Going Unconventional to Market Movies

Abstract: A MOVIE opening tomorrow, "Take the Lead," has an appropriate title, and not just because it is about dancing. The studio releasing the film, New Line Cinema, wants to take the lead in finding alternative ways to market movies beyond traditional methods like advertising on television and in newspapers. It is a search that is also preoccupying the rest of Hollywood, anxious to reverse a slump in ticket sales. For "Take the Lead" -- a romantic drama about a professional dancer who volunteers to teach all the right moves to New York City schoolchildren -- New Line is sponsoring such unusual marketing initiatives as a chance for computer users to create unofficial mash-ups. Those are mixed versions of music from the movie, using material available on the film's official Web site (taketheleadmovie.com). New Line is also providing a variety of blogs, online social communities and Web sites with mash-ups of music and images from "Take the Lead" produced by professional D.J.'s and V.J.'s, which supplement the trailers for the movie being shown in theaters. The D.J.'s are also playing the mash-ups they produced during live events at clubs where they work. Among the online sites where the mash-up trailers can be watched are Google Video (video.google.com), iFilm (ifilm.com), MySpace (myspace.com), TagWorld (tagworld.com) and YouTube (youtube.com). New Line, which is part of Time Warner, has also marshaled a phalanx of promotional partners for "Take the Lead," including the Bloomingdale's division of Federated Department Stores, Circuit City, the Carl's Jr. and Hardee's fast-food chains owned by CKE Restaurants and Sally Beauty, a retailer of hair care and beauty supplies. The promotions include sweepstakes, merchandise giveaways and even a dance contest to be held at local chapters of the Boys and Girls Clubs of America. "New Line is kind of pushing the envelope," said Steve Ellis, chief executive at Pump Audio in Tivoli, N.Y., which is providing the technology for the do-it-yourself online mash-ups. The goal is to encourage consumers "to make a proactive decision to engage with this content," he added, "instead of bombarding them with ads." The unconventional marketing ideas for "Take the Lead," which features Antonio Banderas and Alfre Woodard, are indicative of how serious studios are about finding new methods to woo moviegoers back into theaters. In another example of the trend, a New Line competitor, Lionsgate, is co-producer of a coming film, "Akeelah and the Bee," with Starbucks Coffee, which is sponsoring screenings for its employees and promoting the movie in stores with ads on cardboard cup sleeves. Through last weekend, revenue from movie ticket sales this year had risen less than 1 percent over the same period a year ago, according to data from Exhibitor Relations, which tracks box-office results, while the number of tickets sold had fallen 2 percent. Those mediocre results came after a disappointing 2005, when revenue declined 5.2 percent, to $9 billion, from $9.5 billion, the National Association of Theater Owners reported. New Line had its share of flops last year, including "Son of the Mask" and "The New World." To market "Take the Lead" effectively to its intended audience of younger moviegoers, "you can't force-feed them" with traditional top-down advertising, said Russell Schwartz, president for domestic marketing at New Line in New York. Rather, "it's all about giving these kids our trailers, our songs, and letting them take control," he added. "Our assets become their assets, and that's how they become fans of the movie." There are risks to that approach, Mr. Schwartz acknowledged, particularly since it yields results that are "not as trackable or researchable" as those for campaigns in mainstay media like television or print. "The methodologies we have in place are not that valid anymore," he added. "But it is a new world, and we have to be brave about it." One benefit to shifting more of a movie's marketing budget to the new media is that "the Internet is not that costly," Mr. Schwartz said, adding that $1 million or $2 million is a significant amount to spend online. Mr. Schwartz declined to discuss the marketing budget for "Take the Lead," a fictionalized version of the story told in "Mad Hot Ballroom," a popular documentary released last year by the Paramount Classics unit of Paramount Pictures, owned by Viacom. The budget is estimated to be around the average spent by a studio to publicize a release, which is about $40 million. "The nice thing about the advertising is that it's using stuff that's originating in the movie," said Liz Friedlander, the director of "Take the Lead," who for the last decade has directed video clips for musical acts like Blink-182 as well as commercials for advertisers like McDonald's and Target. "I definitely have strong opinions" about the advertising for the film, Ms. Friedlander said, "because I've had success in that medium and I've had failure in that medium, and I've learned from both." Ms. Friedlander said she approved of the nontraditional steps New Line was taking because they "let people know it's a different ride" from what they might be expecting if they were familiar with "Mad Hot Ballroom" or fictional films about teachers like "To Sir, With Love." Jan Roberts, public relations director at Sally Beauty, a national chain of 2,100 stores, said that movie studios frequently ask her company to sponsor coming releases. "But we're very particular," Ms. Roberts said, adding that the "Take the Lead" sponsorship was appealing because "it has all the bells and whistles" in the form of the new-media elements. "We're trying to resonate with the teen market and increase our cool factor," Ms. Roberts said. "Everyone wants to be cool." The promotion between Sally Beauty, based in Denton, Tex., and "Take the Lead" includes posters in stores and the distribution of 220,000 booklets titled "Prep for Prom," which include coupons and information about a sweepstakes on the company's Web site (sallybeauty .com). The relationship between a movie about dancing and prom season, a busy time for Sally Beauty, was also a draw, Ms. Roberts said. In the two weeks that the promotion has been in the marketplace, she added, "we're seeing a very positive trend in both redemption of coupons and sales."

NEW LINE CINEMA
NATIONAL ASSOCIATION OF THEATER OWNERS
THEATERS (BUILDINGS)
MOTION PICTURES
ADVERTISING AND MARKETING
FINANCES
ADVERTISING (TIMES COLUMN)


Birth? Trivial Next to Cellular Doughnut-Making Process

Abstract: If modern science is right, the great mystery of embryonic development is less about how life unfolds, and more about how it folds. Embryos of many organisms grow from two cells to four, then eight, and so on until there are thousands in a kind of ball. Then sheets of cells start to make folds or furrows as the basic shape of the creature — fly or fish or human — begins to emerge. One of the most striking examples is a moment in the development of Volvox , a kind of algae that forms one of the simplest multicellular organisms. When it is a sphere of a few thousand cells, it reaches adult size, but not adult shape. So it turns itself inside out. Scientists at the University of Cambridge in England have made a time-lapse recording of the process that shows it in three dimensions for the first time and has enough detail that researchers can check their mathematical descriptions of the transformation. The shape changing is no mere curiosity. Volvox embryos do it in two ways, and the one the Cambridge researchers studied is remarkably similar to something that occurs in the embryos of humans and other animals, when a ball of cells turns into a doughnut shape, with an inside and an outside. Although it’s not immediately obvious, grown up humans are still kind of messy doughnuts, with arms, head, legs and most of our internal organs all part of the doughnut itself. The hole, in terms of geometry, at least, is the digestive system, from beginning to end. That process is called gastrulation , and it is enormously significant in the embryo’s growth, the beginning of a crucial distinction between what’s inside and what’s outside. The paper in Physical Review Letters describing the new research begins with a quote from the embryologist Lewis Wolpert: “It is not birth, marriage or death, but gastrulation which is truly the most important time in your life.” Humans and other large, complicated animals are, however, very difficult to study. Even when they are embryos, their cells not only change shape during gastrulation but move around and turn into different kinds of tissues. For Stephanie Höhn, Raymond E. Goldstein and their Cambridge colleagues who did the research, Volvox presented a process that is a little bit simpler. The spherical skin of a Volvox embryo is one cell deep. Each cell has a tail, and just before inversion they are all pointing inward. They need to point outward, so they can flutter and move the Volvox along, so the embryo turns inside out. All the cells stay in place, maintaining their connections with other cells. But they change shape. Dr. Goldstein said, “If you were to take a basketball and you tried to turn the thing inside out,” that would be similar to what Volvox has to do. But imagine that the basketball has a hole in the top and that the cells at the bottom change shape so that the bottom shrinks and curves inward. Then it would be easier to push it through the top. The process was known but hadn’t been characterized mathematically, or seen in three dimensions. That’s what Dr. Goldstein and his colleagues did, using an advanced microscopic technique called selective plane illumination , which allowed them to make a time-lapse movie that shows the whole inversion in a few seconds. In real time, it takes several hours.


In Senate Debate, Jabs Sometimes Get Personal

Abstract: Senator Charles E. Schumer of New York and the Republican seeking to unseat him, Jay Townsend, sparred over health care, federal spending and Wall Street on Sunday in a debate marked by tart exchanges. Mr. Townsend attacked Mr. Schumer again and again, at one point accusing the senator of selling out the interests of New York to curry favor with his colleagues in Washington as he attempts to ascend in the Senate hierarchy. Specifically, Mr. Townsend, a businessman from Cornwall-on-Hudson, charged that Mr. Schumer had supported the health care bill Congress approved this year even though it cut federal aid to New York by about $1 billion. The health care legislation was a priority of President Obama and Democratic leaders in Congress. “If this man will do this to climb the leadership ladder, imagine what he would do to hold on to stay in the throne,” Mr. Townsend said, referring to Mr. Schumer, who is frequently mentioned by his colleagues as a possible successor to the current Democratic majority leader in the Senate, Harry Reid of Nevada. But Mr. Schumer protested, saying that the legislation included no such cuts in aid to New York because he had warned Democratic leaders that he would withdraw his support if New York were shortchanged. Mr. Schumer said the final legislation contained additional funds for the state. “I worked real hard along with the Congressional delegation to reverse it,” he said, referring to the cuts Mr. Townsend mentioned. “I went to the president himself and said I wouldn’t vote for the bill unless it’s reversed. As a result, New York got $2.1 billion.” Mr. Schumer then took a few swipes at Mr. Townsend, who stood only a few feet away. At one point, the senator, sounding exasperated, noted all the complaints Mr. Townsend had about legislative initiatives that Congress passed to address the nation’s economy, including the Wall Street bailout and the economic stimulus plan. “It’s very easy to point the finger,” Mr. Schumer said. “Come up with some constructive solutions.” The two differed on other issues as well, including a proposed Muslim community center and mosque near the site of the World Trade Center attacks. Asked by one of the moderators if he thought the proposed mosque was a good idea, the senator said flatly: “I am not opposed.” But Mr. Townsend was unequivocal. “I oppose it,” he said. “I believe it is an offensive and insensitive to the relatives of the victims.” The debate, held at Marist College in Poughkeepsie and sponsored by NY1, was the only meeting between Mr. Schumer, a two-term incumbent, and Mr. Townsend, a market-research consultant who is barely registering in the polls. Mr. Townsend rarely passed up an opportunity to take jabs at Mr. Schumer. But Mr. Schumer had little to gain by engaging Mr. Townsend and, as a result, largely stuck to a recitation of what he described as a record that included assisting small businesses and middle-class families. Mr. Townsend even got slightly personal when he made passing reference to an episode last year in which it was reported that Mr. Schumer used a profanity on a plane to Washington while referring to a flight attendant who told him to turn off his cellphone before takeoff. Mr. Schumer, the state’s senior senator, subsequently called the flight attendant to apologize. “Who can forget what Senator Schumer said to the attendant?” Mr. Townsend said. Mr. Schumer did not respond to Mr. Townsend’s remark. The race between Mr. Schumer and Mr. Townsend has attracted little attention, reflecting the strong position Mr. Schumer finds himself in politically as he seeks his third term. More than that, Mr. Schumer, typically a highly visible politician, has been barely a presence on the campaign trail, though his campaign has been running many television commercials. A recent New York Times poll showed that Mr. Schumer had a significant lead over Mr. Townsend, with 61 percent of likely voters supporting Mr. Schumer and 21 percent backing Mr. Townsend. For some time, Mr. Townsend had been asking Mr. Schumer to debate him. In an effort to prod him into debating, he charged that the senator was reluctant to defend his record in public.

