When Couples Divorce but Still Run the Business Together

Abstract: Most business owners know not to bring personal issues to work, but that has been especially difficult for Agostinho Ribeiro. That is because he runs his company, a law firm based in Danbury, Conn., with his former wife, Valerie Calistro. The two met in the late ’80s, in law school, and the relationship blossomed in the early ’90s at the firm — Ventura, Ribeiro & Smith — where Mr. Ribeiro was essentially the chief executive. They were married in 1998, and soon after, Ms. Calistro took a more active role in running the company’s operations. Together, they built the business into what is now a 50-person operation with an emphasis on civil litigation. But while the business grew, their home life started falling apart. Mr. Ribeiro and Ms. Calistro divorced in 2006, and suddenly, the former spouses had to make a choice: Do they continue running the business together or should one of them leave? (Ms. Calistro was not an equity partner at the time of the divorce; she is now.) “People said, including both of our lawyers, that we shouldn’t work together,” Mr. Ribeiro said. “But we talked in an office for two hours and decided we should try to make our business relationship work.” Given a 2007 Census Bureau estimate that about 3.7 million businesses are owned by a husband and a wife. Given the high rate of divorce, this situation is more common than many realize. This small-business guide, based on the experiences of owners like Mr. Ribeiro and Ms. Calistro, offers suggestions on making the best of a difficult situation. “We created the business,” Mr. Ribeiro said, “we created the structure, and we had a team that counted on us.” Six years after signing the divorce papers, the business partners say they are working together happily and the firm is in good shape. RESPECT IS CRUCIAL When Stephanie Blackwell and her husband of 12 years divorced in 1991 — “we just fell out of love,” she said — she wanted out of the business they had started together, growing alfalfa sprouts. He was angry, she said, and she could not deal with it. One day she drove off, but he chased her and told her to come back to work. “There was so much anger between the two of us,” she said, “but I still cared for him. I just didn’t want to be married.” While it was tough to continue running the company with her husband, she stuck it out. They had four children together, she could not afford to leave her job, and she still respected him. In 1998, she left to start another business, Aurora Products , which turned into a $45 million company that packages and sells natural and organic snacks. Initially, her former husband took full control of the alfalfa business but it closed 12 years later. He now works for her, overseeing construction of a new plant. Ivan Lansberg, co-founder and senior partner at Lansberg Gersick & Associates , a consulting firm in New Haven that advises family businesses, also emphasizes the importance of respect. Unfortunately, he said, many relationships become so damaged — especially if one person has cheated — that trust and respect are not possible. To Mr. Lansberg, it all depends on open communication, predictability (people have to do what they say they are going to do), and consistency (they have to follow through even on bad days). But there also has to be some compassion. “You have to be able to put yourself in the shoes of the other person and empathize with what they are going through,” he said. GET HELP Unlike most former spouses, those who own a business together must continue to see each other regularly even after the