Saturday, 6 December 2008

A Place in the Auvernge, Friday, 5th December 2008


China prepares blacklist of dangerous food additives
By Mark McDonald
Friday, December 5, 2008
HONG KONG: As China continues to try to repair the reputation of its damaged food and dairy industries, the Ministry of Health is preparing a blacklist of dangerous food additives, "especially toxic or harmful substances, which are likely to be used in food products."
The blacklist was disclosed by Su Zhi, deputy director of the ministry's Food Safety and Sanitation Surveillance Bureau. His comments came on a Chinese television program and were reported by state media on Friday.
The ministry also said it would be establishing stricter food-labeling requirements and quality standards, starting with the dairy sector.
The blacklist, which Su said would be "updated constantly," is seen as the latest in a series of measures intended to clean up the dairy industry, one of the largest in the world. Chinese farmers, food producers and government inspectors have come under intense pressure in recent months as dangerously contaminated products have been discovered, ranging from baby formula, milk and eggs to candy, cookies and pet food.
The most significant culprit in the dairy scandal has been the industrial chemical melamine, typically used in the production of plastics and pesticides. Melamine has been widely added to milk and milk products in China, and while the chemical does not add protein, it does trick food tests into showing elevated protein levels.
Contaminated milk has sickened 300,000 children in China, officials said this week, and 860 children remain hospitalized with kidney and urinary tract problems. At least six children have died in the scandal, officials said.
Melamine found in products containing Chinese milk powder has led to widespread recalls both in China and around the world. The state-run newspaper China Daily reported this week that Chinese milk exports had dropped by 92 percent since September, when news of the scandal first broke.
In response to the surge of contaminated Chinese products, the U.S. Food and Drug Administration last month opened its first overseas inspection offices in Shanghai, Beijing and Guangzhou.
Andrew Jacobs contributed reporting from Beijing.

UN climate official defends global emissions program
By Elisabeth Rosenthal
Friday, December 5, 2008
After a U.S. government report this week called into question the efficacy of the United Nations' global trading scheme to reduce greenhouse emissions, the top UN climate official defended the program Friday and said he expected the United States to commit to emissions targets under a new administration.
Yvo de Boer, executive secretary of the UN Framework Convention on Climate Change, called the report, released this week by the U.S. General Accounting Office, "constructive criticism," rather than "an excuse not to participate."
"This is trying to foster a debate about how we can make what we're doing more effective," he said.
The report questioned whether the UN program, called the Clean Development Mechanism, led to environmental improvements in the developing world that were significant and verifiable.
Under UN auspices, climate officials from around the globe are meeting this week and next in Poznan, Poland, to discuss a replacement for the Kyoto Protocol, the international emissions treaty that expires in 2012. They must reach an agreement by next December.
The United States, which emits more greenhouse gases than any other industrialized country, will need to sign a new treaty to ensure the agreement's success in controlling emissions, but Washington's exact role or intentions remain unclear at this time of transition. The United States never ratified the Kyoto Protocol, under which dozens of other industrialized nations pledged to reduce their emissions.
During the U.S. presidential campaign, Barack Obama said the United States should be party to a future climate treaty and should cap its emissions, but Washington is represented by the Bush administration team in Poznan.
Under the UN's Clean Development Mechanism, countries that have set targets to reduce emissions can do so in two ways: by reducing emissions at home or by paying for new projects to reduce emissions in the developing world, gaining so-called carbon credits. Such projects might include paying to clean up a cement factory in Central Asia, for example, or supporting a hydroelectric power project in Africa.
The U.S. report, released Tuesday, said that the system did not always have the desired effect because it was hard to monitor and assess the distant projects. Some people were gaming the system, getting offsets for projects that would have occurred anyway or which not actually have beneficial environmental effect.
"Carbon offsets involve fundamental tradeoffs and may not be a reliable long-term approach to climate change mitigation, the report said, adding: "It's not possible to ensure that every credit represents a real, measurable and long-term reduction in emissions."
De Boer said several safeguards were in place to ensure that emissions reduction were real, but noted "we're in a learning experience."

Mixed report on renewable energy in U.S.
By Kate Galbraith and Matthew L. Wald
Friday, December 5, 2008
NEW YORK: In hopes of slowing global warming and creating "green jobs," the U.S. Congress and the incoming administration may soon impose a mandate that the United States get 10 or 15 percent of its electricity from renewable sources within a few years.
Yet the experience of U.S. states that have adopted similar goals suggests that passing that requirement could be a lot easier than achieving it. The record so far is decidedly mixed: Some states appear to be on track to meet energy targets, but others have fallen behind on the aggressive goals they set several years ago.
The states' goals have contributed to rapid growth of wind turbines and solar power stations in some areas, notably the West, but that growth has come on a minuscule base. Nationwide, the hard numbers provide a sobering counterpoint to the green-energy enthusiasm sweeping Washington.
Al Gore, the former vice president, is running advertisements saying that the United States could switch entirely to renewable power within a decade. But most experts do not see how. Even with the fast growth of recent years, less than 3 percent of the nation's electricity is coming from renewable sources, excepting dams. "I think we are really overselling how quick, how easy and how complete the transition can be," said George Sterzinger, executive director of the Renewable Energy Policy Project, a Washington advocacy group.
More than half the 50 states have adopted formal green-energy goals. In many states, the standards are too new to be evaluated, but so far the number of successes and failures is "sort of a 50-50 kind of affair," said Ryan Wiser, a scientist at Lawrence Berkeley National Laboratory who is co-author of a recent report on the targets.
Connecticut and Massachusetts have made their utilities pay for missing targets, and utilities in Arizona and Nevada are lagging. California and New York appear almost certain to miss deadlines that are looming in the next few years.
A few states have met their goals, or even exceeded them. One big success has been Texas, which has capitalized on a wind-power boom and already exceeded its 2015 goal. The state gets 4.5 percent of its electricity from the turbines. New Mexico's big utilities are at 6 percent renewable power, within striking distance of the state's 10 percent goal by 2011.
The structure and aggressiveness of the targets varies widely among states; some have been able to meet their goals because they set relatively modest ones in the first place. Maine set a goal of 30 percent renewable power by 2000, an impressive-sounding target that was essentially meaningless because the state was already getting close to half its electricity from sources that counted against the goal, including dams. A more recent law requires development of new renewables in Maine.
In those states that set aggressive goals and have had trouble meeting them, a big hurdle has been building power lines that could transmit the electricity, Wiser said. Another has been the utilities' inability to secure enough long-term contracts to buy renewable power.
California is the prime example of a state reaching high and falling short. Big utilities there are supposed to get 20 percent of their electricity from renewable sources by 2010, and most are expected to miss that deadline.
San Diego Gas & Electric gets a mere 6 percent of electricity from renewable sources, and the state's other two big utilities, Pacific Gas & Electric and Southern California Edison, are at 14 and 15.7 percent, which includes some dams. The Edison number is a 2007 figure; the other two are more recent.
Fines for missing the targets can run to $25 million a year, but because of fine print in the regulations, the San Diego utility and Pacific Gas & Electric said they did not expect to incur fines; a representative for Southern California Edison said he was not sure.
The utilities cited a catalog of reasons for falling short. These include stop-and-start federal tax incentives for renewable power, problems finding reliable suppliers among the many young and fragile startups in the industry, and difficulty getting transmission lines built and obtaining permits to build solar stations and wind farms.
"Not every part of the country is equally blessed in terms of having locations for renewables," said Debra Reed, president and chief executive of San Diego Gas & Electric, which is having trouble getting new transmission lines built to an area with a lot of sunshine.
Moreover, for utilities, the effective goals keep changing. As customers' electricity use rises, so does the amount of renewable-derived electricity the utilities must produce to meet their percentage targets. "When you're judged based on customer demand, you're always chasing a moving target," said Stuart Hemphill, vice president of Southern California Edison, which serves a fast-growing population.
The only mechanism the states have to force utilities into line is to fine them for not meeting the targets, but such costs would ultimately be passed on to electricity customers or company shareholders, neither of whom would look favorably on politicians who imposed such a burden in tough times.
That may explain why most of the penalties issued to date have been modest. In 2006, the payments totaled around $18 million for Massachusetts and $5.6 million for Connecticut, and virtually nothing in any other state, Wiser's report said.
U.S. lawmaker warns of carmaker job loss "disaster"
Friday, December 5, 2008
By Kevin Drawbaugh and John Crawley
A senior U.S. congressional leader warned on Friday of an "unmitigated disaster" if a major U.S. automaker were allowed to collapse at a time when the economy is already losing jobs at an alarming pace.
With new data showing employers axed more than 533,000 jobs in November -- the highest monthly job-loss in 34 years -- Rep. Barney Frank urged the Bush administration to use money from a $700 billion (479.4 billion pound) bank bailout programme to assist Detroit.
The financial system and the economy would be devastated if General Motors, Ford or Chrysler were forced into bankruptcy or shutdown, said the Massachusetts Democrat who chairs the House Financial Services Committee.
"In the midst of the worst economic situation since the Great Depression it would be an unmitigated disaster," Frank said as the CEOs of the Big Three U.S. automakers testified to lawmakers for a second straight day.
Despite the grim economic outlook, the auto industry's drive for a $34 billion emergency taxpayer bailout was stuck in neutral with lawmakers trapped in a political gridlock.
Broad consensus exists between Congress and the Bush administration that the automakers need help, but officials are refusing to budge from their views on how to do it, with some lawmakers opposed to doing anything at all.
The White House refuses to carve out for Detroit some of the $700 billion bailout it is already showering on Wall Street and the banks, saying that money is intended only to help stabilise the financial sector. It backs helping the automakers by modifying a $25-billion Energy Department loan program meant to promote fuel-efficient technologies.
President George W. Bush told reporters on Friday it was important for Congress to act next week on redirecting those energy loans.
But Congressional Democrats oppose this and insist the administration should help the automakers with money from the bank bailout -- the Troubled Asset Relief Program (TARP).
While U.S. leaders argued, other nations were moving to help their auto sectors.
The German government said on Friday it is looking at options to help GM's Opel unit and is on track to make a decision by Christmas.
Australia said local banks agreed to help the country's crippled car-financing industry with new funding worth A$2 billion (867 million pounds).
U.S. employers axed 533,000 jobs in November, the most since 1974, the Labour Department said on Friday. The unemployment rate rose to 6.7 percent from 6.5 percent in October.
On a combined basis, GM, Ford and Chrysler have cut more than 100,000 factory jobs since sales began to slow in 2006.
GM said on Friday it will lay off 2,000 unionised workers and eliminate a production shift at three plants in Michigan, Ohio and Canada.
Congressional Democratic leaders would like to address aid for the auto sector in the House and Senate next week.
House Speaker Nancy Pelosi said earlier in the week that Congress or the Bush administration would have to act quickly to prevent the collapse of one or more automakers.
GM and Chrysler want immediate loans to forestall possible failure, while Ford is asking for a $9 billion credit line that would be tapped later if necessary. GM wants $12 billion in loans, with $4 billion of that immediately, as well as a $6 billion credit line. Chrysler wants $7 billion immediately.
"This is about survival at this point in time. There's going to be, unfortunately, (job) losses," United Auto Workers President Ron Gettelfinger told lawmakers.
"We can't sugarcoat it, we can't stick our heads in the sand," said Gettelfinger, appearing before the House hearing with chief executives Rick Wagoner of GM, Alan Mulally of Ford and Bob Nardelli of Chrysler.
All four testified before the Senate Banking Committee on Thursday.
Shares of GM were down 2.7 percent at $4 in late morning trading, while Ford rose 3.4 percent to $2.75, both on the New York Stock Exchange. Chrysler is owned by private equity firm Cerberus Capital Management.
(Reporting by John Crawley, Kevin Drawbaugh and Karey Wutkowski; Editing by Tim Dobbyn)
Russia and India sign nuclear pact
Friday, December 5, 2008
NEW DELHI: President Dmitry Medvedev of Russia signed agreements Friday to develop new nuclear plants in India as the countries sought to deepen ties beyond their historical defense and weapon sales relationship.
The deal will allow Russia to build more reactors at the Kudankulam nuclear power plant in the southern Indian state of Tamil Nadu and plants elsewhere in country, the Indian government said in a statement.
The deal comes after India earlier this year signed a nuclear pact with the United States, giving New Delhi access to civilian nuclear fuel and technology on the international market for the first time in three decades.
Overturning a U.S. ban on nuclear trade instituted after India first tested an atomic device in 1974, the U.S. pact provides India with access to nuclear fuel, reactors and technology to generate power for its 1.1 billion plus people.
"The signing of the agreement on civil nuclear cooperation with Russia marks a new milestone in the history of our cooperation with Russia in the field of nuclear energy," Prime Minister Manmohan Singh said at a news conference with Medvedev.
Russia is competing with the United States for influence in India, a Cold War ally of Moscow which the Kremlin sees as a growing partner in Asia.
"The cooperation in the energy sector remains a priority for us," Medvedev said. "We are very interested in developing cooperation in the nuclear sector. It is especially important now that various energy sectors are being developed."
Both countries signed a contract for India to buy 80 Mi-17 transport helicopters (Mi-17), worth more than $1 billion, said Anatoly Isaikin, head of Russia's state-run arms-export monopoly Rosoboron.
India, which wants to buy billions of dollars of weapons as it rearms, has been unhappy with holdups on major Russian arms contracts, including a delay to a $1.5 billion aircraft carrier modernisation.
"Our main task is to switch from buying or selling weapons to jointly designing and producing them. We have such plans in rocket building and aviation," Medvedev said.
India, along with China, is one of Russia's biggest clients for arms sales.
The two also signed a deal to cooperate on future manned space flight, and in building an astronaut training centre, said Anatoly Perminov, head of Russia's space agency Roskosmos.
The first Indian cosmonaut is expected to fly on the Soyuz rocket in 2013, he said. India launched its first unmanned moon mission Chandrayaan-1 on Oct. 22, joining the Asian space race in the footsteps of rival China.

Thieves get €85 million in jewelry from Paris boutique
By Doreen Carvajal
Friday, December 5, 2008
PARIS: A savvy band of jewel thieves, armed with guns and some posing as women, have struck in the heart of the city's golden triangle of luxury shops, stealing more than €85 million worth of diamonds, rings and watches from a posh Harry Winston boutique.
The brazen $108 million theft Thursday, which some French newspapers quickly branded the heist of the century, reflected a savvy knowledge of the jewelry business, happening during the peak of the holiday season, when jewelry stocks are plentiful.
It was the second time that the boutique on Avenue Montaigne was robbed in the past 14 months and came a little more than a week after Cartier in Paris lost a €635,000 diamond ring to a veiled woman posing as a tourist from Qatar who switched the real gem for a fake.
"Harry Winston is not the only target," said Doron Lévy, a spokesman for the Union of French Jewelers in Paris, who huddled with executives of Harry Winston on Friday to debate a public response. "It is interesting how imaginative these thieves are. They are very observant and they know how people work in the shops. And they are always looking for vulnerable points."
The police said that at least four people were involved in the robbery of Harry Winston, which is on a street of deluxe shops near the Champs Élysées that is crowded with boutiques for Chanel, Dior and Gucci. Around closing time at 5:30 p.m. Thursday, the thieves entered and confronted 15 employees. At least two of the robbers were dressed in wigs and women's clothes, while a fourth accomplice apparently waited outside as the getaway driver, Lévy said.
The robbers struck two employees and then scooped up the jewels in the display cases into sacks and were gone in less than 15 minutes. No one was seriously hurt, the police said.
On Friday, Harry Winston issued a terse two-sentence response from its headquarters in New York.
"We are cooperating with the authorities in their investigation," a spokeswoman, Rhonda Barnat, said in the statement. "Our first concern is the well-being of our employees."
The golden doors of its boutique on Avenue Montaigne were locked Friday, and some of its display windows were empty. Barnat said by telephone that the reopening date had not been set. Even so, knots of television cameramen gathered around its entrance, along with tourists taking unlikely souvenir photos.
The boutique has already weathered an earlier audacious robbery of €10 million of goods, in October 2007. At the time, the company offered a €500,000 reward for information leading to the recovery of its diamonds. In April, Harry Winston posted a pre-tax gain of $13.5 million from the settlement of its insurance claim in that earlier robbery.
To date, the record for jewelry theft remains a heist in February 2003, when thieves reaped €100 millions in diamonds from the vaults at Antwerp's diamond exchange.
Lévy, of the jewelers' trade group, said thieves were becoming more imaginative and were carefully studying how stores functioned.
For example, the culprits in the latest Harry Winston robbery knew the names of some of the store's employees, he said, and they dressed as women because they were aware that typically jewelers are more trusting of females and so more likely to allow them to enter.
"It's a very sensitive moment when someone tries to enter a shop," Lévy said, noting that the employees study the potential customer before unlocking the doors. "If they know you are not a client, they will not open."
In a jewelry robbery in London, he added, thieves successfully overcame suspicion by arriving in a Bentley automobile. The thieves, one dressed in a dark blazer and a Panama hat and the other in a cream-colored suit, struck Graff Diamonds on Sloane Street, in West London, in June 2007. In the Paris case, the thieves were young white men who were speaking in French but had accents, he said.
"They were professionals," Lévy said.
One investigator told the newspaper Le Monde that it would be difficult to resell the jewels in Western Europe. But apparently it is another story in Eastern Europe, with the investigator calling that territory "a new El Dorado for some years for traffickers."
Trader blamed for loss at Société Générale is denied permission to confront chairman
Bloomberg News
Friday, December 5, 2008
PARIS: Jérôme Kerviel, blamed by Société Générale for its record trading loss, has been denied permission by investigators to question the bank's chairman, Daniel Bouton, lawyers for both sides said Friday.
The judges leading the investigation decided that arranging a meeting between the two would not add anything new to their understanding of how the trading loss occurred, or when the bank's leadership discovered that Kerviel had been taking unauthorized positions, the lawyers said.
"It's the first time that the judges declared clearly that, in light of statements by Mr. Kerviel, they consider that the hierarchy was not informed of the fraudulent positions," Jean Veil, a lawyer for the bank, said by telephone.
Kerviel, 31, is under investigation by the judges, Renaud Van Ruymbeke and Françoise Desset, for his role in the bank's €4.9 billion, or $6.3 billion, trading loss.
While he has admitted to taking positions that exceeded limits, faking documents and evading internal controls, Kerviel has said that the bank was aware of his actions and that the loss stemmed from a decision to unwind his positions over three days of falling markets.
"We asked to meet with Bouton not to humiliate him but to ask for explanations" about letters from him attesting to the bank's internal controls, Kerviel's lawyer Caroline Wassermann said. She said Kerviel's legal team would appeal the decision to not call Bouton.
Bouton, 58, stepped down as chief executive in May but remained as chairman. He had held both roles since 1997 and his offer to resign after the bank revealed the trading loss was turned down twice.
Kerviel is scheduled to be questioned by Société Générale's general counsel, Gérard Gardella, on Monday at a closed-door meeting with the judges. Kerviel faces charges including breach of trust, falsifying documents and hacking the bank's computers to input faked information.
Deconstructing the war of the words over Lance Armstrong
By Samuel Abt
Friday, December 5, 2008
PARIS: Now that Jacques Derrida and Roland Barthes have joined the Immortals (the ones in the sky, not those in the Académie Française) and the equally late Paul de Man (definitely not da man) has been unmasked as a Nazi collaborator and cad, who is left to deconstruct the war of words over Lance Armstrong's safety among the French? Semiotics majors, to your posts.
Our slugfest thus far: Armstrong, seven consecutive times the winner of the Tour de France, and his Astana team director, Johan Bruyneel, a speaker of five languages, accuse Marc Madiot, the director of the Française des Jeux team and fluent in French, of calling for insurrection if Big Tex, witty and eloquent in English, otherwise not, enters a race in France.
Which is what he intends to do. Armstrong confirmed recently that he plans to enter the Tour and said that concerns for his safety, almost unanimously voiced by him, had been overstated.
In an e-mail message, the Armstrong-Bruyneel prosecution cited an interview, complete with video, that Madiot granted to the obscure Web site in which he supposedly dissed Armstrong's comeback by saying in a translation supplied by Bruyneel, "I think he has a real will of taking over cycling (in French it says put his hands on cycling). But I don't know under which form. One thing is for sure: we will have to defend ourselves.
"More than ever, we will have to tighten our elbows amongst us, the little French, to keep the ethical line. And then cycling is played out on the public roads. We can not allow that no matter who does no matter what on our roads." (That's French, the language of Rimbaud?)
Challenged on his translation, Bruyneel replied in a recent conversation, "What about when he calls for national solidarity?"
Good point, except that Madiot did not say that. The coach365 interviewer, who lives in blogosphere anonymity, did. As for tightening the elbows, that's the old "il faut se serrer les coudes," or, more idiomatically and less threateningly, "stand together."
Another good point: Bruyneel and Madiot have often clashed in their interpretations of the moral boundaries in bicycle racing. For example, the intense Bruyneel has hired lepers like Ivan Basso, a decision denounced by Madiot.
On the other hand, Bruyneel's riders have won 8 of the last 10 Tours de France, Madiot's guys have not finished in the top five in any of them.
What's the verdict? Did Madiot call for revolt, a veritable Bastille Day in the streets at the next Tour de France? Should Armstrong be worried?
All answers, please, to
Royal shuns new French Socialist leadership team
Friday, December 5, 2008
PARIS: Maverick French Socialist Segolene Royal and her allies have refused to join the leadership team of newly elected party chief Martine Aubry, a supporter said on Friday, a further sign of deep divisions in France's opposition.
The move raises the prospect of a protracted split between Royal, who shot to prominence last year in a failed presidential election campaign against Nicolas Sarkozy, and Aubry, the architect of France's 35-hour work week.
Aubry beat Royal last month by a razor-thin margin in a battle for leadership of the Socialist party. Royal at first disputed the result but conceded defeat after an internal party review confirmed she had lost.
Royal and her supporters see themselves as the modernising wing of the party and describe Aubry as more traditional.
"To us, the conditions for renovation and unity do not seem to be there," Royal's ally, Vincent Peillon, said on Friday.
Royal's aides say she will not attend a Socialist party meeting on Saturday at which Aubry will officially unveil her leadership team.
The Socialists have been bogged down by acrimonious infighting for months, allowing Sarkozy to pursue his ambitious reform programme almost unopposed.
(Reporting by Laure Bretton, writing by Brian Rohan; editing by Tim Pearce)
Dalai Lama row sparks new France boycott calls
Friday, December 5, 2008
By Emma Graham-Harrison
Angry Chinese nationalists are gathering online momentum for a boycott of French products in protest against President Nicolas Sarkozy's plan to meet the exiled Tibetan Buddhist leader, the Dalai Lama, this weekend.
Beijing has already warned Paris about Sarkozy's decision and said it forced the government to postpone a planned EU-China summit, but some citizens want a more tangible response to what they see as a slight to national pride.
"I am using my real name to swear to the French: I am going to boycott French goods for my whole life. I will never use French brands or any product made in France," said one poster, who identified himself as Yan Zhongjie. A first boycott call put online earlier this week has been blocked, probably by government censors wary of anger that escalated into widespread protests after the Paris leg of the Olympic torch relay was disrupted by anti-China protesters.
But cached records show it was seen by nearly 850,000 readers and notched up 90,000 comments before it disappeared.
Fiery nationalists like Yan see the Dalai Lama as a Machiavellian separatist who wants to split China just as it is rising to international power after over a century of humiliation, poverty and political impotence.
The elderly monk, ultimate spiritual and political leader for millions of Tibetans, says he does not seek independence, only autonomy, for his people, because he fears their cultural and religious traditions are being slowly crushed.
He fled into exile in 1959 after a failed insurrection against Chinese rule in Tibet, and is now based in India but travels the world promoting Tibetan issues, to the irritation of Beijing and many ordinary Chinese.
"Our country must speak out on this affair, make some kind of protest. This can't be tolerated," said retiree Lan Fusheng, heading out of French-owned boycott target Carrefour.
Taiwan President Ma Ying-jeou on Friday also said the Dalai Lama would eventually be welcome on the self-ruled democratic island which Beijing claims as a renegade province.
He had earlier come under huge pressure from Buddhist groups after quashing hopes for a 2009 visit, saying the time was wrong, as his government works to improve relations with Beijing.
China's government, while it has been unusually vehement on an issue that always raises hackles, still seems keen to keep nationalist sentiment as low key as is politically feasible.
Although there is a massive French presence in China, and much for companies like Carrefour to lose, China has a trade surplus with the European nation and antagonising key partners during a global slowdown could be risky.
Chinese Foreign Ministry spokesman Liu Jianchao said on Thursday that Sarkozy's proposed meeting with the Dalai Lama had caused "a lot of dissatisfaction" with the Chinese people, but also called on the public to be "calm and rational."
But even web users who have not joined the boycott calls are infuriated by the meeting.
"Sarkozy is a typical flip-flopping runt," said one posting on the website of the official People's Daily newspaper (
"China should stiffen its spine on issues of sovereignty and take a harder line against Europe and America."
(Additional reporting by Ben Blanchard and Chris Buckley in Beijing and Ralph Jennings in Taipei; Editing by Nick Macfie)