Debates (Political)
United States Politics and Government
Senate
New York State
Schumer Charles E
Townsend Jay
Elections


U.S. Weighs Response to Sony Cyberattack, With North Korea Confrontation Possible

Abstract: WASHINGTON — A White House official said on Thursday that the administration was considering a “proportional response” against those who hacked into Sony Pictures computers, a retaliation that could thrust the United States into a direct confrontation with North Korea. Officials would not describe what such a response might entail, but they stressed that the episode had become a major concern at the upper levels of government, including President Obama, who lately has been discussing the issue with aides every day. “This is something that’s being treated as a serious national security matter,” Josh Earnest, the White House press secretary, told reporters. “There is evidence to indicate that we have seen destructive activity with malicious intent that was initiated by a sophisticated actor.” United States officials have privately concluded that North Korea was “centrally involved” in the hacking even as Sony canceled the release of a comedy that features the fictional assassination of the North Korean leader, Kim Jong-un, and that apparently prompted the cyberattack. Mr. Earnest would not confirm the North Korean role at his daily briefing but he did not deny it either, saying that investigators would ultimately report on their findings. Mr. Earnest said the government did not tell Sony to pull the film, “The Interview,” and expressed support for the studio’s right to make it, even if it would offend some viewers. “The United States stands squarely on the side of artists and companies that want to express themselves,” he said, “and we believe that that kind of artistic expression is worthy of expression and is not something that should be subjected to intimidation just because you happen to disagree with the views.” But he was vague about what kind of action the United States might take in response to the cyberattack and even hinted that it may be of a character that was hard to publicly detect. He added that the president and his team would take into consideration that its authors might be trying to stir a response to get attention, a calculation often imputed by Washington to North Korea’s mercurial leadership. “They would be mindful of the fact that we need a proportional response, and also mindful of the fact that sophisticated actors, when they carry out actions like this, are oftentimes — not always, but often — seeking to provoke a response from the United States of America,” Mr. Earnest said. “They may believe that a response from us in one fashion or another would be advantageous to them. So we want to be mindful of that.”

Cyberwarfare
North Korea
Sony Pictures
The Interview
Barack Obama
US Foreign Policy


Hurdles Shown in Detention Reform

Abstract: In the fall of 2006, a man’s death brought a team of government investigators to the large, privately run immigration jail in Eloy, Ariz., in the desert between Phoenix and Tucson. Medical care was so poor, the team later warned federal immigration officials, that “detainee welfare is in jeopardy.” Another death there soon spurred another inquiry, and another scathing report was issued about the care provided by the private company, the Corrections Corporation of America . But the government scrutiny did not add up to much for Felix Franklin Rodriguez-Torres, 36, an Ecuadorean construction worker who wound up in Eloy that fall as an unauthorized immigrant after being jailed for petty larceny in New York City. By mid-December, a fellow detainee told the man’s relatives, Mr. Rodriguez lay pleading for medical help on the floor of his cell, unable to move. He died weeks later of testicular cancer, a typically fast-growing but treatable disease, which had gone undiagnosed and untreated during his two months at Eloy, which holds more than 1,500 detainees. And despite a high-level discussion of his case among federal immigration officials while he was dying — captured in e-mail messages between Washington and Arizona — his death on Jan. 18, 2007, was not listed on the roster of detention fatalities that the agency produced under pressure last year and updated in April. His death, and the damning reports that preceded it, are coming to light now only through a Freedom of Information Act lawsuit by the American Civil Liberties Union. On Monday , after inquiries about Mr. Rodriguez’s death by The New York Times, the Immigration and Customs Enforcement agency added his name and nine others to the public roster — including another unrecorded detainee death at Eloy, in 2005. The Rodriguez case echoes many others that have spurred demands for an overhaul of the troubled and expanding realm of immigration detention. But in its details, it underscores the daunting challenge facing the Obama administration as it tries to improve detention conditions, starting with greater oversight of places like Eloy. “The rampant problems of medical and mental health care aren’t just going to go away if there’s more oversight,” said David Shapiro, a lawyer with the A.C.L.U.’s National Prison Project, which has called for legally binding rules on conditions in immigration detention. “There have to be consequences.” The Corrections Corporation of America referred questions about Mr. Rodriguez’s case to the immigration enforcement agency, which is part of the Department of Homeland Security . Matthew Chandler, a spokesman for the department, said the administration had taken its first steps “to improve medical care, custodial conditions, fiscal prudence and ICE’s critical oversight of the immigration detention system, and we will find out why this death wasn’t reported properly.” The administration’s long-term goal, announced this month as a three-to-five-year plan, is a vastly different detention system, no smaller in size, but less penal in character than the current sprawling mix of jail and prison cells. At the same time, however, Janet Napolitano, secretary of homeland security, is expanding immigration enforcement. And for now, officials said they would continue to rely on the same prison companies and county jails to house people facing possible deportation for immigration violations. In some ways, Mr. Rodriguez’s case fits one of Ms. Napolitano’s priorities: detaining people accused of immigration violations who are already in jail for a crime. Records show that Mr. Rodriguez, who had entered the United States on a visitor’s visa in 1998 to represent Ecuador in a karate tournament, was transferred to immigration authorities on Nov. 8, 2006, after serving five months at Rikers Island. He had been accused of joining several other men in robbing an acquaintance after a Saturday of soccer and beer in Corona, Queens. Though he pleaded guilty to petty larceny, he maintained his innocence even on his deathbed, said his father, Felix Rodriguez, a legal resident who has been a deliveryman for a Manhattan jewelry company for 15 years. “I understand a prisoner shouldn’t be on a golden bed, but a prisoner is a human being,” the father said in Spanish. “He at least deserves respect when he is so sick he can’t even eat.” By the time the ailing detainee was taken to the emergency room at Maricopa Medical Center in Phoenix, on Dec. 27, 2006, he had a mass in his neck that had “tripled in size” and obstructed his breathing, according to a government accounting form summarizing his care. Too far gone for chemotherapy, he was soon placed on life support, and he died when it was disconnected. But even while he was dying, a draft synopsis of his case was already circulating in Washington among high-level officials at the immigration agency. It stated that the detainee had been seen by the Eloy medical staff “on numerous occasions,” and first complained of a sore neck on Dec. 25. In their exchanges about the case, officials did not question why the medical staff had failed to recognize symptoms of cancer. Just weeks earlier, the agency’s own investigations had linked two Eloy deaths to inadequate medical staffing by the Corrections Corporation, which was then reaping record profits from stepped-up immigration enforcement. “Medical care in this facility does not meet ICE standards,” the first investigating team wrote to John P. Torres , director of detention and removal operations, after looking into the suicide of a 32-year-old Guatemalan detainee there on Sept. 29, 2006. They noted that a sick call request from the Guatemalan, Jose Lopez-Gregario, had been ignored for a week, even though he was on suicide watch and known to be despondent. The medical staff — “overwhelmed due to a sudden loss of veteran staff” — apparently assumed he had already been deported. Cut off from care in an isolation cell and racked with guilt that he had left his family without enough food, he hanged himself. A second team assessed Eloy again after a 27-year-old Colombian was found unconscious in an isolation cell there on Dec. 6, 2006; an “unwitnessed seizure” left him brain-dead. The investigators not only found fault with the way his case had been handled, but also documented systemic problems with the administration of medical care — in contrast to routine audits, in which Eloy, like most detention centers, was typically rated “acceptable” on a checklist. “The facility has failed on multiple levels to perform basic supervision and provide for the safety and welfare of ICE detainees,” the investigators wrote . The Colombian, Mario Chavez-Torres, had shown symptoms of bleeding on the brain, and should have been sent for outside evaluation, the report said; a week after his written request for medical attention for “headaches, dizziness and vomiting,” he collapsed in the shower. A call for medical help by a guard was answered an hour later by a vocational nurse who told the guard: “I’m not qualified. To be honest, I’m just a pill-pusher.” That lone nurse on the night shift was responsible for distributing medication to 300 chronically ill detainees in a population of 1,500, the report said. The first report had warned that most of the seasoned medical staff left Eloy that fall, months before a planned takeover of its medical unit by ICE’s Division of Immigration Health in 2007. But immigration authorities had continued to send detainees to Eloy, and Mr. Rodriguez was among them. To his sister Janneth Montesdeoca, who lives in Ozone Park, Queens, Mr. Rodriguez, an athlete, seemed healthy until just before his transfer to immigration authorities. On her last visit to Rikers, she noticed that his head seemed swollen. Considering his dire condition two months later, the swelling was most likely a sign that cancer was blocking his lymph system, said physicians consulted for this article, adding that it should have been caught in a full medical exam. Both reports had noted that though all immigration detainees are supposed to get a medical exam within 14 days of admission, timely exams were not being performed at Eloy that fall. Most testicular cancer is fast-growing, said Dr. David Weiner, a urologist at St. Luke’s-Roosevelt Hospital Center in Manhattan, but even after spreading, “it’s a very treatable cancer in the vast majority of cases.” In a phone call to his mother from Eloy on Dec. 18, 2006, Mr. Rodriguez said he had seen the doctor there many times, complaining of coughing and fever. He promised to telephone again at Christmas. When he did not, his worried family repeatedly contacted his deportation officer, who kept assuring them that Mr. Rodriguez was fine, said his brother-in-law, Leonardo Montesdeoca, a United States citizen who is a software supervisor for the Metropolitan Transit Authority. As the family tells it, they learned the truth about a week after Mr. Rodriguez had been taken to the hospital, in a call from a fellow detainee. “He said Franklin was very, very sick,” Mr. Montesdeoca said. “They would call the attention of the guards and they would just ignore, they would look the other way. He got to the point where he didn’t move anymore.” Records show that on Jan. 12, 2007, the hospital told the detention company that he had as little as a week to live. But his sister says the deportation officer would not tell them where Mr. Rodriguez had been hospitalized. Instead, relatives said, he offered to release the detainee to their care if they paid for a plane ticket to New York — a plan derailed, apparently, because the patient was too sick to travel. It was a phone call from Mr. Rodriguez that brought the family to his deathbed. Against the rules, a nurse had lent him her cellphone. “If it wasn’t for her, I wouldn’t have known if my son was dead or alive,” said his mother, Maria Torres, who lives in Queens. “I give thanks to that nurse, even now.” His face lit up when he saw his parents arrive the next day, Mr. Montesdeoca said. They were able to speak for a few hours before the two detention guards at his bedside cut off the visit. When the family returned the next morning, he was in a coma. A few days later, they agreed to discontinue life support. E-mail messages about his impending death had already ricocheted between Washington and Arizona. “Thanks for the advance notice,” one official wrote from a BlackBerry after receiving the draft synopsis on Jan. 17, and sending a copy on to John Torres, the director of detention and removal for the agency, and Gary E. Mead, the deputy. Dr. Gene A. Migliaccio, director of the agency’s Immigration Health Services, was asked “to reach out to Phoenix” and “to ensure that proper protocols are followed.” One of his employees followed up by asking if anyone had the Eloy medical records: “When this detainee is taken off life support, may I get a copy for my death chart?” But there is no evidence that the medical records were ever collected. The death was automatically referred to the immigration agency’s Office of Professional Responsibility in Washington, which simply sent it back to the Phoenix field office for an internal management review. In March 2007, the matter was closed after the local office filed its conclusions in three sentences: the detainee had died of aggressive cancer, the matter had been handled appropriately, and there was no evidence of negligence. The same month, a report by the Homeland Security Department’s inspector general on the death of the Colombian detainee found no evidence of foul play or inadequate response. But at least two more detainees died at Eloy in 2008 — a 41-year-old Iraqi and a 52-year-old man from Ghana. Mr. Rodriguez’s ashes were mailed to his mother, and when she visited relatives in Ecuador, she carried them there for burial. “I never want another immigrant to feel this pain,” she said. “Not knowing what to do, his suffering and no way of getting him help.”

