When Traffic Piles Up, Drivers Sit and Publishers See New Opportunity

Abstract: With explosive population growth in Atlanta over the last decade, traffic engineers there are grappling with some of the worst jams in the country. But when marketers at Random House looked at Atlanta’s bottlenecks recently, they saw an opportunity: to pitch audio books as the antidote to road rage. A new promotion, Atlanta Listens, has placed billboards and advertising on the sides on more than 110 buses. The copy begins, “Make your commute more ... ” and ends with one of a number of adjectives, such as “magical” (with an image of the book “Harry Potter and the Deathly Hallows”) or “lighthearted” (with “The Nanny Diaries.”) “The campaign is really to communicate to the commuters of Atlanta, ‘Here’s more you could be doing in your car — you could be learning more or making your commute more romantic,’” said Amanda D’Acierno, director for marketing and publicity at Random House Audio. She said that traffic woes were not the only reason that Atlanta was chosen over other cities for the $200,000 promotion, which includes print ads, book festival sponsorships and street teams giving away audio books at parking garages. The city has also been a good market for Random House, ranking 1oth in audio book sales and 12th for print sales. According to a survey by AudioFile, a magazine for audio book enthusiasts, 53 percent of customers listen in their cars, compared with 24 percent who listen at home. In Atlanta, the average commuter drives 31 minutes each way, almost 20 percent longer than the national average. The Audio Publishers Association said that audio book sales represented about $923 million in 2006, a 6 percent increase over 2005. But even as the industry grows, audio book divisions generally must make do with meager marketing budgets that are spent riding the coattails of publicity for hardcovers. “I would guess this is the first time that audio books have been on billboards and the sides of buses,” Ms. D’Acierno said. It is also unusual — if not unprecedented — for a publisher to advertise a format over individual titles, though booksellers are hardly complaining. Pam Fromer, audio buyer for Borders Group, the bookstore chain, said that overall audio book sales (not just Random House titles) are up as much as 10 percent at the 15 Borders stores in the region as a result of the “Atlanta Listens” campaign, which started in August and will end in November. Borders is giving audio books prime real estate in displays at the front of some stores. “Audio is one of those categories that if you get someone to try it for the first time, you’ve pretty much created an audio book listener out of that,” Ms. Fromer said.

Random House
Book Trade
Commuting
Atlanta (Ga)


Bouygues to Take 1.4 Billion Euro Write-Down on Its Alstom Stake

Abstract: LONDON — The French conglomerate Bouygues said on Monday that it would take a 1.4 billion euro write-down on its stake in the transport and energy company Alstom. Bouygues, whose operations include telecommunications, construction and property units, is the largest shareholder of Alstom, with a 29 percent holding in the French industrial group that also operates in similar sectors, like construction and infrastructure. Alstom said last month that a decline in demand for new power plants around the world was weighing on its short-term financial outlook. Many energy companies have been holding back on investment in new facilities, as energy use, particularly among companies involved in heavy industry, remains subdued in both emerging and developed economies. In response, Bouygues said on Monday that it would reduce the value of its stake in Alstom to 3.1 billion euros when it reports its full-year earnings on Feb. 26. Bouygues said the write-down, equivalent to $1.9 billion, would not affect its overall cash position or operating performance. Shares of Bouygues fell less than 1 percent in early trading in Paris, while Alstom’s stock price rose less than 1 percent. Bouygues acquired its original stake in Alstom from the French government in 2006, and has progressively expanded its stake.


Virginia Republicans Weigh Court Challenge to Voting Rights for Felons

Abstract: Republican lawmakers in Virginia said on Monday that they were considering a court challenge to Gov. Terry McAuliffe’s decision to restore voting rights to more than 200,000 convicted felons, opening the door to a legal battle that could create uncertainties about their ability to vote in November. “Governor McAuliffe’s flagrant disregard for the Constitution of Virginia and the rule of law must not go unchecked,” Thomas K. Norment Jr., a Republican and the majority leader of Virginia’s State Senate, said. On Monday, Mr. Norment and another Republican, William J. Howell, the speaker of the state’s House of Delegates, said they had retained Charles J. Cooper, a prominent conservative lawyer who argued before the Supreme Court in support of California’s onetime ban on same-sex marriage, “to examine the legal options to remedy this Washington-style overreach by the executive branch.” Mr. McAuliffe issued an order on April 22 that effectively did away with his state’s Civil War-era limitations on voting rights for convicted felons, many of whom are African-Americans, by allowing those who have completed their prison and parole or probation time to vote. His action was hailed as a victory for enfranchisement but prompted a backlash from Republicans, who accused the governor of overstepping his Constitutional authority as part of a political gambit to get more Democratic voters to the polls in November. Mr. McAuliffe is a longtime political ally of Hillary Clinton, the likely Democratic presidential nominee, and Virginia could be a crucial swing state in November, but Mr. McAuliffe denied that the action was motivated by politics. “His predecessors and previous attorneys general examined this issue and consistently concluded Virginia’s governor does not have the power to issue blanket restorations,” Mr. Norment said in his statement. “By doing so now with the acknowledged goal of affecting the November election, he has overstepped the bounds of his authority and the constitutional limits on executive powers. An aide to Mr. Howell, Matthew Moran, said that no date had been set to file the lawsuit but that lawmakers intended “to move forward as quickly as possible.” Mark Herring, the state attorney general, who is a Democrat, is ready to defend Mr. McAuliffe’s order if it is challenged, said Mr. Herring’s director of communications, Michael Kelly. It is the latest conflict between Mr. McAuliffe’s administration and lawmakers from the Republican-controlled General Assembly, who have clashed over issues like gun rights , Medicaid expansion and a state Supreme Court appointment. A spokesman for Mr. McAuliffe said on Monday that the Republicans had not yet specified their legal rationale for challenging the restoration order, and accused them of playing politics with voting rights. “These Virginians are qualified to vote and they deserve a voice, not more partisan schemes to disenfranchise them,” the spokesman, Brian Coy, said. According to the Sentencing Project, a research organization in Washington, one in five African-Americans in Virginia are not allowed to vote. The group estimates that nearly six million Americans around the nation cannot vote because of felony convictions. Carl W. Tobias, a law professor at the University of Richmond School of Law, said he believed Mr. McAuliffe had the constitutional authority to restore the felons’ voting rights, but a lawsuit could impede voter registration ahead of the November election. “I think what they are likely to do is to go into state court and to ask for an injunction, basically to stop registration and voting by the people whom the governor has enfranchised,” Mr. Tobias said. He added: “With the elections coming, the stakes are really high, and so time really is of the essence, I don’t think there’s any question about that.”

Virginia
Terry McAuliffe
Voter registration
Ex Cons
Sentencing Project
Hillary Clinton
Charles J Cooper
2016 Presidential Election


Incentives Figure in Success of Netflix

Abstract: The star attractions at Netflix keep winning over new, and sometimes unlikely, fans. But one feature of the movie streaming service’s business model is less well known: the unusual way it offers incentives to its staff. Rivals struggling to compete with the company, which is led by its founder, Reed Hastings, might want to take a peek. Defying and converting skeptics with innovation has become standard operating practice for Netflix. An additional 3.3 million people subscribed last quarter, bringing the total to 23 million, while operating margins held strong at 14 percent. A new adversary sounds intimidated. Charlie Ergen, whose Dish Network bought Blockbuster out of bankruptcy, says he does not plan to challenge Netflix on streaming because of its “insurmountable lead.” Even Time Warner’s boss, Jeffrey L. Bewkes, who once likened Netflix to the Albanian Army, changed his tone recently and expressed some admiration for what the $12 billion company had accomplished. Part of the success may stem from the uncommon way Netflix rewards its people. Employees eligible for stock options can tailor the mix of salary and equity in their compensation packages. The amount of options used to be restricted, but the cap was lifted last year. Mr. Hastings took only about 9 percent of his $5.5 million pay in cash. Equally unusual is how Netflix doles out options. They are granted monthly instead of annually, as is typical. Given how Netflix shares swing wildly, this makes sense. About a fifth of them are also on loan to short sellers, who think the company is overvalued or the business model is not sustainable. This can help smooth volatility and reduce some frustration that might discourage managers. To wit, on Nov. 1, the shares were at about $167. A month later they were up to $200. And they opened 2011 at just over $178. Because of the dollar-cost averaging afforded employees, they can worry less about underwater options and more about how to keep Netflix a step ahead of the competition. Heeding Say on Pay Companies that ignore say-on-pay votes may pay a hefty price: lawsuits. Shareholders are speaking up on executive compensation with the voice they were given by last year’s financial overhaul legislation. Their advice is not legally binding, but that has not stopped disgruntled investors from calling in lawyers to enforce their views. The Dodd-Frank Act created say-on-pay to blunt criticism that executives were compensating themselves like rock stars. Beginning on Jan. 21, most public companies had to put pay packages for top officers to an “advisory vote” by shareholders. The law did not change directors’ fiduciary duties, so ignoring a thumbs-down verdict is allowed. Few boards have faced that option. On Friday, for example, just 27 percent of Goldman Sachs’s shareholders voted against 2010 pay of $18 million for its chief, Lloyd C. Blankfein. At last count, only 12 of more than 350 companies that have held meetings received less than majority support for their executives’ pay. Still, those few could face costly consequences. A negative vote can lead to bad publicity or the ouster of directors. But for Jacobs Engineering and Beazer Homes, which lost say-on-pay votes this year, it has meant lawsuits against management by major shareholders. The suits claim the votes were slam-dunk evidence that executive pay was excessive. By not altering pay after the votes, the suits argue, management unjustly enriched itself, breached its duties to shareholders and, in Jacobs’s case, wasted company assets. These are tough arguments to win. The law generally leaves compensation decisions up to the directors. It is easy to see the reasoning for that. Most shareholders do not pay enough attention to make informed decisions about corporate matters, and some others might have agendas that diverge from the interests of smaller investors. Still, executive compensation has generally soared, even when profits and share prices have fallen. Many incentives for chief executives are misaligned with shareholder interests. When that perception is wrong, boards should explain why. And when it is not, they are better off heeding shareholder concerns about pay, and adjusting accordingly than squandering more of their owners’ treasure on defending themselves in court. JEFFREY GOLDFARB and REYNOLDS HOLDING