At least 22 dead in Pakistan blast
By Pir Zubair Shah
Friday, December 5, 2008
ISLAMABAD: A powerful explosion struck a crowded central bazaar in the chaotic city of Peshawar in Pakistan's northwest Friday, killing at least 22 people and wounding more than 90, Pakistani officials said.
The chief of police in Peshawar, Malik Naveed, told a television station that the explosion occurred in an area in the center of the city at a time when many people were out shopping for a coming festival. He said that the explosion, which took place at 7:20 p.m. local time, struck near a Shiite mosque and that he expected the number of dead and wounded to rise.
According to a Peshawar resident, Rasool Din, who was reached by telephone, the large explosion occurred in a congested area, and rescue operations were being hampered by power failures. Gas pipes had also exploded, making even more difficult the task of dousing the fire caused by the explosion, he said.
The dead and wounded were being taken to the local hospitals, where the authorities had declared an emergency and were asking for donations of blood.
Peshawar has witnessed a series of suicide bombings by Taliban militants in the past few months. In November, gunmen abducted an Iranian diplomat in the city, a day after the assassination of an American aid official there.
The diplomat, Hesmatollah Atharzadeh, who was the commercial counselor at the Iranian Consulate, was leaving his house in a suburb when the gunmen attacked. The police said they suspected that Islamist militants were involved in the killing of the American aid worker, Stephen Vance.
Also last month, a suicide bomber blew himself up in the city's main stadium after the closing ceremony of interprovincial games, the first such event after a new secular provincial government lifted the ban on sports imposed by a coalition of religious parties.
In August, a Pakistani Air Force bus was bombed in Peshawar in an attack that killed 14 people, many of them air force personnel. The Taliban took responsibility for that attack, which was carried out by a remote-controlled bomb.
Graham Bowley contributed reporting from New York.
India acknowledges errors in response to attacks
By Somini Sengupta and Jane Perlez
Friday, December 5, 2008
MUMBAI, India: India conceded Friday that the devastating terrorist attacks on Mumbai last week revealed "lapses" in its security arrangements, while the country's prime minister articulated the scale of anger and grievance stirred by the attacks in the Indian public.
"The people of India feel a sense of hurt and anger as never before," said the prime minister, Manmohan Singh, at a news conference in New Delhi.
That anger has been directed in part at India's neighbor, Pakistan, where Indian and American officials believe the attackers received training, and Manmohan said on Friday that other countries around the world should now confront Pakistan over the alleged presence of terrorists on its soil.
"We expect the world community to come to the same conclusion, that the territory of a neighboring country has been used for this crime," he said, referring to Pakistan.
But the anger is also focused domestically too, as Indians rage at their government for not having done more to protect them.
In the most public outrage so far, tens of thousands in Mumbai marched near the attacked sites on Wednesday, while similar rallies were held in New Delhi and in the southern technology hubs of Bangalore and Hyderabad.
Speaking in Mumbai on Friday, India's new home minister, Palaniappan Chidambaram, admitted that there had been "lapses" in the way India handled the crisis and said his government was trying to "improve the effectiveness of the security systems."
"There have been lapses," he told reporters. "I would be less than truthful if I said there had been no lapses."
Questions raised include why Indian intelligence had no forewarning of the plot, why security was so loose at the sites attacked in Mumbai, and why Indian security forces were so poorly armed — and in some cases so slow to respond.
Meanwhile, evidence linking the attackers to Pakistan builds. Fresh evidence unearthed by investigators in India has indicated that the Mumbai attacks were stage-managed from at least two Pakistani cities by top leaders of the militant group Lashkar-e-Taiba.
Indian and American intelligence officials have already identified a Lashkar operative, who goes by the name Yusuf Muzammil, as a mastermind of the attacks. On Thursday, Indian investigators named one of the most well-known senior figures in Lashkar, Zaki-ur-Rehman Lakhvi.
The names of both men came from the interrogations of the one surviving attacker, Muhammad Ajmal Kasab, 21, according to police officials in Mumbai.
While Muzammil appears to have served as a control officer in Lahore, Pakistan, Lakhvi, his boss and the operational commander of Lashkar, worked from Karachi, a southern Pakistani port city, said investigators in Mumbai.
It now appears that both men were in contact with their charges as they sailed to Mumbai from Karachi, and then continued guiding the attacks even as they unfolded, directing the assaults and possibly providing information about the police and military response in India.
Some of the calls appeared to be conversations about who would live and who would die among the gunmen's hostages, according to an official who interviewed survivors and a report by security consultants with contacts among the investigators.
While Indian officials have pointed a finger directly at Pakistani elements, terrorism experts and some Western officials warned that the emerging sketch of the plotters was still preliminary and could broaden even to include militants within India. India, too, has a long history of antagonism with Pakistan.
In Mumbai, meanwhile, Chidambaram issued a lower tally on Friday for casualties in the attacks, saying 163 people — including 18 members of the security forces — died along with nine suspected terrorists. The number of injured was 293, he said. Previous accounts put the death count among the attackers' victims at more than 170.
On Thursday, Secretary of State Condoleezza Rice met in Islamabad with Pakistani leaders, a day after meeting with Indian leaders, to urge that the two countries work together to find the attackers' commanders and bring them to justice.
"What I heard was a commitment that this is the course that will be taken," Rice told reporters at Chaklala Air Base in Pakistan after meeting with President Asif Ali Zardari and Prime Minister Yousaf Raza Gilani.
But while Pakistan's leaders offered polite assurances, they made no public announcement of concrete measures to be taken against Lashkar. They have also continued to express skepticism of Pakistani involvement and have resisted handing over 20 suspects demanded by India.
Lashkar-e-Taiba, whose name means "army of the pure," was founded with the help of Pakistani intelligence officers more than 20 years ago as a proxy force to challenge Indian control of Muslim-dominated Kashmir.
Since then, the group has broadened its ambitions, its reach and its contacts with an international network of jihadi groups. Its fighters have turned up in Afghanistan and Iraq and have been blamed for several other high-profile attacks in India before.
Today it is technically banned in Pakistan but operates openly through affiliates. Its links to Al Qaeda remain murky, as does the extent of its current ties to Pakistan's main spy agency, Inter-Services Intelligence, or ISI.
In an interview this week, Muhammad Yahya Mujahid, a spokesman for Jamaat-ud-Dawa, a parent organization of Lashkar, denied that Lashkar or its leader, Haffiz Muhammad Saeed, had any connection to the attack. The surviving gunman in Mumbai claimed to have met Saeed at a training camp in Pakistan.
American counterterrorism officials said there was no clear evidence that the Pakistani intelligence service played a role in the Mumbai attacks, or that Pakistani operatives were linked to the attackers.
Deven Bharti, a deputy commissioner on the Mumbai police force, would not comment on Indian media reports claiming direct links between the ISI and the Mumbai attacks.
But, he said, "we have certain evidence of government complicity that we are trying to verify."
The weapons used in the attacks, he said, came from a factory based in Punjab Province in Pakistan that is under contract to the Pakistani military, he said.
The factory was also the source of grenades and explosives used in several earlier terrorist attacks in India, Bharti said. Those included bombings in Mumbai in 1993; a suicide attack on the Indian Parliament in 2001 and the bombing of the Indian Embassy in Kabul, Afghanistan, in July, he said.
Investigators discovered the link to the Pakistan factory, Bharti said, after recovering a grenade left by the attackers that had EN ARGES printed on it.
That corresponds to a brand name belonging to a German company that granted a license to the factory to make weapons for the Pakistani military.
One possible collaborator in the plot, the authorities say, was an Indian named Faheem Ahmed Ansari, who was arrested in February in a northern Indian state, Uttar Pradesh, along with two other suspected Lashkar members.
Ansari told the police interrogators that from fall 2007 to February 2008 he surveyed possible targets for Lashkar in Mumbai, including the Taj Mahal Palace & Tower hotel and the Chhatrapati Shivaji Terminus, the old Victoria rail station.
The Uttar Pradesh police said he was arrested in connection with a gun and grenade attack on New Year's Eve on a police camp in Rampur when he returned to pick up weapons left behind. His intention was to take the weapons to Mumbai for use in a later operation, they said.
Other evidence emerged Thursday highlighting the sophistication and cruelty of the attacks.
Some of the six people killed at the Jewish center in the city had been treated particularly savagely, the police said, with bodies bearing what appeared to be strangulation marks and other wounds that did not come from gunshots or grenades.
Even before the attackers landed on Mumbai's shores, Lakhvi, the Lashkar commander, who is normally based in Kashmir, helped organize the plot from Karachi for the last three months, said a Pakistani official in contact with Lashkar.
The gunmen also kept in contact with their handlers in Pakistan with cellphones as they rounded up guests at the two hotels, officials say.
The attackers left a trail of evidence in a satellite phone they left behind on the fishing trawler they hijacked near Karachi at the start of their 500-mile journey to Mumbai.
The phone contained the telephone numbers of Muzammil, Lakhvi and a number of other Lashkar operatives, according to a report on the Mumbai siege released Thursday by M. J. Gohel and Sajjan M. Gohel, two security analysts who direct the Asia-Pacific Foundation in London.
The numbers dialed on the phone found on the trawler used to call Muzammil matched the numbers on the cellphones recovered from the Taj and Oberoi hotels, the report said.
Based on evidence found on the trawler, it was possible that five other men were involved in the plot and were still at large, the report said.
In one of the hotels, a gunman asked several Indian guests what caste they belonged to and what state they came from, said an official who interviewed the guests.
Once the attacker found out these details, he then called someone believed to be Muzammil, who was also identified by the surviving gunman and who was in Lahore, according to phone records recovered by investigators.
The surviving guests said the attacker told the person on the other end of the phone the guests' details and asked whether they should be killed or not.
At one point, a guest said one of the calls seemed to be a conference call with two people on the other end.
Once the calls were finished, the attacker moved the small group of guests, who did not know what their fate would be, into a room. When the attackers became distracted by tear gas fired by the police, the hostages managed to escape.
In another instance, the gunmen forced a Singaporean hostage at the Oberoi hotel, Lo Hwei Yen, to call her husband in Singapore. She told him that the hostages were demanding that Singaporean officials tell India not to try a rescue operation. The next day, Lo was killed, the foundation's report said.
Investigators found that after the gunmen killed her, they used the phone she had called her husband with, the report said.
"The worrying scenario is that Muzammil may have ordered her execution along with two other hostages that were found murdered in the same room," the report said.
8 prisoners die in uprising at Afghan prison
By Kirk Semple
Friday, December 5, 2008
KABUL: The Afghan government has begun an investigation to determine how eight inmates died during an uprising against prison guards and police officers trying to search two cell blocks at the notoriously overcrowded Pul-i-Charki prison here, a justice ministry official said Friday.
The clash, which also left 13 people wounded, including three prison guards, erupted Thursday when inmates resisted an attempt by the security forces to sweep the blocks for hidden weapons and cell phones, said Mohammad Qasem Hashemzai, the deputy justice minister.
Pul-i-Charki is bedeviled by corruption, poor infrastructure, overcrowding and a violent mix of criminals that includes many Taliban fighters. It has become a symbol of the dysfunction and shortcomings of the Afghan judicial system. Criminals have been able to bribe their way out. Riots are common.
During the revolt on Thursday, the prisoners set fire to mattresses and attacked the guards with weapons, including scissors and homemade blades, the official said. A prisoner in another cell block who requested anonymity said in a telephone interview Friday that he heard gunfire coming from cell blocks 3 and 4 throughout the day on Thursday.
Hashemzai said the security forces that stormed the cell blocks were armed with guns but he refused to confirm if there had been gunfire or whether any of the victims had been struck by bullets.
"The matter is under investigation to see how these eight people were killed, whether through gunshots or through manmade weapons," he said.
During the clash, the prisoners took two prison guards hostage, the official said, though one was freed late Thursday and the other was freed early Friday, when calm was finally restored, Hashemzai said.
Rights groups fret over Iraqi prisoners
Friday, December 5, 2008
By Tim Cocks
They have outraged Iraqis and been condemned by human rights groups, but next year the prisons in which U.S. forces hold thousands of Iraqis will be flung open under a U.S.-Iraq security pact.
That worries both the U.S. military, which fears hardened insurgents could again roam the streets, and rights campaigners who fear the opposite: that Iraqi authorities will transfer the detainees to Iraqi prisons -- and maybe torture or execute them.
"We are concerned that we will most likely release dangerous detainees back into the communities of Iraq who have directly contributed to the deaths of not only Iraqi and Coalition Forces, but countless numbers of civilians," said Major Neal Fisher, spokesman for U.S. detainee operations.
"Every detainee in our custody came to us because they posed an imperative threat to the security and stability of Iraq."
The security pact agreed with Iraq will give U.S. troops a legal basis to remain in the country for three more years, replacing a U.N. mandate that covered the presence of foreign forces in Iraq since the 2003 U.S.-led invasion.
For the first time, Iraq will have authority over roughly 150,000 U.S. troops in the country.
Iraq's presidency council ratified the pact on Thursday, bringing it formally into effect until a referendum in July.
One of the powers the U.S. military loses under the new deal is the right to detain Iraqis indefinitely without charge.
That means it will have to turn the 16,000-17,000 detainees currently in its custody over to Iraqi authorities in an orderly manner. Under Iraqi law, they will have to be tried or released.
For U.S. officials, that is a headache. Thousands of prisoners, some of them former Sunni Arab insurgents or Shi'ite militiamen, will be back on the streets. For most, there is simply not enough evidence to keep them under lock and key.
The U.S. commander in charge of the detainee programme, Brigadier-General David Quantock, was unavailable for an interview, but he told USA Today that officials were working hard to build cases against dangerous detainees.
"We're going to... make sure they stay behind bars," he said.
The U.S. military has released some 15,000 prisoners in the past year. Fisher said it plans to release 1,500 more a month.
For rights groups, there is a dark irony in U.S. concerns about having to release Iraqis against whom there's no evidence.
"Why are they detained if they don't have adequate evidence against them?" asked Malcolm Smart, Director of Amnesty International's Middle East and North Africa Programme.
"The numbers who've been released suggest that maybe there weren't good reasons to hold a lot of those people in the first place ... We need a proper process of law and order -- and that does mean not holding people in detention without trial."
One Iraqi, Jassim al-Mashhadani, said he spent three months in a U.S. prison. Details of his story could not be independently verified.
Eight U.S. soldiers burst into his house around midnight on January 21, 2006, seized him and placed a hood over his head, he says. They kept him in isolation for two weeks while they interrogated him.
"They used to tell me: no one knows where you are. If we kill you now, no one will know what happened to you," he said.
After that, he was sent to the notorious Abu Ghraib prison, west of Baghdad, where revelations of serious abuse by U.S. guards sent shockwaves around the world in 2004.
"They never let me call anyone, until a few days before they released me. Until now, I don't know why they arrested me," he said.
Abu Ghraib shot into the spotlight when pictures showing U.S. soldiers tormenting and sexually humiliating prisoners made world headlines. Mashhadani said he was not mistreated there.
But rights groups now fear Iraqi prisoners will face torture by Iraqi guards, after the transition to their control.
"Reports of torture and ill treatment of people (in Iraq) are persistent and so there's clearly a risk," Smart said.
He added that the legal system was not delivering fair trials, even in high profile cases of former members of ex-dictator Saddam Hussein's government.
Joost Hiltermann, Iraq expert at the International Crisis Group, said possible mistreatment of the mostly Sunni Arab prisoners under Prime Minister Nuri al-Maliki's Shi'ite-led government could stoke sectarian tensions.
Sunni Arab politicians say it doesn't have to be that way, as long as they keep only those they have evidence against.
"We do not support the release of terrorists," said Abdul al-Kareem al-Samarrai'i, a leading member of the Islamic Party. "(But most) ... detainees in American prisons are innocent."
(Additional reporting by Waleed Ibrahim and Aseel Kami; Editing by Michael Christie and Samia Nakhoul)