Immigration and Customs Enforcement (US)


Porsche Chief Pays for Overreaching

Abstract: FRANKFURT — The largest European carmarker, Volkswagen , moved quickly on Thursday to consolidate its grip on Porsche , which dismissed Wendelin Wiedeking , its chief executive, who had sought to take over VW in a quest that fell apart along with the global financial system. Writing another chapter in the crisis-driven reordering of the global auto industry, Porsche’s supervisory board reached an agreement with Mr. Wiedeking calling for his departure. It approved plans for the new chief executive, Michael Macht, to secure an investment of billions of euros from the government of Qatar . That will ease the way for the creation of an integrated automobile company that includes Porsche as the 10th brand in Volkswagen’s stable. Alluding to Audi, the premium brand that Volkswagen turned into a profitable franchise in the United States and elsewhere, Volkswagen’s chief executive, Martin Winterkorn, predicted that Porsche would take advantage of the larger company’s economies of scale while protecting its brand in the eyes of its customers. “We can call on our considerable experience in the integration of proud and successful brands rich in tradition,” Mr. Winterkorn said after a VW board meeting in Stuttgart . “Like Audi today, Porsche can also continue its independent development under the aegis of Volkswagen and preserve its own identity.” The various owners and interests of Volkswagen — a patchwork of rich families, influential unions and the German state of Lower Saxony, which owns about 20 percent — must still negotiate the precise details of the combination, while adding a newcomer from a Persian Gulf emirate. A similar declaration in May led to weeks of bickering between the two companies. But the departure of Mr. Wiedeking, who had fiercely defended Porsche’s independence, removes a serious stumbling block to integration — with VW in control. Christian Wulff, the premier of Lower Saxony, said the companies would complete the immediate details in time for a board meeting in mid-August and that a final merger could be completed by mid-2011. Wolfgang Porsche, the chairman of the sports car maker, and Ferdinand Piëch, his cousin and the chairman of Volkswagen, both issued statements in support of this goal, with Mr. Porsche emphasizing the need to preserve “the Porsche brand.” “The merger with Volkswagen is a done deal now,” said Ferdinand Dudenhöffer, director of the Center for Automotive Studies at the University of Duisburg-Essen. If the combination with Porsche pans out, Volkswagen would add a gold-plated name in automaking to its lineup, a step that its backers view as a logical extension of the company’s growth strategy. VW sold 6.3 million vehicles last year, making it one of the largest automakers in the world, while Porsche sold about 100,000 vehicles. Though the company sells more Volkswagens than it does any other brand, it also makes Bentley and Lamborghini, as well as Audi sports cars, and gives its executives considerable leeway in managing their brands. Mr. Porsche, the gentle patron behind Mr. Wiedeking for the last 18 years, acknowledged Thursday that a different future awaited the company, which his grandfather founded as an automotive consulting and design firm in 1931. Choking up as he addressed Porsche’s employees in Stuttgart, Mr. Porsche promised that the storied company would thrive in its new form. “Count on me,” Mr. Porsche said. “The Porsche myth is alive and will never die.” Porsche also announced the departure of Holger P. Härter, its chief financial officer and a close confidant of Mr. Wiedeking. Mr. Härter gained notoriety for engineering Porsche’s purchase of VW shares using complex financial derivatives , a strategy that at one point led to an epic squeeze on those investors who had bet VW shares would fall. Under the agreement with Porsche’s supervisory board, it will raise at least 5 billion euros, or $7.1 billion, in new capital, a portion of which will come from selling a stake to Qatar. Porsche needs fresh cash to ease its 9 billion euro debt burden, which it accumulated to buy slightly more than 50 percent of VW. The Piëch and Porsche families, which control the company’s voting shares, will buy new shares as well, or make a “contribution in kind,” Porsche said. That refers to the possibility that the families would combine with Porsche their lucrative business in distributing Volkswagen brands in Austria and other parts of Central and Eastern Europe. Mr. Winterkorn also said that by buying a package of options from Porsche, Qatar would acquire 17 percent of Volkswagen, making it the company’s third-largest investor after Porsche and Lower Saxony. The decisions Thursday, however, portend considerable friction over the unresolved question of whether Volkswagen would buy shares in Porsche itself as part of the integration of the two companies. “You need Qatar, Porsche and Volkswagen to create a healthy integrated company,” said Arndt Ellinghorst, head of automotive research in London for Credit Suisse in London. Volkswagen said it would do so “step by step,” but Porsche made no mention of the idea, which would allow VW to mimic the influence that Porsche already has over the larger company. Mr. Piëch, the Volkswagen chairman who is also on Porsche’s board, has pushed strongly for an acquisition of Porsche shares once the smaller company brought in fresh capital to ease its debt load, a step Mr. Wiedeking had opposed.