divorce papers are signed. That can make it harder to heal, which may be a good reason to seek professional help — even if it is too late to save the marriage. Terri Allen still cared for her husband when the two separated in 2010 — they are not yet divorced — but there was so much anger that they could barely communicate. That made it difficult to continue running their accounting firm, which is based in Toronto. The couple decided to hire a therapist to help them sort through their problems so they could continue working with each other. They found someone who specializes in Imago Relationship Therapy , a type of therapy that helps people communicate. “It helped us learn how to talk to each other in a calm and rational way,” Ms. Allen said. Soon, she said, the yelling and screaming stopped, and they began to appreciate each other’s needs and concerns. “I was able to make it not about him and not about me,” she said. “So I became less angry.” And that did wonders for their business relationship. When personal feelings interfere in a work conversation, she uses what she learned in therapy. “I’ve learned to be patient,” she said. CREATE AN AGREEMENT Most business partners sign a shareholders agreement to establish what happens if someone wants to sell. Married entrepreneurs, though, often do not write such an agreement. “We didn’t have a proper partnership agreement,” Ms. Allen said. “We were married, and we wanted to work together.” She and her husband are now putting together an agreement. When it’s done, it will detail how they would split the business’s assets if either one were to decide to leave. “It would have been great if we had done it before,” she said. When Mr. Ribeiro and Ms. Calistro divorced, she was worried that she might lose her job. She asked her ex-husband to sign an agreement saying she could stay in the business for three years. “I needed to know that I could continue working here and earn an income,” she said. That security calmed her nerves and gave them time to find a way to work together. TALKING TO EMPLOYEES When owners divorce, the employees, not unlike children in a divorce, often pick sides. If that happens, Mr. Lansberg said, the company can fall apart quickly. Divorcing owners, he said, need to be upfront about what is happening. If employees hear the news from someone else, they are likely to feel betrayed and worry about their jobs. “If people get wind of it, it tells them something about their connection to you,” he said. “They’ll feel like you don’t trust them.” He suggests couples come up with a common story that they can share. Reassure staff members that the issues are being dealt with, he said, and that the company is not going to be affected. Of course, many people are not comfortable being that open. Ms. Blackwell, for example, did not make any formal announcement, though some staff members knew what was going on. “I felt sorry for the office administrator,” she said. “There was a lot of hollering and screaming.” Ms. Allen took Mr. Lansberg’s approach. After the separation, she and her husband sat down with their employees and told them. “We knew we needed to be the first ones to tell them,” she said. They told the staff that while the separation had been a long time coming, they still respected each other and wanted to continue in the business. The employees, she said, “were polite and thankful that we told them. They were happy that they knew their jobs were secure.” As difficult as it is to run a business with a former spouse, Ms. Allen, Ms. Blackwell, Mr. Ribeiro and Ms. Calistro all said that it gets easier after about two years.