Stock Options and Purchase Plans
Wages and Salaries
Netflix Inc
Executive Compensation
Boards of Directors
Subprime Mortgage Crisis


Japanese Stocks Recover Slightly, but Markets Still Feel the Turmoil

Abstract: The financial aftershocks from the earthquake in Japan gathered force on Tuesday as investors fled from riskier assets like stocks, oil and gold amid growing worries that the crisis could slow a global economy that only recently seemed to be getting back on its feet. Unnerved by a 16 percent drop in Japanese shares in the first two trading days of the week, stock markets slumped as investors sought havens like United States dollars and Treasury bonds , pushing interest rates lower. By the close of trading in New York, however, shares of United States companies recovered some of their losses after the Federal Reserve said it would keep its accommodative monetary policy in place to stimulate the United States economy. The Fed’s announcement brought calm on a day of market turmoil that raised painful memories for some of 2008, when the financial crisis froze capital markets and precipitated a similar rush for safety. “This was a very scary day for global stock markets,” said Carl B. Weinberg, chief economist at High Frequency Economics. After the roller-coaster session, the Standard & Poor’s 500-stock index, which at one point had been down 35 points, closed down 14.52 points, or 1.12 percent, at 1,281.87. The Dow Jones industrial average fell 137.74 points, or 1.15 percent, to 11,855.42. The Nasdaq fell 33.64 points, or 1.25 percent, to 2,667.33. On Wednesday in Tokyo, markets regained some lost ground, with the Nikkei 225 rising 488.57 points, or 5.7 percent, to close at 9,093.72. But on Tuesday, the uncertainty extended to energy markets, as analysts warned that diminished growth in Japan could prompt a sharp decrease in oil demand. “We don’t know the extent to which the post-tsunami Japan is going to grow, and whether or not there will be consequences for other countries as well,” said Chris Lafakis, an energy economist for Moody’s Analytics. Amid the flight to safety, oil prices fell $4.01 to settle at $97.18 a barrel, while gold dropped $30.70 to $1,395.70 an ounce. The 10-year Treasury note, meanwhile, rose 14/32, to 102 22/32. The yield fell to 3.30 percent, from 3.36 percent late Monday. The central fear is that the disaster — especially the danger of increased radiation exposure from stricken Japanese nuclear reactors — could rip a big hole in the supply lines of the world’s third largest economy and set back the global recovery. Some of the first ripples reached the United States on Tuesday as Subaru said it was canceling all overtime at its plant in Lafayette, Ind., which builds the Outback, Legacy and Tribeca models, to reduce the chance that it will run out of some parts from Japan. “The main economic shock is not the direct loss of business, but spillover effects in terms of damage to the power and transportation industries and disruptions to the supply chain,” said Ethan S. Harris, an economist at Bank of America Merrill Lynch. “Specifically, many auto and electronics firms rely on the affected region for parts.” As a result of the volatility, several debt offerings were postponed, while Toys “R” Us was forced to delay a planned syndicated loan. The ultimate impact on world growth is likely to be small, however. “The quake-ravaged economy, the world’s third largest, could lower economic activity in Japan as much as one percentage point, and shave off worldwide growth 0.2 percentage point in 2011,” said Bernard Baumohl, an economist at the Economic Outlook Group. The region affected by the quake accounts for only about 6 percent of Japanese gross domestic product, and economists calculate that the short-term effects might be eventually offset as Japan spends hundreds of billions to rebuild. Closer to home, a temporary reduction in American exports to Japan might trim 0.1 to 0.2 of a percentage point from United States economic growth in 2011, according to Stuart Hoffman, chief economist at PNC. One major exporter, General Electric, which designed the reactors at the Fukushima nuclear plant, fell for the second day in a row, closing down 1.6 percent at $19.61. G.E. has either built or licensed 92 nuclear reactors now operating worldwide — about 20 percent of the global total, according to Michael Tetuan, a spokesman for General Electric. But nuclear power development remains a small part of the company’s overall operation; it produces reactors in partnership with Hitachi. The business accounted for just $1 billion in revenues in 2010 — a tiny fraction of the $85 billion generated by its industrial supply business. “Nuclear is not a major piece of the puzzle for G.E.,” said Daniel Holland, an analyst with the investment research firm Morningstar. “This doesn’t move the needle a whole bunch.” Despite the problems in Japan, the Japanese yen strengthened, as speculation increased that big Japanese investors like pension funds and banks — Japan is the second-largest holder of United States Treasuries — would dump their overseas holdings and buy yen to return cash home. At the same time, there were signs that investors were unwinding other trading positions. With interest rates near zero at home, Japanese investors used yen to buy Australian and Canadian dollars, as well as the Brazilian real, to invest in higher-yielding assets there. Other foreign investors placed similar bets, bullish on those countries’ growth prospects. But as demand for the yen picks up, those currencies have weakened. The Canadian dollar fell 1.5 percent on Tuesday morning, while the Australian dollar fell around 2 percent. The Brazilian real has fallen nearly 4 percent since Friday. Across Wall Street, traders said the initial reaction among many hedge funds and institutional investors to the Japanese crisis was to sell first and ask questions later. “It’s definitely been risk-off since Friday,” said Ward McCarthy, chief financial economist with Wall Street investment bank Jefferies & Company. “Uncertainty tends to breed a desire for safety. As it becomes easier to assess what all of the ramifications are, I suspect that will recede.” For instance, Robin Thorn, who oversees the $1.3 billion PineBridge Global Equities mutual fund , decided on Sunday evening to cut the fund’s 9 percent position in Japanese stocks in half. With the help of his team of more than two dozen analysts in Tokyo — many who have been sleeping in their offices — Mr. Thorn sold off companies that had exposure to nuclear-plant construction. “That turned out to be the right thing in the shorter term,” Mr. Thorn said. But Mr. Thorn said he and his team were also looking for buying opportunities, saying he had increased the fund’s stake in companies that will play a role in Japan’s rebuilding. And on Tuesday afternoon as Japanese American Depositary Receipts and exchange-traded funds rebounded sharply from early lows, Mr. Thorn said he expected Japanese markets to rally. “We feel a lot of the emotional selling has been done,” Mr. Thorn said. “And it’s clear through the action of U.S.-based investors today that people are now trying to look for bargains.”

Stocks and Bonds
Japan Earthquake and Tsunami (2011)
Japan


Signs of a Rift in British Coalition Over European Union

Abstract: LONDON — A blunt warning from the United States to Prime Minister David Cameron over his plans to loosen ties with the European Union was echoed by Mr. Cameron’s coalition partner Thursday, opening new fissures here over Britain’s ambivalent attitude toward the 27-nation bloc. Nick Clegg, the deputy prime minister and leader of the Liberal Democrats, said risking Britain’s membership in the union was perilous, and he mocked a long-awaited speech on E.U. policy that Mr. Cameron is expected to make in the Netherlands before the end of the month. Mr. Clegg, who is a Dutch speaker and whose party supports the European Union, joked that he would be on hand to translate Mr. Cameron’s speech “from double-Dutch to just Dutch.” Mr. Cameron, whose Conservative lawmakers are increasingly critical of the European Union, has said he wants to renegotiate Britain’s relationship with the bloc and seek consent from voters for the outcome of those talks. Many observers expect him to make an explicit promise of a referendum in his upcoming speech — in part because Mr. Cameron’s party risks losing support to the Independence Party, which wants Britain to leave the union. The political temperature rose following an unusual, on-the-record intervention on Wednesday, in which a senior United States official argued that Britain was a more useful ally if it remained fully engaged in the European Union. Speaking in London, Philip Gordon, the assistant secretary of state for Europe, added that referendums held by other nations on E.U. agreements “have sometimes turned countries inward.” Britons pride themselves on their “special relationship” with Washington, and the possibility that it would be weakened by a movement away from the European Union is problematic for Mr. Cameron. Addressing parliamentary journalists in London, Mr. Clegg — who has been increasingly willing to take a different stand from Mr. Cameron on a range of issues — outlined a vision on Europe starkly at odds with that of the prime minister while asserting that such divisions need not affect the overall coherence of the coalition. That seems plausible, because practical decisions over E.U. relations will probably be delayed until after the next elections, scheduled for 2015. “When you have got one in 10 jobs in this country, three million people whose jobs are dependent in one way or another on our position as a full and leading member of the world’s largest single market,” said Mr. Clegg, “you play with that status at your peril.” “Do we lead or do we hang back in a subsidiary status?” Mr. Clegg asked. “Obviously, the Americans and others, quite understandably, say, ‘Right, you are a big nation, you’ve got big horizons, you’ve got big ambitions, you’ve got a big history — act big, don’t act small.’ That’s my attitude.” One argument in London is that the euro zone — which Britain never joined — will seek to integrate further and that this will require a new E.U. treaty. Many of Mr. Cameron’s supporters believe that in exchange for agreeing to that, he can wrest back some powers from Brussels, allowing him a new settlement that could be put to voters in a referendum. But Mr. Clegg said a new treaty might not arise and advised against promising a referendum before it was clear what the future held. “Why would you provoke a great national debate about nothing very much in particular in response to a document that hasn’t materialized yet and might never materialize?” he said. In a separate development, Gunther Krichbaum, chairman of the European affairs committee in Germany’s Parliament, said a referendum “could paralyze efforts for a better Europe and deeper integration.” “Britain would risk being isolated,” he was quoted as saying in The Guardian. “That cannot be in Britain’s interests.” Mr. Cameron’s official spokesman played down the controversy. “The prime minister’s view is that it is in the British national interest to be in the E.U., but he wants to change that relationship with the E.U. and to seek fresh consent for it,” he said.