Fund Fees Revisited in Court

Abstract: In 1970, Congress decided that there was too little price competition in the mutual fund industry and amended the law to allow fund investors to file suits claiming that management fees were excessive. Now a federal appeals court has decided that the law makes no sense, and has essentially rejected it. The provision in question is not a model of legislative clarity; it reflects a compromise between some legislators who wanted to impose tough limits on compensation and others who favored a gentler approach. It provides that fund managers have a “fiduciary duty with respect to compensation for services,” and gives shareholders the right to go to court without being specific about what criteria judges should use in deciding such cases. “A fiduciary must make full disclosure and play no tricks but is not subject to a cap on compensation,” wrote Judge Frank H. Easterbrook, the chief judge of the United States Court of Appeals for the Seventh Circuit, in a decision issued this week. “The trustees (and in the end investors, who vote with their feet and dollars), rather than a judge or jury, determine how much advisory services are worth,” he added. One reason that decision surprised some lawyers was that such disclosures were required long before the 1970 amendments to the Investment Company Act were passed. If the new section added no new requirements, as Judge Easterbrook concluded, then the section he was interpreting would appear to be superfluous. Until now, the ruling precedent has been a 1982 decision by the United States Court of Appeals for the Second Circuit, in a case known by the name of the plaintiff, Irving L. Gartenberg. That ruling stated that a fee could be deemed excessive if it was “so disproportionately large that it bears no reasonable relationship to the services rendered and could not have been the product of arm’s-length bargaining.” In the years that followed, there do not appear to have been any cases won by complaining investors. But securities lawyers say there have been some settlements, and the threat of legal action may have lowered some fees. Funds have set up elaborate processes in which the independent directors review information and then seek to negotiate lower fees with the manager. Arthur Levitt, when chairman of the Securities and Exchange Commission, reflected the widespread view of the law when he said in 1998 that “directors don’t have to guarantee that a fund pays the lowest rates. But they do have to make sure that fees fall within a reasonable band.” Mr. Levitt’s remarks were cited by Harris Associates, which manages three funds for the Oakmark family of funds, when it asked a federal judge in Illinois to apply the “universally followed” Gartenberg rules and dismiss a challenge to the compensation Harris had received. The judge agreed, and that might have been the end of the case. But the plaintiff appealed to the Seventh Circuit, based in Chicago, arguing that the judge should have compared the fees charged to the fund with the much lower fees charged by Harris to institutional clients when it manages similar accounts. That comparison was cited by Eliot Spitzer, when he was New York’s attorney general, when he told Congress that investors in one fund family were overcharged by hundreds of millions of dollars each year. At the heart of the dispute is the fact that the Investment Company Act seems to assume an industry structure that is very different from the actual one. It assumes mutual funds are formed by groups of investors who come together and pool their money. They elect directors, sometimes called trustees, and the directors hire managers to run the fund. The directors negotiate to get the best possible deal from the best qualified managers. In the real world, mutual funds are put together by sponsors, which have families of funds and try to come up with new ones that will attract investors. The fund directors are chosen by the sponsor and ratified by the few shareholders who bother to vote. In the Gartenberg decision, Judge Walter Roe Mansfield concluded that while there was intense competition between mutual funds, that did not mean there was also competition between advisers for fund business. “The former may be vigorous even though the latter is virtually nonexistent,” he wrote. Judge Easterbrook, in a decision joined by two other judges, disagreed. “That mutual funds are ‘captives’ of investment advisers does not curtail this competition,” he wrote. “An adviser can’t make money from its captive fund if high fees drive investors away.” He cited “a recent, careful study ” which concluded “that investors can and do protect their interests by shopping, and that regulating investment advisory fees through litigation is likely to do more harm than good. That study was by John C. Coates, a Harvard professor of law and economics, and R. Glenn Hubbard, the dean of Columbia Business School and a former chairman of President Bush’s Council of Economic Advisers, and was partly financed by the Investment Company Institute, the mutual fund industry group. The study concluded that “existing case law — prominently the Gartenberg test — is a sensible interpretation of what was intended” by Congress and that the courts should not be open to wider fee challenges. It did not suggest dropping Gartenberg, as the Seventh Circuit did, and no parties in the Harris case asked that it be dropped, although the plaintiffs wanted it to be strengthened. The Coates-Hubbard study was critical of other studies that found a lack of competition in the fund business. A co-author of one of those studies, John P. Freeman, a professor of business and professional ethics at the University of South Carolina Law School, has fired back, calling the Coates-Hubbard study a “superficial and deeply flawed piece of advocacy espousing the views of fund sponsors.” An immediate effect of the ruling will probably be to reduce the already small amount of litigation in the area. “It should make plaintiffs think twice before they sue an adviser for charging excessive fees,” said Jay Baris, a partner in Kramer Levin Naftalis & Frankel, a New York law firm, who represents some fund directors. The Seventh Circuit decision is binding only on courts in that circuit, which covers Illinois, Indiana and Wisconsin. But if it becomes widely accepted it could lead boards to forgo the often extensive process of gathering information to determine if fees are reasonable. Harris asserted that procedure had led to decisions that limited the fees it received as the funds grew larger. In any case, there is little evidence that many investors care much about fees. The biggest growth area in money management has been in hedge funds, which normally charge a fee of 2 percent of assets, plus 20 percent of profits. The highest fee Harris charged was 1 percent of assets. If they do care, the S.E.C. took action Wednesday to make it easier to obtain and compare fund fee information electronically. Anyone who finds fees unreasonably high, however, now has a much smaller chance of getting the courts to intervene.


Turkey: Aid Ship Won’t Join Flotilla

Abstract: Technical problems will keep a Turkish humanitarian aid ship that was the target of a fatal raid by the Israeli military last year from joining a flotilla that is set to leave for Gaza next week, the pro- Palestinian charity that owns the boat announced on Friday. The charity, the Humanitarian Relief Foundation, said the decision was not the result of political pressure from the government. Nine people were killed in the raid on the ship, the Mavi Marmara, straining ties between Turkey and Israel. The new flotilla is expected to challenge Israel’s blockade of the Gaza Strip this month. Israeli military officials warned Thursday that they would use force if necessary to prevent boats from breaking the blockade.

Defense and Military Forces
Humanitarian Aid
Turkey
Gaza Strip


For Jets’ Punter Weatherford, It’s Only Easy Listening Music This Week

Abstract: FLORHAM PARK, N.J. — The heart rate of Steve Weatherford, the Jets ’ punter who loves heavy metal rock and has a huge “Carpe Diem” tattoo on his left biceps, has returned to normal, but Jay Feely, the Jets’ place-kicker, is still joking that he is taking no chances. Weatherford can listen only to Beethoven this week, or, even better, Enya or Kenny G. “I told him you can’t listen to that stuff anymore — no Metallica,” Feely said Thursday, laughing. A punter is like an offensive lineman, mostly drawing attention only when he plays poorly. Before the Jets’ playoff victory last Saturday at the Cincinnati Bengals, Weatherford drew attention from the coaching staff and trainers because he had suddenly fallen ill, alarmingly so. Weatherford said his heart was racing to 170 to 180 beats per minute. He felt as if he would pass out. He has a genetic heart condition that was diagnosed when he was in high school and was treated surgically when he was a sophomore at Illinois, but there was no reason for this. “In my position, it’s more beneficial to be relaxed and keep my heart rate level,” Weatherford said. As Feely punted against the Bengals , Weatherford sat in the team’s locker room, hooked to a heart monitor. After the first half, when his heart rate dropped to 75 or 80 beats a minute, he was allowed to call his wife, Laura, who was watching the game at their home in Illinois. “She thought my hamstring was hurting again,” Weatherford said, smiling. Weatherford, in his first season with the team, missed the entire game. Feely punted seven times in the 24-14 victory, knocking three punts inside the Bengals’ 20. Weatherford was placed on medication and had a series of tests over the weekend. He was deemed to be fine. Jets Coach Rex Ryan said Thursday that Weatherford had no recurrences. He is expected to punt Sunday on the road against the San Diego Chargers in the American Football Conference divisional-round playoff game, in which field position will most likely be critical. Weatherford, who is 27 and has a son, Ace, said he would have surgery after the season that he hopes will take care of the problem. “I want to live to be an old dad,” he said. Perhaps the oddest part of the whole episode was that Weatherford is the last person his teammates would think would have a heart problem. Weatherford, who is with his fourth team in his fourth N.F.L. season, was a decathlete in college. “He can do it all,” said Wallace Wright, a member of the Jets’ punt coverage team. “You’re a decathlete in Division I in college — nothing else needs to be said.” Actually, Wright did not know that Weatherford was ill until five minutes had been played Saturday. The Jets stalled on their first drive, and Wright ran onto the field to take his spot as one of the wide players in the punt formation. “So, I’m looking for my punter, and right before the punt, Steve’s not out there, and I’m thinking, what?” Wright said. “You just have to move on and do with what you have.” Feely averaged 34.3 yards on four first-half punts — far lower than Weatherford’s season average of 42 yards — but none of Feely’s punts were blocked or shanked. That was a moral victory. Feely finished the game. “I asked him about what we want to do right off the bat,” the Jets’ special-teams coordinator, Mike Westhoff, said Thursday of Feely. “I said, ‘Let’s just get if off quickly and get it up high.’ ” Referring to Brad Smith, positioned in front of Feely, Westhoff said: “Brad did a nice job of bluffing. It made us look like we were going to fake it half the time. I think that held them. That occupied them for just a split second and let Jay get it and kick it. “Jay is a competitor. One thing you know about Jay Feely is he’s a very talented athlete, first of all. He does a lot of things well. He’s an outstanding golfer. He can run and tackle. Jay is a good athlete and he just competed.” Weatherford was distraught. He thought he was letting his teammates down. At one point before the game, he pulled an IV tube out of his arm and told Ryan that he was going to play. “I was like, oh, no, you’re not,” Ryan said Tuesday. Weatherford had appeared in N.F.L. playoff games before — he punted for New Orleans in the 2006 National Football Conference championship game against Chicago — so he said he was not nervous before the game against Cincinnati. “It wasn’t my first rodeo,” said Weatherford, a native of Terre Haute, Ind. “It’s just kind of bad luck.” This week has been quiet. At least the Jets know now Feely can punt in a pinch. As soon as he found out something was wrong with Weatherford, Feely ran onto the field to take some long snaps from James Dearth. He did fine. He does not want to do it again. “Honestly, I would have felt more comfortable returning punts,” Feely said.