Small Business
Entrepreneurship
Divorce Separations and Annulments


For Some Eagles, a Dream Situation

Abstract: In his first news conference with Philadelphia, Vince Young set the tone for the team and the city when he was asked to characterize the Eagles’ collection of high-profile talent. “Dream team,” Young said, and the hunt was on. “From Nnamdi to Cromartie and from Jason to myself, it’s beautiful to see where we’re trying to go,” he added. “I’m all for it.” Young was referring to the Eagles’ acquisition of cornerbacks Nnamdi Asomugha and Dominique Rodgers-Cromartie and defensive lineman Jason Babin. Although Young’s characterization has ruffled feathers around the N.F.L., the Eagles, without having played a regular-season game, are a dream come true for at least three players. The Eagles are certainly a dream come true for Young, the quarterback whose career was in the lost-and-found after the last three seasons with the Tennessee Titans. After a number of bizarre incidents off and on the field, Young, the N.F.L.’s offensive rookie of the year for 2006, lost credibility with teammates and fans and ultimately lost a measure of self-confidence. “That’s definitely behind me,” Young, 28, told reporters. “It was a learning experience, and I’m a work in progress. There isn’t no one perfect in the league. As you see guys get older and more mature, they start to take off, so I’m kind of in that mode right now. I definitely wouldn’t take anything back. I’ve learned from all of my mistakes. I’m basically just ready to just move forward and do what I can to get the Eagles to a Super Bowl .” The Eagles are a dream come true for Asomugha, 30, who spent seven losing seasons with the Oakland Raiders before they went 8-8 last season. “Obviously, it’s frustrating to not win,” Asomugha said. “The No. 1 goal when you come into this league is to win the championship. You hear every team say it every year, you know, ‘We want to win the Super Bowl; that’s our goal.’ It’s the only reason you play. So when you’re not winning and not making it to the playoffs, that can be frustrating. I’ve seen what the Eagles have done in the past, the winning tradition that they have, and it excites me. It excites everyone here.” The Eagles have been a dream come true for quarterback Michael Vick . The story of Vick’s rise, his fall and now his resurrection in progress is becoming N.F.L. legend. He went from being on top of the world to living a nightmare: spending nearly two years in prison for his involvement in a dogfighting ring, being given an opportunity by Philadelphia to return to the N.F.L., then executing a succession of remarkable performances last season. Last week, Vick, 31, signed a multiyear contract extension, with more than $32 million guaranteed. During a news conference, Vick was asked if there were times when he was in prison that he doubted he would ever see such a day. “To be honest, I never thought this day would come,” he said. “Sometimes as a man, you can fear what you can’t see. Nobody can ever predict the future. You don’t know what is going to happen, and tomorrow is not promised. I just wanted to play a game just to prove myself. You just keep pressing forward and keep believing.” Vick could be talking about Eagles fans. Until the Phillies won the 2008 World Series, no city with all four major professional sports teams had gone longer without a championship than Philadelphia. The Phillies have helped take the edge off, although their success has only deepened the despair of Eagles fans, who last celebrated a title in 1960. Now the Eagles have become a team of salvation and redemption. Coach Andy Reid said of Vick: “Listen, this is a great story all the way through, and this is really what America is all about. Second chances. When he was given a second chance at having an opportunity to start in the National Football League, he took again an opportunity there and turned it into this.” In the past three years, the Eagles have made bold decisions — like signing Vick and jettisoning Donovan McNabb — intended to nudge them toward a long-awaited championship. When it became apparent last season that Vick had regained his Pro Bowl form, Reid made him the starter even though he had designated Kevin Kolb as the No. 1 quarterback before he was injured. In July, the Eagles traded Kolb to Arizona for Rodgers-Cromartie and signed Young as Vick’s backup. Philadelphia is perceived as a frugal organization, if not cheap, reluctant to shower players with money and quick to cut ties with players making what it deems to be exorbitant demands. The Eagles shattered that mold this off-season, signing Asomugha to a contract worth a reported $60 million over five years and signing Young to a one-year contract worth a reported $4 million. Jeffrey Lurie, the team’s owner, disputed the notion that the Eagles were cheap. “I think when you sign some big-time free agents, there’s an assumption that you’re spending more, but we’re literally not,” Lurie told reporters after the high-profile signings. “We’re doing what we always do, we spend to the max because that’s our blueprint. We spend to the max, but we try to be as efficient as you can in doing it and pick the right players.” There will be no easy games. Outside Philadelphia, many N.F.L. fans will be rooting for a disaster. Like the Miami Heat, Philadelphia will get every team’s best shot. Unlike the Heat, who had the luxury of an 82-game schedule to make adjustments, the Eagles, with 16 regular-season games, have a narrow margin for error. They open the season Sunday in St. Louis, then travel to Atlanta before going home to face the Giants. But Philadelphia fans have legitimate reasons to do more than hope for a Super Bowl run. They can expect one, although Lurie has tried to tone down the hype. “We’re about as far from a dream team as you can be,” he said. “We’re playing catch-up. The only dream team I know is the Green Bay Packers. We dream to become as good as the Green Bay Packers and hold that trophy.” Nice try, but too late; expectations are soaring, and they should be. Vince Young was right, after all. The Eagles really are a dream team.