Great Britain
EU
Euro Crisis
Nick Clegg
David Cameron
US Foreign Policy


U.S. Seeks to Focus Trial on Illicit Ties in Venezuela

Abstract: MIAMI — American prosecutors are seeking to introduce evidence in a federal trial that revolves around a suitcase filled with $800,000 in cash to show that the defendant, Franklin Durán, got rich through a string of illicit schemes involving Venezuelan officials that netted him and a partner more than $100 million. The accusations of rampant corruption involving Mr. Durán, a Venezuelan businessman, which are laid out in court documents, could make the government of President Hugo Chávez of Venezuela a central focus of the trial. Opening statements are scheduled to begin here on Tuesday in United States District Court. The case involves accusations that a group of Venezuelan businessmen tried to pressure Guido Antonini Wilson, a Venezuelan-American businessman who was caught with the suitcase in Buenos Aires in August 2007, to cover up the true purpose of the $800,000. Prosecutors contend that the money was intended to be a campaign contribution from Mr. Chávez to Cristina Fernández de Kirchner, who was running for president of Argentina and was elected two months later. Mr. Wilson returned to Florida after being caught with the money in Argentina. He approached the F.B.I. about pressure he said he was receiving to remain silent. Mr. Wilson agreed to wear a recorder and lured the Venezuelans to a series of meetings that were videotaped by investigators. In December, prosecutors announced that five men — four Venezuelans and an Uruguayan — had been indicted, accused of participating in the cover-up. Four of them were soon arrested and the fifth suspect, Antonio José Canchica, a high-ranking member of Venezuela’s intelligence service, remains at large. They were charged with illegally serving as agents of a foreign government, Venezuela. Three of the four men who were arrested, including Carlos Kauffmann, Mr. Durán’s business partner, have pleaded guilty and are expected to testify. Mr. Wilson, who prosecutors say was threatened with physical harm and was offered a bribe of $2 million, is likely to be the first major witness to testify. The trial could heighten tensions between the American and Venezuelan governments. The case has drawn angry reactions from Mr. Chávez and Mrs. Kirchner, who accused the Bush administration of trying to drive a wedge between Argentina and Venezuela, which have grown closer in recent years. In court documents, prosecutors argue that Mr. Durán and Mr. Kauffmann were motivated to help the Venezuelan government in the cover-up because of a long history of illicit dealing with Venezuelan officials. The men began working together about 10 years ago, the documents said, and they own fancy Florida homes and enjoy racing cars. According to court filings, Mr. Durán and Mr. Kauffmann received fees from members of the Venezuelan National Guard for handling kickbacks from companies doing business with the National Guard. They took fees for directing money from the Cojedes state government to a bank, the court documents said. They also paid kickbacks to a high-level government official to protect their construction projects, according to the documents. The recipient was Gov. Jhonny Yánez Rangel of Cojedes, according to a person briefed on the case. A spokesman for Mr. Yánez Rangel said Monday that he was unavailable for comment. In addition, they received $30 million in construction contracts in the state of Vargas and gave 10 percent of the money to two high-level officials, prosecutors said in court filings. Judge Joan A. Lenard of the United States District Court has not yet ruled on the admissibility of these accusations in court. Edward Shohat, Mr. Durán’s lawyer, said in court filings that the accusations of previous suspect dealings were irrelevant. He has also said in court documents that American officials pursued the case to try to embarrass the Chávez government.

Venezuela
Suits and Litigation
Chavez Hugo
Durán Franklin
Courts


University of Cincinnati to Pay $4.85 Million to Family of Man Killed by Officer

Abstract: WASHINGTON — The University of Cincinnati has agreed to pay $4.85 million to the family of an unarmed black man who was shot to death in July by one of its police officers, a settlement that also requires the college to provide an undergraduate education to his 12 children, create a memorial to him on campus and include his family in discussions on police reform. The family of Samuel DuBose , who was killed by a white officer during a routine traffic stop in what a prosecutor called a “senseless, asinine shooting,” reached the settlement after two days of mediation, the university said Monday in announcing the deal. It estimated the total cost to the university, which is publicly funded, to be $5.3 million. The agreement, which does not require the university to admit liability, includes a promise that the university president, Santa J. Ono, will apologize to the DuBose family. In an interview, Dr. Ono said the university felt a “civic responsibility” to go beyond the kind of cash settlement customary in police-involved deaths. “I wanted to take care of the family and the next generation of the family,” Dr. Ono said. “And I wanted it to be absolutely clear that the University of Cincinnati cares not only about this family, but also about peace within the city of Cincinnati.” One of Mr. DuBose’s daughters, Raegan Brooks, 18, who served as the family’s representative in the talks, said she was “very comfortable” with the settlement. Still, she added, “At times I wanted to walk out because I felt like they were putting a price on my father’s life.” Ms. Brooks, a student at Cincinnati State Technical and Community College, said she had been registered to attend the University of Cincinnati when her father was killed, but decided “it felt kind of unloyal for me to go there.” She intends to finish her two years at the community college and transfer to the university. Image Photographs of Samuel DuBose near where he was killed. The University of Cincinnati has agreed to provide a free education to his 12 children. Credit Tom Uhlman/Associated Press Mr. DuBose, 43, was shot and killed on July 19 by Officer Ray Tensing, who pulled him over in a Cincinnati neighborhood adjacent to the campus because his car lacked a front license plate. The shooting was captured on a body camera, and Officer Tensing, who was fired from the department, faces trial on a charge of murder. The death, amid an intense national debate over race and policing, raised questions about whether the university’s police force had the experience and training required to enforce laws in complex urban neighborhoods. The university has since created a community advisory council, led by a prominent African-American judge, and the settlement calls for a DuBose family member to participate in the panel. Mr. DuBose’s sister, Terina DuBose Allen, an educational consultant in Columbus, said the provision “brings us peace with the fact that they are going to make some reforms.” The deal, mediated by Billy Martin, a Washington lawyer whose clients have included basketball stars and other prominent figures, appears in line with other recent settlements of cases involving police officers. The City of Baltimore agreed in September to pay $6.4 million to the family of Freddie Gray, an unarmed black man who suffered a fatal spinal injury in police custody. The estate of Eric Garner, who died in New York after an officer used a chokehold, a banned maneuver, to restrain him, settled with the city for $5.9 million. In Cleveland, a jury awarded $5.5 million to the estate of Kenneth Smith, a hip-hop artist who was fatally shot by an off-duty officer. Mr. DuBose is not the first black man to die as a result of an encounter with the University of Cincinnati police, and he will not be the first to have a memorial on campus. Kelly Brinson, 45, a psychiatric patient, and Everette Howard, 18, a student, died in 2010 and 2011 after campus officers fired stun guns at them, according to lawsuits filed by their families. The settlement with the Howard family led the university to erect a bench and a plaque near the spot where he died, said Al Gerhardstein, a civil rights lawyer in Cincinnati who represented that family and also represents the DuBoses. Mr. Gerhardstein has made what he calls “more comprehensive” settlements a signature of his work. Monday’s announcement was timed to coincide with the holiday commemorating the birthday of the Rev. Dr. Martin Luther King Jr., Mr. Gerhardstein said. He called the deal a product of “the type of collaborative, peaceful work” that Dr. King stood for.