Football
Weatherford Steve
New York Jets
Feely Jay


Crowds Scatter as Baltimore Curfew Takes Hold

Abstract: BALTIMORE — Armored vehicles lined this battered city’s main thoroughfares and thousands of law enforcement officers and National Guard troops worked to maintain order and enforce a citywide curfew Tuesday night, amid scattered reports of unrest after a day of largely peaceful protests. As the curfew went into effect at 10 p.m., hundreds of people remained in the streets near the intersection of Pennsylvania and West North Avenues in blighted West Baltimore, where a CVS drugstore had been looted and burned during Monday night’s riots , after the funeral for Freddie Gray, who died after suffering a spinal cord injury in police custody this month. There were some reports of arrests, and police fired pepper-spray balls to disperse crowds, who had earlier stood their ground despite entreaties from religious leaders and community activists. Shortly before midnight, Police Commissioner Anthony W. Batts said, “The curfew is in fact working.” He added that 10 people were arrested after it went into effect. “Citizens are safe. The city is stable,” he said. “We hope to maintain it that way.” National Guard soldiers were set to be deployed in a two- or three-block radius of a northwest Baltimore neighborhood, Mr. Batts said, “to sustain that area, to stabilize it and make sure that everything is O.K.” Earlier Tuesday night, nearly 1,000 people gathered at the Empowerment Temple A.M.E. Church, where about 500 religious leaders of different faiths called for healing. Members of the audience spoke about a litany of problems plaguing the city and called for better policing, policies to create jobs, and better schools. Voices From the Streets of Baltimore The day after chaos erupted across Baltimore, people who were assembled near a looted CVS drugstore discussed the violence. But out in the streets, there were intermittent clashes with police, as some threw bottles at a line of officers behind riot shields. The tense mood Tuesday night was a stark contrast to the almost upbeat feeling earlier in the day, as hundreds of people of all ages and races — many of them toting brooms and trash bags — worked to clear the neighborhood of rocks and debris . In the late afternoon, peaceful demonstrators marched through the streets, chanting, “All night, all day, we’re gonna fight for Freddie Gray!” “It’s sad, this don’t make no sense,” said Clarence Cobb, 48, one of many neighborhood residents who, describing themselves as brokenhearted, came out to survey the wreckage and clean up. “It comes to a point where you just got to take pride in your own neighborhood. This makes us look real bad as a city.” As Gov. Larry Hogan and Mayor Stephanie Rawlings-Blake tried to assess the damage from the rioting, there was intense debate over whether the mayor had waited too long to ask the governor to send in the National Guard — and whether the city police, who confessed to being outnumbered and outflanked a day earlier, were underprepared. The authorities said that 15 buildings and 144 cars had been set on fire during Monday night’s chaos, which began in Northwest Baltimore’s Mondawmin neighborhood and spread to other pockets of the city after morning funeral services for Mr. Gray, who was eulogized with soaring gospel music and impassioned calls for justice and peace. The police made 235 arrests. Nineteen police officers were injured, but by Tuesday, all had been treated and released. With schools closed and camouflage-clad National Guard members patrolling the streets, Baltimore struggled to find some sense of normalcy. The Baltimore Orioles, forced by the unrest to postpone games Monday and Tuesday against the Chicago White Sox, announced that the teams would play Wednesday at Camden Yards — but without fans , because the ballpark would be closed to the public. Mapping the Clashes Between Baltimore Police and Protesters Gov. Larry Hogan of Maryland declared a state of emergency and activated the National Guard when riots broke out after the funeral of Freddie Gray. In Washington, President Obama, making his first public remarks on the crisis here, denounced the rioters as “criminals and thugs” and said there was “no excuse” for the violence. He sought to distinguish it from the largely peaceful demonstrations that have unfolded since Mr. Gray died on April 19. Speaking in the Rose Garden, Mr. Obama said that he understood people “want answers,” and that the Justice Department was working with local law enforcement to find out what happened to Mr. Gray. But, he said, “when individuals get crowbars and start prying open doors to loot, they’re not protesting, they’re not making a statement — they’re stealing. When they burn down a building, they’re committing arson.” The police had begun gearing up for the violence Monday afternoon after word spread across social media of a call for high school students to “purge” — an apparent reference to the 2013 action horror movie “The Purge,” whose plot revolves around one night a year when, from 7 a.m. to 7 p.m., crime is legal and police, fire and medical emergency services are unavailable. The police said Tuesday that what they expected to be a demonstration by high school students had quickly evolved; of the 235 arrests, they said, just 31 were juveniles. They also said that the number of young people had swelled because the area is a hub for eight schools, and students had emerged from buses. “When we deployed our officers yesterday, we were deploying for a high school event,” Capt. J. Eric Kowalcyzk, the Baltimore police spokesman, told reporters here. “I don’t think there’s anyone that would expect us to deploy with automatic weapons and armored vehicles for 13-, 14- and 15-year olds.” Most Baltimore officials, including Mayor Rawlings-Blake, had convened at the New Shiloh Baptist Church for Mr. Gray’s funeral, which let out shortly before the violence began. The mayor, saying the city had reacted “very swiftly,” defended herself. “There’s always going to be armchair quarterbacks,” she said Tuesday, adding that she faced a “very delicate balancing act” and had to be careful about “not escalating and increasing the problem” by creating a militarized atmosphere that could further inflame tensions. That was the case in Ferguson, Mo., after the fatal police shooting of Michael Brown in August. Image Residents cleaned Baltimore’s battered streets Tuesday as law enforcement officers stood guard. Credit Matt Rourke/Associated Press In death, Mr. Gray has taken his place along with Mr. Brown as a national symbol of police mistreatment of black men. His death set off a string of largely peaceful protests, although a march downtown did lead to scattered violence on Saturday night. But it renewed long-simmering tensions between residents of this majority black city and a police force with a history of aggressive, sometimes brutal, behavior. Six Baltimore officers have been suspended with pay, and the police are investigating Mr. Gray’s death. Mr. Batts, the police commissioner, has said the results of the inquiry will be presented on Friday to the city prosecutor, who will determine whether to bring charges. Even as 2,000 National Guard troops and police from multiple states came in to secure the streets, more protests were planned; college students calling themselves City Bloc said they would march to City Hall on Wednesday “to make young people’s voices heard over the many people characterizing the riots as the only way people are responding to the death of Freddie Gray.” The crisis in Baltimore is as much a test for Mr. Hogan, a Republican whose election in this heavily Democratic state in November was a surprise, as for Ms. Rawlings-Blake, and there appeared to be some tension between them. The governor said as early as Saturday that he was prepared to declare a state of emergency, allowing him to call in the National Guard, when a march through downtown set off scattered nighttime violence. But he had to wait for the mayor to ask; she did so at about 6 p.m. Monday, roughly two hours after the rioting began. “You could say: ‘Should she have called us a couple of hours earlier? Should we have made the call without her?’ ” the governor said on Tuesday. “But it wasn’t an issue on Saturday.” Some said the police had exacerbated tensions by sending 200 to 300 officers to the Mondawmin Mall as school let out. “Having the cops showing up in riot gear just inflamed the situation,” said Melech Thomas, 27, a minister who works with youth in West Baltimore. Video After a night of violent clashes with the police, protests, vandalism and arson, Baltimore residents aim to put their city back together. Policing experts said Ms. Rawlings-Blake was walking a delicate line, and some said they would much rather see a city take Baltimore’s cautious approach than react with the kind of militarized police presence used by Ferguson. Chuck Wexler, executive director of the Police Executive Research Forum, a research group based in Washington, said, “It’s better to go in low key and build up if necessary.” Norman H. Stamper, the Seattle police chief who oversaw a harsh response to vandalism and demonstrations when the World Trade Organization met in that city in 1999, and who later disavowed those tactics, agreed. “There is a sense of damned if you do, damned if you don’t,” he said. “I’m not saying Baltimore did everything right, but generally, when you get criticized for exercising restraint, that’s preferable to sort of a wanton, aggressive response.” Throughout Tuesday, state troopers in riot gear and National Guards members patrolled the Inner Harbor tourist district and around downtown Baltimore hotels. Three hundred law enforcement officers from states including Pennsylvania and New Jersey, as well as the District of Columbia, arrived by nightfall. Governor Hogan said he had been in touch with the state’s insurance commissioner and the Small Business Administration about financial assistance to business owners who incurred losses. As the city seeks to rebuild, some in Baltimore say the problems here run much deeper than Mr. Gray’s death and the conduct of the police. Near the burned-out CVS, Robert Wilson, a college student who went to high school in Baltimore, said: “With the riots, we’re not trying to act like animals or thugs. We’re just angry at the surroundings, like this is all that is given to us, and we’re tired of this, like nobody wants to wake up and see broken-down buildings. They take away the community centers, they take away our fathers, and now we have traffic lights that don’t work, we have houses that are crumbling, falling down.” Mr. Wilson said he had seen someone on television say, “This doesn’t feel like America.” “And I’m like, ‘This is America!’ ” he said. “ ‘They just don’t want you to know!’ ”

Police Brutality,Police Misconduct,Police Shootings


Olympic Champion Sammy Wanjiru May Make Run at Marathon World Record in Chicago

Abstract: The Olympic champion Sammy Wanjiru of Kenya will headline the Chicago Marathon in October in a potential attempt to set a world record. Wanjiru became the first Kenyan to win the Olympic marathon in Beijing last summer, taking the gold medal in 2 hours 6 minutes 32 seconds . He prevailed in conditions so hot and humid that many people consider his victory the greatest marathon ever run. His time was an Olympic record but not a world record. In April, Wanjiru, 22, won the London Marathon in cooler conditions, setting a personal best and a course record of 2:05:10 — the ninth-fastest time ever run — after running at world-record pace for the first half of the race. Chicago’s flat course could produce a searing time when the marathon is run Oct. 11, but weather could be a determining factor. The race has been run in extreme heat the past two years. And even in the best conditions, the aggressive, front-running Wanjiru must still chop 72 seconds off his personal best to break the world record, 2:03:59, set by Haile Gebrselassie of Ethiopia last September in Berlin . “You have an athlete at a point in his career where he is very aggressive and very athletic,” Carey Pinkowski, the race director of the Chicago Marathon, said in a telephone interview. “On a course like Chicago, hopefully those things come together and we see something historic. Obviously, he’s got to have an excellent buildup in training and preparation. The weather and everything has to go right. Some things out of our control have to contribute, but it’ll be fun.” Four world records have been set at the Chicago Marathon. Two were set by men, Steve Jones of Wales in 1984 and Khalid Khannouchi of the United States in 1999; and two by women, Catherine Ndereba of Kenya in 2001 and Paula Radcliffe of England in 2002. Challenging Wanjiru in the fall will be the past two men’s winners at Chicago, Evans Cheruiyot and Patrick Ivutu, both of Kenya. “My plan for the fall is to lower my personal record, and the Chicago Marathon course is the best opportunity for me to achieve that,” Wanjiru, who has done much of his career training in Japan, said in a statement. This week, the New York City Marathon is expected to announce that Ryan Hall of the United States will participate in this year’s race, which will be run Nov. 1. Hall has a personal best of 2:06:17, set in a fifth-place finish at the 2008 London Marathon. He finished 10th at the Beijing Olympics and third at the 2009 Boston Marathon . Hall holds the American half-marathon record, 59:43 .

