an old Estonian god, Taara," Rouk said. "He lives. He exists. Though there are people who would like to get rid of him.
"Christians," she added, "have no respect for nature."
Magic seems to be back in fashion, said Evi Tuttelberg, who lives in a 500-year-old farmhouse near the well. Tuttelberg, 80, used to laugh when her mother-in-law reported seeing flaming devils flying over Tuhala. In her mother-in-law's day, people left offerings of money and food at the "sacred juniper" and spoke of secret underground chambers hidden in the fields.
Then Estonia entered its long Soviet period, and witches and wood elves receded from public discourse. The same went for the Witch's Well, she said.
"No one used to talk about it," she said. "It was just a hole in the ground."
But this year, it was a marvel. A fresh and loamy scent rose from the forest floor; electric-green moss sprang underfoot, and water had frozen into beads on bare branches. People wheeled their newborns all the way to the water's edge and watched as mist rose from the cropland.
Ants Talioja, whose family has owned the land for 11 generations, wandered around proud and distracted, like the headwaiter of a restaurant. When he stopped moving for a moment, though, his expression was pained. There are plans to build a limestone quarry about two and a half kilometers, or a mile and a half, from the Witch's Well, and Talioja said he feared that the project would drain the water that coursed mysteriously under Tuhala.
That would mean this year's eruption could be the last. Talioja, 62, was born over that flowing water, and he said he believed that it had given his family certain gifts; one woman in his family lived to the age of 105.
The mining company has offered to pipe in fresh drinking water to compensate for the 1,000 wells that could run dry, he said. But it was clear from the grim expression on Talioja's face that piped-in water was no substitute.
The Associated Press
Tuesday, December 9, 2008
MADRID, Spain: Spain warned Tuesday of possible retaliatory attacks by the armed Basque group ETA following the arrest of the organization's latest suspected leader.
French and Spanish police detained Aitzol Iriondo in a town square in southern France on Monday. Police believe Iriondo took over the leadership of ETA following the Nov. 17 arrest of Mikel de Garikoitz Aspiazu, alias Txeroki.
The Interior Ministry said two others were arrested with Iriondo and three more suspected ETA members were detained in Spain later Monday.
"I am sure ETA is preparing to carry out a criminal act," Interior Minister Alfredo Perez Rubalcaba said Tuesday. "They're still there. This is not finished."
ETA, whose name stands for Basque Homeland and Freedom in the Basque language, has killed over 825 people since 1968 in its campaign for an independent state straddling northern Spain and southwest France. Most recently it is blamed for the fatal shooting of a 71-year-old Basque businessman in northern Spain last Wednesday.
Rubalcaba said Spain must keep up its guard.
"One always has the feeling that the more cornered they (the ETA) are, the more dangerous they may turn," he told reporters in the southern city of Granada.
Rubalcaba said police also found three guns, a computer and electronic material in the car during the operation in the French town of Gerde. He identified the other two arrested as Eneko Zarrabeitia and Aitor Artetxe.
Several hours later, police arrested three more suspected ETA members across the border in the Spanish town of Irun. Their identities were not released.
Investigators believe Iriondo may have been one of three ETA members who participated in the fatal shooting of two Spanish civil guard officers in the southern French town of Capbreton last December, Rubalcaba said.
Police cooperation between France and Spain has led to the arrests of dozens of ETA suspects in recent years. Previously, ETA member used Basque areas in southwest France as safe havens while preparing to carry out attacks in Spain.
Tuesday, December 9, 2008
NEW YORK: Sam Zell acknowledged from the start that his deal for Tribune Co. was flawed.
"I'm here to tell you that the transaction from hell is done," Zell said last December when he sealed his $8.2 billion takeover of the publisher of The Chicago Tribune and The Los Angeles Times.
But just how hellish this deal was, particularly for Tribune employees, became painfully clear Monday when the 161-year-old company filed for bankruptcy.
There is a lot of blame to go around, and much of it will be directed at Zell, the real estate baron whose knack for buying when everyone else is selling earned him a fit sobriquet for the news business these days: the Grave Dancer.