Police Brutality,Police Misconduct,Police Shootings


No Problems With the Prison Next Door

Abstract: If you want to live at 100 11th Avenue, a luxury condominium building in West Chelsea with a fancy architectural pedigree, it will probably cost you a couple of million dollars, or at least $10,000 monthly rent. For your grand fee, you will get wide open vistas of the Manhattan skyline and views of the Hudson River all the way down to the Statue of Liberty . But many of the apartments in the building have views of something else, too: the roof of the building next door, where women in dark green uniforms can be seen milling about under a protective bubble made of chain-link fence. The residents of the adjacent building have some of the same views as the condos next door — except these people cannot wait to move out. That is because 100 11th Avenue , a building designed by the Pritzker Prize -winning architect Jean Nouvel, presses right up against the Bayview Correctional Facility, a medium-security prison for women. “We called it the naughty girls’ club,” said Holly Parker, a managing director at Prudential Douglas Elliman and the director of sales at the Nouvel building. “We never said the p-word.” Two weeks ago, the last unsold apartment at 100 11th Avenue went into contract, and the price per square foot for the building averaged about $1,850, Ms. Parker said; that is nearly $600 higher than the average per-square-foot price for Chelsea condos in the fourth quarter of last year, according to the appraisal firm Miller Samuel. So as it turns out, the only thing more surprising than the building’s next-door neighbor is the conclusion that in the end, the “p-word” did not matter much at all. “The building did not appear to be stigmatized by it,” said Jonathan Miller, president of Miller Samuel. The apartments did take several years to sell out, Mr. Miller said — a few are now back on the market, including one asking $16.9 million — and some were heavily discounted from their original asking prices. But that was really a function of the market, he continued, not the neighbors. “Would they have sold quicker or at a higher price if the prison wasn’t there?” he said. “Yes, there’s potential there, but it’s not a make-or-breakout issue.” He paused to have a chuckle. “Breakout!” Brokers who did deals at 100 11th Avenue said there were certainly buyers for whom the jumpsuit view was a no-no, but plenty of people were unperturbed, and some even found the grit appealing. “I show my friends when they come over,” said Joseph Wald, as he walked his two French bulldogs around the block. “There’s the view of the water, there’s the view of the city, and there’s the view of the prison. It’s a great conversation starter.” One woman, who works for a resident of the building, said that once in a while, she would wave at the inmates. The response, unfortunately, is not always friendly. “They’ve flipped us off a couple of times,” she said with a smile. In the suburbs, appraisers said, this might be considered a problem. But Michael Vargas, co-founder of the Vanderbilt Appraisal Company, said Manhattanites were not terribly interested in what happened next door, so long as the neighbors were not smelly or loud. “A luxury building like this is an enclosed environment,” Mr. Vargas said. “People are more concerned about the finishes, the quality, the luxury amenities and the view.” And the prison building, residents pointed out, is discreet (no bars, only very thick screens) and actually rather attractive. The orangeish brick structure, which has some nice prewar detail on the facade, was constructed in 1931 as a Y.M.C.A. for merchant seamen. Steve Crotch, another resident at the Nouvel building, said that despite the condominium’s fabulous facade — it is made up of hundreds of panes of glass that hang together like a shattered mirror just before the pieces fall to the floor — he felt it was the prisoners who were the victims of the view. “I feel a bit like we’re rubbing it in,” he said. A medium-security prison like Bayview houses a range of inmates, including well-behaved violent offenders and nonviolent offenders whose crimes were severe, according to the State Department of Corrections. That could mean people convicted of a variety of crimes, including murder, robbery and selling drugs. Most of the women at Bayview are nearing the end of their sentences or are in work-release programs. For about five hours during the week and eight hours on weekends, Bayview inmates are permitted out on the roof to take in the air. They can choose between the exercise area, which has sweeping city views, and a smaller deck, lined with gray plastic picnic tables, that has straight-on views of the Hudson River. There is a third recreation area for inmates who misbehave. It has no view. River or no river, 11th Avenue was a scary place when Bayview opened in 1974, said Wendy A. Featherstone, the prison superintendent, who has worked at the facility on and off since 1983. But today, the neighborhood is a parade of art galleries and suede loafers, and the juxtaposition of the Nouvel design, with Chelsea Piers across the street and the prison up the block, is a lot like the architectural equivalent of riding the subway. “The person you’re sitting next to might be the wealthiest person, but they’ve chosen to take the train,” Ms. Featherstone said. “It’s New York life.” In recent years, rumors have been circulating that Bayview is soon to close, but the Department of Corrections said there was no truth to them. And if the wisdom of a one famous New Yorker is to be believed, that should be no cause for concern. “There’s an old George Carlin joke about how the safest place to live is right next to a prison,” said Jonathan Berkowitz, a dog walker who has a client in 100 11th Avenue. “If someone escapes, what do you think they’re going to do? Stick around?” he continued in a perfect Carlin rasp. “No! They’re going to run like hell!”

Chelsea (NYC)
Real Estate and Housing (Residential)
Prisons and Prisoners
Bayview Correctional Facility


Sorry, Cubs Fans: You’re Probably Doomed

Abstract: The road ahead is most likely a brief climb, then a steep downhill plunge. Having clinched the National League Central, the Chicago Cubs will now continue motoring toward a 100-victory season and the best record in the major leagues. Then, in all probability, they will meet their inevitable doom once again. That is not a sentence any Cubs fan, like myself, wishes to write, and it has absolutely nothing to do with black cats, billy goats or Steve Bartman . Alas, I fear that the Cubs will have very little chance of winning the World Series next month simply because of cold, hard statistical baseball trends — and a little bit of bad history. Early Friday, on fan websites and in the streets of Wrigleyville, there was a great deal of celebration now that the Cubs were officially the N.L. Central champions . There was also some understandable, if misplaced, optimism. After all, the Cubs are clearly the best team in baseball, on the field and on paper. They’re stacked, and stoked. Image Cubs pitcher Kyle Hendricks is a leading candidate to win a Cy Young Award this year. Credit Morry Gash/Associated Press They feature a 2015 Cy Young Award winner (Jake Arrieta), this year’s leading Cy Young candidate (Kyle Hendricks), two most valuable player candidates (Kris Bryant and Anthony Rizzo), the fastest-throwing closer in the world (Aroldis Chapman), a remarkably flexible lineup and a lovable manager, Joe Maddon, whose eccentric, throwback hunches turn out just fine. And their digitally oriented president of baseball operations, Theo Epstein, is well versed in the fine art of snapping historic losing streaks, having accomplished the impossible with the Boston Red Sox in 2004. But then there is statistical reality: Since 1995, when Major League Baseball’s playoff system first consisted of a minimum of eight teams, only four clubs with the best regular-season record went on to win the World Series. On five occasions in that 21-season span, teams shared the best record, so there were actually 26 clubs with the “best record.” Four for 26 is a .154 batting average, which cannot be very heartening for a Cubs fan. Winning 100 or more games is an even poorer indicator of World Series success. Since 1995, 21 teams have won 100 or more games in the regular season. Of those, only the 1998 Yankees and the 2009 Yankees went on to win it all. We all remember what happened to the 2001 Seattle Mariners, who won a remarkable 116 games during the regular season and then were rudely routed by the Yankees, four games to one, in the American League Championship Series. Image Kris Bryant, last year’s National League rookie of the year, may end up being this year’s most valuable player. Credit David J. Phillip/Associated Press There is also the worrisome issue of how the Cubs have recently performed in the postseason. Since 2007, they have been swept in three of their four playoff series and have an overall record of 4-11, including a wild-card game win. And there is the matter of potential postseason opponents, which is also not particularly encouraging. The Cubs’ first playoff series will almost certainly be against the winner of the National League wild-card game. That could mean the Mets, who destroyed the Cubs last October, or the San Francisco Giants, who win it all whenever the year is an even number. Guess what year this is? The St. Louis Cardinals would be an easier, but less likely, opponent. If the Cubs advance, then comes the N.L. Championship Series, possibly against the Los Angeles Dodgers, one of the hottest and most talented teams in the league, and now featuring Clayton Kershaw and his resurgent arm. Finally, in a possible World Series, any American League champion will own home-field advantage because of the All-Star Game result. All this bad stuff does not necessarily mean Cubs fans should abandon their dreams. For what it is worth, last week the data-driven FiveThirtyEight website gave the Cubs a fairly generous 23 percent chance of winning the World Series , although that is a lot lower than it set Donald J. Trump’s odds of winning the presidency. The Westgate Las Vegas SuperBook places the Cubs’ championship odds at 5 to 2, making them the favorite. Image Anthony Rizzo, who is also an M.V.P. candidate, has over 30 home runs and over 100 R.B.I. for the Cubs this season. Credit Morry Gash/Associated Press There was also Maddon’s assertion to reporters, just before the Cubs clinched the division, that his team had “much larger baseball fish to fry in our skillet.” But ultimately, we are talking about the Cubs, so their fans should take necessary precautions while preparing for the worst. In New York, they might want to head to Kelly’s Sports Bar in the East Village, which bills itself as the lone home in the city for fans of the Chicago Cubs and the Buffalo Bills, who once lost four straight Super Bowls and have not made the N.F.L. playoffs in the 21st century. Kelly’s is a place where losers go on a regular basis. “There’s something about the long-term suffering that makes them prouder about the character-building,” said Al Landess, manager at the tavern. “Being able to endure such agony, the payoff is bigger.” Landess fully grasps the October landscape facing both the Cubs crowd and his place of employment. “It will either be ‘Here we go again,’ or utter bliss,” he said. “At least get ’em into the N.L.C.S., for the sake of the bar. We welcome criers.”