Marathon Running
Wanjiru Sammy
Gebrselassie Haile
Chicago Marathon
Awards Decorations and Honors


Rebuilding the Shores, Increasing the Risks

Abstract: This might be a good time to take a look at the most important environmental law that nobody has ever heard of. The real estate industry fought that law bitterly in Congress, but lost, and it landed on Ronald Reagan’s desk in 1982. The president not only signed it, but did so with a rhetorical flourish, calling it a “triumph for natural resource conservation and federal fiscal responsibility.” The law — the Coastal Barrier Resources Act — was intended to protect much of the American coastline, and it did so in a clever way that drew votes from the most conservative Republicans and the most liberal Democrats. It is worth bringing up today because we are once again in an era when our coasts are at risk and our national coffers are strained. The $75 billion in damages from Hurricane Sandy, coming only seven years after the $80 billion from Hurricane Katrina, told us this much: We need a plan. The climate is changing, the ocean is rising, more storms are coming, and millions of Americans are in harm’s way. The costs of making people whole after these storms are soaring. Without ideas that stand some chance of breaking the political gridlock in Washington, the situation will eventually become a national crisis. The law that Reagan signed in 1982 might just offer a model of how to move forward. First, the background: Scientists are still figuring out how storms will be altered as global warming proceeds, but they are pretty certain about some things. Land ice the world over is melting in the changing climate, and the ocean is heating up, too, which makes the water expand. Those factors are causing the ocean to rise. It rose about eight inches in the past century, requiring billions of dollars to fight erosion. Recently the rate of increase seems to have jumped, to about a foot per century — and climate scientists think it will go up quite a bit more. The cautious prediction at this point is that we could see two or three feet of sea-level rise by 2100, and possibly even six feet. What will that mean for people living near the shore? You might think things would be fine for them until the day the ocean finally covers their land. But it does not work that way. Long before inundation occurs, people will be hit more and more often by coastal flooding. In places where it took a huge storm to send seawater into living rooms, a routine storm will do the trick once the ocean has risen several feet. It should be obvious that the more people we move out of harm’s way in the reasonably near future, the better off we will ultimately be. But we are doing the opposite, offering huge subsidies for coastal development. We proffer federally backed flood insurance at rates bearing no resemblance to the risks. Even more important, we go in after storms and write big checks so towns can put the roads, sewers and beach sand right back where they were. We are, in other words, using the federal Treasury to shield people from the true risks that they are taking by building on the coasts. Coastal development has soared as a direct consequence, and this rush toward the sea is the biggest factor in the rising costs of storm bailouts. So what was so clever about that 1982 law, and how can we learn from it? Development pressure on the nation’s coasts was intense back then, but hundreds of miles of barrier islands and beaches were as yet unspoiled. Environmental groups would have loved a national ban on further coastal development, but conservatives would never have gone along with that. Two Republicans, Senator John H. Chafee of Rhode Island and Representative Thomas B. Evans Jr. of Delaware, found the magic formula. Their bill simply declared that on sensitive coastlines that were then undeveloped, any future development would have to occur without federal subsidies. In other words, no flood insurance and no fat checks after storms. The law did not prohibit anybody from building anything. And in fact, some development has occurred on lands in the redlined zone. But the law has mostly held, discouraging development along some 1.3 million acres of American coastline — a monumental triumph that continues to pay dividends. So here is a modest idea. As the first plank of our plan for coping with storm risk, what about expanding the boundaries of the program that Reagan took such pride in? That is not to be cruel: people deserve humanitarian help after big storms. But Robert S. Young , head of the Program for the Study of Developed Shorelines at Western Carolina University, thinks we have to start weaning beach towns from the welfare roll. One way to begin, he suggests, would be to identify the towns in the riskiest areas, the ones that the taxpayers keep bailing out again and again. Perhaps we say to them: You get one more shot. We will make you whole after the next big storm, and if you choose to use the money to rebuild, then you are on your own. Just maybe, in some areas that should never have been developed in the first place, the necessary retreat from the beaches would finally begin.

Coastal erosion
Climate Change
Global Warming
Coast
Real Estate
Housing
Flood
Personal finance
Federal Aid


Garmin Forerunner 405 G.P.S.-Enabled Watch

Abstract: Like its forebears, the Garmin Forerunner 405 is a G.P.S.-enabled watch with an abundance of training features to keep runners and bikers motivated. Since it’s almost always more fun to run with a friend, the Forerunner offers a virtual partner — a nagging and tireless system that resides on your wrist. The watch keeps track of pace and distance and even allows you to pick up the pace with just a tap or swipe of the touch-sensitive bezel. The new model also works with Garmin’s optional heart-rate monitor and its foot cadence sensor for indoor runs. It comes in black and green and, unlike the earlier, bulkier Forerunner models, it looks stylish enough to be worn off the track. Once you arrive home after a workout, wireless ANT+Sport technology beams your workout data to your computer. Runners can plan routes, set goals and track progress online. The watch will be available next month for $300. While it is no substitute for the chit-chat of a favorite running partner, this high-tech watch may just keep your mind focused on the run instead of office gossip. JOHN BIGGS

Computers and the Internet
Global Positioning System
Garmin Limited


Judge Rejects Bid by Amgen to Block Biosimilar Drug by Novartis

Abstract: A U.S. judge on Thursday denied Amgen’s bid to block the sale of Novartis’s recently approved biosimilar form of Neupogen, a blockbuster drug used to prevent infections in cancer patients. Novartis’s drug, Zarxio, contains the same active ingredient as Amgen’s $1.2 billion-a-year Neupogen, and once released would become the first biosimilar in the United States. Kristen Davis, a spokeswoman for Amgen, said in an emailed statement that the company planned to appeal the decision, which was by U.S. District Judge Richard Seeborg of San Francisco federal court. Because biosimilars are made in living cells, they are not considered exact duplicates of original brands. Insurers are hoping that biosimilars will be sold for discounts of 40 to 50 percent from the cost of original brands in the United States, but Novartis has not yet disclosed the intended U.S. price for Zarxio. The judge denied Amgen’s request for a preliminary injunction. Novartis had agreed to delay its U.S. release until the court’s decision, or until April 10, whichever came first. It was not immediately clear how long Amgen’s appeal would take, or whether Novartis might release its biosimilar before an appeals court decision is rendered. If Novartis were to initiate such an “at-risk” release, it might later have to pay costly damages in the event that Amgen’s patent is declared valid and enforceable. Biosimilars have been on the market since 2006 in Europe. The U.S. Food and Drug Administration in March approved Zarxio for the same five conditions for which Neupogen is used — among cancer patients undergoing various treatments.

Amgen
Novartis
Pharmaceuticals
Mergers and Acquisitions


200 Teas? That’s De-Lovely

Abstract: Ours may be a coffee-drinking society, as Robert Scott, owner of the Montclair teahouse Cha-Ma-Gu-Dao, readily concedes. But that doesn’t mean the typical coffeehouse, all that foam and caffeine notwithstanding, can come close to serving up the sensuous, multitiered and occasionally mind-expanding experience a thoughtfully appointed tea spot can. All the evidence you need is here, in one of more than 200 varieties Mr. Scott has been importing and serving since opening in December. An information technology professional who lives in Andover, he discovered a taste for teas on business trips to Asia and India. If a menu that bounces from De Lovely (a flavored black tea) to Moon Palace (a green tea) makes your head spin, brace yourself. But don’t skip the chance to sit and be served here. Kekecha, a rare yellow Chinese tea, is head clearing and beautifully colored. It is served in a wide white cup by a waitress who is accustomed to educating defectors from the latte line. Ming Thai Reserve, an oolong from the mountains of Thailand, displays a quiet exoticism. Chai-almond cookies (five for $3) make a nice accompaniment. All teas are $2.25 for a 12-ounce cup; pots, about 17 ounces, cost $6 for the rare teas and $4 for others. Atmospherically, Cha-Ma-Gu-Dao, which means “ancient tea and horse trail” in Mandarin, is sleek. Though it serves a very British Queen’s tea, the 1,900-square-foot space, with 10 tables and a five-seat bar, is spare. You’ll find no jars of jam or tea cozies for sale here, but you will find hand-crafted Japanese cups ($37 and up) and bins of bulk teas with names that fascinate: the delicate-sounding Japanese Sencha Gyokuro Asahi, at $47 for 100 grams (40 to 50 cups), is for the deep-pocketed tea drinker; the Wimbledon, on the other hand, sounds as cheerful as its price tag of $4.10 per 100 grams. Cha-Ma-Gu-Dao, 212 Glenridge Avenue, Montclair; (973) 746-0975; Monday to Wednesday, 11 a.m. to 7 p.m.; Thursday and Friday, 11 a.m. to 8 p.m.; Saturday, 10 a.m. to 8 p.m., and Sunday, noon to 5 p.m. TAMMY LA GORCE


Zuma Names Panel to Investigate South Africa Mine Shooting

Abstract: JOHANNESBURG — South Africa ’s president appointed a panel of judges on Thursday to investigate the events that led up to the police shooting that killed 34 miners on strike at a platinum mine last week. The killings, which followed a week of violent protests by miners demanding that their wages be sharply increased, stunned South Africa and brought back memories of police killings during the apartheid era. A memorial service honoring the 34 miners, and 10 others killed earlier, was held on Thursday next to the outcropping of rock near the mine in Marikana, a small town on South Africa’s platinum belt 70 miles northwest of Johannesburg. The mine is owned by the London-based producer Lonmin. President Jacob Zuma , seeking to cool anger at the government in the wake of the police shooting , visited the site of the protest on Wednesday and pledged a thorough investigation. The panel Mr. Zuma appointed will be led by a retired judge and will examine the role of the company, the unions and the South African police force, and it will have the power to subpoena witnesses and refer cases for prosecution. The police opened fire on the striking miners last Thursday after failing to disperse them with rubber bullets, tear gas and water cannons. In news videos of the episode , some of the miners can be seen carrying machetes, clubs and spears, and appear to charge at the police. Officials said several guns were also retrieved from the miners, who had hacked two police officers to death earlier in the week. But the police have been widely criticized for killing so many people. Copycat strikes erupted at other nearby platinum mines this week, but miners have returned to work, company officials said. South Africa has the world’s richest known deposits of platinum, which is used extensively in automobile parts and jewelry. The deadly strike at the Lonmin mine has become a political football as Mr. Zuma struggles to hold on to his position as leader of the African National Congress ahead of a conference later this year. After the killings, Julius S. Malema, the firebrand former leader of the African National Congress’ Youth League, who has called for South Africa’s mines to be nationalized, visited the striking miners and harshly criticized Mr. Zuma. Mr. Malema was expelled from the A.N.C. in April for sowing disunity in the party.