Football
Philadelphia Eagles
Free Agents (Sports)
Vick Michael
Asomugha Nnamdi


Criminal Trial Set to Begin for Pennsylvania’s Attorney General

Abstract: PHILADELPHIA — Pennsylvania’s attorney general goes on trial on Monday in a perjury and obstruction case that comes at the end of a tumultuous four years in office marked by petty feuds, a pornographic email scandal and political intrigue. The attorney general, Kathleen G. Kane, remains on the job even though she lost her law license over her felony arrest. An ethics board accused her of “egregious conduct” amid criminal charges of leaking grand jury material to a newspaper to embarrass enemies and then lied about it under oath. The State Supreme Court last year voted to strip Ms. Kane of her law license , a move she attacked given that two justices were forced to step down as part of her crusade to out state employees who traded offensive, racist and sometimes pornographic emails. Dozens of people in her office were also fired or disciplined. Ms. Kane, 50, has said she would not give up fighting what she calls the “old boys network” in state government, but she did not seek re-election this year, and her term expires in January. She was the first woman and the first Democrat elected to the job. “You can arrest me two times, you can arrest me 10 times. I’m sure this isn’t the end of the game,” Ms. Kane said after prosecutors added more charges to the case. “But I will not stop until the truth comes out, and I will not stop until the system operates the way it’s supposed to.” Jury selection in Ms. Kane’s trial starts Monday in Philadelphia, where she appeared before a grand jury investigating the leak of 2009 grand jury information about a former N.A.A.C.P. official. The official was never charged. Ms. Kane’s lawyers have argued that she only authorized the release of nonsecret information relating to who was charged — and who was not — by her predecessors. And she denied that she was sworn to secrecy about those prior investigations. Ms. Kane is charged with perjury, a felony, for allegedly lying to the grand jury, and eight misdemeanor counts that include obstruction, official oppression, conspiracy and false swearing.

Attorney general
Perjury
Kathleen G Kane
Philadelphia
Pennsylvania


Week 15 Matchup: Jets (6-7) at Panthers (9-4)

Abstract: 4:05 p.m. Eastern, CBS MATCHUP OF THE WEEK Jets’ Chris Ivory vs. Panthers’ front seven Ivory views defenders as nuisances, not obstructions. If one is in his way, or even three, he tries to run over them, and he often succeeds. The Jets need another strong game from him to alleviate the pressure on quarterback Geno Smith. Ivory’s 3.1 yards after contact leads all running backs, according to ProFootballFocus.com, but on Sunday, he will face his toughest challenge of the season. The Panthers, led by middle linebacker Luke Kuechly, feature the N.F.L.’s top-ranked rushing defense. “I remember he was a tackling machine coming out of college,” Jets Coach Rex Ryan said of Kuechly. “Apparently, he’s still a tackling machine.” NUMBER TO WATCH 836 That is how many yards the Jets have allowed the past two weeks, the most in a two-game stretch during Ryan’s tenure, exceeding the 809 they surrendered this season to New Orleans and Cincinnati. The Jets survived lapses last Sunday because of Oakland’s defensive ineptitude. They are unlikely to be as fortunate Sunday. QUOTATION OF THE WEEK ‘This is a young quarterback that’s fearless. He doesn’t know any better. Those guys are dangerous.’ Panthers Coach RON RIVERA, when asked about preparing for a rookie like Geno Smith. BEN SHPIGEL