U.S. Supreme Court to decide on military detentions
By Adam Liptak
Friday, December 5, 2008
WASHINGTON: The U.S. Supreme Court on Friday agreed to decide the most fundamental question yet concerning executive power in the age of terror: May the president order the indefinite military detention of people living in the United States?
The case concerns Ali al-Marri, the only person on the American mainland being held as an enemy combatant, at the U.S. Navy brig in Charleston, South Carolina. Marri, a citizen of Qatar, was legally in the United States when he was arrested in December 2001 in Peoria, Illinois, where he was living with his family and studying computer science at Bradley University.
Eighteen months later, when Marri was on the verge of a trial on credit card fraud and other charges, President George W. Bush declared him an enemy combatant, moving him from the custody of the Justice Department to military detention. The government says Marri is a sleeper agent sent by Al Qaeda to the United States to commit mass murder and disrupt the banking system.
The case, which will probably be argued in the spring, will present the Obama administration with a series of difficult strategic choices. It can defend the Bush administration's expansive interpretation of executive power, advance a more modest one or short-circuit the case by moving it to the criminal justice system.
In July, the U.S. Court of Appeals for the Fourth Circuit, in Richmond, Virginia, issued a fractured decision in the case. In one 5-to-4 ruling, the court ruled that the president has the legal authority to detain Marri.
But a second, overlapping 5-to-4 majority of the court ruled that he must be given an additional opportunity to challenge his detention in federal court. An earlier court proceeding, in which the government had presented only a sworn statement from a defense intelligence official, was inadequate, the second majority ruled.
The government had urged the Supreme Court to put off consideration of the case, al-Marri v. Pucciarelli, No. 08-368, until the trial-court do-over was completed.
Two other men have been held as enemy combatants on the American mainland since the attacks of Sept. 11, 2001. Rulings in their cases will inform the Supreme Court's treatment of Marri.
In 2004, in Hamdi v. Rumsfeld, five justices of the Supreme Court said Congress had granted the president power to detain at least those enemy combatants captured on the battlefield in Afghanistan, even if they are American citizens, for the duration of hostilities there. But the detainee in that case, Yaser Hamdi, was freed and sent to Saudi Arabia not long after the court's decision, which also allowed him to challenge his detention.
Based on the Hamdi decision, the Fourth Circuit in 2005 upheld the detention of Jose Padilla, an American arrested at a Chicago airport. Although Padilla was said to have ties to Al Qaeda, the Fourth Circuit decision largely turned on his own activities on the battlefield in Afghanistan. Just before the Supreme Court was to decide whether to hear his case for a second time, Padilla was transferred to the criminal justice system and convicted on charges related to terrorism last year.
In a recent brief, the government provided the justices with a sworn 2004 statement from Jeffrey Rapp, the defense intelligence official. The statement, declassified in 2006, said that Marri had met with Osama bin Laden and Khalid Shaykh Muhammed in the summer of 2001.
"Al-Marri offered to be an Al Qaeda martyr or to do anything else that Al Qaeda requested," Rapp said.
The Qaeda officials told Marri, the statement said, to leave for the United States and to make sure he got there before Sept. 11.
The government's brief said the congressional authorization must have intended to allow the detention of people like Marri, and called a contrary interpretation absurd. Such a reading, the brief said, "relies on the assumption that when Congress authorized the use of military force to respond to the Sept. 11 attacks, it did not intend to reach individuals virtually identically situated to the Sept. 11 hijackers."
In a brief filed three weeks ago, lawyers for Marri, who has been held without charge in isolation for more than five years, said the court should not delay consideration of the case.
"Since the nation's founding," the brief said, "persons lawfully residing in this country have correctly understood that they can be imprisoned for suspected wrongdoing only if the government charges them with a crime and tries them before a jury."
A great team of rivals
By Henry A. Kissinger
Friday, December 5, 2008
On its face, the team Barack Obama has appointed for national security policy violates some maxims of conventional wisdom: that to appoint to the Cabinet individuals with an autonomous constituency and who are therefore difficult to fire circumscribes presidential control; that to appoint as security adviser, secretary of state and secretary of defense individuals with established policy views may absorb the president's energies in settling disputes among strong-willed advisers.
It took courage for the president-elect to choose this constellation and no little inner assurance - both qualities essential for dealing with the challenge of distilling order out of a fragmenting international system.
In these circumstances, ignoring conventional wisdom may prove the precondition for creativity. Both the president-elect and the secretary of state-designate, Hillary Clinton, must have concluded that the country and their commitment to public service require their cooperation.
Those who take the phrase "team of rivals" literally do not understand the essence of the relationship between a president and a secretary of state. I know of no exception to the principle that secretaries of state are influential if and only if they are perceived as extensions of the president. Any other course weakens the president and marginalizes the secretary of state.
The Beltway system of leak and innuendo will mercilessly seek to widen any even barely visible split. Foreign governments will exploit the rift by pursuing alternative White House-State Department diplomacies.
Effective foreign policy and a significant role for the Department of State in it require that the president and the secretary of state share a common vision of international order, of overall strategy and of tactical measures. Inevitable disagreements should be settled privately; indeed, the ability of the secretary to warn or question is in direct proportion to the discretion in which it is expressed.
As the president-elect has pointed out, neither of the principals could possibly be undertaking their new relationship unless they had come to similar conclusions. Performance and not formal certification as the leading agency will define the role of the State Department. No president will feel obliged to take advice because an organizational chart requires it.
The Foreign Service of the United States is an incomparable instrument honed by a lifetime of dedicated service. Like every elite service, it does not avoid a certain clannishness. The views of those who did not rise through its ranks are not always taken seriously enough. Secretaries of state have been frustrated by its complex internal clearances, and presidents have complained in their memoirs about the slowness of its reactions.
In its daily business, the State Department is in effect a big cable machine responding to thousands of incoming reports from posts all over the world. Processed through the various assistant secretaries for formal action, only a small percentage of these cables ever reach the secretary, and an even smaller number make it to the White House. Left to itself, the system therefore involves a series of lateral clearances achieved by the mutual balancing of special concerns. Geopolitical and strategic considerations have no organic constituency.
No one can question the secretary-designate's leadership potential for breaking through encrusted patterns or her formidable presence in a negotiation. Her most immediate challenges are to provide strategic guidance and to reorganize the department so that its implementing capacity matches its extraordinary reporting skill.
The guardian of the process of the execution of long-range foreign policy is the national security adviser, institutionally indispensable though treated with reservation by the traditional departments. No one like General James Jones has ever been appointed security adviser, with his experience as former head of the Marine Corps and NATO Commander.
The security adviser's job in its present form emerged in 1961 in the Kennedy administration because no purely administrative staff could handle the flow of papers into the White House. Unless the flow of memoranda is disciplined into defined options, the president would be spending much of his time refereeing intramural disputes. In fact, when the security adviser is weak, interdepartmental arguments have been especially intense.
The security adviser must take care that the president is given all relevant options and that the execution of policy reflects the spirit of the original decision. This is a formidable task because the departments tend to equate internal morale with the adoption of their own recommendations.
The maxim that the security adviser should act as a traffic cop, not a participant in the policy process, is more theoretical than practical. Any individuals able enough to supervise the development of options will be informed enough to contribute to their content. And the daily frequency of the security adviser's contact with the president makes the distinction psychologically untenable.
The security adviser inevitably has the advantage of propinquity. His or her office is 50 feet down the hall from the president's; the secretary of state is 10 minutes away. Then, institutionally, the security adviser works almost exclusively on problems of concern to the president. The secretary of state has many clients around the world requiring attention, sometimes not of overwhelming presidential interest. The secretary of state travels frequently; the security adviser is almost always within reach of the president.
Inevitably, the facilitating function of the security adviser has been accompanied by a role in policymaking based on a vast, almost unique, experience. His special relationship to the president requires a delicacy in conduct not always achieved by security advisers, including the author.
The continuation in office of Robert Gates as secretary of defense is an important balancing element in that process. Alone among the key players, he is at the end, not the beginning, of his policy role. Having agreed to stay on in a transitional role, he cannot be interested in the inevitable jockeying that accompanies all new administrations.
The incoming administration must have appointed him with the awareness that he will not reverse his previous convictions. He must make the difficult adjustment from one administration to another - a tribute to the non-partisan nature of the conduct of his office in the Bush administration. He is a guarantor of continuity but, at the same time, the shepherd of necessary innovation.
Process is no substitute for substance, of course. But even with this caveat, the new national security team encourages the hope that America is seeking to move beyond its divisions to its opportunities.
Henry A. Kissinger served as national security advisor and secretary of state in the administrations of Presidents Nixon and Ford. Distributed by Tribune Media Services.
EU urged to seize Obama security opportunity
Friday, December 5, 2008
By David Brunnstrom
The European Union should seize on Barack Obama's election as U.S. president as a chance to press for a more collaborative, U.N.-led approach to tackling world crises, an EU security review will say next week.
"At a global level, Europe must lead a renewal of the multilateral order...we have a unique moment to renew multilateralism, working with the United States and with our partners around the world," a draft of the review says.
The United Nations should be at the "apex" of such an approach, it adds.
The document is an update of an EU security strategy agreed in 2003 in a bid to heal deep splits within the bloc over the U.S.-led invasion of Iraq.
Many EU states were alarmed by the unilateral approach pursued by U.S. President George W. Bush, especially in his first term, and have been heartened by the prospect of Obama, who opposed the Iraq war and has favoured multilateralism.
The security review highlights growing threats posed by nuclear proliferation, cyber crime and disruption to energy supplies. It will stress the need to remain engaged with Russia and to fully involve emerging global powers such as China and India in international decision-making.
"Europe faces increasingly complex threats and challenges," said a draft summary to be presented to EU foreign ministers on Monday before endorsement by EU leaders at a December 11-12 summit.
"Globalisation has...made threats more complex and interconnected," it says. "(It) is accelerating shifts in power and is exposing differences in values. Recent financial turmoil has shaken the developed and the developing world alike."
"Terrorism and organised crime have evolved with a new menace," the paper adds. "The Iranian nuclear programme has significantly advanced, representing a danger for stability in the region and the whole non-proliferation system."
For the EU to lead a renewal of multilateralism, it was necessary for it to be "more capable, more coherent and more active" in world affairs.
The paper highlights progress in developing a common European security policy, with more than 20 missions deployed in response to crises ranging from Aceh to Chad.
"But there is no room for complacency," it says. "To ensure our security and meet the expectations of our citizens, we must be ready to shape events. That means becoming more strategic in our thinking, and more effective and visible around the world."
A senior EU official said the review would stress the need for the EU to strengthen its ability to deploy missions by making up shortfalls in equipment such as transport aircraft and helicopters and improved training.
It will also stress the need to build on relations with eastern and southern neighbours and to cooperate with Russia, despite concerns about Moscow's war with Georgia in August.
"We need to engage Russia; we need to tie Russia to a rules-based system on the economic and political level," the official said. "There is no other alternative; indignation is not a policy. The solution can only be engagement."
(Editing by Mark Trevelyan)
Piracy is terrorism
By Douglas R. Burgess Jr.
Friday, December 5, 2008
The golden age of piracy has returned. Just as Henry Every and William Kidd once made their fortunes in the Red Sea, a new generation has emerged, armed with grenade launchers and assault rifles, to threaten trade and distract the world's navies. With the recent capture of the Saudi supertanker Sirius Star, a crime that once seemed archaic has again claimed center stage.
And yet the world's legal apparatus is woefully confused as to how to respond to piracy. Are the Somali pirates ordinary criminals, or a quasi-military force?
The question is not insignificant. It has virtually paralyzed the navies called to police the Gulf of Aden. The German Navy frigate Emden, on patrol this spring to intercept Qaeda vessels off the Somali coast, encountered pirate vessels attacking a Japanese tanker. But since it was allowed to intervene only if the pirates were defined as "terrorists," the Emden had no choice but to let the pirates go.
Currently, 13 vessels are held by pirates in the Gulf of Aden, while the navies of a dozen nations circle almost helplessly. The legal confusion extends to what happens once pirates have been caught. In theory, any nation can shoulder the burden of prosecution.
In fact, few are eager to do so.
Prosecuting pirates puts enormous strain on a country's legal system. A state whose ship was not attacked, and whose only involvement with the incident was as rescuer, might balk at being asked to foot the bill for lengthy and costly proceedings. Yet it might find itself forced to do so, if neither the victim's nor the pirates' state is willing. As Somalia has not had a recognized government since the early 1990s, the situation is all the more precarious for would-be capturers. The result is that ship owners, knowing that no rescue is imminent, pay the ransom. This emboldens the pirates further, and the problem worsens.
Fortunately, there is a way out of this legal morass. Indeed, the law is very clear - we just seem to have forgotten about it. The solution to piracy lies in the very nature of piracy itself.
The Roman lawmaker Cicero defined piracy as a crime against civilization itself, which English jurist Edward Coke rephrased as "hostis humani generis" - enemies of the human race. As such, they were enemies not of one state but of all states, and all states shared in the burden of capturing them.
From this precept came the doctrine of universal jurisdiction, meaning that pirates - unlike any other criminals - could be captured wherever they were found, by anyone who found them. This recognition of piracy's unique threat was the cornerstone of international law for more than 2,000 years.
Though you wouldn't guess it from the current situation, the law is surprisingly clear. The definition of pirates as enemies of the human race is reaffirmed in British and U.S. trial law and in numerous treaties.
As a customary international law it cuts through the Gordian knot of individual states' engagement rules. Pirates are not ordinary criminals. They are not enemy combatants. They are a hybrid, recognized as such for thousands of years, and can be seized at will by anyone, at any time, anywhere they are found.
And what of the Emden's problem? Are pirates a species of terrorist? In short, yes. The same definition of pirates as hostis humani generis could also be applied to international organized terrorism. Both crimes involve bands of brigands that divorce themselves from their nation-states and form extraterritorial enclaves; both aim at civilians; both involve acts of homicide and destruction, as the United Nations Convention on the High Seas stipulates, "for private ends."
For this reason, it seems sensible that the U.S. and the international community adopt a new, shared legal definition that would recognize the link between piracy and terrorism. This could take the form of an act of the U.S. Congress or a new jurisdiction for piracy and terrorism cases at the International Criminal Court.
There is ample precedent. In the 1970s, the hijacking of airliners was defined by the UN as "aerial piracy." In 1985, when Palestinian terrorists seized the cruise ship Achille Lauro and held its passengers hostage, President Ronald Reagan called the hijackers "pirates." Recent evidence also indicates that the Somali pirates hand over a part of their millions in ransom money to Al Shabaab, the Somali rebel group that has been linked to Al Qaeda.
The similarities and overlaps between the two crimes have prompted some jurists to advocate abandoning the term piracy altogether in favor of "maritime terrorism." By reasserting the traditional definition of pirates as hostis humani generis, and linking it to terrorism, the U.S. and other nations will not only gain a powerful tool in fighting the Somali pirates, but other incidents of terrorism around the world as well.
Recognizing piracy as an international crime will do something else: It will give individual states that don't want to prosecute pirates an alternative - the international court. If pirates are recognized under their traditional international legal status - as neither ordinary criminals nor combatants, but enemies of the human race - states will have a much freer hand in capturing them. If piracy falls within the jurisdiction of the international court, states will not need to shoulder the burden of prosecution alone.
Today the world's navies are hamstrung by conflicting laws and the absence of an international code. A comprehensive legal framework is the only way to break the stalemate off Somalia. In a trial before the Old Bailey in 1696, Dr. Henry Newton, the Admiralty advocate, declared, "Suffer pirates and the commerce of the world must cease."
More than 300 years later, the world is suffering again. Fortunately, this time we have the answer.
Douglas R. Burgess Jr. is the author of "The Pirates' Pact: The Secret Alliances Between History's Most Notorious Buccaneers and Colonial America."
Grand theft nautical
By John S. Burnett
Friday, December 5, 2008
To the horror of many and the fascination of most, the Sirius Star, an enormous tanker transporting 2 million barrels of crude oil to the United States, was captured by pirates far off the African coast on Nov. 15.
The tanker, owned by Aramco, the Saudi oil company, was carrying enough crude to supply New England with fuel oil for 10 days - in the winter. It is seven times the size of the Titanic. How, then, could a dozen pirates in two puny boats armed with rifles and a grenade launcher board a ship this size?
Quite easily - as I found out after spending weeks on a nearly identical ship on a passage from Saudi Arabia to Singapore five years ago.
From the bridge nine stories above the sea, there was a feeling of absolute invincibility. I remember the captain of the ship telling me that it was inconceivable that pirates could board his vessel. I imagine he feels differently today.
The Sirius Star was plodding at service speed - 15 knots - about 480 miles off the East African coast. This is far away from known pirate waters, so the 25 crewmen aboard were probably working their regular watches, performing duties during a normal day at sea.
The Sirius was on autopilot; the proximity alarm on the radar - the collision avoidance system - had been set, and a young third officer was most likely alone on the bridge reading a magazine or sending e-mail messages to his family and occasionally glancing at the myriad dials and gauges embedded in the instrument panel. He may have seen a small blip on the radar screen; this far offshore, it was likely a fishing trawler. But the mysterious vessel was watching him; it then launched its boats for the attack.
The aft deck of a fully laden crude carrier is only 10 to 13 feet above the surface of the sea. Motoring up to the ship, the pirates hooked grapnels connected to ropes and fastened to aluminum ladders onto the railings above, scaled the hull, rushed the bridge and commandeered the ship. It was probably over in minutes.
The Sirius was just a target of opportunity. Pirates had no idea that they were about to capture a potential floating bomb. It is not the crude oil that is volatile. You can douse a cigarette in the stuff. It is the vapor from the cargo that is vented into the air that is explosive. For this reason, no one is allowed on deck with a camera, flashlight, cellphone or a plastic cigarette lighter in his pocket. One can imagine the captain of the Sirius Star pleading with his captors not to shoot their guns on deck.
No one wants to contemplate the effects of an exploding tanker laden with 300,000 tons of crude oil. To place this ship in some perspective, the Exxon Valdez, which ran aground in the Gulf of Alaska in 1989, carried 53 million gallons of crude oil. The Sirius is carrying nearly 84 million gallons. If that amount of crude were to escape, the environmental damage to the Indian Ocean and the East African coast would be catastrophic.
So what can be done?
Given the failure to stop the pirates, shipping companies are now diverting their fleets - instead of sailing through the Suez Canal and the Gulf of Aden, tankers and other merchant vessels are forced to travel around the tip of South Africa to get from the Middle East to Europe and the U.S., all of which adds weeks to the passage and increases the cost of delivery.
But this is merely a short-term solution. The only long-term fix has to take place on shore in Somalia. Somalia has not had a recognized functioning government since 1991. Law is dispensed through the barrel of a gun.
There was some semblance of law and order in 2006, when the Islamic Courts Union, loosely linked with Al Qaeda, took over much of the country and imposed Shariah law. Though there were cruel tradeoffs, the Islamists virtually eradicated piracy. (The crime was a capital offense punishable by beheading.)
When Ethiopian forces, supported by the United States, replaced the Islamists with an ineffective transitional government in 2006, piracy returned.
It is evident that no nation can impose its will on Somalia. And certainly no nation can force Somalis to stop the best business in town. But if the West really hopes to eliminate piracy in these strategic shipping lanes, then it should consider involving the courts union, the only entity that has proved it could govern the country, and its militant wing, Al Shabaab, in a new government. If there is movement to talk to the Taliban in Afghanistan, then there should be some effort to talk to the fundamentalists in Somalia.
If the Islamists were permitted to form a viable, functioning and effective government, this shattered land might be able to return to the community of nations - and supertankers will be able to deliver oil to the United States without fear of getting hijacked.
John S. Burnett, the author of "Dangerous Waters: Modern Piracy and Terror on the High Seas," is working on a book about the hijackings off the Somali coast.