Advertising is in a free fall, and every newspaper is suffering.
But Zell literally mortgaged the future of Tribune's employees to pursue what one analyst, Jack Newman, at the time called "a childhood fantasy."
Zell financed much of his deal's $13 billion of debt by borrowing against his employees' pension plan. The folks who work for Tribune ended up with equity, and they will probably be left with nothing.
As Newman, an analyst at CreditSights, explained at the time: "If there is a problem with the company, most of the risk is on the employees, as Zell will not own Tribune shares." He continued: "The cash will come from the sweat equity of the employees of Tribune."
And so it is.
Granted, Zell, 67, put up some money. He invested $315 million in the form of subordinated debt in exchange for a warrant to buy 40 percent of Tribune in the future for $500 million. It is unclear whether his money will be protected in bankruptcy.
But with one of the grand old names of American journalism confronting an uncertain future, it is worth remembering all the people who helped orchestrate this ill-fated deal - and made a lot of money in the process. They include members of the Tribune board, the company's management and the bankers who walked away with millions of dollars for financing and advising on a transaction that many of them knew, or should have known, could end in ruin.
It was Tribune's board that sold the company to Zell - and allowed him to use the employee's pension plan to do so. Despite early resistance, Dennis FitzSimons, then the company's chief executive, backed the plan. He was paid about $17.7 million in severance and other payments. The sale also bought all the shares he owned - $23.8 million worth. The day he left, he said in a note to employees that "completing this 'going private' transaction is a great outcome for our shareholders, employees and customers."
Well, at least for some of them.
Aiding and abetting the board were a group of bankers from Citigroup and Merrill Lynch, which walked off with $35.8 million and $37 million, respectively, for advising Tribune. Those banks played both sides: they also happened to lend Zell the money to buy the company. For that, they shared an additional $47 million pot of fees, according to Thomson Reuters.
And then there was Morgan Stanley, which wrote a "fairness opinion" blessing the deal, for which it was paid a $7.5 million fee (plus a $2.5 million advisory fee).
On top of that, a firm called Valuation Research Corp. wrote a "solvency opinion" suggesting that Tribune could meet its debt covenants. Thomson Reuters, which tracks fees, estimates VRC was paid $1 million for that opinion. VRC was so enamored with its role that it put out a news release.
"We were proud to be selected to provide these services to the Tribune Company Board," Bryan Browning, a VRC senior vice president, wrote in that statement. I called Browning on Monday. He didn't call back.
In some corners of the world, you could arguably applaud Tribune's board for selling the company when they did. The Chandler family, which owned 12 percent of Tribune through its prior sale of Times Mirror, campaigned for a sale and eventually won, though the family accepted a much lower price than they had hoped for.
You could even call them prescient, having sold before the financial crisis and economic downturn that has put so many companies in harm's way. And at $34 a share, Tribune shareholders made out like bandits.
The share price of the company's closest rival, McClatchy, has tumbled 84 percent since the Tribune deal closed.
But what about those employees? They had no seat at the table when the company's own board let Zell hijack its pension plan in exchange for $34 a share. Newman, the analyst who predicted the trouble, said during an interview Monday, "The employees were put in a very bad situation." He added that while boards were typically only responsible to their shareholders, this situation might be different. "There has to be a balance," he said, "to create sustainability for all the stakeholders."
Dan Neil, a Pulitzer Prize-winning columnist for The Los Angeles Times, led a lawsuit with other Tribune employees against Zell and Tribune this autumn. The lawsuit contended "through both the structure of his takeover and his subsequent conduct, Zell and his accessories have diminished the value of the employee-owned company to benefit himself and his fellow board members."
If the employees win, they will probably become Tribune creditors - and stand in line with all other creditors in bankruptcy court.
By Richard Pérez-Peña
Tuesday, December 9, 2008
As if the Tribune Company did not have enough problems, a day after the company filed for bankruptcy protection, federal law enforcment officials said on Tuesday that the governor of Illinois, Rod Blagojevich, had been illegally threatening to withhold the state's help in a business deal, unless the Chicago Tribune newspaper fired editorial writers who had criticized the governor and called for his impeachment.