Baseball
Chicago Cubs
World Series
Statistics


‘Clear’ Plan for Airport Security May Be Revived

Abstract: Verified Identity Pass, a company founded by the entrepreneur Steven Brill , offered travelers a tempting proposition: pay up to $199 a year, submit to a fingerprint and iris scan, and skip to the front of interminable airport security lines. But last June, the company left its roughly 200,000 paying customers stranded, saying that it was ceasing operations and did not have cash to offer refunds. Now it appears those customers will get a break. Kurtis Fechtmeyer, an investment banker based in Emeryville, Calif., said on Tuesday that his new investment group, Henry Inc., had signed a letter of intent with Morgan Stanley, the defunct company’s largest debt holder, to buy its assets and reopen its fast-lane security service, called Clear. Mr. Fechtmeyer said his group thought it could bring back the service as soon as this holiday season. It will offer former Clear members, some of whom had paid for years of the service in advance, the option of rejoining with their membership intact. “People are still desperate for convenience at security checkpoints, and the government is very interested in having more registered travelers whose identities are verified,” he said. “There is still strong demand for this service.” If the former members choose not to sign up, Mr. Fechtmeyer said, their personal information will be destroyed. The fate of that data had been a source of worry for some Clear customers. Mr. Fechtmeyer, a former managing director of FBR Capital Markets, an investment bank, had been helping Clear secure extra financing before it shut down. His investment group is composed of family-owned funds in the Bay Area and elsewhere and at least one principal investor whom he declined to name because the deal was not yet completed. Word of a possible new life for the Clear service surfaced ahead of a hearing that a House Homeland Security subcommittee will hold on Wednesday to discuss the future of the Transportation Security Administration’s registered traveler program. Mr. Fechtmeyer’s wife, Alison Townley, also a principal of Henry, will testify. The vision for the Clear service was first laid out soon after the 9/11 attacks in a Newsweek column by Mr. Brill, the founder of Court TV and American Lawyer magazine. He wrote that a private company could solve the problems of security and long lines in airports with a smart identification card, backed by biometric tests, that would allow members to pass through special lines at airports. Verified Identity Pass, the New York-based company he created to pursue that idea, required people to go through a lengthy enrollment process, give up personal information and have an iris scan and fingerprints recorded. In return, they got to bypass security lines, accompanied by Clear “concierges” who were stationed at airports like Kennedy International. In its four years of operation, V.I.P. raised $90 million in financing from the likes of Spark Capital, Baker Capital, Lockheed Martin, General Electric and Lehman Brothers. But it became known less for its service than for a string of controversies. Mr. Brill was forced out of the company by investors earlier this year and later sued over breach of contract, winning a million-dollar judgment. Last year, a company laptop containing the personal information of some 33,000 customers was lost for a week at San Francisco International Airport (it was later found and the information had apparently not been accessed). When the Clear service ceased operations over the summer, after backers could not agree on how to restructure its debt, some members filed a class-action lawsuit, accusing the company of fraud and of breaching its contracts. But people involved with the company say it was near profitability when it shut down. That is one reason Mr. Fechtmeyer and Ms. Townley are optimistic that they can turn the Clear service into a successful business. They say they have already begun to meet with representatives from the Transportation Security Agency and Clear’s partner airports, some of which said “you cannot open soon enough,” according to Ms. Townley. They also said that they conducted a survey of Clear customers over the summer, and that 70 percent said they would return to the service. Another 20 percent said they would return depending on which airports were included. The new buyers are developing ways to allow people to sign up for the service directly at the airport — presumably when they are confronted in person with a long, time-wasting security line. Mr. Brill, who now runs Journalism Online, a venture developing ways for newspapers to charge for online access, was cautiously enthusiastic about a new life for Clear. “Assuming they comply with the privacy requirements of the program, I think it would be great,” he said. “The way the company got shut down was at best irresponsible. If someone is going to try to make it up to those customers, I think that’s a real good thing.”

Verified Identity Pass
Airports
Security and Warning Systems
Brill Steven T


In Vermont, a Bank That People Still Trust

Abstract: ORWELL, Vt. — Not much has changed over the years at the First National Bank of Orwell. Not the gilded chandeliers and teller’s booths with brass bars separating employees and customers. Not its view of the village green across the street. And most certainly not its ability to make loans, even as the big-city banks are cutting back. “Demand is up, there’s a tight credit market out there, and we benefit from having money available,” said Bryan Young, the vice president. “We’re very particular on what and who we take, and there’s no need to take anything less than solid credit.” While many of the nation’s large and midsize banks are staggering under the weight of bad mortgages piled up during the housing boom, the First National Bank of Orwell, Vermont ’s smallest bank, founded in 1832, is having its best year in recent memory. Loans are up 22.6 percent from a year ago, and deposits are up 7 percent in the same period, Mr. Young said. The bank has $36.5 million in assets. “If the banks maintained the lending standards that they had established in the past, and had not and did not buy a lot of securities from Fannie Mae and Freddie Mac, they’ve got no problems and they’re sound,” said James F. Gatti, a finance professor at the University of Vermont. “There is a value to sticking to your knitting, if you will,” Mr. Gatti added. “And I think banks that did will prosper, and prosper nicely, in the next few years.” Of course, not all small banks have sailed through the financial crisis . Some invested heavily in Fannie Mae and Freddie Mac, the mortgage finance companies that were effectively nationalized in September, and must now write off that debt. Others, especially in places like Florida and Nevada, are having problems after making loans to contractors who cannot sell or finish homes. There is concern in some circles that Congress's decision, as part of an economic bailout plan, to raise bank insurance to $250,000 from $100,000 could prop up problem banks that might otherwise fail or merge with other institutions. And while well-managed community banks have weathered the storm, the bread-and-butter of their portfolios are mortgages and commercial loans, which could face greater risk as the economic slowdown deepens and unemployment rises. But for the moment, most of the country’s smallest banks are doing well, in large part because they, like the bank here, did not get into subprime loans, said Karen Tyson, a spokeswoman for the Independent Community Bankers of America, a trade group that represents small banks. “There are about 8,500 banks, and a majority of those are not having the challenges that the larger institutions are having,” she said. “They are in a position to withstand this, and they want to help the country recover.” Indeed, while a Federal Reserve Board survey released Monday found that banks over all had tightened lending on everything from commercial real estate to residential mortgages since July, First National still has plenty of capital to lend and has not had to restrict lending, Mr. Young said. “Nothing’s really changed,” he said. “We haven’t tightened anything in particular.” First National, whose main branch is next to a village store where local residents sit on the porch, drink coffee and chew the fat, has stayed successful because its employees know the area and their customers. “Having the borrower sit in front of us is very meaningful,” Mr. Young said. “We’re not massive brokers, trying to underwrite a loan from the 55th floor of an office somewhere. There’s serious value in looking someone in the eye and understanding what their drive is, where they’re coming from and how serious they are about the project.” The employees at the branches here and in neighboring Shoreham also know where a building project is and what it looks like. “We benefit from knowing what house they’re talking about, what shape it’s in and what neighborhood,” Mr. Young said. “We benefit from a very detailed knowledge of our community, its people and its geography.” Many times, the project is on one of the dairy farms that dot the verdant, rolling hills here. Or a couple are asking for a mortgage to buy their first home. No matter who the prospective borrower is, the bank requires a 20 percent down payment for every loan, Mr. Young said. As bigger banks fail or merge, some community banks are absorbing growing numbers of depositors, while strengthening community ties and championing their conservative approach to lending. The increase in deposit insurance has helped, said John S. Carusone of the Bank Analysis Center in Hartford, Conn., which provides data to small banks in 11 states on the East Coast. “They may be viewed as a safe haven for retail and commercial customers that are disenchanted with the performance of larger banks,” he said. Such has been the case at the Bank of South Carolina, which has four branches in the Charleston area. The bank’s growth last month was the biggest in its 21-year history, with nearly $15 million in new deposits. The president and chief executive, Hugh C. Lane Jr., said his bank had grown carefully and refused to take risky investments. Like Mr. Young, Mr. Lane prides himself on providing personal service. “The cardinal rule of banking,” Mr. Lane said, “is to know your customer.”

First National Bank
Vermont
Banks and Banking
Mortgages


Race's Future in Australia Unclear

Abstract: MELBOURNE — The Australian Grand Prix has a contract to stay put until 2015, but that has not stopped questions about its future in Melbourne. In the weeks preceding the Grand Prix, the first of the Formula One season, Bernie Ecclestone, the promoter of the series, said he would have no problem if Melbourne dropped the race, because it is not a lucrative. The race is staged in the late afternoon local time, which means it is shown early in the morning in its strongest market, in Europe, costing the circuit money. Ecclestone has repeatedly asked for the race to be run at night, but the organizers do not want to invest in lighting. Local politicians have said that the government have ended up losing money on the race, which was estimated last year to cost about 50 million Australian dollars, or $52 million, to stage, and that tax funds could be better spent elsewhere. In addition, environmental groups have complained about using Albert Park, a public space, for the race. In an interview Saturday in the Melbourne newspaper The Age, Ron Walker, the chairman of the Australian Grand Prix Corporation, defended the costs by comparing them to those of other sports in the city. Walker was lord mayor of the city from 1974 to 1976, and he brought the race from Adelaide to Melbourne in 1996. “People don’t stop to think that the tennis center has consumed about $650 million already of taxpayers’ money, and there’s another $285 million to go in order to keep the tennis there until 2026,” he said, referring to the home of the Australian Open. “Across the road, the government has just spent on a soccer stadium $268 million.” The Australian Financial Review reported Friday that business leaders were urging the government in Victoria state, where Melbourne is located, to negotiate a new contract while Ecclestone, 81, is still in charge of such deals. Paul Stoddart, an Australian and a former Formula One team owner, said that because of the longstanding relationship between Ecclestone and Walker, Australia paid only one-twelfth of what some other countries did for the rights to hold a race. Simon McGrath, the head of Accor hotels in Australia, called for local business to support the event. Accor owns 19 hotels in Melbourne. “Everyone believes it should be kept,” he said of the race, “but the government is under pressure cost-wise.” McGrath said occupancy rates at hotels have remained high during the global financial crisis, thanks to the city’s sporting events: Australian Open tennis, the Grand Prix, the Masters golf tournament and the Spring Racing Carnival, a horse race. The Grand Prix Corporation estimates that races generates about 70 million dollars for the local economy, but opponents peg that total at less than 40 million dollars. In 1996, the race cost taxpayers just 2 million dollars, but that has increased over the years to an estimated 50 million dollars last year.