U.S. loses 533,000 jobs; worst month since 1974
By Louis Uchitelle
Friday, December 5, 2008
NEW YORK: With the American economy deteriorating rapidly, companies in the United States shed 533,000 jobs in November, the government reported Friday, in the largest one-month decline in employment in 34 years.
The unemployment rate rose to 6.7 percent in what was the 11th consecutive monthly fall in employment.
The data offered fresh evidence that the economic contraction accelerated in November. This promises to make the current recession, already 12 months old, the longest since the Great Depression. The previous record was 16 months, in the severe recessions of the mid-1970s and early 1980s.
The job decline suggests that American consumers and businesses have pulled back sharply on spending in response to the worsening credit crisis. That has put pressure on Congress and the White House to come up with a stimulus package that would substitute for the missing private-sector outlays.
Over all, the losses since the recession began in December 2007 now total about 1.9 million, with most coming in the last three months.
"We have gone from recession into something that looks more like collapse," said Ian Shepherdson, chief domestic economist at High Frequency Economics, referring to the accelerating job losses in recent months.
The losses in November far exceeded the 350,000 figure that was the consensus expectation of economists.
"Business shut down in November," said Mark Zandi, chief economist at Moody's "Businesses are in survival mode and are slashing jobs and investment to conserve cash. Unless credit starts flowing again soon, big job losses will continue well into next year."
The employment report, by the Bureau of Labor Statistics, included sharp upward revisions in job-loss figures for October (to 320,000, from the previously reported 240,000) and for September (to 403,000, from 284,000).
A mass departure from the labor force - people who have stopped actively looking for work - helped hold down the unemployment rate in November, which was up only two-tenths of a percentage point from October's 6.5 percent. The so-called underemployment rate, however, jumped to 12.5 percent, up 1.5 percentage points since September. Most of the underemployed are people working part time who want to work full time but cannot.
The 12.5 percent is the highest level of underemployment since the statistic was first compiled in 1994.
More than 420,000 men and women who had been working or seeking work in October left the labor force in November. Most presumably gave up looking for a job, the bureau's report suggests. If they had continued that search, the unemployment rate in November would have been closer to 7 percent.
In addition, 70 percent of the job loss was in the service sector, particularly in retailing, temporary work and hotel and restaurant employment. Indeed, the only sectors adding jobs in November were health care and education.
"The service sector had been holding up relatively well into this downturn, but now the service sector is just imploding," said Michael Darda, chief economist at the research firm MKM Partners. "As goes the service sector, so goes the U.S. economy."
The employment report increased the likelihood that the next Congress, with the support of Barack Obama as president, will enact a stimulus package by late January that could exceed $500 billion over two years.
Obama issued a statement on Friday that called the employment report "a dramatic reflection of the growing economic crisis we face." He said it was further evidence that "we need an economic recovery plan that will save or create at least 2.5 million more jobs over two years while we act decisively to maintain the flows of credit on which so many American families and American businesses depend."
Under the stimulus plan, over half the money would probably be channeled into public infrastructure spending. Many economists consider such investments an effective way to counteract, through federally financed employment, the layoffs and hiring freezes spreading through the private sector.
"Basically, $100 billion of public investment in such things as roads, bridges and levees would generate two million jobs," said Robert Pollin, an economist at the University of Massachusetts. "That would offset the two million jobs that we are now on track to lose by early next year."
The manufacturing sector has been particularly hard hit, losing about 600,000 jobs this year. That is roughly a third of the jobs lost since employment peaked in December and, in January, began its uninterrupted decline.
Manufacturing layoffs seem likely to accelerate as the three U.S. automakers close more factories and shrink payrolls even more as they try to qualify for the federal government loans they asked Congress this week to approve.
While manufacturing has led the way, the job cuts are rising in nearly every sector of the economy.
"My sense is there is just a collapse in demand," said Mark Levinson, chief economist for the union Unite Here, whose 450,000 members are spread across apparel manufacturing, hotels, casinos, industrial laundries, airport concessions and restaurants. "Our members are being laid off big time."
The latest jobs report came during a week of compelling evidence that the American economy was falling precipitously. On Monday, the National Bureau of Economic Research ruled that a recession - the 12th since the Depression - began last December, even earlier than many people had thought.
That news was followed by fresh reports of cutbacks in construction spending, home sales, consumer spending, business investment and exports. And companies in every industry sector announced layoffs this week, including AT&T, the telecommunications company, with 12,000 job cuts; DuPont, the chemical company, 2,500; and Viacom, the media company, 850.
Even retail sales in the Christmas season were off sharply. The International Council of Shopping Centers on Thursday described November sales at stores open at least a year as the weakest in more than 30 years.
With all this in mind, and particularly the shrinking employment rolls, economists are estimating that the gross domestic product is contracting at an annual rate of 4 percent or more in the fourth quarter, after a decline of 0.3 percent in the third quarter.
"Our GDP forecast for 2009 is now minus 1.8 percent, rather than minus 1 percent," HIS Global Insight, a forecasting and data gathering service, told clients in an e-mail message this week, explaining that all the latest bad news left it no choice but to issue a sharp downward revision.
"We see the unemployment rate at 8.6 percent by the end of 2009," Global Insight said.
John Silvia, chief economist at Wachovia, said the new unemployment data suggested that economic growth was falling at a rate of 5 percent in the fourth quarter.
"There's no quick fix here," he said. "There's no quick rebound."
Jack Healy contributed reporting.
Honda withdraws from Formula One racing
By Mark McDonald and Brad Spurgeon
Friday, December 5, 2008
HONG KONG: Honda announced on Friday that it would withdraw from Formula One, a startling pullout that has its origins in the dismal state of the auto industry and that is likely to have huge repercussions on the high-profile global racing circuit.
A glum Takeo Fukui, the chief executive officer of Honda, made the announcement at a news conference in Tokyo.
He called the company's withdrawal from the series "a difficult decision" caused by the worldwide economic gloom and "the quickly deteriorating operating environment facing the global auto industry."
"I offer my sincere apologies," he said, "to everyone involved."
The governing body for Formula One racing said in a statement Friday that the sport's finances were in "an already critical situation."
Honda has struggled badly this year, battered by weaker sales and a stronger yen. November sales, for example, were off 32 percent from a year earlier.
"Honda must protect its core business activities and secure the long term," Fukui said. "A recovery is expected to take some time."
While he cited economic reasons for departing from Formula One, the Honda team could have used the sporting equivalent of a bailout. Honda finished in ninth place out of the 10 teams that finished the season. A co-sponsored team, Super Aguri-Honda, withdrew after just four races of the 2008 season, citing a lack of funding.
The Honda team's drivers also fared poorly: Rubens Barrichello of Brazil finished 14th in the standings and Jenson Button of Britain was 18th.
With the Honda racing team now up for sale, one of the principal worries among frenzied Formula One bloggers around the world was the future of the Toyota Formula One team - and perhaps the future of the circuit itself.
Toyota, the world's largest automaker, has had its own financial troubles this year, and its November sales were down 34 percent from a year earlier.
But a Toyota spokesman was quoted earlier in the week as saying the company had no intention of putting its Formula One team on the block. The company said it would introduce its new racing car on Jan. 15 over the Internet instead of its usual glamorous unveilings.
Also, last week, LG Electronics announced a multiple-year technological partnership and marketing sponsorship program with the overall race series.
But car companies are cutting costs, laying off workers, closing factories and, in the United States, pleading for bailouts. Those woes clearly extend to racing sponsorships. Audi, the German carmaker, announced this week that it would withdraw from the popular Le Mans sports car series in Europe. And on Friday, it said it would withdraw from the American version of the same series.
Formula One bills itself as the world's richest sport. Its race teams subsist on sponsorships, television rights money, advertising contracts and sales to the so-called Paddock Club, which caters to the wealthy during the 17 to 19 annual races, each known as a Grand Prix. The sport features some of the world's heftiest brands in some of the glossiest sectors - telecommunications, drinks, computers, banking and automobiles.
For their sponsorships, the companies get global television exposure for their logos - even if those trademarks are flashing by at 220 miles an hour - along with big promotional dividends. The Formula One race in Brazil last year was the world's second-most-watched sports event with 78 million viewers, trailing only the 2007 Super Bowl with an audience of 97 million.
The 11 teams on the Formula One circuit spent a reported $1.6 billion during the 2008 season, which ended on Nov. 2. Max Mosley, the president of the International Automobile Federation, which governs Formula One and other racing series, has called that spending figure "unsustainable."
A statement Friday from the federation reiterated that view, even repeating the word "unsustainable" and adding that "the global economic downturn has only exacerbated an already critical situation."
Even successful, winning teams on the circuit lose money, and the budget for the Honda operation was said to be between $217 million and $300 million this season. The team employed more than 700 people at its headquarters in Brackley, England.
The Honda withdrawal came as a surprise to the team, Formula One sources said.
Until recent years, Formula One was a Eurocentric sport. And while TV revenues from Europe still dominate, half the races are now outside Europe, including events in Australia, Brazil, Bahrain, Malaysia, China, Turkey and Singapore. A race in India is planned for the 2011 season.
Honda entered the series racing in the early 1960s, not long after it first started making cars. The team's first Formula One race was the 1964 German Grand Prix - in the backyard of BMW and Mercedes, no less - and the first victory came the following year in Mexico.
The Honda driver Jo Schlesser was killed at the French Grand Prix in 1968, leading the team to shut down its team and withdraw from Grand Prix racing at the end of that year. It returned to Formula One in 1983 but only as an engine supplier, most notably to the highly successful McLaren and Williams teams.
By the time it left again in 1992 it had won 69 more races and several world championships, dominating the series. It returned again in 2000 as an engine provider to the British American Racing team, and it bought the team outright in 2006, when it began to race under the Honda name again.
At the time, a share of Honda stock on the Tokyo exchange was priced at ¥3,980, or $43. The stock closed Friday at ¥1,653, down 8.3 percent for the day.
For Iceland, an exodus of workers
By Helga Kristin Einarsdottir and Meera Bhatia
Bloomberg News
Friday, December 5, 2008
REYKJAVIK: Almost 1,200 years after the Viking chief Ingolfur Arnarson left Norway to found Reykjavik, the crisis engulfing Iceland is forcing his descendants home.
"There are no jobs here," Baldvin Kristjansson, an 18-year-old from western Iceland who once worked repairing containers, said at a European job fair here. "I'm going to move away and go to Norway."
Iceland, an Atlantic island of 320,000, is facing the biggest exodus in a century, a result of its worst financial crisis since gaining independence from Denmark in 1944.
Iceland's $7.5 billion annual economy may shrink about 10 percent next year, according to the International Monetary Fund, which is helping provide a $4.6 billion bailout package.
About half of Icelanders aged 18 to 24 are considering leaving the country, the Icelandic newspaper Morgunbladid said, citing a survey of 1,117 people taken Oct. 27 to 29.
"Tens of thousands" will depart, estimated Lars Christensen, chief analyst at Danske Bank, the biggest lender in Denmark.
Iceland's biggest wave of emigration was in the late 1800s and early 1900s. Then, 15,000 out of a total population of 70,000 left, joining a flow to North America from countries including Norway, Sweden and Ireland.
A hundred years later, Iceland's economy is struggling after the nation's banking system collapsed last month under the weight of its foreign debt.
Inflation surged to an 18-year high of 17.1 percent in November after a currency collapse that drove up prices. A protest against the government turned violent last week as the police used pepper spray to battle demonstrators in front of Reykjavik's main police station.
Unemployment is forecast to rise to 7 percent by the end of January from a three-year high of 1.9 percent in October, the Labor Directorate estimates.
"A lot of people are registering unemployed," said Valdimar Olafsson, who is an adviser in Reykjavik for Eures, a network of European public employment services. "It's very hectic, and Icelanders are asking for jobs, especially in Norway."
Norse settlers arrived in Iceland around 874 on sail-powered wooden longships. The country came under Norwegian control in 1262 and then under Danish dominion in 1380. It gained autonomy 90 years ago this month and became fully independent in 1944.
The Danes and Norwegians, along with Germans and Poles, returned to pluck Icelandic talent at a job fair on Nov. 21 and 22. It drew 2,500 people.
Neither Denmark nor Norway has been fully spared from the effects of the global crunch. Denmark's economy will shrink 0.5 percent next year, according to the Organization for Economic Cooperation and Development. Norwegian economic growth more than halved to 0.2 percent in the third quarter.
Both remain in much better shape than Iceland, though, and Norwegian and Danish companies are seeking skilled workers.
"Iceland is more or less in a state of coma," said Sigrun Thormar, who runs a consulting business for Icelanders moving eastward. "There will be an increase in the number of Icelanders seeking work in Denmark."
Danish unemployment is 1.6 percent. In Norway, the jobless rate rose to 1.8 percent last month from 1.7 percent the previous month. Norway's Labor and Welfare Administration expects unemployment to stay below 3 percent over the next two years.
Teknova, a research institution based in Kristiansand that is looking for scientists, and Aibel, a provider of products and services to the oil and gas industry based in Billingstad, are among Norwegian companies seeking Icelandic workers.
In total, Norway's employment service has 350 vacancies posted, said Ragnhild Synstad, a Eures adviser from Norway who attended the job fair.
"I have been absolutely swamped with employers that are interested," Synstad said. "The response was overwhelming. We heard some very sad stories about families who have lost everything."
Stefan Gudjonsson, 37, who was laid off from his job as an account manager at an information technology company, said he might have to leave his 6-year-old son behind for work elsewhere.
"I don't like the look of things right now and also worry about what has yet to happen," he said. "People are trying their best to be optimistic, but the prospects look anything but good."
Investors win $141 million in suit against Bank of America
Friday, December 5, 2008
A jury in New York decided Thursday that a unit of the Bank of America Corporation had defrauded several investors, including the American International Group and other financial companies, by selling them low-value asset-backed securities.
The jury in U.S. District Court in New York awarded the plaintiffs a total of $141 million, including interest.
The verdict came after less than two days of deliberations.
"We are pleased with the outcome and grateful to the jury for their hard work over many weeks," said David Spears, a lawyer representing all of the investors except AIG
The jury ruled in favor of the investors on all claims under U.S. securities laws and also claims under New York State common law for fraud.
Société Générale, the Travelers Companies, the New York branch of Bank Leumi Le-Israel BM , the Allstate Corporation, Bayerische Landesbank and the International Finance Corporation, an arm of the World Bank, were among the plaintiffs.
The suit was filed in 2001 and went to trial in late October this year before Judge John Koeltl of Federal District Court.
A Bank of America spokeswoman, Shirley Norton, said the bank was "evaluating all options" for judicial review of the verdict.
"We do not believe the verdict is supported by the evidence presented," she said in a statement.
The lawsuit contended that Nationsbanc, which Bank of America acquired in 1998, sold asset-backed securities based on consumer receivables from Heilig-Meyers, a furniture retailer based in Richmond, Virginia The plaintiffs contended that Nationsbanc made them appear to be high-quality receivables, when in fact they were of low quality.
"We are pleased with the verdict," an AIG spokesman said.
Heilig-Meyers was not a defendant in the case. It filed for bankruptcy in 2000. More Articles in Business »
For troubled fund's shareholders, a tough choice
By Diana B. Henriques
Friday, December 5, 2008
The Reserve Primary Fund has presented its deeply frustrated shareholders with a stark choice.
If they are patient, they might ultimately get back 98.5 cents for each dollar they had in the money-market fund, which in September became only the second such fund to ever "break the buck," or report a share price below a dollar.
But if they continue to wage legal battles against the fund and its managers, the company will use investors' own money to defend itself against their accusations of mismanagement and deception.
So this money fund seen as relatively safe has presented investors with a painful dilemma: if they fight for more than 98.5 cents, they risk getting far less, because more of their money will be used to pay the fund's legal expenses. Those terms, described in a "plan of liquidation" posted on the Reserve Fund's Web site late Wednesday, are part of the contract that fund trustees negotiated with the money manager that has been running the fund since its inception more than 30 years ago.
Even so, the choice struck some legal experts as somewhat brazen.
"This is a very smart thing they have done," said Tamar Frankel, a law professor at Boston University who has written extensively on mutual fund legal issues. "It pours not only ice water but ice on any claims" by shareholders, she added.
But if the fund's manager or trustees are to blame for the fund's current troubles, Frankel said, she is very skeptical that they would be allowed to tap shareholder money for their legal bills.
The fund's shareholders are off the hook for those legal bills only if the trustees or the fund advisor have committed willful malfeasance, acted in bad faith, displayed gross negligence or shown a reckless disregard for their duties.
But in a classic Catch-22, it is not clear how anyone could prove they engaged in such behavior without some sort of litigation — which could in turn reduce the 98.5 cents return that shareholders will get if there are no new legal expenses.
"This is a complicated and unprecedented situation," a spokesman for the trustees said. "The trustees are acting in good faith to treat all shareholders fairly and equitably."
The offer is the latest jolt for investors in the once-formidable Primary Fund, whose founders invented the money fund concept more than 30 years ago. The fund was the largest of more than a dozen money funds operated by the Reserve Management Company.
The fund began to fray on Sept. 15, the morning Lehman Brothers filed for bankruptcy protection, when it was hit by a wave of redemption orders. By the next day, it had broken the buck.
The run was a shock to Primary Fund investors because the fund held only a small amount of Lehman Brothers notes — $785 million, out of $64 billion in assets. And it was a shock to the entire money fund industry, prompting U.S. regulators to quickly introduce an insurance program for money funds, in a bid to restore investor confidence.
The next day, the fund froze all Primary Fund redemptions and announced plans to liquidate the Primary Fund; within days, it had frozen all its money funds, even those that had not broken the buck, and began trying to liquidate assets in today's weak credit markets.
The latest plan shows that the fund trustees still have not decided how to handle a fundamental dispute between shareholders who redemeed before the fund broke the buck and those who redeemed afterward. It says only that it "will attempt to resolve the question," and said it hoped to announce in three weeks how big its legal contingency fund will be.
One of the most potentially damaging claims facing the fund is pending in U.S. court in Minneapolis, where Ameriprise Financial, which had hundreds of thousands of customers caught in the fund, is accusing the fund managers of tipping some investors in advance that the fund was in danger of breaking the buck.
"The Reserve's plan is ingenious," said Harvey Wolkoff, a lawyer with Ropes & Gray in Boston who is handling that case for Ameriprise. "Their plan is that their own investors reimburse them for their wrongdoing."
Along with the liquidation plan, the fund also announced on Wednesday that it is making a second distribution of cash to shareholders who have been unable to withdraw their money since the fund broke the buck.
The latest distribution of $14.4 billion, added to $25 billion in October, brings the shareholders' recovery so far to about 80 cents on the dollar.
There is about $10.8 billion in assets left in the fund, about half of which matures between July and October of next year. Unless the credit markets strengthen enough to allow those notes to be sold at par before maturity, the final payments to shareholders could come more than a year after their money was first frozen.
Risk-wary investors send pound down vs dollar
Friday, December 5, 2008
LONDON: Sterling stumbled against a broadly stronger dollar on Friday, as investors seized on data showing the U.S. economy lost more than half a million jobs in November as a fresh reason to unload exposure to risk.
U.S. employers axed payrolls by 533,000 in November, the most in 34 years and far more than expected, government data showed, as the year-old recession hammered every corner of the U.S. economy.
Along with other currencies, sterling has lost traction in recent months as central banks race to boost growth by slashing borrowing costs, while investors favour lower-yielding units like the dollar and notably the Japanese yen.
"The fact that we had such weak payroll numbers dampens any pick up in risk appetite we may have had earlier in the week," said Geraldine Concagh, economist at AIB Group Treasury in Dublin.
"We see a continuation of factors that have been weighing on sterling -- the weak outlook for the UK economy and the expectation for further monetary easing from the Bank of England," she added.
By 3:34 p.m., the pound was down 0.8 percent on the day at $1.4565 after hitting a 6-3/4 year low of $1.4467 according to Reuters data on Thursday. The euro was down 0.1 percent at 87.00 pence but still near a record high of 87.25 pence reached late on Thursday.
The Bank slashed borrowing costs to 2.00 percent from 3.00 percent on Thursday in an attempt to shore up the battered economy and hinted at more cuts to come as it warned normal lending volumes would not be restored without further measures.
The cut was deeper than a 75 basis point reduction by the European Central Bank, whose benchmark rate is still half a percentage point higher than the UK's. Analysts say that this leaves the pound vulnerable to further declines against the euro.
"When all is said and done a 100 basis point cut in the UK and 75 basis points from the euro zone implies a higher euro/sterling rate," Standard Bank's head of G7 currency strategy Steve Barrow said.
"Euro/sterling is likely to push higher going forwards towards the 90 pence mark," he added.
Most analysts expect the Bank of England to take interest rates down further in the new year, raising the possibility that the UK will have to embark on a policy of quantitative easing as the central bank seeks to counter a deflation risk.
The economy is seen as one of the most vulnerable in the developed world to the current financial crisis given high levels of indebtedness, a slowing housing market and heavy reliance on the financial sector.
A string of weak data recently have pointed to weakness in all areas of the economy and sparked worries that the country could be set for a deep and prolonged recession.
(Additional reporting by Veronica Brown and Harpreet Bhal)
(Reporting by Jessica Mortimer; Editing by Victoria Main)
BMW and Mercedes sales plunge
Friday, December 5, 2008
By Michael Shields and Alastair Himmer
Global sales at the world's top premium carmakers, BMW and Mercedes, plunged by a quarter in November and Honda backed out of Formula One racing as the economic downturn exacted a mounting toll on automakers.
With even well-heeled consumers keeping a tight grip on their wallets, group vehicle sales at BMW fell 25.4 percent to 96,570 units, led down by a 26.2 percent drop at the flagship BMW brand, it said on Friday.
Daimler's Mercedes-Benz Cars premium division saw unit sales drop 25.2 percent to 84,500 vehicles. Unit sales at its core Mercedes-Benz brand fell 27.6 percent to 74,400 units.
Car sales across the globe have plummeted as consumers curb spending in the face of mass lay-offs and a credit crunch, pushing big U.S. carmakers to the brink and heaping pressure on their foreign rivals, too.
In Germany, Europe's biggest auto market, new car sales are expected to hit post-reunification lows this year and next before recovering somewhat in 2010, the VDA auto industry association forecast this week.
In Japan, Honda delivered a major blow to Formula One by withdrawing from the sport with immediate effect.
Japan's number two carmaker is seeking to cut costs to combat the global economic crisis and concluded it would no longer bankroll the Formula One team and its estimated annual budget of $500 million (342.4 million pounds).
Honda Chief Executive Takeo Fukui told a news conference a return to the sport could take time, and that there were no plans to continue as an engine supplier.
"This difficult decision was taken recently and was made in light of the quickly deteriorating operating environment facing the global auto industry," Fukui told reporters.
"Honda must protect its core business activities and secure the long term as widespread uncertainties in the economics around the globe continue to mount."
Honda could trigger a domino effect of manufacturers toppling out of Formula One unless costs fall dramatically, International Automobile Federation (FIA) President Max Mosley said.
"I have to say it was not entirely unexpected," the Briton told reporters after Honda's news.
"I've been expecting one of the major manufacturers to stop for some time, because even before the current situation the costs were completely out of control.
"And now I think it's difficult to imagine how any manufacturer could stay in unless we make really substantial reductions in cost," he added in a conference call.
Toyota, BMW, Mercedes, Renault and Fiat each burn through $200 million a year competing in Formula One.
BMW shares fell 2.6 percent and Daimler's had retreated 4.2 percent in Frankfurt by 2:19 p.m. British time, while the DJ Stoxx autos index was down 2.9 percent. Honda shed 1.9 percent in Tokyo.
Detroit remains the epicentre of the consumer earthquake shaking the automotive world.
The chief executives of General Motors and Chrysler told the U.S. Congress on Thursday they would consider restarting merger talks if needed to win their slice of up to $34 billion in emergency U.S. government aid.
"I would be very willing to look at it seriously," GM CEO Rick Wagoner told the Senate Banking Committee, adding that merger talks earlier this year were dropped on concerns GM did not have the financing to merge with Chrysler.
Chrysler CEO Robert Nardelli said his job would likely be the first to go in a merger with GM, but if that would save Chrysler and its workers, "I would do it."
The chiefs of the Big Three automakers, including Ford CEO Alan Mulally, pledged to refocus on higher fuel efficiency vehicles and lower production costs.
But they encountered deep scepticism among lawmakers suspicious of such promises, given the companies' past failures to wean themselves from gasoline guzzlers and to make innovative cars that consumers want to buy.
"I don't trust the car companies' leadership," said New York Democratic Sen. Charles Schumer at the hearing. But in a comment reflecting many lawmakers' sentiments, he added, "We can't let the industry fail."
Even mighty Toyota has been humbled by the global market turmoil. It cut the ribbon on a new $860 million SUV plant in Canada on Thursday, but has already had to scale back production plans for the factory.
(Additional reporting by Alan Baldwin in London and by John Crawley and Kevin Drawbaugh in Washington, editing by Will Waterman)
Washington's new tack: Helping homeowners
By Edmund L. Andrews
Friday, December 5, 2008
WASHINGTON: After pouring vast amounts of money into financial institutions of almost every type, and having little to show for it, the Bush administration and the Federal Reserve are suddenly taking a new look at ordinary homeowners.
Ben Bernanke, chairman of the Federal Reserve, warned on Thursday that the soaring number of foreclosures threatened the economy. He then proposed some ideas — government-engineered loan modifications, and more taxpayer money to help people refinance — to keep people in their homes.
"The public policy case for reducing preventable foreclosures does not rely solely on the desire to help people who are in trouble," Bernanke said. "More needs to be done."
At the Treasury Department, meanwhile, top officials continued to work on a plan to bolster the housing market by subsidizing 30-year home mortgages with rates as low as 4.5 percent — a level that home buyers have not seen since the early 1960s.
Both actions highlighted how economic policy makers have come almost full circle. Since the financial crisis began last summer, both the Fed and the Treasury had focused almost exclusively on patching up the financial system — propping up banks, Wall Street firms, money market funds and issuers of commercial debt.
But the new focus on helping individuals could create a bitter split between those who want to buy homes and those who already own them. It has already opened up a rift between the real estate industry, which wants to increase sales, and the banking industry, which wants to get out from under staggering volumes of troubled mortgages.
Under a plan that top Treasury officials are weighing, the Treasury Department would underwrite tens of billions of dollars worth of 30-year, fixed-rate mortgages at rates far lower than most Americans have ever seen.
According to, the 30-year, fixed-rate mortgages fell on Thursday to 5.58 percent, down from 5.76 percent last week. The 10-year Treasury note fell to 2.55 percent late Thursday, a new low.
But the cheap mortgages would be available only for people buying houses, not the roughly 50 million families that already have mortgages and would want to refinance at a lower rate.
As a result, the plan offers no direct relief to the millions of people who face foreclosure because they took out exotic mortgages that they could not afford. Nor would the plan offer any benefit to people who have stayed current on their mortgages and would simply be interested in taking advantage of a lower rate. As envisioned by Treasury officials, homeowners who now pay 6 percent would be watching new neighbors arrive whose monthly payments were almost one-third lower.
"At this point, our view is that such a program may do more harm than good," said Camden Fine, president of the Independent Community Bankers of America, which represents about 8,000 small banks.
"You have thousands of banks that made loans and have them sitting on their books, and whose borrowers have worked their rear ends off to make the payments," he said. "Those people are going to go to their banks and tell them their neighbor just got a 4.5 percent loan, and the banks aren't going to be able to help them. They're going to have extremely angry and disgruntled customers."
But the National Association of Realtors, whose members want to bolster home sales, is lobbying hard for the idea.
"We believe that the only way to really address the housing situation is to increase sales," said Lawrence Yun, chief economist for the association. "Home prices will not stabilize until we address the inventory problem, and the only way to bring down the inventory of houses on the market is to bring in a new set of buyers. We think this would do the trick."
Yun estimated that a one-year program to provide home buyers with an interest rate of 4.5 percent would cost the government about $50 billion. It would result, he predicted, in about 500,000 home sales — an increase of slightly more than 10 percent over today's depressed sales rate. If the program were extended to people who simply wanted to refinance, Yun warned, the government's cost could easily be 10 times higher.
Neel Kashkari, the assistant Treasury secretary who is overseeing the $700 billion bailout plan, publicly confirmed on Thursday that the mortgage plan was under consideration but offered no other details.
People familiar with the discussions said Treasury officials were still debating the exact mechanism for financing the cheap mortgages. The main idea is to allow Fannie Mae and Freddie Mac, the government-controlled mortgage-finance companies, to buy up and guarantee 30-year, fixed-rate mortgages paying 4.5 percent interest.
The Treasury would provide the money by buying up the mortgage-backed securities from Fannie and Freddie.
The plan closely resembles a proposal developed by Christopher J. Mayer, vice dean at the Columbia Business School.
"This really is the opportunity of a lifetime," he said. "If you ask someone if this is the time to come into the market, I think anyone who would have bought a house in 2007 and was sitting on the sidelines, or who wants to buy this year or would buy in 2010, would want to take advantage of this."
Mayer said long-term Treasury rates are so low right now that the government could actually make a profit on the cheap loans. The Treasury can sell 10-year bonds right now and pay only 2.7 percent a year, far below the 4.5 percent that it would be charging home buyers.
But he said his own preference was to make the mortgages available to existing homeowners as well as home buyers.
"I think there are additional benefits one could have by extending the program for people who refinance," Mayer said. "At 4.5 percent, you might be looking at 25 million people who could refinance and the average savings could be $400 to $500 a month."
In the past, Treasury and Fed officials often pleaded that their rescues of Wall Street were crucial to the well-being of Main Street. But the new Treasury idea would amount to directly helping Main Street.
Meanwhile, Bernanke all but reversed the rhetoric of recent months by arguing that helping homeowners avoid foreclosure were critical for the whole economy.
"Steps that stabilize the housing market will help stabilize the economy as well," Bernanke said. "Reducing the number of preventable foreclosures would not only help families stay in their homes, it would confer much wider benefits."
Bernanke, speaking at a Fed conference on housing, outlined proposals for bolder government action. He suggested that the Treasury subsidize lower fees and interest rates on a new program, Hope for Homeowners, that is intended to help troubled homeowners refinance at much lower rates. At the moment, lenders pay an upfront insurance premium of 3 percent of the loan value and borrowers face fairly high interest rate of 8 percent.
Bernanke also supported a proposal by the Sheila C. Bair, chairwoman of the Federal Deposit Insurance Corporation, to have the government engineer as many as 1.5 million loan modifications. The Treasury and White House have fought the idea for months.
Finally, Bernanke proposed that the government share the cost when a mortgage servicer reduces a borrower's monthly payment. Preventing foreclosures, he said, "should be high on the agenda."
Chinese contemporary art bubble goes flat
By Sonia Kolesnikov-Jessop
Friday, December 5, 2008
SINGAPORE: The enigmatic self-portraits of Yue Minjun with their jaw-breaking grin are one of the most recognizable images of Chinese contemporary art and, when the going was good, those dealing in Yue's smiling men also laughed all the way to the bank.
The "Execution of Maximilian," inspired by the 1989 crackdown in Tiananmen Square, sold for $5.9 million in 2007 and "Gweong-Gweong," considered one of his best early works, sold in May this year for a record $6.85 million.
But collectors are no longer snapping up Yue's work. After four years of unprecedented boom, some sense is returning to the market.
"The market for Chinese contemporary art had long been overheated. Many artworks and artists are overpriced and overrated, notwithstanding the fact that they are good artworks by good artists. Needless to say, there is a lot of junk being traded as "meaningful' artwork," said Daniel Komala, the president of Larasati Auctioneers in Singapore.
"For good artworks, the bubble has deflated significantly; for meaningless artworks, the bubble simply burst," Komala said. "The market is looking for a new equilibrium, which is somewhere between 30 to 40 percent below its peak."
At Christie's Hong Kong evening sale of Asian contemporary art on Nov. 30 only 18 of the 32 lots sold. Works by Yue, Fang Lijun and Wang Guangyi found no takers, while Zhang Xiaogang's "Bloodline: Big Family No. 2," a large family portrait from the collection of the film director Oliver Stone, sold for $3.4 million, below an already conservative estimate of $3.9 million.
A rare early work by Zeng Fanzhi, "From the Masses, To the Masses," valued by Christie's at around $3.9 million, failed to make its reserve price - in sharp contrast with the May sale when "Mask Series 1996 No. 6" fetched $9.7 million, a record for a Chinese contemporary work.
"The logic of the market is quite simple right now," said Ingrid Dudek, a specialist in Asian contemporary art at Christie's. "Things that are fresh and well-priced will perform well, and things that are pushed too hard or come back at auction quickly may struggle.
"At the end of the day we would have hoped for better, but as with the sales in New York and London over the last month and a half, we're actually very happy that the market is still displaying as much liquidity as it did. For many of these works, clients have put in after-sale offers and many are now being sold."
Still, Dudek said, there was "definitely some kind of correction going on." Financial crisis aside, collectors of Chinese contemporary art appeared to be developing more discrimination. "There was really a moment where everything was high and easy," she said. "That's no longer the case."
In retrospect, Sotheby's inaugural evening sale of Asian art in Hong Kong on Oct. 4 was a turning point. That night, it became clear that top names no longer attracted a blind following, as only 28 of the 47 lots on offer sold. Works by Liu Wei, Wang Guangyi and Yue crashed.
A "Bloodline" painting by Zhang Xiaogang, another iconic painter of the good times, topped the sale at $2.96 million, at the lower end of its estimate, but another from the same series went unsold.
At the Borobodur auction in Singapore on Oct. 11, Yue's "Life Pose," depicting a naked man sitting on the floor, had a relatively low pre-sale estimate of $250,000 but it still did not sell. Early November sales in China confirmed the trend as lot after lot of contemporary work remained unsold at China Guardian's Grand Fall auction, while Beijing Huachen Auctions canceled all its forthcoming contemporary sales.
Nicole Schoeni, director of the Hong Kong-based Schoeni Art Gallery, said recent auction results would "humble a lot of people."
"I'm in a sense quite relieved to see this happening," she added. "A lot of the speculators are also not getting involved anymore."
Vinci Chang, head of 20th century Chinese and Asian contemporary art at Christie's Hong Kong, also sees a bright side. "This is a buyer's market," she said. "If you have a keen eye and know what is best, this is probably the best time to get the best work at the best price."
Komala said: "As long as the price of the top Chinese contemporary artists such as Zhang Xiaogang and others is still a fraction of Damien Hirst's," the buyers will return.