The writers were not fired, the editorial page continued to take on the governor, Tribune editors said Tuesday that they were not aware of any pressure from the governor's office, and the company said it did not do the governor's bidding.
But conversations recorded by federal investigators, and excerpted in a criminal complaint filed on Tuesday by the United States attorney's office for the Northern District of Illinois, suggest that for a few weeks, Blagojevich and his chief of staff, John Harris, believed that Tribune would give in to their demands.
The allegation stems from the Tribune Company's efforts to sell the Chicago Cubs baseball team and its stadium, Wrigley Field. That deal, originally expected to be completed early this year, is crucial to giving the company the cash it needs to survive in the short term, but it has been delayed several times.
Company executives had looked into getting a state agency, the Illinois Finance Authority, to help arrange the financing for a stadium sale because it would have big tax advantages for the company. The complaint states that in one of several secretly recorded conversations, Harris told the governor that the savings to Tribune would be $100 million to $150 million.
The complaint says that last month, Blagojevich sent Harris to tell Tribune that he could not move the stadium deal forward as long as the editorial writers were in place ostensibly because would bypass the Ilinois Legislature, the very kind conduct those writers had criticized him for.
In one recorded conversation, the complaint says, the governor said, "someone should say, 'get rid of those people.' " He advises telling the Tribune of the stadium deal, "Maybe we can't do this now," and in a profanity-laced phrase says the paper should dismiss the editorial writers who have criticized him if it wants an agreement.
In conversations recorded several days later, the complaint says, Harris told the governor that he had spoken with an unidentified advisor to a person identified as "Tribune Owner," clearly a reference to Sam Zell, chairman and chief executive of Tribune Company. In one case, Harris said, the advisor assured him that Zell "got the message and is very sensitive to the issue," and that there were "certain corporate reorganizations and budget cuts coming and, reading between the lines, he's going after that section." Later, he tells the governor that the cuts will be made by the end of November.
But since then, the editorial page has continued to criticize Blagojevich. There have been staff cuts in several part of Tribune Company, but the paper says there have been none at The Tribune's editorial page. The one editorial writer the governor complained about by name, John P. McCormick, remains the deputy editorial page editor.
Tribune Company released a statement on Tuesday afternoon saying, "No one working for the company or on its behalf has ever attempted to influence staffing decisions at The Chicago Tribune or any aspect of the newspaper's editorial coverage as a result of conversations with officials in the governor's administration."
In a separate statement, the paper's editor, Gerould Kern, said, "There was never an instance where I was contacted or called, where any influence at all was placed against me."
As for the allegation that Blagojevich was trying to get the writers fired, Kern said, "I was as surprised as everyone else when I saw that."
In a news conference, Patrick Fitzgerald, the United States Attorney whose office led the investigation, did not characterize Tribune's conduct in the scheme. But he did praise the Tribune newspaper for delaying publication of certain articles at his request during the investigation. What the subject of those articles was, he did not say. Recommend More Articles in US »
By Stuart Elliott
Tuesday, December 9, 2008
The bankruptcy filing on Monday by the Tribune Company underscored that the brunt of the injuries being suffered by the media during the recession are in local markets — especially newspapers.
Already, advertising is bracing for the possibility of the first two consecutive yearly declines in spending since the early days of the Great Depression. The effects of the financial crisis, which exacerbated the woes that have befallen advertisers since the recession began last December, are certainly being felt broadly among television, magazines, cable and other media. But newspapers in particular are being hit hard by the slump.
Many executives who spoke at an annual media conference in New York, sponsored by UBS, released forecasts that predicted across-the-board declines in ad spending in 2009.
Another sign of how lackluster the results have been for newspapers is that UBS canceled a presentation on newspaper ad spending for Monday, the first morning of the conference. Such presentations had long been a mainstay of the event, formally called the Global Media and Communications Conference; this year's, which continues through Wednesday, is the 36th annual conference.