Indian and Pakistani Troops Clash Again on Kashmir Line

Abstract: NEW DELHI — Indian and Pakistani troops exchanged heavy gunfire overnight Tuesday, after days of fighting that has left at least 17 civilians dead and dozens wounded on both sides of the Kashmiri frontier. Each country blames the other for violating a longstanding cease-fire, and neither has begun a meeting of commanders at the border, the traditional mechanism for de-escalating such standoffs. Pakistani officials said that Indian forces began firing without provocation on Tuesday night, hitting villages near the boundary between the two sides, and that a woman died on Wednesday of injuries sustained overnight. Pakistani news media reported the death of another civilian hit during the day on Wednesday. At least 10 Pakistani civilians had died and 42 had been wounded in three days, military officials said Wednesday. On the Indian side, officials said Wednesday that two women were killed and 12 people wounded on Tuesday night. They said that Pakistani forces were aiming mortars and small-arms fire at villages more than a mile beyond the de facto border. India had reported the deaths of five civilians overnight Monday. D. K. Pathak, the chief of India’s border security force, said that Pakistan might have stepped up attacks to provide cover for infiltrators, or to destabilize the Indian state of Jammu and Kashmir before elections. “No, so far none of the parties have intervened, nor have they asked for a flag meeting, and we have no immediate plans of doing that,” Mr. Pathak told NDTV, a news channel. “Let us see how the situation unfolds.” Pakistan issued a strongly worded statement on Tuesday, saying Indian forces had been firing and shelling for seven days and had killed four Pakistani civilians on Monday, the Muslim holiday of Eid al-Adha. The statement said Prime Minister Nawaz Sharif “extended a hand of friendship to India,” a reference to his visit to New Delhi for Prime Minister Narendra Modi’s swearing-in in May. It went on to say that, by canceling planned talks between the foreign secretaries of the two countries, “the Indian side has shunned all our peace overtures.” “We hope that the Indian side would give peace a chance,” said the statement, issued by Sartaj Aziz, Mr. Sharif’s national security adviser. It went on to say that “all our efforts to secure peace and tranquillity” had brought no cooperation from India. On the Indian side, the village of Arnia, nearly two miles from the dividing line, has taken the brunt of mortar firing. Dharmendra Pareek, a senior border guard in the region, said the village was only around 3,000 feet wide and that damage from any mortar shell extends 1,000 feet in every direction, so that firing was bound to harm civilians. He said that Indian troops did not intentionally target Pakistani civilians and that those hit were living beside border posts. Thousands of villagers in Indian-controlled territory have fled to safer areas. Devi Das, who lives in a village around half a mile from the frontier, said 90 percent of his neighbors had left. “The sense of fear because of shelling is so strong that we can’t live in the village,” he said in a telephone interview. “Even last night, the roofs of several houses were damaged, and parts of houses collapsed.”

India
Pakistan
Kashmir and Jammu
Military
Civilian casualties


CBS Says James Corden Will Start as ‘Late Late Show’ Host in March

Abstract: CBS said on Thursday that James Corden would debut March 9 as the host of the network’s “Late Late Show.” Mr. Corden, a British comedian who will be a new face to virtually the entire American audience, is succeeding Craig Ferguson, who is ending his 10-year run on the late-night show Dec. 19. To the extent Mr. Corden is known in America, it most likely is for winning the Tony Award for his performance in the play “One Man, Two Guvnors.” CBS will fill the roughly two-month period before Mr. Corden’s arrival with guest hosts. The network also announced that Mr. Corden would have a fellow Briton, Ben Winston, as his executive producer. Mr. Winston currently serves as executive producer of the British version of “The X Factor.”


U.S. Was Warned of System Open to Cyberattacks

Abstract: WASHINGTON — The inspector general at the Office of Personnel Management, which keeps the records and security clearance information for millions of current and retired federal employees, issued a report in November that essentially described the agency’s computer security system as a Chinese hacker’s dream. But by the time the report was published, Chinese hackers had already cleaned out tens of thousands of files on sensitive security clearances, and were preparing for a much broader attack that ultimately obtained detailed personal information on at least four million current and former government employees. Even today, the agency is struggling to patch numerous vulnerabilities. A number of administration officials on Friday painted a picture of a government office struggling to catch up, with the Chinese ahead of them at every step. The agency did not possess an inventory of all the computer servers and devices with access to its networks, and did not require anyone gaining access to information from the outside to use the kind of basic authentication techniques that most Americans use for online banking. It did not regularly scan for vulnerabilities in the system, and found that 11 of the 47 computer systems that were supposed to be certified as safe for use last year were not “operating with a valid authorization.” The problems were so severe for two systems that hosted the databases used by the Federal Investigative Service, which is responsible for the background investigations for officials and contractors who are issued security clearances, that the inspector general argued for temporarily shutting them down because the security flaws “could potentially have national security implications.” Hackers in China apparently figured that out months before the report was published. Last summer a breach was detected that appeared aimed directly at the security clearance records — information that could help a determined hacker gain access to email or other accounts belonging to those entrusted with the nation’s secrets. While upgrades were underway, a much broader attack occurred, apparently starting in December. Before it was detected, personal information on at least four million people was apparently downloaded by a patient, well-equipped adversary — and the number is likely to grow. As one senior former government official who once handled cyberissues for the administration, who would not speak on the record because it could endanger the person’s role on key advisory committees, said on Friday, “The mystery here is not how they got cleaned out by the Chinese. The mystery is what took the Chinese so long.” Researchers and government officials have determined that the Chinese group that attacked the office was probably the same one that seized millions of records held by the health care firms Anthem and Primera. Based on the forensics, experts believe the attackers were not part of the People’s Liberation Army, whose Third Department oversees much of the military’s cyberintelligence gathering. Rather they believe the group is privately contracted, though the exact affiliation with the Chinese government is not known. Image Workers outside the Office of Personnel Management. Its computer system was hit by attackers. Credit James Lawler Duggan/Reuters For the Obama administration, which came to office holding East Room events on cybersecurity and pressing Congress, for years, to pass legislation that would allow the private sector to share information with the government, what has happened at the Office of Personnel Management can only be described as a case study in bureaucratic lethargy and poor security practices. In the most egregious case cited by the inspector general, outsiders entering the system were not subjected to “multifactor authentication” — the systems that, for example, require a code that is sent to a cellphone to be entered before giving access to a user. Asked about that in an interview, Donna Seymour, the chief information officer at the Office of Personnel Management, said that installing such gear in the government’s “antiquated environment” was difficult and very time consuming, and that her agency had to perform “triage” to determine how to close the worst vulnerabilities. The agency now plans to install two-step authentication across its network, Ms. Seymour said. A longtime data security official, she also defended the decision to ignore the inspector general’s advice to shut down two systems that contain the security clearance information. Ms. Seymour said that the investigators were using an outdated assessment of the security measures — and that the agency was in the process of getting tighter controls when the intrusion happened. Another senior official said that with the agency under pressure to clear a huge backlog of security clearances, halting the process was “a nonstarter” with Congress. During the installation of new security scanning software, officials said, they found evidence of the broad downloading of millions of files. But administration officials said a lack of management focus on the problems contributed to the slow response — combined with a lack of focus on protecting systems that are not part of the national security infrastructure but that contain large amounts of data. And a number of administration officials in interviews on Friday painted a picture of Chinese adversaries who appear to be building huge databases of information on American citizens, useful for intelligence gathering and other purposes. “They didn’t go to sell the data, which is what criminal groups usually do,” said James Lewis, an expert at the Center for Strategic and International Studies. “It’s biographic databases that really give an intelligence benefit — and that get into an opponent’s skin.” Such databases indicate where a government official was posted, and security clearance information would list their foreign contacts — useful if there was an effort to track down Chinese citizens in contact with Americans. The chronology of attacks against American targets matches China’s stated economic and strategic objectives, members of Congress were told in briefings held by the Department of Homeland Security and other agencies. “I’m angry and frustrated that we are at a place where this kind of attack can be successful,” said Rep. Jim Langevin, a Rhode Island Democrat who sits on both a subcommittee on cyberissues and the Armed Services Committee. The attackers, he said, “could have been inside the systems for weeks or months.” In fact, investigators believe they were there for at least three months, before being detected in April. Government officials in the United States have been tracking several such privately contracted Chinese groups since 2008 and believe they operate at the behest of the state. One, based out of Guangzhou in southern China, has been tied to thousands of attacks on victims in the United States, Britain, Canada, Europe, Russia and Africa that develop missile, satellite, space and nuclear propulsion technology. At the White House, officials were struggling to explain on Friday how the breach could have happened after warnings from the inspector general and others. Michael Daniel, the White House’s top cyberofficial, declined to speak on the record about the attack, and Lisa Monaco, who has been handling cyberissues as one of Mr. Obama’s top national security officials, declined to be interviewed. “The threat that we face is ever-evolving,” said Josh Earnest, the White House press secretary. “We understand that there is this persistent risk out there. We take this very seriously.” Mr. Earnest said Mr. Obama’s efforts to push legislation would bolster the nation’s data. “We need the United States Congress to come out of the Dark Ages and actually join us here in the 21st century to make sure that we have the kinds of defenses that are necessary to protect a modern computer system,” he said.