Giants’ Defense Off to a Slow Start in Steve Spagnuolo’s Return Engagement

Abstract: EAST RUTHERFORD, N.J. — Coach Tom Coughlin, trying to address failures that contributed to his team’s missing the playoffs each of the last three seasons, returned to a glorious chapter in the franchise’s past when he hired Steve Spagnuolo as defensive coordinator in January. Spagnuolo oversaw a staunch defense in 2007 and 2008, and he orchestrated a game plan that allowed the Giants to upset New England, 17-14, in Super Bowl XLII to close the 2007 season, denying the Patriots a perfect record. Although his second stint with the team cannot be assessed so soon, it is fraught with problems as the Giants face the explosive Atlanta Falcons on Sunday at MetLife Stadium. Spagnuolo, 55, has not had the services of Jason Pierre-Paul, a defensive end who represented the Giants’ best pass-rushing threat, and it is unclear that he ever will. Pierre-Paul stayed away from team activities in a push for a new contract before he severely injured his right hand in a fireworks accident on July 4. His right index finger was amputated. The Giants, thin at safety, lost four players at that position during the preseason: Nat Berhe (calf), Justin Currie (ankle), Bennett Jackson (knee) and Mykkele Thompson (Achilles’ tendon), who are on injured reserve. The veteran middle linebacker Jon Beason missed the season-opening 27-26 road loss to the Dallas Cowboys with a strained left knee. He may see limited action against Atlanta. And the opener suggested that Spagnuolo’s acumen will be severely tested in what looms as a playoffs-or-bust season for this coaching staff. Dallas opened with a 17-play, 79-yard drive that consumed 10 minutes 27 seconds and led to Dan Bailey’s 21-yard field goal. The Cowboys marched 76 and 72 yards in the final eight minutes for touchdowns in rallying from a 10-point fourth-quarter deficit. Image On Steve Spagnuolo’s six-year absence from the Giants, Coach Tom Coughlin said, “He’s the same person and a better coach.” Credit Gary Landers/Associated Press During his first Giants tour, Spagnuolo’s defenses were known for tormenting quarterbacks. Dallas’s elusive Tony Romo was never sacked as he completed 36 of 45 pass attempts for 356 yards and three touchdowns. The Cowboys amassed 436 total yards. Despite abundant causes for concern, Spagnuolo is upbeat. “I’m very, very proud of the way the defense played,” he said Thursday, noting the Giants’ three takeaways. “None of us felt like we came away with anything because the bottom line is winning the game. But I certainly felt like we gained a lot in regards to finding out a little bit about who we are and what we can do and how we can play and what we can be about.” The Giants will very likely have to exert more pressure on Falcons quarterback Matt Ryan if they are to avoid a third consecutive poor start to a season. They began 0-6 in 2013, which they finished 7-9. Two initial defeats contributed to a 6-10 record last year. “We’ve got to get to the quarterback more, no question about that,” Spagnuolo said. “How do you do it? We’ll try to figure that out.” Spagnuolo established a reputation for designing exotic blitz packages when the Giants had a league-leading 53 sacks in 2007. They sacked Patriots quarterback Tom Brady five times and harassed him throughout the Super Bowl. Fantasy Football Rankings 2015 These player rankings from the Sablich brothers are for standard and PPR scoring formats and will be updated throughout the season. Spagnuolo said that he had “a lot of other bullets” but that he had been holding back what he presented to avoid overloading his players. “It’s definitely limited now, I will tell you that, just because I want to let them play, and that is the focus,” he said. “Whether we get to add the other things or not depends on who’s in there, how healthy we stay. I’m going to have to decide that as we go.” A four-day turnaround to Thursday’s home game against the Washington Redskins will not help. Atlanta, which accumulated 395 yards in a 26-24 home win against the Philadelphia Eagles on Monday night, presents an enormous challenge. Ryan has thrown for at least 200 yards in 32 consecutive road games, an N.F.L. record. The Falcons have one of the league’s most potent receiving tandems in Julio Jones and Roddy White. Jones compiled his 20th 100-yard game by catching nine passes for 141 yards and two touchdowns in the opener. Jones and White have combined for 2,000-yard seasons three times, including 2,514 yards in 2014. In the last seven seasons, White has made 164 third-down catches that produced first downs, more than any other receiver. “Who we play doesn’t matter,” said Robert Ayers Jr., a Giants defensive end. “We’ve got to put ourselves in a situation to rush the passer, win first and second downs, and make it third-and-long.” Dallas dominated time of possession, maintaining control for 37:10, and all but established a blueprint for others to follow as Romo dissected the Giants’ secondary while the offense awaited its turn. “It’s just hard to establish a rhythm when a team does a good job at controlling the ball so well,” Giants receiver Odell Beckham Jr. said. If Spagnuolo invigorates the Giants’ defense, that will help restore his stature. The Rams went 10-38 in his three seasons as their coach. Then Spagnuolo found himself in the wrong place at the wrong time when he agreed to become the New Orleans defensive coordinator in 2012. The Saints, in apparent disarray as Coach Sean Payton was serving a one-year suspension because of a bounty scandal, allowed a league-record 7,042 yards that season. Spagnuolo spent the last two seasons as an assistant coach with the Baltimore Ravens. Still known for his intensity, Spagnuolo said he was working to keep the game from consuming him as much as it once did. “I’m just trying to enjoy it a bit more,” he said. “Sometimes we can get so wrapped up in this that it absorbs us.” Coughlin said he believed that Spagnuolo had grown from his experiences elsewhere. “He’s the same person,” he said, “and a better coach.”