For the United States, ZenithOptimedia is forecasting a decline in ad spending this year of 3.8 percent compared with 2007 and a decline of 6.2 percent in 2009 compared with 2008.
One reason for the larger decline next year is a slowdown in demand for ad space in newspapers, compared with relatively "robust" demand for commercial time on television, said Steve King, chief executive at ZenithOptimedia, a unit of the Publicis Groupe.
"We're in turbulent and challenging times," he said, resulting in "a sharp downturn in advertising spending."
King did offer a ray of hope to the ad and media industries. "It's not as though everyone has turned off the tap," he said. "People are still trying to sell goods and services."
However, a UBS analyst who spoke at the conference, Matthieu Coppet, revised downward his estimates for ad spending. He previously forecast a decline in the United States next year of 5.9 percent compared with 2008; he changed that to a decline of 8.7 percent, primarily because local advertising could fall by a "double-digit level."
Coppet is predicting that local ad spending in newspapers in 2008 could fall 9 percent from 2007 and in 2009 it could fall 21 percent from 2008.
For newspapers in general — local and national ads, in America and other regions around the world — the declines Coppet is forecasting are, he wrote in a report, "the worst in the history" of the medium.
Martin Sorrell, the chief executive at WPP, said he believed that an economic recovery would not take hold until 2010.
Although there is likely to be "more pressure in the first half than the second half" of 2009, Sorrell said, forecasts of a comeback in the second half are "optimistic."
"The real world won't change for the better till 2010," he added, "when greed has overcome fear yet again."
Ad spending in the United States this year is being "really pulled down by extreme softness in spending at the local level," according to another speaker at the conference, Robert Coen, senior vice president and forecasting director at Magna in New York, a media services unit of the Interpublic Group of Companies.
He is predicting a 16 percent decline in ad spending for local newspapers in 2008 compared with 2007. By comparison, Coen is expecting local television ad spending in 2008 to fall 9 percent from 2007; local radio, 8 percent; local yellow pages, 3 percent; and other local media, 0.5 percent.
And it will be almost as bad for local newspapers come next year, Coen predicted, with ad spending declining 12 percent compared with 2008.
The figures for other local media in 2009 are not as bad: local TV, down 7 percent; local radio, down 6 percent; local yellow pages, down 5 percent; and other local media, down 3.7 percent.
Spending in newspapers this year by national advertisers is also falling. Coen is forecasting a decline of 10 percent compared with 2007. That would tie newspapers with radio for the worst showing for national advertising in 2008.
The Coen forecast for national ad spending next year in newspapers echoes the local outlook. He is projecting a 10 percent decline compared with 2008, second only to national spot TV, with a decline of 11 percent.
If Coen's predictions come to pass, they would stir memories — or nightmares — on Madison Avenue of the 1930s. Coen, who has been tracking ad trends for decades, revised his forecast for total ad spending in the United States in 2008 to a decline of 3.2 percent from 2007. At different times in the last year and a half, he had forecast gains for 2008 of 2 percent, 3.7 percent and 5 percent.
Coupled with Coen's final figures for American ad spending in 2007, which showed a decline of 0.7 percent from 2006, two consecutives down years in 2007 and 2008 would be the first since 1932 and 1933.
Coen is also forecasting a decline for 2009, of 4.5 percent from 2008. That also represents a downward revision; he predicted in July that ad spending next year would rise 3.1 percent from this year.
If there are indeed three consecutive years of declines — 2007, 2008, 2009 — it would be the first time that has happened since 1931-33.
(For the record, there were four consecutive down years at the start of the Depression, according to Coen's records; ad spending in 1930 fell compared with 1929.)
Among the reports issued by companies not presenting at the conference were forecasts from the Carat media agency, part of the Aegis Group. Carat predicted that ad spending in the United States this year would rise 1.7 percent from 2007 but fall in 2009 by 6.5 percent from 2008.
Spending for ads in newspapers next year will decline "by another 10 to 15 percent" from 2008, the Carat report said, as categories like real estate, retail and classified "all may see their newspaper spending drop by double digits."