Qatar's Museum of Islamic Art: Despite flaws, a house of masterpieces
By Souren Melikian
Friday, December 5, 2008
DOHA, Qatar: Few can boast of having created from scratch a museum that deals with the arts of the past, no matter from what culture. This feat pulled off within a couple of decades or so by the ruling family of Qatar was revealed this week as the Museum of Islamic Art opened its doors to the public.
Like any Utopian realization, this one displays some remarkable features matched by equally blatant weaknesses. The new building designed by I.M. Pei was meant to be "an architectural gem, home to a thousand treasures," as posters along avenues leading to the museum claim. Beauty is in the eyes of the beholder as the saying goes, and not all beholders will be overwhelmed by the geometrical volumes that seemed to be heaped upon one another when seen from a distance.
Once inside, visitors may wonder why little attention has been given to some basic requirements for the display of objets d'art. Daylight, which would have been of immense benefit to ceramics and silver-inlaid brass wares, has been largely shunned in a land where it is often glorious.
Had artificial lighting been devised with greater sensitivity for the objects, this might be forgiven. But apparently someone forgot to warn those who installed the lighting equipment that directional light aimed from high up in the ceiling on sensational candlesticks from Iraq, Iran and Syria would cause nasty reflections, leaving other areas barely discernible.
The contrast with a few objects displayed in individual cases properly lit where their splendor duly comes out, as is the case with a 10th-century bronze animal from Arab Spain, makes these elementary mistakes all the more irksome. In fairness to the new museum, such mishaps are not uncommon in world-famous, long-established institutions. The Louvre exhibition of treasures from Qatar two years ago suffered from similar deficiencies.
These mistakes are compounded by the larger problem of the overall distribution of the art which does not follow any discernible purpose.
Visitors stepping into one of the galleries where the objects are set in individual cases several steps apart may be forgiven if they fail to detect any logic in the arrangement - there is none. A very beautiful bowl with blue lettering on the ivory ground and a label assigning it to 10th-century Iraq sits a short distance away from a 10th-century bronze animal from Arab Spain described as a fountainhead. A 16th-century decanter (not a "water bottle") from the Turkish city of Iznik is there, too, and as they approach a corner of the room, the more diligent art lovers may spot an important astrolabe from Iran signed in 374 of the Islamic calendar (984-985 A.D.) by Hamid ibn al-Khizr al-Khujandi. With luck, they may even catch sight in a wall vitrine of an extraordinary flask of deep blue glass decorated in gold with a stylized pomegranate tree and parrots that is tentatively attributed to Syria.
If confined to one room, the random grouping might conceivably be justified as an anthology of stunning pieces, each to be admired in isolation. But this goes on endlessly.
In the room next to this one, the theme of "patterns" is supposed to justify the selection. Extremely fine revetment tiles from Iznik dating from the 1580s are visible on a wall. Nearby, the opening page of a Moghul manuscript with a magnificent rosette is said to have formed part of an album put together for the emperor of Hindustan, Shah Jahan. The label, alas, omits to specify for the layman's benefit that the page is cropped on all sides, which drastically alters its balance.
Further on, a rare bowl from 15th-century Iran with turquoise cloud bands and lotus blossoms on black ground sits in a case on its own. No aesthetic link connects any of the above.
What could have led to the decision of setting side by side in a central vitrine an ivory oliphant from 12th-century Italy (perhaps Sicily, the label speculates), and a 17th-century tinned copper bowl from Iran with a date possibly to be read 1[0]89 (1678-1679 AD), is puzzling.
If the reason is simply the presence of a hunting scene (naturally involving animals) on the Iranian bowl and of animal effigies carved in sunken relief on the oliphant, the parallel is hardly illuminating. This is the equivalent of displaying together a 12th-century Romanesque sculptural group from France and a 17th-century picture by Rubens on the grounds that both represent Mary and the infant Jesus.
Such lack of visual coherence is the inevitable consequence of the concept of "Islamic art" that underpins the display. This is a European construct of the 19th century that gained wide acceptance following a display of Les Arts Musulmans at the old Trocadero palace in Paris during the 1889 Exposition Universelle. The idea of "Islamic art" has even less substance than the notion of "Christian art" from the British Isles to Germany to Russia during the 1000 years separating the reigns of Charlemagne and Queen Victoria might have.
Should any art historians declare themselves competent to deal with paintings, artifacts or monuments created across Europe during that period, not many would take them seriously, and were a museum director to prepare haphazardly a similar artistic concoction, he would not last long in the job.
Yet that is roughly how the Western art world, academic or not, approaches the lands where Islam prevails. Never mind that the sundry cultures are more diverse taken as a whole than those of Europe.
The reasons for the enduring myth are many. In the West, museums stick to the notion of "Islamic art" because they lack the money, the space or the competencies required to set up separate Arab, Iranian, or Turkish departments. Similar lack of financial and/or human resources lead universities to run "Islamic departments."
In Islamic countries, the situation varies. The general tendency to import wholesale Western European concepts and fashions, from clothes to constitutional matters, paved the way for the adoption of the "Islamic art" myth. Ironically, the anachronistic phrase translated from European languages would have been incomprehensible in earlier times. Humans alone can be "Muslims," i.e. entrust themselves unto God, inert things cannot - even if the qualifier is changed to "Islamic." The myth is particularly popular in those parts of the Muslim world that have only made a modest contribution to art because by using an all-encompassing qualifier, they feel that they, too, somehow own the art of the more powerful cultures.
This overall confusion has a corollary - inadequate scholarship, regrettably reflected in easily half the labels that require urgent revision. Many do not yield basic information that can be culled merely by glancing at the inscriptions painted on the pottery or inlaid in gold on the brass vessels and candlesticks.
Nonspecialists might be interested to learn that the ceramic bowl with blue lettering ascribed to "Iraq (probably Basra)" is signed. The line reads in Arabic mimma 'amala S[a]lih," "made by S[a]lih." It says a lot about the status of artists - and the fame of some - that the sole decoration is confined to that signature. Add in passing that the bowls with such blue lettering on ivory ground that have appeared in the market are traceable to Iranian, not Iraqi, sources. This, added to various bowls recovered from archaeological excavations across Iran, carries greater weight than the shards excavated in Samarra, the Iraqi city that was briefly a caliphal capital where goods arrived from all over the world.
It would be of even greater interest to visitors who are not specialists in Arabic epigraphy to be told that the fantastic Syrian brass incense burner inlaid with silver and gold carries the titles and names of the great Mamluk Sultan of Syria and Egypt, al Malik an-Nasir Muhammad ibn Qalawun.
On the third floor, a candlestick of extraordinary importance is likewise inscribed with the titles and names of a ruler, Sheykh Abu Eshaq, the Injuid Sultan of the southern Iranian region of Fars, who reigned from 1341-1356. This not only makes the bronze piece decorated with miniature-like court scenes a royal object, it also tells us that it was made in the capital of the Sultanate, Shiraz. The label is again silent on these matters.
Curiously, the very names of the objects in English and Arabic are often wrongly stated. Truncated conical pottery bowls are dubbed "dish" in English and "sultaniyya" in Arabic, not the classical word, which is ka's or sometimes jam.
Most regrettably, no special emphasis is laid on some of the most important objects in the collection. A group of brass pieces from 13th-century Iraq, including two pairs of stunning door knockers, and some unique candlesticks, can be seen for the most part on the third floor. Only one, decorated with dazzling silver-inlaid scrollwork, and assigned to Baghdad, is in a main gallery on the first floor. Trade sources report that these all left a Shiite shrine on the outskirts of Baghdad in the days of Saddam Hussein. Later, they passed into the hands of a great Kuwait collector, the late Jasem al-Homaizi, whose objects were acquired by Qatar.
There are several more objects of cardinal importance unmatched in most of the world's museums. Two velvet panels illustrating wine drinking at the Safavid court of late-16th-century Iran are miraculously well preserved.
If only for these masterpieces, anyone who has a chance should pay a visit to this imperfect museum with many unforgettable works of art.
Soaring in art, a museum trips over finances
By Edward Wyatt and Jori Finkel
Friday, December 5, 2008
LOS ANGELES: When this city's Museum of Contemporary Art appointed a classically trained curator from the Art Institute of Chicago as its director in 1999, many viewed it as a welcome sign that art rather than business would be kept at the forefront of one of the most dynamic museums in the country.
They did not know how right they were. Nearly 10 years later, the museum remains internationally renowned for its collection of postwar art and for organizing some of the most serious and ambitious contemporary art exhibitions anywhere.
Yet by putting art ahead of the bottom line, the Museum of Contemporary Art has nearly killed itself. The museum has operated at a deficit in six of the last eight years, and its endowment has shrunk to about $6 million from nearly $50 million in 1999, according to people who have been briefed on the finances.
Now the California attorney general has begun an audit to determine if the museum broke laws governing the use of restricted money by nonprofit organizations. And a growing chorus of local artists, curators and collectors, including current and former board members, are lobbying to remove the museum's director, Jeremy Strick, its board, or both.
The museum's tailspin has brought an outpouring of grief and disbelief in a city that has recently cast itself as a rival to New York as the nation's art capital. The closing of such a respected museum, or even its merger into another institution, would leave a formidable hole not only in the city's psyche but in the national cultural landscape as well.
"The museum has a very significant role beyond the culture of Los Angeles," said Connie Butler, a former curator there who is now chief drawings curator at the Museum of Modern Art in New York. "People in the art world feel they are going to wake up one morning and one of the greatest resources in terms of contemporary art in the Western world is going to be permanently altered."
Museum officials say they expect a solution to the crisis by the end of the year, if not by the next board meeting, on Dec. 16. A possible merger with the Los Angeles County Museum of Art has been discussed and is supported by some trustees, although the museum's official position is that it wants to remain independent.
Eli Broad, the billionaire philanthropist who frequently plays the role of Medici here, offered $30 million last month in support of the Museum of Contemporary Art, on the condition that half of it be matched by contributions from other donors. So far, no other donors have publicly stepped forward.
Museum officials would not agree to be interviewed for this article or to discuss the scope of the state's audit. In written responses to questions, the museum said it was "pursuing and assessing all of its options," including talks with Broad and with the Los Angeles County Museum of Art about possible partnerships. "Central to all these discussions is MOCA's commitment to its core mission," the museum said.
Part of its challenge may be that the very people who are considering the museum's options include those who oversaw its decline. One of the board's two co-chairmen, Tom Unterman, for example, has served on the board's finance committee for the last eight years and was finance chairman the last three. David Johnson, the other co-chairman of the board, was previously head of its governance committee.
"It's obvious that there needs to be new management," said Jane Nathanson, a member of the boards of both the Museum of Contemporary Art and the Los Angeles County Museum of Art. "MOCA needs to look deeply into the way it has functioned and move forward to rebuild the reputation of the museum."
Some trustees have departed in recent years, frustrated with what they called the museum's financial recklessness and lack of leadership. "I saw the train wreck coming," said Susan Nimoy, a collector who left the board in 2006 after pushing hard, she said, to bring the budget in line with available money.
"My main complaint to the board was that none of you would run your household budget the way this institution is run," Nimoy said. "I think every one of those trustees should resign and Jeremy should resign."
The museum was founded in 1979 by a corps of collectors after the demise of the Pasadena Art Museum left Los Angeles without a major museum dedicated to modern or contemporary art. The city agreed that if the founders could raise $10 million for operating costs, it would help pay for construction of a new museum downtown.
While the building was in development downtown, a nearby city warehouse was renovated for use as a temporary home. It opened in 1983, three years before the main building was completed on Grand Avenue. (The museum also maintains a small gallery at the Pacific Design Center in West Hollywood.)
Dean Valentine, a media entrepreneur and former museum trustee, described the museum as central to the city's becoming a major cultural center. "For many artists in Los Angeles, it was the first institution that expressed interest in their work," Valentine said, comparing its importance for West Coast artists to that of MoMA in New York for the Abstract Expressionists some 50 years ago.
Historically, one problem dogging the museum has been the lack of a proper home for its permanent collection, which features early work by John Baldessari, Ed Ruscha and Robert Rauschenberg, among others. The Grand Avenue building is considered too small by today's standards while the larger Geffen Contemporary lacks necessary climate controls to preserve art.
"It's a source of frustration for many of us," Valentine said. Like Nimoy, he left the museum board in 2006, unhappy with the leadership; both have since joined the board of the Hammer Museum here.
Given its financial crisis, the Museum of Contemporary Art has announced plans to close the Geffen for six months next year and is promoting the location online for rental to film crews.
According to its financial statements, the only time in the last seven years that the museum has managed to finish with a surplus was in the 2007 fiscal year, when its revenues topped expenses by $3 million. But much of that surplus came from a gain on the sale of investments; admissions and membership revenues had declined, and the budget surpassed $21 million, the highest ever.
The museum said it expected its audited financial statements, once completed, to show that it generated a surplus in the 2008 fiscal year as well, although it declined to provide details.
Yet in nearly every year since 2000, the museum has drawn down on the principal of its endowment to pay for operations, a practice frowned upon as risky in the museum world.
And at times the museum has secured financing for exhibitions in ways that many other museums would shun. To help pay for last year's Takashi Murakami exhibition, the museum solicited hundreds of thousands of dollars in donations from art galleries that represented the artist and therefore stood to gain from any related career boost.
The museum said in a statement that it recently bolstered its ability to raise money, hiring a new director of development and nearly doubling its donations in the last two years. It noted that in the last seven years, 20 of the board's 40 members, including life trustees, have given more than $1 million in addition to their required annual gifts.
But others say the reluctance of potential donors to respond publicly to Broad's offer of matching money stems from a lack of confidence in the museum's stewardship.
Meanwhile, his rescue plan has stirred concern that Broad will try to call the shots at the Museum of Contemporary Art, as he did while a trustee there in the 1980s, before a rift led to his departure. Some potential donors have said privately that his role as a major benefactor of the Los Angeles County Museum of Art would give him too much power if he were to lead the rescue of the Museum of Contemporary Art.
In an interview this week, Broad offered additional details of his plan, saying he would give the museum $15 million in installments equal to however much the museum raised, plus $3 million a year for five years to pay for operations and exhibitions.
Broad has also said privately that he favors a management change, according to people who been part of the discussions. Although the museum does not receive direct city financing, its main buildings were financed by or leased from the city. Eric Garcetti, who as president of the Los Angeles City Council is a nonvoting member of the museum's board, said, "There does seem to be a consensus forming that new leadership should be brought in to run the museum, that the board should be reinvigorated and there should be a paring down of the budget."
"I believe," Garcetti said, "that the public deserves more reassurance that an institution that the public helped fund will be held to a higher standard."