Football
Steve Spagnuolo
Atlanta Falcons
Giants


Leroy Arthur Petry Given Medal of Honor

Abstract: WASHINGTON — President Obama grasped the prosthetic right hand of Sgt. First Class Leroy Arthur Petry in congratulations on Tuesday, awarding him the Medal of Honor for actions in Afghanistan that included saving two comrades’ lives by hurling away a grenade as it exploded. This is only the second time since the Vietnam era that the nation’s highest military honor has been awarded to a soldier who survived combat in a conflict still under way; the other awards were given posthumously. Mr. Obama bestowed the first award last fall to another veteran of Afghanistan, Staff Sgt. Salvatore A. Giunta , who was present in the East Room along with medal recipients from past wars. Seven Medals of Honor have gone to soldiers killed in Afghanistan or Iraq. Mr. Obama called them “members of the 9/11 generation” of service members. Sergeant Petry, an Army Ranger and father of four who has served two combat tours in Iraq and six in Afghanistan, was nominated by his colleagues and honored for his actions on May 26, 2008. Then 28 years old, he came under fire with other Rangers during an operation in mountainous eastern Afghanistan, near Pakistan, to clear a compound where a top Qaeda commander was believed to be hiding among insurgents. “Today we honor a singular act of gallantry,” Mr. Obama said at the White House ceremony. “Yet as we near the 10th anniversary of the attacks that thrust our nation into war, this is also an occasion to pay tribute to a soldier, and a generation, that has borne the burden of our security during a hard decade of sacrifice.” Sergeant Petry was shot in both legs and was seeking cover behind a chicken coop with two other Rangers when a grenade exploded nearby, wounding the others. When a second grenade landed feet away, Sergeant Petry scooped it up and threw it as it detonated. The blast ripped away his right hand and filled him with shrapnel. He applied a tourniquet to his wrist and continued to radio for support and direct the operation before being evacuated. Sergeant Petry was credited with saving the lives of the other soldiers, both of whom were at the White House. Mr. Obama told the audience that in an Oval Office meeting before the ceremony, Sergeant Petry “gave me the extraordinary privilege” of seeing a plaque bolted to his prosthetic hand and inscribed with the names of other Rangers from the 75th Regiment who have died. “They are quite literally part of him, just like they will always be part of America,” Mr. Obama said. Both before and after affixing the medal and its blue ribbon around Sergeant Petry’s neck, Mr. Obama grasped his right hand and shook it. Mr. Obama also used the occasion to once again claim progress in Afghanistan. Quoting from President Ronald Reagan, who spoke of Rangers in World War II, Mr. Obama said of Sergeant Petry and other Afghanistan veterans, “These are the heroes who helped end a war.”