Speakers at the UBS conference reiterated that ad spending will be slow to return.
Adam Smith, futures director at GroupM, a media division of WPP, predicted an increase in American ad spending this year compared with last, albeit just 0.3 percent.
But Smith agreed that 2009 would be weaker than 2008; he is predicting a 3.2 percent decline.
For worldwide ad spending next year, Smith said, newspapers will suffer the largest decline of any medium, down 3.6 percent from 2008.
As a result, Smith forecast a "cultural shift" in the newspaper industry, as local and regional papers adjust from 30 percent profit margins to 10 percent margins — "forever."
The Associated Press
Tuesday, December 9, 2008
LONDON: British manufacturing contracted in October by almost three times as much as economists had forecast, retail sales slumped in November and housing sales fell to the lowest in three decades, as the country slipped deeper into recession, data showed Tuesday.
Factory output fell 1.4 percent from September, the Office for National Statistics said. Economists had predicted a 0.5 percent decline, according to the median of 22 forecasts in a survey.
Meanwhile, real-estate agents and surveyors sold the fewest properties since records began in 1978, the Royal Institution of Chartered Surveyors said.
The data intensify "pressure on the Bank of England to deliver yet another hefty interest-rate cut in January," said Howard Archer, chief European economist at IHS Global Insight in London. "It is far from inconceivable that interest rates could come all the way down to zero."
The pound, which has fallen 25 percent against the dollar this year, dropped to $1.4779 in London.
The Organization for Economic Cooperation and Development predicts the world's largest economies, including Britain, the United States, Japan and the euro region, will all shrink next year.
Factory production fell for an eighth month, the longest streak since the 1980 recession, when Margaret Thatcher was prime minister.
Ten out of 13 categories of factory production fell on the month, led by paper and publishing, basic metals and transport equipment, the statistics office said. The decline on the month was the biggest since 2005. Manufacturing accounts for 14 percent of the economy, compared with about 75 percent for services.
DS Smith, which produces paper and corrugated packaging, said Dec. 3 that its first-half operating profit fell 10 percent as the company struggled to pass along higher raw material costs to its customers.
"This is a big concern, and adds to the sense that activity has just ground to a halt," said Ross Walker, an economist at Royal Bank of Scotland. "These numbers keep us on track for further rate cuts."
The housing market slump is also deepening. House prices dropped 7.4 percent from a year earlier in October, the government's Department for Communities and Local Government said on its Web site. Mortgage approvals fell 52 percent from a year earlier, the Council of Mortgage Lenders said. Banks granted 39,900 loans, compared with 34,900 in September.
Banks are not passing on the full extent of the Bank of England's interest-rate reductions. The average cost of a loan fixed for 24 months with a 25 percent deposit fell to 5.11 percent from 5.82 percent in October, compared with the central bank's 1.5 point cut, the bank said today on its Web site.
The British economy stalled in the second quarter and contracted 0.5 percent in the third. The economies of the OECD's 30 members will shrink 0.4 percent in 2009 after expanding 1.4 percent in 2008, the group said Nov. 25.
Bank of England policy makers cut the key rate by a percentage point last week, joining central banks around the world in reducing borrowing costs to keep inflation from slowing too much.
Separately, British retail sales fell in November for the second consecutive month as consumers, worried about the shaky economy, tightened their belts ahead of Christmas - the first such back-to-back drop since the survey started in 1995.
In its monthly assessment released Tuesday, the British Retail Consortium found that total sales, which include new stores and space, fell 0.4 percent in November from the previous year.
November's decline followed October's 0.1 percent decline and means total sales have fallen for two months in a row for the first time since the BRC survey started in January 1995.
Same store sales, which exclude new stores and space, fell 2.6 percent.
"Retailers will be hoping that customers have been putting off Christmas shopping - not canceling it," said Stephen Robertson, the BRC's director-general.
Robertson said there were some hopes that the "extraordinary" levels of discounting, offers and promotions at present will entice some shoppers back in the crucial Christmas trading period.
For some retailers, December accounts for nearly 80 percent of annual revenue.