36 hours in Zermatt, Switzerland
By Nicholas Kulish
Friday, December 5, 2008
Zermatt is defined by altitude, by the principle of the vertical, where the highest peaks in Switzerland tower overhead on all sides. To glide among the pale blue glaciers, breathing the hard, clean wind on nearly 200 miles of marked trails is the essence of skiing. The town is rich in history, dating back to the famously fatal climbing accident that ended the first successful ascent of the Matterhorn and cemented the town's legend. Glitz and glamour may be the allure, but class and understatement are still the rule, with a mum discretion among its famous guests that would not be out of place in Zurich's private banks.
4 p.m. 1) WATCH OUT
Ski trips usually begin with the realization of an absence, the taunting solitary glove or partnerless wool sock. Zermatt's main commercial strip street, Bahnhofstrasse, can fill most worldly wants, as well as orient you to the town itself. Start at the train station and pop into the bakery Biner (Bahnhofplatz 4; 41-27-967-61-67; for mini baumnusstörtli, a Swiss walnut treat (3.20 francs, or about $2.60 at 1.25 francs to the dollar), to nibble as you walk the cobblestone lane. For luxury watches, visit Haute Horlogerie Schindler (Bahnhofstrasse 5; 41-27-967-11-18), which carries timepieces by Breguet, Blancpain and Vacheron Constantin. Duck into one of the kitschy cuckoo clock stores down the block to catch your breath from the five-figure price tags. It may be the first — but not the last — sticker shock you'll encounter in Zermatt.
The stark, jagged silhouette of the Matterhorn is the symbol of Zermatt, as well as a local obsession, featured on every photograph and logo as if required by law. To understand why, visit the subterranean Matterhorn Museum (Kirchplatz 11; 41-27-967-41-00;; admission, 10 francs). Enter through the 3-D glass rendering of the mountain jutting upward in the town's Kirchplatz. Follow the stairs down to discover the village being excavated by archaeologists. Exhibitions range from a Neolithic stone ax to the very rope that snapped and sent four of the first climbers to reach the Matterhorn's summit to their deaths. The museum is a good primer, but nothing resonates like the rough tombstones at the nearby church, where the climbers are buried.
8 p.m. 3) THE LILT OF LAMB
There are more than a few mediocre, yet overpriced, restaurants specializing in uninspired lamb dishes. The taxidermy and glitter-filled funhouse Chez Heini (Wiestistrasse 45; 41-27-967-16-30; is the happy exception, a cult favorite in town for its food and madcap décor. The chef, Dan Daniell, tends to the succulent lamb on an open wood fire in one corner of the restaurant, with a four-course meal running a not-inexpensive 76 francs a person. But it comes with priceless entertainment. When the lights dim, the chef-cum-recording star grabs a microphone and serenades diners with his own brand of Switzo-pop, under a giant video screen showing helicopters swooping around the Matterhorn like a karaoke fusion of "The Swiss Family Robinson" and "Apocalypse Now." Warning: You may find yourself singing his Matterhorn ditty for the remainder of your trip.
There are few attainable real-life experiences that make one feel like James Bond, and fewer still that don't involve tuxedos and roulette. Crossing a border on skis is one of them. Take three gondolas up over 12,500 feet on the Klein Matterhorn. Blaze through the fresh snow on Theodul glacier, so high you can ski it year-round. When you're ready to switch nationality, glide over the Plateau Rosa into Italy. There's no border post, but your cellphone might trill and vibrate as you carve down the Italian slope, pledging its allegiance to a new national carrier. To complete your mission, have a cappuccino on the terrace at Bontadini (Piste 6 on the Italian side of the Theodul Pass; 39-335-250312).
1 p.m. 5) SKI-UP DINING
Before exploring Rothorn and Sunnegga, on the other side of Zermatt, make your way to the quaint village of Findeln for lunch. Findlerhof bei Franz und Heidi (41-27-967-25-88; offers unbeatable views and Swiss classics (reservations strongly recommended). The quiche with leeks, onion and cheese sets a new standard, worth every penny of 25 francs. A rösti, a kind of potato pancake, will fuel a full afternoon of skiing. After lunch, experts should make a beeline for the famous moguls at the Triftji glacier, the traditional home of the annual Bump Bash, a half-party, half-competition held in Zermatt every March. Beginners beware!
4:30 p.m. 6) WHEEL OF FORTUNE
You won't find a more festive après ski scene than at Papperla Pub (Steinmattenstrasse 34; 41-27-967-40-40;, where live bands hammer out classic rock tunes and the revelers dress up as everything from gorillas to Teletubbies. For something a little harder than glühwein, 20 francs buys a spin on the wheel of drinks, with prizes ranging from four shots all the way up to a bottle of the special house brew. The recipe is secret, but sambuca and Tia Maria are among the confirmed ingredients. The only losers on the wheel are the four shots of Evian water, but if you hit that aqua-snake eyes, the bartender will take pity on you and give you a half-price second spin.
Between a full day on the slopes and a few pints worth of après ski, a little rest is needed. Instead of a nap, head over to the Swiss army knife of night life, Vernissage (Hofmattstrasse 4; 41-27-967-66-36;, which is a bar, art gallery, restaurant and movie theater. Built by the local artist and architect Heinz Julen, the space is a technical and aesthetic marvel. Glass panes seal off the theater from the hubbub of the bar upstairs. Have a drink and sit back, knowing that at intermission your tiger prawns or chicken with lentils — fusion foods that offer a nice break from the local cuisine — will be brought to your seat. Starting at around 60 francs for the meal and the movie.
10 p.m. 8) A TOUCH OF TARTAN
For a pick-me-up, stop by Edward's Bar café in the Hotel Monte Rosa (Bahnhofstrasse 80; 41-27-966-03-33;, the city's oldest hotel, which is scheduled to reopen in a few days after renovations. The small bar is as cozy as an old pair of plaid pajamas, in large part because it is decorated in red and green tartan pattern, from the walls to the stool covers. Watch the bartender lovingly prepare your Irish coffee (15 francs), lighting the whiskey on fire and swirling it in the glass to melt the sugar.
The DJ's spin into the morning at Schneewittchen (German for "Snow White"), adjoining the Papperla Pub. Schneewittchen is the spot for foam parties, beach parties and a Heaven and Hell night, where partygoers dress like devils and angels, but no one acts like the latter. The Hotel Post (Bahnhofstrasse 41; 41-27-967-19-31; has five bars and clubs, featuring everything from live music, laid-back lounges and the notorious Broken Bar Disco, where you can dance on a wine barrel into the morning.
10 a.m. 10) SLIDEWAYS
Don't let the innocent-looking wooden toboggan fool you. This is not taking your Flexible Flyer to the neighborhood hill. The Gornergrat toboggan course (41-27-921-47-11; is steep and curving, and for 8 francs an hour you can let gravity takes its course. Acceleration is rapid, and there are no brakes, except for your feet. So make like Fred Flintstone and plow down the speedy, combed turns and expect a hard wipeout or two. The adrenaline thrill will have you back up the hill in no time.
Swiss, Continental and American fly nonstop from New York to Zurich, starting at around $700 for travel this month. Zermatt is three and a half hours by train from Zurich. The Swiss rail system ( has a special Swiss Transfer Ticket for 127 francs, about $100 at 1.25 francs to the dollar, round trip from the airport.
Hotel rates in Zermatt vary throughout the year. In ski season, rooms at the Grand Hotel Zermatterhof (Bahnhofstrasse 55; 41-27-966-66-00;, the luxury hotel synonymous with Old World belle époque elegance, start at 700 francs for a double.
Across the street, the historic Hotel Monte Rosa (Bahnhofstrasse 80; 41-27-966-03-33, has doubles starting at 500 francs during the season.
The Hotel Mirabeau (Untere Mattenstrasse 12-14; 41-27-966-26-60; offers cool, modern décor that is the antithesis of mountain kitsch, with doubles starting at 540 francs. The spa offers a warm Swiss chocolate massage from 120 francs.

Google and the libraries
By Alex Beam
Friday, December 5, 2008
It seemed like a great idea at the time.
In 2004, Google signed a deal with five major research libraries to digitize all the books in their collections. "Google's mission is to organize the world's information, and we're excited to be working with libraries to help make this mission a reality" proclaimed company cofounder Larry Page. It looked like an encouraging first step toward a world in which all knowledge was online, all the time.
Not everyone was so enthralled with this beatific vision of the Future According to Google.
Authors had the temerity to insist they be paid for their digitized content, which was going to be used to sell Google ads, or, down the road, be loaded into a possible Google Reader. The Authors Guild sued, and eventually settled with Google, resulting in a complicated agreement about royalty payments that awaits the approval of a judge.
Libraries excluded from the Google project wondered where they would fit in. The words "Free to All" are etched in stone above the Boston Public Library, but last I checked, those words do not appear on the fuselages of the Boeings and Gulfstreams owned by Google founders Page and Sergey Brin.
Google executives sound like they are doing the world an immense favor by digitizing books, rarely mentioning that they are in business to sell stuff, not give it away.
"We felt it would be extremely useful to the world if books were in digital format," is how product manager Adam Smith explained to me the original impetus behind the digitization project.
But this wasn't a charitable undertaking, was it? "It is useful to Google, and that's why we've done this," he said.
Is resistance futile? Not everyone thinks so. In 2005, Yahoo!, Microsoft, and the nonprofit Internet Archive launched an actual charity called the Open Content Alliance, which signed up 19 Massachusetts libraries, including the BPL, MIT, Brandeis, and Boston College, as well as huge systems like the University of California's.
Open means open access to digitized books; by inference, Google means closed. Primary funder Microsoft withdrew its support this year, and the OCA is morphing into the Open Knowledge Commons, now supported by the Sloan Foundation, which will hold an organizational meeting at the Library of Congress next week.
Everyone's terrified of trashing Google, mainly because of the company's astonishing power in the marketplace, and because it has already digitized 7 million books that libraries want access to.
"There's no Google-bashing," insists Maura Marx, executive director of the new Commons. "We need to ensure that there is a viable alternative and that access to knowledge remains open and does not become commodified." She and Google executive Smith note that some libraries, like California's, are cooperating both with Google and with open access initiatives.
Happily, not everyone is scared of Google. Harvard, one of the original participants in the 2004 deal, has decided not to allow Google to sell any of the university's copyrighted holdings. In a letter published by the Harvard Crimson, chief librarian Robert Darnton told his staff that Google's settlement with the Author's Guild "contains too many potential limitations on access to and use of the books by members of the higher-education community and by patrons of public libraries. ...For now, the Harvard University Library will continue to explore other ways to open up its collections more broadly for the common good."
In a heated philippic, "Free Our Libraries!" posted on the Web site of the Boston Library Consortium, Richard Johnson, an adviser to the Association of Research Libraries, decries the "momentous, ill-considered shift...that threatens to limit the public rights in the collections assembled and maintained, often at public expense, in libraries around the globe."
"Companies are paying nothing for access to the crown jewels," Johnson writes. "We may awaken one day to find that our digital heritage has become private property rather than a public good."
Librarians of the world, unite! You have everything to lose: your books.
Boston Globe
Bob Dylan and Barry Feinstein's 'Hollywood Foto-Rhetoric'
By Charles McGrath
Friday, December 5, 2008
Hollywood Foto-Rhetoric The Lost Manuscript. Text by Bob Dylan. Photographs by Barry Feinstein. 141 pages. Simon & Schuster. $30; £14.99.
The Bob Dylan archives amount to what the British call a lumber room - a cavernous storage space so full of odds and ends that even Dylan himself doesn't know what's in there. Just when you think the place has been emptied out, something new - a bootleg tape, some video footage, a collection of sketches and doodles - pops to light. The newest unboxing, which Dylan in characteristic fashion had forgotten all about, is a series of 23 poems he wrote in the early 1960s to accompany a collection of Hollywood photographs by Barry Feinstein. Either half of this collaboration would be worth having, but combined, under the quizzical title "Hollywood Foto-Rhetoric," they add up to one of the oddest coffee-table books to come along in a while.
That "f" in "foto-rhetoric" leads you to anticipate a volume in tabloidy, Hollywood Confidential style, and there are a couple of glimpses of weird Kenneth Anger-like Hollywood. But most of the photographs are more moody, even arty, than they are leering or sensational. Feinstein went on to become the court photographer of rock 'n' roll royalty, but in the early '60s he was working as a studio flunky for the mogul Harry Cohn, and he took these pictures backstage on movie sets or driving around town after hours. They're suffused with a kind of anti­glamour that was probably meant to be tough and unflinching at the time but now seems almost tender. There are pictures of discarded props, spoiled film, headless mannequins, out-of-work actors and actresses. Jerry Mathers turns up in a group photo with his real-life relatives, who look even more Cleaverish than his television family. Among the other actors portrayed are a gaunt and weary Judy Garland; Bette Davis, troweled with makeup, dragging on a cigarette between takes; and Jayne Mansfield, blowzy and overweight, not many years before she died. The dust jacket, in case you missed the message, shows the crumbling "Hollywood" sign in the Los Angeles Hills photographed from behind. Feinstein's Hollywood is a land of make-believe, and now, in the bleached-out sunlight, its best days are clearly past.
What Dylan brings to this vision is a kind of antic surrealism, at times reminiscent of the liner notes he wrote for "Highway 61 Revisited." In an introductory Q. and A., he is reluctant to call the text poetry. "If they are poems, or if they are not poems . . . does it really matter?" he says. "And who would it matter to?" But they certainly look and read like poems, in tense, narrow lines, of just one or two beats sometimes, that stack on the page, Billy Collins says in the introduction, like "a teetering column of poker chips." The style seems learned partly from the Beats, terse and jangly, with no capitalization and lots of dropped letters:
off an runnin
runner up
bound t go
bust the top
just t find out
what i'm missin.
But the voice is reliably Dylanesque:
from the outside
lookin in
every finger wiggles
the doorway wears long pants
an slouches
no rejection
all's fair
in love and selection.
Occasionally a poem will explicitly comment on the accompanying photograph. The one next to a picture of a heartbroken Marlene Dietrich at Gary Cooper's funeral, for example, reads:
t dare not ask your sculpturer's name
with glance back hooked, time's hinges halt
as curiosity's doom inks beauty's claim
that sad-eyed he shall turn t salt.
More often the poems take off on the theme of a photo or enact a scenario (a casting-office interview, say) suggested by it. And sometimes the relation of text to picture is pretty oblique. Without Luc Sante's explanatory note in the foreword, you would probably never guess that the last poem, illustrating several pictures of Academy Award-winning actors holding their Oscars, was inspired by the time Dylan, receiving an award from the Emergency Civil Liberties Committee, compared himself to Lee Harvey Oswald. The poem next to a photo of a dancing Judy Garland imagines, for some reason, a fight between a man and the husband of a woman he has been ogling. Go figure.
Most of these poems, it must be said, read like the work of just a few moments. They lack the complexity, the emotional power of some of the great Dylan song lyrics, which, as Christopher Ricks demonstrated in "Dylan's Visions of Sin," really can stand comparison to Marlowe, Keats and Tennyson. They're mostly riffs, the poetic equivalent of scale playing. On the other hand, you can read these little verses without humming the tune in your head, and they allow you to appreciate Dylan's verbal dexterity ' his gift for rhyme and free association - in isolation, as it were. This is the kind of quickness and improvisatory brilliance that allowed those great lyrics to happen.
Nor is the text of "Hollywood Foto-Rhetoric" entirely rhetorical. The best poems add up to a wary meditation on fame and celebrity, on the disguises we all put on ' themes to which he would later return. When Dylan wrote these poems he could not have guessed that he would become one of the most photographed musicians ever, and yet his engagement with Feinstein's comfortless vision of Hollywood may explain why in photographs Dylan himself so seldom smiles, so often looks wary, so rarely looks unposed. He's like those Plains Indians who feared that the camera could steal your soul.