China
Hacker (computer security)
Office of Personnel Management
Premera
Anthem Blue Cross
Civil service
Cyberwarfare
US Politics


Egyptian Court Acquits 17 in Case Arising From Poet’s Death at March

Abstract: CAIRO — An Egyptian court on Saturday acquitted 17 witnesses who had been facing criminal charges after some of them came forward to testify about the apparent police killing of an unarmed poet and activist in January, lawyers for the defendants said. The group had seen riot police officers violently disperse a peaceful march on Jan. 24, including by firing birdshot. The poet, Shaimaa el-Sabbagh, 31, was fatally wounded as she participated in the march. Her dying moments were captured by photographers and widely circulated in Egypt and around the world, highlighting what human rights advocates say is a quotidian resort to brutality by Egypt’s security services. In April, prosecutors drew even more attention to Ms. Sabbagh’s killing by charging the witnesses with illegally protesting. They included bystanders who happened to be near the march and a doctor who treated Ms. Sabbagh. Eleven of the witnesses had previously come forward to the police and agreed to testify, defense lawyers said. The charges, along with the unexpected acquittal, underscored the increasingly capricious nature of Egypt’s justice system under the military-backed government of President Abdel Fattah el-Sisi. Courts have emerged as a critical ally in a crackdown on dissent, with judges sentencing thousands of government opponents to jail terms. At the same time, zealous prosecutions and enthusiastic sentencing by some judges has at times served as source of embarrassment to Mr. Sisi’s government, which has faced international criticism for sentencing hundreds of people to death. The notoriety of the case was probably a factor in the acquittals on Saturday, said Sayed Abou el-Ela, a lawyer and member of the Socialist Popular Alliance who appeared in photographs with Ms. Sabbagh, holding her after she was struck by the police birdshot. “The whole world saw it was a crime, a hideous crime,” he said. “The media witnessed this and showed it from the first moment. “We should not suppose that this is justice, or change.” Ali Soliman, who was coordinating the defense for the witnesses, said prosecutors could appeal the acquittals, although that was unlikely. Prosecutors have also charged a police officer with “battery causing death,” a form of manslaughter, in connection with Ms. Sabbagh’s killing.


Daunting Tests Await Admiral Named N.S.A. Chief

Abstract: WASHINGTON — It is not hard to understand why veterans of the National Security Agency argue that 2013 was the worst year since Harry S. Truman got the place running 62 years ago. It started with Edward J. Snowden’s leaks of stolen N.S.A. documents and ended with a holiday letter to families of agency employees declaring that despite what everyone was hearing on television and reading in the papers, their relatives were heroes, not violators of privacy rights. In recent weeks it has gotten tougher. President Obama has moved from lukewarm defenses of the agency’s programs to embracing recommendations to take the bulk collection of telephone call records out of its hands. Google and Yahoo say they are equipping themselves with new technologies designed to defeat N.S.A. interception, and the general counsel of Microsoft blogged not long ago that “government snooping potentially now constitutes an ‘advanced persistent threat,’ ” a phrase normally used to describe China’s most sophisticated hackers. And to stop leakers, the agency plans to step up monitoring the calls, emails and financial transactions of agency employees, a move the N.S.A.’s privacy critics find particularly rich in irony. On Monday, when Mr. Snowden spoke to the South by Southwest Interactive Festival in Austin, Tex., from Moscow — his voice and image shaky because they were being passed through a series of computer servers to ensure his security — he taunted the agency about its ignorance of what is coming next. “The U.S. government still has no idea what documents I have because encryption works,” he declared. The man chosen by Mr. Obama to navigate this bureaucratic, political and public relations disaster is Vice Adm. Michael S. Rogers, who on Tuesday will face members of the Senate at his confirmation hearing, an event not likely to be accompanied by the thunderous applause that greeted Mr. Snowden in Texas. Friends of Admiral Rogers in the intelligence community, who have worked with him in his current job running the Navy’s Fleet Cyber Command, say they wonder whether he has a sense of what he is wading into. “Why would anyone in his right mind be director of N.S.A. right now?” asked John R. Schindler, a former N.S.A. officer who is now a professor at the Naval War College. “It’s a massive political headache.” Mr. Schindler, echoing intelligence officials who know Admiral Rogers, said he is “superbly qualified” to guide the agency’s cyber and surveillance programs. But he added that “no director in the agency’s history has ever walked into this big a challenge.” “Rogers is taking over what they call in the Navy an ‘unhappy ship,’ ” he said. It is Admiral Rogers’s particular bad luck that he is not appearing in front the Senate Intelligence Committee, which has largely embraced the surveillance programs it is supposed to oversee. Because he will also be the head of United States Cyber Command, the Pentagon’s cyberwarfare unit, he will be appearing before the Armed Services Committee, whose members include some of the agency’s significant critics, from Democrats like Senator Mark Udall of Colorado, who has described the agency’s domestic surveillance as a violation of American principles, to Republicans like Senator Ted Cruz of Texas, who has taken the opposite view, saying, “The federal government has not been effective enough monitoring and surveilling bad guys.” The question resonating inside the N.S.A. these days is whether Admiral Rogers is prepared to become the public face — and public defender — of such an embattled agency, a job his predecessor, Gen. Keith B. Alexander, took on with gusto. Just last week, General Alexander was at Georgetown University, defending the agency’s programs, arguing that the Snowden disclosures have weakened American cyber defenses, and gently mocking how much oversight the agency receives. “We’re reviewed by the general counsel and the inspector general” of the Departments of Defense, the director of national intelligence, the White House, Congress and many others, he said, giving a taste of how many minders Admiral Rogers will have to face. Adding to the challenge is the fact that Admiral Rogers has always been an insider. “He’s never had to deal with a surveillance program, much less defend it,” one of his friends and colleagues said. “He’s a crippy,” shorthand for cryptologist. “He’s never had to speak in public about these issues, much less endure senators showing off for the cameras.” Senator Jack Reed, Democrat of Rhode Island, a former Army officer who serves on the committee and knows Admiral Rogers, described what awaits the new director as “a complicated set of legislative issues, political issues and constitutional issues.” But in the end it may be the White House that poses his largest challenge. Mr. Obama may have signed off on many of these programs during his first four years, but officials at the N.S.A. and Cyber Command complain his embrace of the agency has been tentative at best. Over the agency’s objections, he accepted the recommendation of his own advisory committee on surveillance that the N.S.A. should not be able to hold on to bulk data from telephone calls, but still has not received the ideas he asked for about what private-sector mechanism should be set up to allow court-ordered searches, a system that General Alexander fears could be clunky and slow. There are other, less politicized but more complex battles Admiral Rogers is about to wade into. The telecommunications companies that, reluctantly or not, allowed the N.S.A. to tap their cables and wander through their circuits are now far more hesitant, fearing the backlash of being described as N.S.A. collaborators. Microsoft, Google and others are now urging Mr. Obama to embrace two strong recommendations from the advisory committee on surveillance. One would direct the government to work to strengthen commercial encryption, rather than work to weaken it. And another strongly discourages the government from stockpiling an arsenal of cyber vulnerabilities — the highly-sought “zero day” flaws — so that if it needs to attack a country with cyberweapons, it has the ammunition in place. To America’s high-tech companies, the problem with the N.S.A. is that it never considered the economic cost of using those weapons, opening up vulnerabilities that others can exploit, and undercutting international confidence in American products. So they want the N.S.A. to swear off the use of those tools. Intelligence officials are horrified at the thought, calling it unilateral disarmament. “If you told the army not to stockpile artillery shells, what are they likely to say back?” asked on senior intelligence official. Inside Cyber Command and the N.S.A., these are the most critical issues, on which billions of dollars are being spent. It is a subject Mr. Obama never mentioned during his January speech on surveillance, turning the hard decisions on encryption and cyberweapons over to an internal study group, headed by Michael Daniels. Mr. Daniels will not talk about the panel’s deliberations, White House officials say. But one senior administration official said the White House was likely to side with the intelligence agencies. “Harry Truman created the N.S.A. to break codes,” he said. “No one can figure out why it makes sense to make that harder.”

Government Surveillance
Classified Information
US Military
US Politics
NSA
Michael S Rogers
Barack Obama
US


In Ellen Pao’s Suit vs. Kleiner Perkins, World of Venture Capital Is Under Microscope