Tuesday, December 9, 2008
By Carolyn Cohn and Jessica Mortimer
The economic recession gripping Britain is likely to be as long and deep as the previous three major post-war downturns, Bank of England policymaker Andrew Sentance said on Tuesday.
Speaking at a monetary policy and markets conference in London, Sentance said the Bank remained focused on countering the economic fallout from the global financial crisis and heading off the risk of deflation.
It had already delivered a significant easing of monetary policy, but this would take time to have an effect, he added.
"Even if we do see a recovery beginning in the second half of 2009 -- as suggested by the Bank's November Inflation Report forecast -- this recession is likely to be comparable in length and depth with the previous three major post-war UK downturns in the mid-70s, early-80s and early-90s," Sentance said.
The Bank last week cut interest rates by one percentage point to 2 percent, their lowest level since 1951 and indicated more needed to be done to lessen the impact of the economic downturn.
The Bank's November Inflation Report forecast a recession slightly less deep than the three major post-war downturns.
"However, recent survey data have been weaker than that forecast implied and so I now expect the recession to be of comparable depth to those previous downturns," Sentance said.
Earlier on Tuesday, official data showed a big fall in factory output in October, while surveys showed retail sales sliding and property sales at a record low.
Sentance said the short-term challenge for monetary policy was to counter the impact on demand from the global banking crisis and "to head off the potential deflationary risks created by an emerging large margin of spare capacity (in the economy)."
In the longer term, policymakers needed to develop better instruments for maintaining the stability of financial systems.
Monetary policy cannot do this unaided, Sentance said, but he also warned against "heavy-handed regulatory interventions."
"We need to take time to decide what a new regime for regulating the financial sector looks like," he said.
Sentance said the Bank had made bold decisions, such as its 150-basis-point cut in interest rates last month.
"The 150 basis point cut in November changed the goalposts of perceptions of the measures the Monetary Policy Council would take," he said.
But he added it would take time for rate cuts to work.
"There is a need to allow a reasonable amount of time to see policy measures take impact," he said. "It takes several quarters for the real side of the economy to respond."
(Writing by Mark Potter, Editing by Stephen Nisbet)
By Sarah Lyall
Tuesday, December 9, 2008
LONDON: The painting shows the mythical hunter Actaeon at the most unfortunate moment of his soon to be cut short young life, when he stumbles upon the chaste goddess Diana and her nymphs bathing naked in the woods. (She is not pleased.) Painted by Titian in the mid-16th century, the work, "Diana and Actaeon," is generally acknowledged to be one of the great masterpieces of the Italian Renaissance.
For 63 years it has been the crowning glory of the National Galleries of Scotland - "our Mona Lisa," as the director general, John Leighton, put it - on loan with 27 other works by Rembrandt, Raphael and the like from their owner, the Duke of Sutherland. But that is all about to change. The duke announced in August that he wanted to sell the works, known as the Bridgewater Collection. That has raised the unhappy prospect that "Diana and Actaeon" and another Titian, "Diana and Callisto," would leave Britain and slip out of public view altogether.
The two paintings, part of a series of "poésies," as Titian called them, for Philip II of Spain, are insured for £180 million (about $263 million). And at least before the economic downturn, experts were estimating that they might fetch £300 million on the open market. But intriguingly, the duke presented an alternative solution, offering the gallery, along with the National Gallery in London, a bargain: the two Titians for £100 million.
He also set a deadline, giving them until Dec. 31 to secure the first £50 million - enough to buy "Diana and Actaeon." If the money is found, he said, he will give them until 2012 to find the next £50 million for the second Titian and will also guarantee the loan of the rest of the Bridgewater Collection for the next 21 years.
With less than a month to go, in the worst economic climate in years, the museums say they are nonetheless cautiously optimistic. Their effort has been buoyed by pledges of £1 million from the Art Fund and £10 million from the National Heritage Fund, as well as by unsolicited public donations.