New study tracks the transmissibility of happiness
By Pam Belluck
Friday, December 5, 2008
How happy you are may depend on how happy your friends' friends' friends are, even if you don't know them at all.
And a cheery next-door neighbor has more effect on your happiness than your spouse's mood.
So says a new study that followed a large group of people for 20 years - happiness is more contagious than previously thought.
"Your happiness depends not just on your choices and actions, but also on the choices and actions of people you don't even know who are one, two and three degrees removed from you," said Nicholas Christakis, a physician and social scientist at Harvard Medical School and an author of the study, to be published Friday in BMJ, a British journal. "There's kind of an emotional quiet riot that occurs and takes on a life of its own, that people themselves may be unaware of. Emotions have a collective existence - they are not just an individual phenomenon."
In fact, said his co-author, James Fowler, an associate professor of political science at the University of California at San Diego, their research found that "if your friend's friend's friend becomes happy, that has a bigger impact on you being happy than putting an extra $5,000 in your pocket."
The researchers analyzed information on the happiness of 4,739 people and their connections with several thousand others - spouses, relatives, close friends, neighbors and coworkers - from 1983 to 2003.
"It's extremely important and interesting work," said Daniel Kahneman, an emeritus psychologist and Nobel laureate at Princeton, who was not involved in the study.
Several social scientists and economists praised the data and analysis, but raised possible limitations.
Steven Durlauf, an economist at the University of Wisconsin-Madison, questioned whether the study proved that people became happy because of their social contacts or some unrelated reason.
Kahneman said that unless the findings were replicated, he could not accept that a spouse's happiness had less impact than a next-door neighbor's.
A study also being published Friday in BMJ, by Ethan Cohen-Cole, an economist at the Federal Reserve Bank of Boston, and Jason Fletcher, an assistant professor at the Yale School of Public Health, criticizes the methodology of the Christakis-Fowler team, saying that it was possible to find what look like social-contagion effects with conditions like acne, headaches and height but that contagion effects go away when researchers include environmental factors that friends or neighbors have in common.
"Researchers should be cautious in attributing correlations in health outcomes of close friends to social network effects," the dissenting authors say.
In an interview, Christakis said that criticism and the acne-headache study's methods were flawed.
An accompanying BMJ editorial about the two studies called the Christakis-Fowler study "groundbreaking," but said "future work is needed to verify the presence and strength of these associations."
The team previously published studies concluding that obesity and quitting smoking were socially contagious.
But the happiness study, financed by the National Institute on Aging, is unusual in several ways. Happiness would seem to be "the epitome of an individualistic state," said John Cacioppo, director of the University of Chicago's Center for Cognitive and Social Neuroscience, who was not involved in the study.
And what about schadenfreude or good old-fashioned envy when a friend lands a promotion or wins the marathon?
"There may be some people who become unhappy when their friends become happy, but we found that more people become happy over all," Christakis said.
Cacioppo said that suggests that unconscious signals of well-being pack more zing than conscious feelings of resentment.
"I might be jealous of the fact that they won the lottery," he said, "but they're in such a good mood that I walk away feeling happier without even being aware that they were the site for my happiness."
The subtle transmission of emotion may explain other findings, too. In the obesity and smoking cessation studies, friends were influential even if they lived far away. But the effect on happiness was much greater from friends, siblings or neighbors who lived nearby.
A next-door neighbor's joy increased one's chance of being happy by 34 percent, but a neighbor down the block had no effect. A friend living half a mile, or four-fifths of a kilometer, away was good for a 42 percent bounce, but the effect was almost half that for a friend two miles away. A friend in a different community altogether can win an Oscar without making you feel better.
"You have to see them and be in physical and temporal proximity," Christakis said.
The BMJ study used data from the federal Framingham Heart Study, which began following people in Framingham, Massachusetts, after World War II and ultimately followed their children and grandchildren. Beginning in 1983, participants periodically completed questionnaires on their emotional well-being.
Many children lack stability long after Katrina
By Shaila Dewan
Friday, December 5, 2008
BATON ROUGE, Louisiana: Last January, at the age of 15, Jermaine Howard stopped going to school. Attendance seemed pointless: Jermaine, living with his father and brother in the evacuee trailer park known as Renaissance Village since Hurricane Katrina in 2005, had not managed to earn a single credit in more than two years.
Not that anyone took much notice. After Jermaine flunked out of seventh grade, the East Baton Rouge School District allowed him to skip eighth grade altogether and begin high school. After three semesters of erratic attendance, he left Baton Rouge in early spring of this year and moved in with another family in a suburb of New Orleans, where he found a job at a Dairy Queen.
A shy, artistic boy with a new mustache, Jermaine is one of tens of thousands of youngsters who lost not just all of their belongings to Hurricane Katrina, but a chunk of childhood itself.
After more than three years of nomadic uncertainty, many of the children of Hurricane Katrina are behind in school, acting out and suffering from extraordinarily high rates of illness and mental health problems. Their parents, many still anxious or depressed themselves, are struggling to keep the lights on and the refrigerator stocked.
For some, like Kearra Keys, 16, who was expelled from her Baton Rouge school for fighting and is now on a waiting list for a GED program, what was lost may be irretrievable. For others, like Roy Hilton, who stands a head taller than his third-grade classmates, recovery may lie in the neighborhood school near the New Orleans duplex where his family has finally found a home.
The families profiled in this series were among the last to leave Renaissance Village when the Federal Emergency Management Agency closed it in May. The government was trying to nudge the poorest, least-educated and sickest evacuees toward self-sufficiency — or at least toward agencies other than FEMA.
More than 30,000 former trailer residents landed in apartments paid for by the federal government until March 2009, a small fraction are in the hands of private charities or government housing programs for the disabled, and thousands more simply traded in their trailers for other temporary quarters. Case managers promised by FEMA to help these families find permanent homes have yet to start work in Louisiana.
Many of the adults are at least partly victims of their own poor choices. But the children are another matter. For them, the experts prescribe the one thing that has been hardest to obtain: stability. Their parents sometimes work against that goal.
Jermaine's father, Joseph Griffin, has had trouble holding on to steady work and said he did not see much value in his son's attending school this semester because he had already missed so much class. "If he doesn't get no credits for it, what sense does it make for him to sit up in there?" Griffin said. "I was going to try to get him a job."
The health problems of Hurricane Katrina children are daunting. When the Children's Health Fund, whose mobile health clinics have provided the only doctors and psychologists available to many of these families, reviewed the charts of children seen this year, researchers with the Mailman School of Public Health at Columbia University found that 41 percent under age 4 had iron-deficiency anemia — twice the rate for children in New York City's homeless shelters. Anemia, often attributable to poor nutrition, is associated with developmental problems and academic underachievement.
Forty-two percent of the children, who lived in trailers laced with dangerous levels of formaldehyde, had allergic rhinitis or an upper respiratory infection, the study found.
More than half of those ages 6 to 11 had a behavior or learning problem, yet in the East Baton Rouge School District children can wait for as long as two years to be tested for learning disabilities.
"Not only has their health not improved since the storm," the study said, "over time it has declined to an alarming level."
Medical care, counseling and child care are hard to find. In that respect, LaTonya London has been lucky. Her youngest children, born while the family lived at Renaissance Village, have two of the 16 Early Head Start slots — down from 200 right after the storm — reserved for evacuees of Hurricane Katrina in Baton Rouge. The baby, Edbony, was born with no forearms. Darren, 2, was two months premature and suffers from asthma and delayed speech.
The eldest of London's five children, Darrell, 7, has developed behavior problems so serious that he has already been suspended several times from first grade, causing London to abandon plans to start vocational training, she said. In response, she has resumed counseling sessions for Darrell at the mobile clinic.
Dr. Irwin Redlener, the director of the Children's Health Fund, notes that there is as yet no comprehensive method of tracking these children, who are supposed to be the subject of a long-term study by the Centers for Disease Control and Prevention.
The key to giving these children a future, doctors and educators have long said, is providing them with a sense of stability — a home that seems permanent, a school where they can put down roots. The recommendation is underscored by the gains made by those families that have found a toehold.
After months of looking, Laura Hilton, who is functionally illiterate, finally found an apartment in New Orleans for her and her two sons, George, 17, and Roy, 11, that was within walking distance of Roy's school. Laura's husband was murdered in New Orleans after the storm, and at the trailer park the Hilton children attended school only fitfully. Roy was known for being both endearing and utterly ungovernable.
Now Roy, who is at least three grades behind and needs special education, tutoring and counseling, can hardly be persuaded to leave school when the last bell rings. He helps teachers on their work days and shows up for Saturday detention even when he has not misbehaved. He fights less, and recently volunteered to sit in the principal's office at recess to keep from getting into trouble and losing his field-trip privileges.
"When he first came in, I was like, 'Why me?' " Wanda Brooks, the principal at the James Weldon Johnson Elementary School, said. "As a school, you're frustrated — why didn't somebody look at this when he was 10?" But then she got to know Roy.
"They begin to talk to you, and you begin to realize what the child went through," Brooks said. "He has not gotten over his dad's death."
Roy has received special attention from a male role model, Edward Williams, the football coach at Johnson. On a recent morning, Williams went into Roy's classroom to find him sulking at his desk while the other children practiced a dance routine.
Drawing Roy aside, Williams told him: "You got to get up and move around. You got to try."
Moments later, Roy was dancing.
But life outside the trailers has not been a relief for every child. With its white tent that served as a community center, Renaissance Village reeked of impermanence, though for many young children who lived there it was almost the only home they had known.
Since the park closed, Adrian Love and her father, Alton, have moved into a Baton Rouge apartment (her mother, a crack user, lives in New Orleans). Love, who has not been able to hold a job since the storm, does not allow Adrian, 9, to play outside much, instead writing out long-division problems for her in a notebook after dinner.
On Adrian's first report card this year, she got straight A's. But she sees her friends from Renaissance Village only rarely. "I wish I still lived there," she said.
Despite her wistfulness, Adrian projects a poise that makes her seem resilient.
Children who had no serious problems before the storm are likely to recover well, said Toni Bankston, who until recently was the director of mental health at the Baton Rouge Children's Health Project. But, she estimated, only about 60 percent fall into that category.
Bankston has particularly grave concerns about the children who have fallen so far behind in school that there is little chance of their catching up. "What you're looking at is our future juvenile justice, our prison population," she said.
In October, Jermaine Howard returned to Baton Rouge and moved into the one-bedroom apartment occupied by his father, brother and grandmother. With the help of Sister Judith Brun, a nun who has been working with evacuees since the storm, he enrolled in ninth grade at Broadmoor High School.
That process alone provided a snapshot of the chaos of Jermaine's life. From several plastic baggies and a dented metal canister, the family could barely amass the documents needed to prove his address.
School administrators balked when they discovered that he had previously been registered under his father's last name, Griffin, not the name on his birth certificate. Jermaine, with tears in his eyes, was forced to explain that his mother was in prison. He was told to pay a visit to the ominous-sounding Board of Hearings. Then came the kicker: because he had already missed so much, he would receive no credit for this semester.
"Nice to see y'all," the school guidance counselor said by way of welcome. "Just too bad it wasn't about three months ago."
UNHCR says 90,000 Congolese unaccounted for
Friday, December 5, 2008
GENEVA: More than 90,000 people who fled their homes in eastern Congo because of violence are unaccounted for, the United Nations refugee agency said on Friday.
Ron Redmond, a spokesman for the U.N. High Commissioner for Refugees (UNHCR), said aid workers visiting parts of North Kivu province that had been inaccessible during recent fighting had found three makeshift displacement sites empty.
Three other UNHCR-run camps in the Rutshuru area -- Nyongera, Kasasa and Dumez -- were forcefully emptied and destroyed several weeks ago, Redmond said.
"With the latest findings, the total number of IDPs who cannot be accounted for in the area has surpassed 90,000," he said, using the acronym for "internally-displaced persons," the official term for people who have fled their homes but have not crossed an international border.
The fate of those who abandoned or were forced out of the camps is unclear, but Redmond said many were thought to have returned to their villages or be staying with host families in the area.
The UNHCR and its aid partners are distributing emergency supplies in the region, hit by fighting between government troops and forces loyal to Congolese Tutsi leader General Laurent Nkunda.
(Reporting by Laura MacInnis; editing by Andrew Roche)
Congo agrees to peace talks with eastern rebels
Friday, December 5, 2008
GOMA, Congo: Congo's government will meet eastern Tutsi rebels in Nairobi, Kenya on Monday for their first direct talks to formalise a cease-fire and discuss a peace process, Foreign Minister Alexis Thambwe Mwamba said on Friday.
Rebel leader General Laurent Nkunda has been demanding direct talks with President Kabila's government as one of the conditions for ending his four-year-old revolt in eastern Democratic Republic of Congo.
Congo's government had been resisting the idea of direct talks with Nkunda's National Congress for the Defence of the People (CNDP) rebels, insisting instead that they return to a wider peace pact signed in January with several armed groups.
"A meeting between representatives from the Democratic Republic of Congo and from the CNDP, under the auspices of United Nations and African Union facilitators, will take place on December 8, 2008 at Nairobi, Kenya to formalise the cease-fire and discuss a peace plan for eastern Congo," Mwamba said.
He made the announcement in Goma, the capital of Congo's eastern North Kivu province, following talks with his Rwandan counterpart Rosemary Museminali.
Nkunda, who says he wants to discuss security and the situation of ethnic minorities with the government, has seized territory in North Kivu in advances since August which routed Kabila's army and displaced a quarter of a million people.
He has declared a cease-fire with government forces, but fighting between his rebels and pro-government militias has continued in the province bordering Rwanda and Uganda.
(For full Reuters Africa coverage and to have your say on the top issues, visit: (Reporting by Joe Bavier; Editing by Pascal Fletcher)
Tutu calls for Mugabe's removal
Friday, December 5, 2008
AMSTERDAM: South African Archbishop Desmond Tutu said on Thursday that Zimbabwe's President Robert Mugabe must step down or be removed by force.
"I think now that the world must say: 'You have been responsible with your cohorts for gross violations, and you are going to face indictment in The Hague unless you step down'," Tutu, a Nobel peace prize winner, told Dutch current affairs TV programme Nova.
Asked if Mugabe, who has been in power since independence from Britain in 1980, should be removed by force, Tutu said: "Yes, by force -- if they say to him: step down, and he refuses, they must do so militarily."
Tutu, who was one of the continent's leading voices against the former apartheid regime in South Africa, said the African Union or the Southern African Development Community (SADC) would have the capacity to remove Mugabe, 84.
"He has destroyed a wonderful country. A country that used to be a bread basket -- it has now become a basket case," Tutu said.
Tutu's comments came on the day Zimbabwe declared a national emergency to halt a cholera outbreak that has killed more than 560 people.
Economic meltdown, which many blame on Mugabe, has left the health service ill-prepared to cope with an epidemic that it once would have prevented or treated easily.
Once hailed as a model African democrat, Mugabe has become increasingly criticised, particularly in the West over a worsening political and economic crisis that critics blame on his policies.
International help for Zimbabwe's collapsed economy is on hold while Mugabe and opposition leader Morgan Tsvangirai remain deadlocked over implementing a power-sharing arrangement.
Tsvangirai's Movement for Democratic Change (MDC) party won parliamentary elections while Mugabe was re-elected as president after Tsvangirai pulled out of a two way run-off, citing intimidation by Mugabe supporters.
(Reporting by Niclas Mika; Editing by Matthew Jones)
U.S. says Mugabe's time is up
Friday, December 5, 2008
By Nelson Banya
The United States said on Friday that President Robert Mugabe's departure from office was long overdue and a food crisis and cholera epidemic in Zimbabwe meant it was now vital for the international community to act.
Zimbabwe has declared an emergency and appealed for international help to battle a cholera outbreak that has killed 575 people, with 12,700 reported cases of the disease, according to the United Nations.
"It's well past time for Robert Mugabe to leave," U.S. Secretary of State Condoleezza Rice said in Copenhagen.
In a further sign of growing international pressure on Zimbabwe, European Union diplomats said the bloc planned more sanctions next week unless progress was made in ending a deadlock over how to implement a power-sharing deal.
Nobel laureate and South African Archbishop Desmond Tutu said on Thursday that Mugabe must step down or be removed by force and that he faced indictment for war crimes in The Hague unless he quit.
Rice said the stalled power-sharing talks, a "sham election" earlier this year, economic meltdown and the humanitarian toll from the cholera epidemic required swift action.
"If this is not evidence to the international community that it's time to stand up for what is right I don't know what will be," Rice told a news conference.
"Frankly the nations of the region have to lead it."
British Foreign Secretary David Miliband said in a statement that Zimbabwe's neighbours should know there was "massive international support for any collective effort to bring a real change to Zimbabwe."
South Africa said on Friday that Zimbabwe's call for international help was encouraging. "We think that that's a major breakthrough," government spokesman Themba Maseko said.
Zimbabwe's neighbours in the 15-nation Southern African Development Community have so far failed to persuade Mugabe and the opposition to form a unity government.
But, faced with Zimbabwe's worsening economic collapse and the humanitarian crisis spilling over into their own countries, they may now be forced to take a stronger stand against the veteran Zimbabwean leader.
Zimbabwe, isolated by Western countries under Mugabe's increasingly authoritarian rule, has the highest rate of inflation seen in modern times -- officially 231 million percent, but prices are actually doubling every 24 hours.
Basic foods are scarce and the currency is worthless and often unavailable in banks.
Trade union activists took to the streets earlier this week to protest about the financial crisis, and dozens of protesters were arrested. Harare residents clashed with soldiers, accusing them of robbery.
"I think if we demonstrate and put pressure, things might change. We also need our leaders to understand that we are suffering, they should see to it that our demands are heard," said a Harare resident who identified himself as David.
The economic meltdown has left the health system ill-prepared to cope with the cholera epidemic that it would once have prevented or treated effectively.
The cholera outbreak follows the collapse of the water system, which has forced residents to drink from contaminated wells and streams. The disease has spread to neighbouring South Africa, Mozambique, Zambia and Botswana.
South Africa said it would send a team of senior government officials to Zimbabwe next week to assess the food crisis and investigate what aid is needed.
Thousands of Zimbabweans are believed to cross the border, often illegally, into South Africa each day. A cholera centre has been set up in the South African border town of Musina.
Mozambique said on Friday it had put all border areas on maximum alert over the threat of cholera, while Zambia said one Zimbabwean had died from the disease in a border town and two were receiving treatment.
Zimbabwe does not have the funds to pay doctors and nurses or buy medicine, and aid agency Oxfam said at least 300,000 people weakened by hunger are in danger from the epidemic.
South Africa will announce an aid package for Zimbabwe next week, Maseko said, adding that Zimbabwe's political parties have agreed that all aid should be distributed in a non-partisan way.
Western nations, which accuse Mugabe of running the once prosperous nation into the ground, have also promised aid. EU ministers have agreed to provide an initial 200,000 euros ($254,000) to the Red Cross and other aid agencies.
(Additional reporting by Sue Pleming in Copenhagen, Wendell Roelf in Cape Town, Charles Mangwiro in Maputo, Shapi Shacinda in Lusaka, Ingrid Melander in Brussels, Stephanie Nebehay in Geneva, Adrian Croft in London; writing by Marius Bosch; editing by Paul Simao and Tim Pearce)
Republicans paid Palin's stylist nearly $55,000
By Michael Luo
Friday, December 5, 2008
WASHINGTON: A woman who appears from campaign finance records to have been the fashion stylist for Governor Sarah Palin of Alaska, the former Republican vice presidential nominee, was paid $54,900 by the Republican National Committee, according to a report filed with the Federal Election Commission.
A charge for that amount to "Lisa Kline & Co." for "Consulting-Campaign" appears on Oct. 17 in the RNC's campaign finance report. Kline is a New York stylist whose name had previously appeared alongside some of the $150,000 in charges for clothing and other "campaign accessories" from luxury stores.
Repeated calls to her home and office in New York over the last month or so since her name first appeared in reports were not returned.
The newest report appears to show about $23,000 in additional charges labeled as "campaign accessories" from a variety of stores, including Saks, Neiman Marcus, Nordstrom, Bloomingdale's, Macy's, Victoria's Secret, Brooks Brothers, Ann Taylor and Target.
Republican officials have said that all of the clothing is now in their possession and will be turned over to charity.
In addition, the McCain campaign paid Palin's traveling hair stylist and makeup artist more than $110,000 for roughly two months of work, according to campaign finance records. The makeup artist was paid $68,400 and her hair stylist received more than $42,000, the FEC report shows
The makeup artist, Amy Strozzi - who was nominated for an Emmy award for her cosmetics work on the television show "So You Think You Can Dance?" - was paid $32,400 by the campaign between Oct. 16 and Nov. 24, the period covered by the most recent reports filed with the commission.
This amount came on top of the $36,000 she had already been paid in previous reports, dating back to September. In addition, Palin's traveling hair stylist, Angela Lew, was paid a total of $42,225, with $23,400 coming during the period covered by the latest reports to the commission, which were due at midnight on Thursday.
An inaugural gift for some strangers
The Associated Press
Friday, December 5, 2008
WASHINGTON: At the JW Marriott Hotel, $1 million will buy you 300 hotel rooms, $200,000 worth of food and private access to a tented, heated balcony overlooking the parade route of President-elect Barack Obama's inauguration.
Earl Stafford is buying it all - and giving it away to strangers.
Stafford, a Virginia businessman, plans to invite disadvantaged people, wounded soldiers and others to the prime location on Pennsylvania Avenue. He is calling it the "People's Inaugural Project," inviting those who would never otherwise have a chance to wear tuxedos or satin dresses to the president's swearing in.
"We believe it is important to include those who are less fortunate, because like Barack Obama, we, too, believe in the American dream," Stafford said Thursday.
Stafford bought the package a week before the election, said Erick Speight, the hotel's senior sales executive. Several corporations expressed interest, but Stafford was quick to turn in his deposit. "My initial reaction was probably shock," Speight said.
"Listening to Mr. Stafford and what he wanted to do seemed surreal; that he was going to purchase the package and venue for such a selfless act was really mind-blowing."
Stafford, the founder of Universal Systems & Technology in Centreville, Virginia, paid $1 million for the hotel package, but is working to raise more money for an inaugural ball for 1,000 people, as well as a youth ball.
Guests found by nonprofits and social service groups will also get gowns and tuxedos, and grooming from hairstylists and makeup artists. There will be a prayer breakfast and luncheon the day before the inauguration, Martin Luther King Jr. Day.
Obama hauls in record $750 million for campaign
By Michael Luo
Friday, December 5, 2008
President-elect Barack Obama brought in nearly $750 million for his presidential campaign, a record amount that exceeds what all of the candidates combined collected in private donations in the previous race for the White House, according to a report filed Thursday with the Federal Election Commission.
Underscoring the success of his fund-raising, Obama reported that he had nearly $30 million in the bank as of Nov. 24, despite spending furiously at the end of his campaign.
Obama, who became the first major-party nominee to bypass public financing since the system began in the 1970s, spent more than $136 million from Oct. 16 to Nov. 24, the period covered in the report. By comparison, his Republican opponent, Senator John McCain, who was limited to the $84 million allotted to him from the Treasury under public financing, spent $26.5 million during that time, according to his latest campaign finance report. Although McCain had $4 million left over, he had $4.9 million in debt, the report said.
Obama reported taking in $104 million in contributions. Assuming most of that money came in before Election Day, Nov. 4, it appears his fund-raising stepped up significantly as the campaign drew to a close. In the first half of October, he raised just $36 million.
An exact figure is difficult to calculate because of vagaries in the way fund-raising numbers are reported. But it appears that Obama raised over $300 million for the general election alone — more than triple what McCain had at his disposal from public financing.
When Obama decided after he clinched the Democratic nomination to forgo public financing, campaign officials said they needed to raise at least twice as much as they would receive in public money, with a goal of raising three times as much, to make it worth the added time away from campaigning that he needed to devote to fund-raising.
Obama's fund-raising total — fueled by both small donors giving incremental amounts online and large donors who were wined and dined and given the chance to mingle with him — appeared to more than validate his campaign's gamble.
Indeed, it could very well mark the epitaph to the public financing system, which critics have long declared is badly in need of updating to stay relevant in presidential elections.
At a minimum, it sets an imposing bar for any potential Republican challenger to Obama in 2012.
"Assuming Obama runs again and his fund-raising prowess is sustained, then it will be a daunting undertaking for any opponent," said Kenneth Gross, a campaign finance lawyer at Skadden, Arps, Slate, Meagher & Flom.
In one illustration of the scope of Obama's fund-raising haul, all the candidates running for president in 2004, including President George W. Bush and Senator John Kerry, the Democratic nominee, together collected less than $650 million, not counting the money received under public financing during the primary and the general elections, according to Federal Election Commission figures.
McCain collected less than $220 million for the campaign's primary phase, compared with the more than $410 million that Obama did in that period.
In the final two months of the race, the Obama campaign spent nearly $170 million on television advertising, compared with $61 million by the McCain campaign, according to the Campaign Media Analysis Group, which tracks advertising spending.
McCain had hoped that money raised by the Republican National Committee, which was able to spend on his behalf under certain restrictions, could help compensate for his financial disparity with Obama. But the R.North Carolina only spent another $31 million on advertising, which left McCain still facing a large deficit on television.
Obama officials said their final tally of individual contributors surpassed 3.95 million, including 547,000 new contributors in the period covered by their latest finance report.
It is unclear what Obama plans to do with the leftover money. In 2004, when Kerry reported that he had more than $14 million remaining in his account for the primaries, some Democratic officials reacted in anger and disbelief that he had not spent all of his resources. Kerry officials said they had reserved some money to pay for a recount or legal challenges.
That type of second-guessing is less likely this time because Obama won. He has several options for his remaining cash, Gross said, like transferring it to the Democratic National Committee or another party committee, or rolling it over to his 2012 re-election campaign.
What is not an option for Obama is to help Senator Hillary Rodham Clinton with paying off the debt from her campaign for the Democratic presidential nomination.
According to reports filed last month, Clinton is still struggling to retire about $7.5 million, and she faces fund-raising constraints should Congress approve her as secretary of state in the Obama administration. Gross said the most the Obama campaign could transfer to her was $2,000.