Abstract: SAN FRANCISCO — Speak up — but don’t talk too much. Light up the room — but don’t overshadow others. Be confident and critical — but not cocky or negative. Ellen Pao got a lot of advice about how to succeed in the clubby, hypercompetitive, overwhelmingly male world of venture capital. Her annual evaluations were filled with suggestions about how she could improve and perhaps even advance to the inner circle of Kleiner Perkins Caufield & Byers, the blue-chip firm where she was a junior partner. She would be paid millions and be at the red-hot center of the crucible of the tech economy. Ms. Pao did not make it. Exactly why is the subject of a lawsuit she filed against Kleiner, which is now being heard in civil court here. Ms. Pao contends she was discriminated against. Kleiner says she failed to improve despite all that coaching and was terminated. The money she might win if Kleiner is found liable is probably trivial in a world where start-up geniuses are worth billions. What is really under examination in this trial is the question of why there are so few women in leadership positions in Silicon Valley. At stake is any hope that the tech world can claim to be a progressive place, or even a fair one. The judge in the trial, which opened on Feb. 23, is allowing the jury to question the witnesses. One anonymous member of the jury put it well this week when he or she asked the star witness, John Doerr , perhaps the most famous and successful venture capitalist in the world and Ms. Pao’s former boss, this question: Were women simply not interested in becoming venture capitalists, “or did the venture capital world fight them off?” In essence, Mr. Doerr said, it was not his fault. Venture capital firms draw from successful companies, and few entrepreneurs are women. It is a very slow process to change, although Mr. Doerr agreed that the percentage of female venture capitalists was “pathetic.” Mr. Doerr, who backed Amazon and Google and whose net worth is estimated by Forbes at $3.5 billion, came across as an ambivalent figure during his hours of testimony. Ms. Pao, now 45 and interim chief of the social media site Reddit, was somewhere between Mr. Doerr’s protégée and surrogate daughter. He promoted her, encouraged her and defended her after his colleagues soured on her. And his interest in having more women in technology seemed genuine. On the other hand, he said that Ms. Pao had “a female chip on her shoulder,” according to a report by an independent investigator hired by Kleiner. Mr. Doerr testified that he did not recall having said this, even after he was shown the relevant page in the report. He also said he had never read the report. “It was summarized for me,” he said. The report, by Stephen Hirschfeld, was not admitted as evidence, but was extensively discussed in testimony Thursday. Ms. Pao’s account to Mr. Hirschfeld depicted an office where sexism was rampant and she was told — in a friendly way — “you had to be one of the guys to be successful.” Kleiner, during its portion of the trial, will undoubtedly seek to undermine that view. Its lawyers told the judge on Thursday that they planned to call 17 witnesses, a number he found so astounding he repeated it in surprise. Yet even allowing for the fact that all the witnesses so far were called by Ms. Pao’s team, documents and testimony in the trial show a firm whose attitudes derived from an earlier era. When Mr. Hirschfeld asked for a copy of Kleiner’s manual on discrimination, it could not be found. Kleiner is only a few miles from Facebook, where the chief operating officer, Sheryl Sandberg, wrote a popular book telling women to “lean in,” by, for instance, seizing a seat at the table during meetings instead of hanging back at the edges. Image John Doerr, a venture capitalist and Ms. Pao’s former boss, arriving to testify in the trial. Credit Robert Galbraith/Reuters Not everyone at Kleiner appeared to have heard of such notions. At one meeting discussed in the trial, Ray Lane, a senior partner, needed someone to take notes. He asked two female junior partners, and was surprised when they said no, according to testimony. Ms. Pao, who is expected to testify as early as Friday, began at Kleiner in 2005 as Mr. Doerr’s chief of staff. She had a consensual affair with a married junior partner, Ajit Nazre, that ended badly. Her suit maintains that Mr. Nazre was in a position to retaliate against her, and did so, and that her position at the firm suffered when she complained. Mr. Nazre later approached Trae Vassallo, another junior partner, on a business trip, showing up at her hotel room door wearing a bathrobe and carrying wine, according to testimony. She rebuffed Mr. Nazre and complained to Mr. Lane. “I feared somewhat for her safety,” Mr. Lane testified. Later, he underscored his alarm, adding: “This could have gone in a different direction. He could have pushed his way into the room.” Mr. Lane conceded his response to Ms. Vassallo’s complaint was less than appropriate: He asked her if she really wanted to go public and if she had talked to her husband. “I made a mistake,” he told the court. “I cared more about her feelings than anything else.” Mr. Lane also jokingly told Ms. Vassallo she should be “flattered” for Mr. Nazre’s attention, Ms. Vassallo testified. He denied having said that. The men and women sitting in judgment of all this behavior look nothing like what Silicon Valley would consider a jury of its peers. Instead of being young, white and male, with a sprinkling of Asians — what critics say is the furthest limit in Silicon Valley in terms of diversity — the jury is half female and ethnically diverse. Testimony ended abruptly Thursday afternoon when one of the jurors had a family emergency. Before then, the jurors had been hearing for days about a world distant from that of most Americans. Ms. Pao, a Harvard-trained lawyer with deep experience in the tech field, was initially paid $220,000 a year, plus 30 to 60 percent of her base salary as a bonus, plus much more as her share of Kleiner’s investment funds. In return for this, she was expected to do whatever she was told, according to testimony and emails shown at the trial. She polished a speech for Mr. Doerr on her honeymoon. When he recommended a book, she wrote the blurb. She worked so much that he begged her to stop, writing her at one point to “please, please really take a real leave. You deserve it!” Kleiner has had about 24 junior partners in its history, Mr. Doerr testified. Most of them were male. Most of them did not make it to the inner circle. “What’s unusual, what is truly unusual, is for a partner to be promoted,” he said. “It’s happened only five times in the 30-year history of the firm.” The others, he said, were asked “to move on.” One of the five who made it was Wen Hsieh, who joined as a junior partner in 2006. Mr. Doerr saluted Mr. Hsieh, saying, “this guy bleeds for Kleiner.” For a photo shoot, Mr. Hsieh literally gave Mr. Doerr the shirt off his back. When he moved to China, he took his family even though they did not want to go. Mr. Hsieh’s testimony involved a lengthy examination of his annual evaluations, which had as many recommendations for improvement as Ms. Pao’s. “Wen needs to speak up more and be willing to challenge our thinking,” one review said. But another said: “He tends to fill every vacuum with his voice.” These contradictions were “hard to weigh,” Mr. Hsieh told the court. And in any case, he had no time to discuss them further: He was flying to China that night.

Ellen Pao
Kleiner Perkins Caufield & Byers
Venture capital
Women and Girls
Discrimination
John Doerr
Lawsuits


Burress Ends His Wait on the Very First Play

Abstract: EAST RUTHERFORD, N.J. — On the Jets ’ opening offensive play Sunday, wide receiver Plaxico Burress was the first player to break the huddle and head toward the line of scrimmage. Burress’s hurry was understandable; it had been nearly 33 months since his last appearance in an N.F.L. game, and he seemed determined not to wait any longer than absolutely necessary. Quarterback Mark Sanchez was only too happy to oblige Burress. Sanchez completed a 20-yard pass to Burress on that very first play to begin a successful return to game action for Burress, who signed with the Jets this off-season after completing a 20-month prison sentence on a gun-possession charge. In his first game since Nov. 23, 2008 —five days before he shot himself in the leg at a Manhattan nightclub — Burress caught three passes for 66 yards, including a diving 26-yard touchdown catch in the corner of the end zone with 58 seconds remaining in the first half as the Jets beat the Cincinnati Bengals , 27-7, in their second preseason game. “On a scale of 1 to 10, I’d probably give it a 15,” wide receiver Santonio Holmes said of Burress’s touchdown catch. Burress’s reception brought the biggest cheers from the tiny crowd at New Meadowlands Stadium, a hardy group that sat through consistently heavy rain. Burress ran past cornerback Fred Bennett, sprinting to get under Sanchez’s lofted pass before stretching out, gathering in the ball and sliding across the slick turf through the end zone. Burress then stood and offered bows to two sides of the stadium as his teammates surrounded him in celebration. It was the last play of the game for Burress, who, like most of the Jets’ top players, did not play in the second half. “It just felt good to get back what I love to do so much,” Burress said. “To be honest, it feels like I never left. The ball hanging up there in the lights — I just trusted myself.” The touchdown reception was a vintage catch for Burress, who has spent much of training camp enduring questions about his ability to remain a star player. Despite being 34 years old as he returns from his extended absence, Burress was adamant last week that he would be the same player he once was. Asked why he was so certain, Burress shrugged. “Because it’s just football,” he said. “You run around, catching the football, understanding your job, understanding the concepts of defense and offense and running to daylight, trying to get open. There’s nothing too hard about it.” For one game, at least, Burress certainly made it look easy enough, although the Jets will surely just be pleased that he did not appear to be affected by the sprained ankle that kept him off the field until last week. Burress did not play in the team’s first preseason game (a loss at Houston), leaving the Jets — Sanchez in particular — to wait and wonder what it would be like to have their newest weapon on the field. Now that Burress is healthy, Sanchez can work to build chemistry with Burress similar to the kind he has with Holmes. “The sky’s the limit for this group,” Sanchez said of Burress, Holmes and another veteran addition, Derrick Mason, who did not play because of a knee injury. Sanchez, who also played only in the first half, completed 12 of 20 passes for 173 yards and 2 touchdowns. In addition to the scoring toss to Burress, Sanchez found Holmes for a 16-yard touchdown catch in the first quarter. Despite those flashes, much of the early part of the game was sloppy, as might be expected from a preseason game played in frequently ugly conditions. While both teams used their regulars for most of the first half, the Jets’ offense did little for the first 25 minutes, simply taking advantage of the situations provided by the defense. Andy Dalton, Cincinnati’s rookie quarterback, appeared overmatched. The Bengals went three-and-out on their first drive, then turned the ball over on the first play of their second when Dalton threw an interception to safety Eric Smith. After Holmes’s touchdown catch, Dalton began the next Bengals possession by fumbling a handoff attempt that went for an 18-yard loss. Later, he threw a second interception (this one picked off by Jim Leonhard) and finished 8 of 19 for 86 yards. It was only near the end of the first half that the Jets’ offense finally shone, as Sanchez engineered a 99-yard scoring drive. A 43-yard completion from Sanchez to tight end Dustin Keller moved the Jets away from their own goal line, and running back LaDainian Tomlinson, starting in place of the injured Shonn Greene (skin infection), gained 16 yards on a pass and two runs to help the Jets move to the Bengals’ 26 with a little more than a minute remaining. After two incompletions, Sanchez floated the ball in Burress’s direction. Even after such a long time away, Burress laid out as if he had never left. And with two preseason games remaining, including next Saturday’s matchup with his former team, the Giants, Burress said he believed Sunday night was only the beginning. “This is just the tip of the iceberg,” he said. “I’m just getting started.”

Football
New York Jets
Cincinnati Bengals
Burress Plaxico
Sanchez Mark
Ryan Rex