South Africa
Mines and Mining
Zuma Jacob G
Demonstrations Protests and Riots
Deaths (Fatalities)
Police Brutality and Misconduct
Lonmin Plc
Marikana (South Africa)


Specialty Food Makers Adopt a ‘Made in U.A.E.’ Label

Abstract: DUBAI — Rosso Vivo, a two-month-old artisanal pizzeria in Dubai, has the city’s Italian community talking. A tough crowd to please, they appear to have given the cozy restaurant their approval, returning in groups to enjoy a slice of Naples, the Italian city credited as the birthplace of pizza. A lot about the Rosso Vivo pizzas is actually Neapolitan: the craft, the chef Raffaele Medaglia and even the bricks are shipped from Naples to build the oven. One exception is the bocconcini mozzarella. It comes from the Italian Dairy Products factory, about 40 kilometers, or 25 miles, from Dubai, within an emerging industrial-free zone in the neighboring emirate of Sharjah. The pizzeria is just one example of the small European-in-origin food businesses, from cheeses to chocolates, that are discovering a favorable business climate in the deserts of the United Arab Emirates . “We decided to opt for a locally produced mozzarella because the origin of milk for cow mozzarella is not as important as the milk for buffalo mozzarella, which we source from Campania in southern Italy,” Stefano d’Orazi Flavoni, the owner of Rosso Vivo, said by telephone last week. “When dealing with cow mozzarella we care more about the texture and the freshness,” he said. “There’s no doubt it’s better coming from an hour away than from Italy.” Local produce is an anomaly in the Emirates, which like its Gulf neighbors is heavily dependent on food imports because of the lack of fertile land. In recent years, “going or growing local” has become a buzz phrase. Gulf countries are increasingly conscious of their reliance on food imports and are attempting to tackle issues like food security, sustainability and pricing. “It’s about time we had more local produce, even if it’s not 100 percent local,” said Alistair McCourtie, the managing partner of Admirals Trading, which distributes Italian Dairy Products’ cheeses in the local market. “The cheeses, for example, use local milk, but the local milk producers probably still use imported food for their cows.” “The hardest customers are the Italian chefs,” Mr. McCourtie said. “They’re always comparing ingredients to their home towns and how their mothers used to do stuff, but the non-Italian chefs love the freshness of the products.” Mr, McCourtie represents about 40 food brands, 20 percent of which are from the Emirates. Each week, Rosso Vivo consumes about 90 kilograms, or almost 200 pounds, of fresh mozzarella, and nine kilograms of ricotta, delivered three times a week by Italian Dairy Products. Sensing an opportunity to supply the local markets with freshly made cheese, three Italian partners set up Italian Dairy Products in 2009. The facility established by the partners — Leo Condemi, Silvia Angelotti and Pietro Rampino — started operating in April 2011 with two Italian cheese makers using local milk to produce mozzarella in different shapes and sizes (ciliegine, bocconcini, treccia, nodini and sfoglia) as well as other dairy products including burrata, scamorza and ricotta. “The milk supply is delivered at 4 a.m. on the same day it is milked and we start production immediately,” Maria Luisa Panzica La Manna, the general manager of Italian Dairy Products, said as she showed the company’s 552-square-meter, or 5,940-square-foot, facility this month. “It can’t get any fresher.” The plant uses 7,000 liters, or 1,850 gallons, of milk each week to produce cheese three times a week, with the help of four other workers from the Philippines and India. “We’re ready to take on larger orders if we need to and even export within the near region. Although the market is very label driven, we’re slowly winning over customers on the freshness factor,” she said. “It’s also a good time to be present locally because of the increasing emphasis on the environmental impact of flying in food.” A large part of convincing customers to buy local produce, according to Mr. McCourtie, “has to do with education.” He added, “The fact that we can take potential buyers to the cheese plant to see the team in action definitely helps.” About 40 kilometers northeast of Sharjah, in the emirate of Ras al-Khaimah, Daniel Hutmacher, a Swiss pastry chef turned entrepreneur, also welcomes customers to visit his 195-square-meter chocolate factory, where he and his sister Ginette Oberson produce handmade chocolates sold under the brand name Chocolat. Since they started Swiss International Chocolates in 2009, Mr. Hutmacher said, it has been challenging to change opinions about locally produced chocolates — even if they are artisanal products made by Swiss chocolatiers. “We operate in a brand-conscious market, so it has been a lot of hard work as we’ve had to engage directly with clients to change perceptions that high-quality chocolates can have a ‘Made in U.A.E.’ label,” he said during a tour of his facility last month. “All our ingredients are imported, but we are experimenting with local and regional flavors such as dates, saffron, rose water, figs and cardamom, all made by Swiss hands,” meaning those of his sister. The entire factory area is temperature controlled at each step of the chocolate-making process: The working temperature is 22 Celsius (71.6 degrees Fahrenheit) and the holding temperature is maintained at a strict 18 Celsius. “We are extremely particular about the temperatures the chocolates are prepared in and transported in, which is why we aren’t focusing on exporting at the moment,” Mr. Hutmacher said. Operating out of Ras al-Khaimah, a less glamorous emirate than Dubai, he concedes, comes with its own image challenges. “Dubai was too expensive to set up the business, but I’m happy with our progress,” he said, “as Chocolat is now served in the world’s highest restaurant in the Burj Khalifa.” The company, whose portfolio of about 250 products includes caramels and fruit jellies, has steadily grown into a business with an annual revenue of about $400,000. Mr. Hutmacher does not have a retail presence and primarily relies on word-of-mouth referrals to expand his clientele, which he said includes members of the royal families of Ras al-Khaimah and Dubai. “Artisanal food production is not easy anywhere in the world,” he said. “In this region, it’s even more difficult, as there’s little understanding about the time factor. Everybody wants everything yesterday, and when you’re an artisanal outfit, it’s not always possible.” But the business is growing, he said, “and we’re in this for the long term, so we have time, and lots of patience.” In February, the U.A.E. minister of trade, Lubna Al Qasimi, forecast that for countries in the Gulf Cooperation Council, the cost of importing food would grow to $53.1 billion in 2020 from $25.8 billion in 2010. She also predicted 5.4 percent growth in annual food consumption for the U.A.E. and 30 percent growth in revenue for the Emirates’ restaurant sector to $780 million over the next four years. Mr. McCourtie of Admirals Trading agrees that there is definitely an opportunity to increase local food production. “It’s encouraging to see attempts in that direction. However, it’s also expensive,” he said. “Operating costs and labor costs are high and land is not cheap. At the end of the day, these are businesses that have to work.”

Food
Cheese
Chocolate
United Arab Emirates
Dubai (United Arab Emirates)
Sharjah (United Arab Emirates)
Ras al-Khaimah (United Arab Emirates)
Pizza
Local Food


Bernanke Says Faster Growth Is Needed to Bolster Job Market

Abstract: WASHINGTON — In a speech that sought by turns to deflate optimism and pessimism about the labor market, the Federal Reserve chairman, Ben S. Bernanke , said Monday that the Fed’s efforts to stimulate growth were gradually reducing unemployment, but that the scale and duration of the problem could leave lasting scars on the economy. “Recent improvements are encouraging,” he said. However, he continued, “millions of families continue to suffer the day-to-day hardships associated with not being able to find suitable employment.” Mr. Bernanke said he was particularly concerned about the unusually large share of the unemployed who have been unable to find work for six months or more. More than 40 percent of the unemployed are in this category, compared with less than 25 percent after other recent recessions. “Because of its negative effects on workers’ skills and attachment to the labor force, long-term unemployment may ultimately reduce the productive capacity of our economy,” Mr. Bernanke told a meeting of business economists in Virginia . In describing the Fed’s efforts to improve growth as being important and productive, Mr. Bernanke countered recent speculation that the Fed might not continue those policies until at least the end of 2014. The Fed intends to hold short-term interest rates near zero through 2014, and has been investing in government debt to further reduce long-term interest rates. Mr. Bernanke did not say that the Fed was considering new measures, a subject of intense speculation among investors. But stock markets, the prime beneficiaries of the Fed’s easy-money campaign, liked the speech all the same. The Standard & Poor’s 500-stock index rose 1.39 percent on Monday. “Those who are looking for a major shift in Fed policy will be disappointed,” Diane Swonk, chief economist at Mesirow Financial in Chicago, wrote in a brief commentary on the speech. She added, however, that Mr. Bernanke “will continue to resist and override dissenters in his own ranks to keep and perhaps even expand monetary policy accommodation.” Ms. Swonk, who attended the speech, noted that the absence of any mention of inflation was unusual, suggesting that Mr. Bernanke remained confident that faster inflation was not an imminent threat. Critics, including some Fed officials, argue that the central bank’s policies are likely to cause inflation because the central bank is trying to stimulate growth in an economy already running near capacity. Unemployment remains at a high level, but those concerned about inflation say that general stimulus will not help because the problems are structural, including, for example, a lack of desirable skills. Mr. Bernanke said Monday that structural unemployment might have increased in recent years, but that high unemployment was mostly a cyclical phenomenon, the result of the general economic malaise. “The continued weakness in aggregate demand is likely the predominant factor,” he said. “Consequently, the Federal Reserve’s accommodative monetary policies, by providing support for demand and for the recovery, should help, over time, to reduce long-term unemployment as well.” Mr. Bernanke outlined several reasons for this conclusion. While employers have always preferred to hire people who have been out of work for short periods, that preference has not increased in recent years as might be expected if the long term unemployed were languishing because they lacked relevant skills. Hiring also remains weak across a range of industries, suggesting broad causes. The Fed also faces critics who agree with this analysis and argue that it should be stimulating the economy more aggressively to reduce unemployment more quickly. Some Fed officials, and many outside economists, argue that the Fed could stimulate the economy most effectively by helping the moribund housing market by buying mortgage-backed securities. Mr. Bernanke himself outlined the stakes in grim detail Monday, describing the toll of long-term unemployment on workers and on the economy. Studies find that people who cannot find work for extended periods suffer permanent declines in wealth , health and earnings potential . And, their skills deteriorate.