Taking down the Blogfather of Iran
The Boston Globe
Friday, December 5, 2008
To Iran's 700,000 bloggers, he is the Blogfather. Hossein Derakhshan is known not only for his erratic opinions and insinuations but also for having discovered a technical solution that made blogging in Farsi possible. When he was arrested last month in Iran and accused of spying for Israel, Derakhshan disproved his own contention that Iran is the freest country in the Middle East other than Israel.
Derakhshan's true offense was that he visited Israel twice, and in a most public way - giving interviews to major newspapers, participating in a university conference, and expressing idiosyncratic views about society, politics, and political figures in Iran. He lauded the liberty of the Iranian blogosphere; defined himself as an atheist who admires Ayatollah Khomeini and believes Iran's theocratic system should be a model for other countries; said he wanted Iranians to realize Israelis are not devils, and Israelis to learn that their received ideas about Iran are all wrong; and argued that Iran should have nuclear weapons for deterrence - but not nuclear energy plants, because of the danger to the environment.
Whatever Derakhshan's peculiar, fluctuating views may have been, he is clearly no spy. A spy would not make high-profile visits to Israel on his expatriate's Canadian passport, or praise President Mahmoud Ahmadinejad before flying into Tehran for the first time in years. The famed figure, who goes by the blogonym "hoder," risks paying a terrible price for assuming that Iran's rulers could be tolerant of the free expression that most bloggers take for granted.
Everyone in the global village who values that freedom should be calling for the release of the Blogfather.
Bush says Iran nuclear program remains threat
Friday, December 5, 2008
By Tabassum Zakaria
U.S. President George W. Bush said on Friday that Iran's nuclear program remained a threat to peace and the United States would not allow Tehran to develop an atomic weapon.
The West has offered Iran diplomatic and economic incentives to suspend uranium enrichment and to support a civilian nuclear power program, Bush said in a speech he planned to give to the Saban Forum later in the day.
"While Iran has not accepted these offers, we have made our bottom line clear: For the safety of our people and the peace of the world, America will not allow Iran to develop a nuclear weapon," Bush said in the speech released by the White House.
Amid hopeful signs of political, economic and social reforms advancing in the Middle East, serious challenges remain, Bush said.
"Iran and Syria continue to sponsor terror, Iran's uranium enrichment remains a major threat to peace, and many in the region still live under oppression," he said.
Bush defended his decision to go to war against Iraq in March 2003 and topple Saddam Hussein, saying that after the September 11, 2001, attacks the United States could not risk the threat Baghdad posed at that time.
"It is true, as I have said many times, that Saddam Hussein was not connected to the 9/11 attacks," Bush said.
But after nearly 3,000 people died in the September 11 attacks, the United States had to decide whether it could tolerate an enemy that supported terrorism and was believed to have weapons of mass destruction, and found "this was a risk we could not afford to take."
Weapons of mass destruction were never found in Iraq after the U.S.-led invasion, and this is considered a major intelligence failure. Bush in a recent television interview said the faulty intelligence on Iraq was the biggest regret of his presidency.
"When Saddam's regime fell, we refused to take the easy option and install a friendly strongman in his place," Bush said. "Even though it required enormous sacrifice, we stood by the Iraqi people as they elected their own leaders and built a young democracy."
He acknowledged that efforts have not always gone according to plan and sometimes fell short, saying "the fight in Iraq has been longer and more costly than expected."
(Additional reporting by Jeremy Pelofsky; Editing by Eric Walsh)
Iranian artillery pounds remote area in Iraq
Friday, December 5, 2008
SULAIMANIYA, Iraq: Iranian artillery fire rained down on a remote area of northeastern Iraq on Friday, causing some material damage but no casualties, a local Kurdish official said.
The artillery bombardment was intermittent, said Azad Asso, a district mayor for Jarawa district at the Iranian border, around 195 km (120 miles) northeast of Sulaimaniya.
Asso said the bombardment began in the afternoon and continued into the early evening.
Iran occasionally shells northern Iraq, where it says Iranian Kurdish separatist fighters take shelter.
The last reported bombardment occurred in August, when an Iraqi civilian was wounded by rocket fire.
(Reporting by Sherko Raouf; Writing by Michael Christie; Editing by Louise Ireland)

Ministers dismissed in Georgia
By Olesya Vartanyan and Michael Schwirtz
Friday, December 5, 2008
TBILISI, Georgia: Prime Minister Grigol Mgaloblishvili dismissed Georgia's defense and foreign ministers Friday, as the government continued to reckon with the disastrous effects of its war with Russia in August.
Mgaloblishvili, who was himself appointed to his post in October, announced the shake-up at a news conference, saying the government needed to focus on "new realities."
"Changes need to be made in the sphere of defense," he said, according to news agencies. "It is important to strengthen foreign policy, and more experience is needed in this direction."
The ongoing government overhaul comes amid mounting criticism of President Mikheil Saakashvili's government over its handling of the five-day August war, which decimated Georgia's military and seriously diminished any hope of regaining control over the two separatists enclaves, Abkhazia and South Ossetia, that were at the heart of the conflict.
Last month, thousands of anti-government protesters spilled into the streets of Georgia's capital, Tbilisi, and many opposition parties have called for Saakashvili's ouster before the scheduled end of his presidential term in 2013.
Opponents of the president may get a boost from news that Irakly Alasania, the Georgian ambassador to the United Nations, resigned Thursday.
Alasania, whom political insiders consider to be a potential challenger to Saakashvili, would not disclose his plans, but said in an interview by phone that he would remain in politics.
"I decided to leave the government to do something good for Georgia" he said.
Saakashvili, who has said his decision to go to war was in response to an imminent Russian military danger, indicated Friday that a lingering security threat from Russia and current economic woes were behind the cabinet changes.
In the cabinet, Batu Kutelia, a deputy defense minister, has been named acting defense minister, replacing David Kezerashvili. Grigol Vashadze, the current culture minister and onetime diplomat in Moscow, will take over the Foreign Ministry from Eka Tkeshelashvili. The prime minister also appointed new ministers of sports, culture and education.
Olesya Vartanyan reported from Tbilisi, Georgia, and Michael Schwirtz from Moscow.
U.S. says Russia must stop blocking Georgia monitors
Friday, December 5, 2008
By Christian Lowe and Brett Young
A senior U.S. diplomat said on Friday Russia must stop blocking international monitors from going into Georgia's separatist South Ossetia region to assess reports of human rights abuses.
The monitors have been unable to return to the Moscow-backed region since a war in August between Russia and Georgia, and human rights groups say that in their absence ethnic Georgians are being harassed by the separatists.
"There is, unfortunately, a silence and darkness with respect to the international monitors that has descended on South Ossetia," U.S. Assistant Secretary of State Daniel Fried told reporters at a security conference in Helsinki.
"The solution is hardly to keep monitors out of South Ossetia ... Russia has an obligation, since it controls this territory, to let in international observers."
Russia launched a counter-attack in August after Georgian troops tried to retake South Ossetia, a Moscow-backed region that threw off Tbilisi's rule in the 1990s.
Moscow said it was acting to prevent genocide of the region's population, but Western governments said its response -- including sending troops beyond South Ossetia and deep into Georgia -- was disproportionate.
The row over Georgia dragged diplomatic relations between Moscow and the United States to a post-Cold War low.
Diplomats at the gathering of the 56-member Organisation for Security and Cooperation in Europe (OSCE) said differences with Russia were mainly to blame for derailing attempts to agree on a joint declaration setting out the organisation's mission.
The OSCE -- the only major security organisation that encompasses the United States, Russia and Europe -- last agreed on a joint declaration in 2002.
"We were close to getting a political declaration, probably closer than we have been for many years, but no cigar this time," said Finnish Foreign Minister Alexander Stubb, whose country holds the OSCE's rotating chairmanship.
Other points of difference with Russia were a major arms control treaty that the Kremlin has threatened to quit, and a lukewarm response to a Russian proposal for a new security pact for Europe, the diplomat said.
Russian President Dmitry Medvedev says the NATO military alliance is a Cold War relic that cements U.S. dominance on the continent. Russian Foreign Minister Sergei Lavrov said his government would keep up its drive for an alternative.
"There are those who want to preserve everything as it was in the 1990s. In other words, a group of countries that positions itself as the most advanced and civilised, determines and controls the direction of travel for the others," he said.
Under a cease-fire agreement after Russia's war with Georgia, Moscow undertook to allow the small group of OSCE military observers stationed in South Ossetia before the fighting to go back, but that has not happened.
Russian officials say they have no objection to the OSCE monitors entering South Ossetia but that the separatist authorities should be consulted -- an obstacle because most states do not recognise them.
Talks will resume on Monday in Moscow on extending the mandate of the OSCE observers in South Ossetia, Stubb said. The current agreement expires at the end of this year.
Greece will take over chairmanship of the OSCE in 2009, followed in 2010 by Kazakhstan, the first ex-Soviet state to lead the organisation.
(Writing by Christian Lowe; editing by Andrew Roche)

Hospitals now a theater in Mexico's drug war
By Marc Lacey

Friday, December 5, 2008
TIJUANA, Mexico: The sedated patient, his bullet wounds still fresh from a shootout the night before, was lying on a gurney in the intensive care unit of a prestigious private hospital here late last month with intravenous fluids dripping into his arm. Suddenly, steel-faced gunmen barged in and filled him with even more bullets. This time, he was dead for sure.
Hit men pursuing rivals into intensive care units and emergency rooms. Shootouts in lobbies and corridors. Doctors kidnapped and held for ransom, or threatened with death if a wounded gunman dies under their care. With alarming speed, Mexico's violent drug war is finding its way into the seeming sanctuary of the nation's hospitals, shaking the health care system and leaving workers fearing for their lives while trying to save the lives of others.
"Remember that hospital scene from 'The Godfather?' " asked Dr. Héctor Rico, an otolaryngologist here, speaking about the part in which Michael Corleone saves his hospitalized father from a hit squad. "That's how we live."
An explosion of violence connected with Mexico's powerful drug cartels has left more than 5,000 people dead so far this year, nearly twice the figure from the year before, according to unofficial tallies by Mexican newspapers. The border region of the United States and Mexico, critical to the cartels' trafficking operation, has been the most violent turf of all, with 60 percent of all killings in the country last month occurring in the states of Chihuahua and Baja California, the government says. And it has raised fears that violence could spill across the border, because dozens of victims of drug violence have been treated at an El Paso hospital in the last year.
The federal government argues that the rising death toll reflects President Felipe Calderón's aggressive stance toward the cartels, which has forced traffickers into a bitter war over the dwindling turf that remains.
In fact, most of the deaths do appear to be the result of infighting among traffickers. But plenty of innocent people are dying too, and the spate of horrifying killings — bodies are routinely decapitated or otherwise mutilated and left in public places with handwritten notes propped up nearby — has left people from all walks of life worried that they might be next.
"If a patient is in the ER bleeding, we should be focused on the wounds," said Rico, who has led doctors in street demonstrations to protest the rising violence in and around Tijuana, where 170 bodies were discovered in November alone, the bloodiest month on record. "Now we have to watch our backs and worry about someone barging in with a gun."
Doctors feel particularly vulnerable. When they leave their offices, they say they face the risk of being kidnapped and held for ransom, as about two dozen local physicians have been in the last few years. Doctors also complain about receiving blunt threats from patients or patients' relatives. "Sálvame o te mato," save me or I will kill you, is what one orthopedic surgeon said he was told by a patient, who evidently did not grasp the contradiction.
Adding to the anxiety, hospitals and health care workers have to notify the authorities when a patient comes in with a gunshot or knife wound, a legal requirement that the traffickers know well. That leads to further threats.
Then, there is the risk of shootouts.
Authorities suspect that the killers and the victim in the intensive care unit at the private hospital, Hospital del Prado, had links to the drug cartels that are wreaking so much havoc across Mexico. Nowhere to be found were the police, who received a call from the hospital authorities when the shooting victim, who was in his 20s, first arrived, as is required by law. The police did not show up until after the gunmen had come and gone and bullet casings littered the hospital floor.
Hospital General de Tijuana, the city's main public hospital, has twice been ringed by police officers and soldiers in the past 20 months. The first time, in April 2007, gunmen stormed the building either to rescue a fellow cartel member who was being treated in the emergency room or to kill a rival, said the police, who were not certain which scenario it was. Two police officers were killed, and all but one of the gunmen got away.
A video taken by a hospital worker revealed a terrifying scene, with two state police officers firing inside the emergency room to protect patients while doctors, nurses and others cowered in closets, under gurneys and wherever else they could find cover.
An elderly woman in a wheelchair is seen hiding under a blanket, while a patient in a hospital gown is sprawled on the floor near his hospital bed.
Meanwhile, panicked patients were escorted out of the building, some with IVs in their arms, to a nearby sports field.
The second time was this past April, when soldiers in camouflage ringed Hospital General de Tijuana, shutting it down while doctors treated eight traffickers who were wounded in various shootouts in the city. The Mexican Army was apparently trying to prevent a repeat of the 2007 shootout. In a recent third episode, soldiers were sent to the hospital for a bomb scare.
"Fear has become part of our lives," said one of the doctors at Hospital General de Tijuana, speaking on the condition of anonymity for fear of reprisals from organized-crime figures. "There's panic. We don't know when the shooting is going to break out again."
The violence is already affecting service, as hospitals armor themselves with more police officers and guards. To protest the spate of killings, some doctors closed their offices for a day in November. And Tijuana clinics are closing earlier on a regular basis, with more and more doctors shunning late-night medical care as too risky.
In Ciudad Juárez, which abuts El Paso, the local Red Cross hospital called a halt to 24-hour emergency service earlier in the year after gunmen killed four people who were being treated for gunshot wounds. Emergency service now ends at 10 p.m.
Paramedics in Ciudad Juárez temporarily stopped treating gunshot victims one day in August after receiving death threats over their emergency radios. They resumed ambulance service later the same day, but only after they were provided armed police escorts.
An episode that took place in the early morning hours of Oct. 5 in Tijuana shows the complicated new environment in which health care workers find themselves. After a major shootout, two wounded men were carried to Clínica Londres, a private health clinic that was closed for the night. There was a lone nurse inside the locked facility, tending to the patients there, and she initially did not open up to the small group of anxious people outside.
The nurse was not qualified to treat gunshot victims, and the clinic did not offer emergency care. But the crowd outside included two men dressed in law enforcement uniforms, who banged menacingly on the door.
Frightened of the men in uniform — criminals routinely wear police uniforms in Mexico — she eventually relented, she told authorities. What happened next is shrouded in confusion.
Tipped off, the army and the police arrived at the clinic and asked the nurse and two other employees who had since arrived if they were treating gunshot victims, and they were told no. Then, hearing a groan from another room, the authorities discovered the two wounded men — the men in uniform had already fled — and accused the health care workers and the group of people who arrived with the patients of having links to the drug traffickers.
The clinic workers, who have been detained for two months while authorities decide whether to charge them, deny that they did anything wrong. "It is not true that this is a narco-clinic," said their lawyer, Rafael Flores Esquerro.
Another Tijuana doctor, Dr. Fernando Guzmán Cordero, has also found himself denying connections to traffickers. Guzmán, a prominent general surgeon, was kidnapped in April and suffered a bullet wound to his leg. But the kidnappers released him 36 hours later, even giving him cab fare home.
Then two weeks later, after another Tijuana shootout, a group of gunshot victims were taken to his clinic for treatment. In radio call-in shows and on Internet chat sites, local residents wondered whether the traffickers were now in cahoots with Guzmán, something he vehemently denied.
"People can say whatever they want," he said. "They say I kidnapped myself or made a pact with them. They say a million things. I know who I am. Why would I get involved with criminals?"
The problem everyone in Tijuana faces, no matter their line of work, is that they might be associating with traffickers without even knowing it. Doctors say they now screen their patients carefully. Traffickers pay well and in cash, but they are not worth the trouble they bring, doctors say.
But hospitals do not have that luxury. "We're not judges," said Carolina Aubanel Riedel, whose family owns Hospital del Prado. "We treat those who arrive."
U.S. police chief indicted after boy killed by Uzi
Friday, December 5, 2008
BOSTON: A police chief was indicted on Thursday for involuntary manslaughter in the death of an 8-year-old boy who accidentally shot himself in the head with an Uzi submachine gun at a Massachusetts weapons show.
Christopher Bizilj lost control of the weapon on October 26 at the Machine Gun Shoot & Firearms Expo in Westfield, about 100 miles (160 km) west of the state capital Boston, police said.
Pelham Police Chief Edward Fleury, owner of COP Firearms & Training that co-sponsored the event, faces another four counts of furnishing a machine gun to someone under age 18.
The grand jury also indicted the sportsman's club where the expo was held and two men who supplied the Uzi that killed the boy.
"It is not a hunting weapon. It has a rate of fire of 1,700 rounds per minute," Hampden County District Attorney William Bennett said of the Uzi.
Under Massachusetts law, children can fire a weapon if they are supervised by a licensed instructor and have consent from a parent or legal guardian. But the law bars the furnishing of machine guns to minors regardless of whether parents consent, said Bennett.
The boy's father was 10 feet (3 metres) behind the boy with a camera as his son fired the weapon.
Fleury was not immediately available for comment.
There are an estimated 250 million privately owned guns in the United States, which has a population of about 300 million. About 30,000 Americans a year die from gun wounds.
(Reporting by Jason Szep; Editing by Xavier Briand)

Palestinians protest at Hebron settler violence
Friday, December 5, 2008
By Nayef Hashlamoun
Palestinians protested on Friday against a rampage by Jewish settlers in response to Israel's eviction of Jews from a disputed building in Hebron, and Israel deployed extra forces to contain the unrest.
Palestinian youths burnt tyres in Hebron and threw stones at Israeli soldiers at a checkpoint, who responded with tear gas and rubber bullets, witnesses said.
Violence spread to another West Bank town where Palestinians said settlers torched olive orchards, a day after settlers shot and wounded three Palestinians in anger at the removal of Jewish families from a building occupied in defiance of a court order.
Palestinian Foreign Minister Riyad al-Malki accused the settlers of "waging war" on Palestinians and urged the United Nations Security Council to take up the issue.
Malki told reporters in the West Bank town of Ramallah that settlers were taking advantage of a power vacuum since Prime Minister Ehud Olmert's recent resignation in a corruption probe.
Olmert is staying on as caretaker premier with limited power until a February 10 Israeli election. Until then, Israel seems "too weak to take any action against settlers," Malki said.
Israeli Justice Minister Daniel Friedman called the settlers' assaults a "shocking pogrom" and told Israel's Channel One television "I regret very much the security forces weren't prepared to prevent" them.
Robert Serry, the U.N. envoy for the Middle East, issued a statement saying he was "concerned about the potential escalation." He demanded "an immediate end to the settler attacks and restraint and calm from all parties."
Serry also urged "vigilance from the Israeli authorities to ensure that the events of yesterday are not repeated."
Hebron has long been a flashpoint, where 650 Jewish settlers live in fortified enclaves guarded by Israeli troops in a city of 180,000 Palestinians.
Palestinians and Western countries see the dozens of Jewish settlements Israel has built in the West Bank since capturing it in the 1967 Arab-Israeli war as a key obstacle to peace efforts.
Tensions have flared anew in Hebron since settlers defied a November 16 court order to vacate a house they said they had bought from a Palestinian man who denied ever selling it.
Israel sent in club-wielding troops to remove a dozen settler families from the building on Thursday, after days of stone-throwing protests there between Palestinians and settlers.
The Jewish state reinforced security in Hebron by deploying 500 riot police on Friday, police spokesman Micky Rosenfeld said.
Some restrictions were also imposed on Palestinians. Rosenfeld said Palestinians under 45 were barred from attending Friday prayers at al-Aqsa Mosque in Jerusalem to prevent any violence from spreading there.
Some violence was reported on Friday but there were no reports of injuries.
Palestinian witnesses said settlers set fire to hundreds of olive trees near the town of Qalqilya on Friday, near the scene of similar torchings on Thursday.
Palestinians said settlers had erected makeshift roadblocks on several roads in the territory on Thursday, blocking their travel.
Israeli border police stood guard outside the padlocked disputed house in Hebron on Friday, allowing settlers in only to remove their belongings from the building.
Faiz Rajabi, the building's owner, said he had not yet regained access. "I am waiting to get my house back," he told television stations.
(Additional reporting by Mustafa Abu Ghaniya in Hebron and Joseph Nasr and Roleen Tafakji in Jerusalem; writing by Allyn Fisher-Ilan; editing by Tim Pearce)

Shelling kills at least 15 in Somalia's capital
Friday, December 5, 2008
MOGADISHU: At least 15 people died on Friday when shells hit an insurgent stronghold in the north of Somalia's capital Mogadishu, witnesses said.
Islamist militants have been battling the Western-backed Somali government and its Ethiopian supporters since early 2007 and now control the south of the Horn of Africa nation.
Some 10,000 civilians have died in the fighting, a million people have been driven from their homes and 3 million rely on emergency food aid.
Residents said they believed the shells were fired by Ethiopian troops in Mogadishu targeting an Islamist base on the edge of a livestock market in the northern area.
"A shell landed in the market killing five women and two men," said resident Omar Mohamed. "We are shocked and collecting their scattered flesh. I could see 10 injured people."
Another resident, Halima Bare, said two mortar shells killed four people and a baby in a restaurant and that she saw three more bodies at a bus stop.
The Islamists said they had not been fighting the Ethiopians Friday. There was no immediate comment from the Ethiopians.
"We have great sympathy for the innocent civilians who are being killed," said Sheikh Abdirahim Isse Adow, spokesman for the Islamic Courts, which were driven from the capital two years ago by Somali and Ethiopian forces.
Ethiopia said last month it would pull all its troops out of Somalia by the end of the year and there are fears the already chaotic country could descend further into anarchy unless more peacekeepers are sent soon.
(Reporting by Abdi Sheikh and Abdi Guled; editing by David Clarke)


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