Britain goes through these sorts of convulsions every few years. Some of the country's best art has been owned for centuries by a handful of aristocratic families. When those families decide to sell, the art establishment, backed by the news media, tends to argue that the works should be "saved for the nation." This happened most recently in 2004, when Raphael's "Madonna of the Pinks" was bought by the National Gallery for £34.88 million, after a public appeal and last-minute government intervention.
But the art world says it is not crying wolf about "Diana and Actaeon," a far more important work than the Raphael and perhaps the most beloved painting in the Scottish National Galleries.
"This case is the real thing," The Guardian wrote in an editorial.
But whether the museums succeed, their sometimes emotional campaign has seized the public's imagination, stirring up unexpected passion for a painting that has influenced and inspired artists for more than 400 years.
"It's been a marvelous experience for us," said Nicholas Penny, director of the National Gallery in London, where the painting is on special display through Sunday. "Even if this campaign is a failure, it's reminded people of how powerful a truly great painting can be."
There are those, of course, who argue that this is not the time to spend so much money on a work of art. In a letter to The Observer of London, two officials at the University of the Arts in London warned that the effort might divert attention from helping today's art students. Kelvin Mackenzie, the former editor of the populist tabloid The Sun, was quoted in the newspapers as saying, "I don't want a plug nickel to be spent on anything until my house price is secure, my job secure, my children's education secure."
But theirs has been the minority view, at least publicly. In November, 40 artists, including Lucian Freud, David Hockney and Tracey Emin, sent a letter to Prime Minister Gordon Brown, asking that he refuse to allow the painting to leave the country by, if necessary, denying it a license for export. (It is highly unlikely that a private collector in Britain would have the means to buy the painting; most likely it would go to a foreigner or to a foreign institution.)
The notoriously camera-shy Freud agreed to be filmed in the gallery, telling Channel 4 News, "I can't imagine anything more beautiful." When he looks at the painting, he added, "I immediately think of myself as this man - as Actaeon."
In London, "Diana and Actaeon" is in a prime spot: Room 1, just up the stairs from the main entrance. It is alone except for "The Death of Actaeon," a companion Titian that is already owned by the National Gallery - after a similar appeal, in 1972 - that shows Actaeon being eaten by his own dogs as the wrathful Diana transforms him into a stag. The lights in the room are muted; the dark walls are bare except for text that tells the story of the paintings and reproduces the stirring lines from Ovid's "Metamorphoses" that were Titian's inspiration.
The painting draws a steady stream of visitors, including artists eager to revel in its mixture of joy and cruelty, and marvel at the way Titian worked so hard and made it look so effortless. "It's the most fantastic thing in the world, the epitome of rhythm and energy and harmony," said David Woodcock, a painter.
The work was so sophisticated, said David Jaffe, the National Gallery's chief curator, that it would go on to influence painters for generations - Cézanne, Seurat and Picasso, among others. Its way of becoming increasingly coherent as the observer moves farther away foreshadows Impressionism, he said, while the way Titian painted Diana from several angles at once is a harbinger of Cubism.
"He's so confident of his means that he's deliberately pushing the boundaries," Jaffe said.
Penny said the campaign had originally not been aimed at members of the public. The plan was to seek government and institutional money first, then approach private individuals: "It never occurred to us that people would see it and say, 'Where's the collection box?"'
The collection box is at the front desk, stuffed full of spur-of-the-moment gifts. Penny, who said he was getting plenty of checks for sums as small as £5, added that donations from the public were expected to reach £250,000 to £500,000.
"There are crucial contributions still being deliberated, and it would be imprudent to announce them before they were made," he said. "But we've been bowled over by the support."
If the money is found, the two museums, in Edinburgh and London, would share "Diana and Actaeon" at five-year intervals.
"Without getting overemotional, it's a battle for the heart and soul of our collection," Leighton of the Scottish museum said.
Among those who love the painting with a passion is Jaffe, the National Gallery curator, who said he stopped in every day to admire it. "It's very hard, in a collection of this quality, to get something that takes everything else up three or four notches, and this one does," Jaffe said recently, all but vibrating with excitement as he gazed at "Diana and Actaeon."
"You look at other paintings in a different way because of this one."
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