Bernanke Ben S
Federal Reserve System
United States Economy
Unemployment


Arrests of 3 Mayors Reinforce Florida’s Notoriety as a Hothouse for Corruption

Abstract: HOMESTEAD, Fla. — Even by Florida standards, the arrests of three suburban Miami mayors on corruption charges within a month were a source of dismay, if not exactly a surprise. On Wednesday, Steven C. Bateman, 58, the mayor of Homestead, was arrested. He is accused of accepting under-the-table payments from a health care company that sought to build a clinic in town, the state attorney’s office for Miami-Dade County said. Mr. Bateman was turned in by City Council members and staff, said employees interviewed Friday at City Hall. On Aug. 6, Manuel L. Maroño, 41, the mayor of Sweetwater and president of the Florida League of Cities , and Michael A. Pizzi, 51, the Miami Lakes mayor, were picked up along with two lobbyists. The United States attorney’s office has accused them of involvement in kickback and bribery schemes concerning federal grants. Prosecutors said Mr. Maroño had received more than $40,000 in bribes and Mr. Pizzi $6,750. The defendants, who were targets of an F.B.I. sting operation, are charged with “conspiracy to commit extortion under color of official right” and could face 20 years in prison if convicted. Gov. Rick Scott suspended all three mayors while the criminal cases proceed. “We bought the trifecta,” said Carla Miller, the ethics officer for Jacksonville and a former federal prosecutor. “It’s bad when three mayors get led out in handcuffs. What’s left of the public trust gets ground into little pieces.” Not that such situations are unusual in Florida, which led the country in convictions of public officials — 781 — between 2000 and 2010, according to Department of Justice figures. “Florida has become the corruption capital of America,” said Dan Krassner, the executive director of a watchdog group, Integrity Florida , citing statistics going back to 1976 and the “significant number of public officials arrested this year and last.” Image State Attorney Katherine Fernandez Rundle displayed evidence last week after the arrest of Mayor Steven C. Bateman of Homestead, Fla. Credit J Pat Carter/Associated Press Florida, and especially Miami and its environs, has long had a reputation as a place where the odd and the eccentric mix with the furtive and the felonious. Last century, organized crime figures from Chicago and New York set up lucrative gambling, extortion and loan-sharking endeavors in Miami Beach and elsewhere, and beginning in the 1980s, South Florida’s economy, culture and reputation were transformed by drug trafficking. With so much money sloshing about, it was perhaps inevitable that a parade of officials would enrich themselves illicitly at the public trough. One was Alex Daoud, who in 1985 became the mayor of Miami Beach and six years later was indicted on 41 counts of bribery. He served 18 months in prison, and has since written a memoir. Last year in Miami Beach, City Manager Jorge Gonzalez, who was making $273,000 a year and had been mired in a web of investigations, was forced to step down after seven of his employees were arrested in a federal corruption investigation. His six-figure pension remained intact. The arrests of the three Miami-Dade mayors followed news in July that the Securities and Exchange Commission had charged the City of Miami and one of its former budget directors with securities fraud, only a few years after the commission reprimanded the city for similar behavior. In May, a former mayor of Hialeah, Julio Robaina, and his wife, Raiza, were charged with failing to report income from high-interest loans totaling more than $1 million that they had made under an informal system involving friends and associates. The Robainas said they were innocent. In 2011, in the largest municipal recall election in the country, the mayor of Miami-Dade County, Carlos Alvarez, was removed from office after he gave large pay raises to close aides and then pushed for a significant increase in property taxes. This year, the State Legislature approved two ethics bills and six that focus on government transparency and accountability — the first time in 36 years that state lawmakers had passed ethics legislation. Mr. Krassner and others think legislators could do more. But many people seem resigned to the prevalence of officials who appear oblivious to ethical boundaries. “They get drunk on power,” said Katy Sorenson, who served on the Miami-Dade Board of County Commissioners for 16 years and runs the Good Government Initiative at the University of Miami, which educates elected officials about ethics and related issues. Image The mayors of Sweetwater and Miami Lakes were also charged with corruption in August. Credit The New York Times “There’s a certain psychology to some of the people who run for office here — they don’t think they’re going down the wrong track, but there’s a slippery slope,” she added. “There’s a lack of self-awareness, an immaturity, a brazenness, of feeling like a big shot. So when they’re arrested, they’re very surprised.” The persistence of political malfeasance — often involving the stereotypical envelopes stuffed with cash, delivered with knowing nods — perplexes those for whom public service is a noble calling. “Maybe it’s the heat,” said Ruth Campbell, 93, a former City Council member here and the curator of the Historic Homestead Town Hall Museum. Mrs. Campbell, who has lived in town since 1942, was sadly aware of Florida’s reputation as a haven for corruption. “We like to be distinguished,” she said, “but not like that.” Prosecutors said Mr. Bateman, among other things, had failed to disclose that the health care company, Community Health of South Florida Inc., secretly agreed to pay him $120,000 over a year to lobby on its behalf. By the time he was arrested, he had accepted $3,625, State Attorney Katherine Fernandez Rundle said. After the mayor’s arrest, a City Council member, Judy Waldman, told reporters, “I have zero tolerance for people using their public office to make money.” Ms. Waldman, who referred to Mr. Bateman only as “that individual,” said his activities on behalf of Community Health Care of South Florida were “just the tip of the iceberg,” and encouraged prosecutors to dig deeper. Mr. Bateman’s lawyer, Ben Kuehne, told The Associated Press that his client was “shocked” by his arrest and had “served the community for many years in an honest, dependable manner.” At City Hall on Friday, in a frame that contained photos of city officials, Mr. Bateman’s likeness had been concealed behind a paper copy of the city’s crest. But a day earlier, a group of his supporters rallied a couple blocks away, and Mr. Bateman, out on bond, showed up, shook hands and vowed to fight the charges.

Bribery and Kickbacks
Mayor
Florida
Miami-Dade County FL
Homestead FL
Steven C Bateman
Manuel L Marono
Michael A Pizzi


JPMorgan Chase Income Higher as Loan Provisions Fall

Abstract: JPMorgan Chase kicked off what was expected to be a mixed quarterly earnings season for big banks on Wednesday with a 23 percent increase in third-quarter income. After powering ahead for the last year on the strength of its trading operations, JPMorgan topped investor expectations with the help of improvement in its credit card business and a gain from money it had previously set aside to cover possible losses from bad loans. Net income rose to $4.42 billion, from $3.58 billion a year earlier. Earnings were a $1.01 a share, handily topping analyst forecasts for 88 cents. Earnings were 82 cents a share in the period a year ago. Revenue fell 15 percent, to $24.3 billion, from $28.8 billion, in the period a year ago. The results were the start of a rush of quarterly reports for the banks at a crucial point for the industry. Citigroup will report its earnings on Monday. Bank of America, Goldman Sachs, Morgan Stanley and Wells Fargo will release their results after that. The nation’s largest banks have returned to health since the financial collapse of 2008 in part because of ultra-low interest rates put in place by federal policy makers. They are charging ahead with plans to adapt to a tougher new regulatory environment, but the weak economy remains a worry, along with the banks’ ability to continue growing revenue. Jamie Dimon, JPMorgan’s chairman and chief executive, said he was “pleased to report” that the bank’s losses were easing and that he remained cautiously optimistic. Mortgage delinquencies, Mr. Dimon said, had leveled off and he expected credit card charge-offs to continue to fall. Still, he warned that losses remain elevated and could climb higher if the economy worsened. JPMorgan emerged from the global financial crisis in better shape than many rivals. But like other big banks, it still confronts potential losses stemming from bad home mortgages and the legal fallout from the spiraling foreclosure mess. Morgan’s Chase Retail Services announced earlier this month that as many as 56,000 mortgages had documentation problems, prompting calls for an industrywide investigation and a nationwide freeze on foreclosures. On Wednesday, the bank announced it had expanded its review to about 115,000 loan foreclosure files in 41 different states, and would correct the documentation issues and resubmit them within weeks. The move effectively will temporarily delay the bank’s foreclosure sales in most of the country, although it stops short of the nationwide moratorium that Bank of America announced earlier this week. Douglas L. Braunstein, Morgan’s newly appointed chief financial officer, said on a conference call with journalists that the bank was “comfortable with the process” and believed it acted appropriately since the underlying data on the forms was accurate. Even so, he acknowledged that fixing the problems would be expensive and the legal costs, stemming from both the state attorneys general investigation and private lawsuits, could quickly mount. “It will cost us some money to make sure we go back and it is done right,” he said. “The whole mortgage issue costs us so much money now, to me it is incremental” to the costs we are already bearing. But Morgan had offered some good news in its latest results. For the third consecutive quarter, the bank set aside significantly less money to cover current and future losses. Overall, Morgan set aside about $3.2 billion, a 67 percent drop from the $9.8 billion it allocated for losses a year ago. That sharp reduction was driven by modest improvements in housing and the job market, as well as signs that credit card borrowers were in better shape. Indeed, Morgan benefited by a $1.5 billion, or an after-tax gain of about 22 cents a share, from lowering the money it set aside for credit cards, as record charge-off levels start to slow. However, the bank did set aside about $1 billion to cover faulty mortgages that it is obligated to repurchase from Fannie Mae, Freddie Mac and private insurers. It also set aside another $1.3 billion to cover future mortgage-related litigation. Together, the charges reduced after-tax earnings by about 33 cents a share. But Mr. Dimon stopped short of saying the economy was turning around. Unlike the previous quarter, when Morgan bought back $250 million of its stock, the bank did not announce additional share repurchases. Nor did Mr. Dimon announce plans to begin restoring regular quarterly dividend payments to shareholders, but instead hinted that that investors would have to wait until 2011. Mr. Dimon had previously said that he would await further improvement in the economy and more clarity about minimum capital requirements to be imposed by regulators before contemplating a restoration of the dividend. Such a move, he indicated, could come in the second half of 2010. While the results were better-than-expected, the bank still faces headwinds. Its investment bank posted a $1.3 billion profit, about 33 percent less than a year ago. Despite fears that stock trading volumes would be sharply lower, stock underwriting fees were down slightly from the previous quarter and the bank profited from the resurgence in corporate bond deals in the early fall. It was also helped by about a $142 million reduction in the money it set aside to cover current and future losses. Trading results in fixed-income, currency and commodities trading, which suffered a highly publicized loss in the second quarter, fell about 38 percent from a year ago, to $3.1 billion. Chase’s consumer businesses, meanwhile, showed some improvement as losses began to ease. The credit card division posted a $735 million profit, after nearly two years of bleeding red ink. The retail bank earned about $907 million, although the mortgage business continues to lose money — albeit less than the bank projected. In September, Mr. Dimon said home mortgages are on track to lose about $5 billion, compared to the $7 billion that the bank had projected earlier this year. But in another troubling sign, revenue fell by about 7 percent, as the bank took in less fee income on deposit accounts. Morgan’s commercial bank reported record quarterly revenue, while its asset management business also posted solid results. Profit in its treasury services unit, which recently underwent a leadership change, fell 17 percent from a year earlier.

Company Reports
JPMorgan Chase & Co
Banking and Financial Institutions