United States Defense and Military Forces


Stocks Rally as Oil Prices Drop to a Three-Month Low

Abstract: Oil prices dropped to a three-month low on Tuesday, and stock markets rallied to their biggest gains in four months, after investors cheered the drop in commodity prices and a statement from the Federal Reserve that suggested the bank would not raise rates soon. The Dow Jones industrials closed up 331.62 points while the broader stock market also rose. The Standard & Poor’s 500-stock index rose 35.87 points, or 2.8 percent, and the Nasdaq index rose 64.27 points, or 2.81 percent. The gains were led by stocks that have performed poorly this year: financial firms and companies dependent on free-spending consumers. Investors were cheered by the steep drop in crude oil, which fell as low as $118 before climbing back slightly. Oil for September delivery fell $2.24 to $119.17 a barrel on the New York Mercantile Exchange. While it is difficult to pinpoint the exact causes for daily market moves, some analysts pointed to weather forecasts predicting that the tropical storm hitting the coast of Texas would bypass major drilling platforms and refineries. That would mean no serious disruptions to domestic oil supplies, which some had initially feared. There is also a broader sense among investors that the slowdown in economic growth will curb fuel demand around the world, pulling prices back to more reasonable levels. Oil prices have fallen about 17 percent in three weeks. Gas prices in the United States have dropped back below $4 a gallon. And the economic downturn has been worse in some countries than financial experts had anticipated. “There’s no real magic other than the softening economy,” Ric Navy, an analyst at BNP Paribas, said. “You can try to decide whether it’s anything more than that, but that’s in the eye of the beholder.” The decline came in tandem with a similar drop in the prices of other commodities like corn, wheat and rice. Corn and soybean prices fell again Tuesday after rain in the Midwest eased concerns about the fall harvest. The prices of other commodities — gold, silver, nickel and copper — also dropped. Raw material prices tend to go up when the dollar weakens, making them a convenient hedge for investors. Gold, in particular, is a popular place to park money when paper currency values are falling. When the dollar strengthens, as it did on Tuesday, commodity prices drop. A drop in oil also tends to drag down the entire commodities sector, because of the trading strategies of many big investors. “When the oil markets weakens, it tends to stop the vigor in precious metals,” James Steel, a commodities analyst at HSBC, said. European stocks performed even better than Wall Street: in afternoon trading, the benchmark indexes in London, Frankfurt and Paris were up more than 2 percent. Markets made a slight jump higher after the central bank held its benchmark rate steady at 2 percent. Emphasizing the dangers to the economy, the Fed said in its statement that a substantial easing of interest rates in recent months, “combined with ongoing measures to foster market liquidity, should help to promote moderate economic growth.” By a vote of 10 to 1, policy makers declared that inflation remained “of significant concern” — a description that seemed to give less importance to the inflationary risks of keeping rates low than the policy makers had at their meeting on June 25. Earlier on Tuesday, the Institute for Supply Management, a trade group of purchasing executives, reported that activity among service-oriented businesses was better than expected in July. The group’s index rose to 49.5 from 48.2 in June, on a scale where readings below 50 indicate contraction. While the industry is still suffering from the downturn — new orders fell for the month, including orders for both exports and imports — there were no signs of a significant collapse. In overnight trading, Asian stocks fell on the slump in commodity prices, which dragged down commodity producers. The Hang Seng index in Hong Kong lost 2.5 percent, to close at 21,949.75.

Oil (Petroleum) and Gasoline
Stocks and Bonds
Europe
Wall Street (NYC)


Charges of Bribery in a Chinese Bank Deal

Abstract: SHANGHAI, Nov. 28 — The American company says it was a legitimate cost of doing business in China, the price it had to pay to help secure a large software contract with one of China’s biggest banks. But a Chinese company that says it got pushed out of the deal has a different version: executives there say it was bribery, a case of an American company secretly funneling money to powerful Chinese government officials to ensure the lucrative banking contract. According to a lawsuit filed earlier this year in United States District Court in Florida, Fidelity Information Services, an American software company, paid for two Chinese banking officials and family members to travel on vacation to Hong Kong, Paris, Rome, Las Vegas and the golfing resort of Pebble Beach, Calif. The suit contends that Fidelity arranged for these trips through a consultant in China who was reimbursed for giving the Chinese bankers and their families an array of gifts, including expensive Sony cameras, luxury outfits from Versace and Burberry, and perhaps even a $330,000 apartment here in Shanghai. The lawsuit grows out of a business dispute between Grace and Digital Information Technology, a Beijing-based consulting company and Fidelity, based in Jacksonville, Fla. It accuses Fidelity of trying to avoid paying $58 million in consulting fees after Grace helped the company win a series of software contracts worth $176 million with the China Construction Bank in 2001. The lawsuit charges that after the contract was suspended in 2002, Fidelity dumped Grace and chose instead to hire another middleman, who was a close friend of the chairman of the huge Chinese bank. Fidelity, the lawsuit contends, made large cash payments to the middleman, who then passed money and gifts on to the Chinese bank’s chairman and other bank officials, possibly in violation of the Foreign Corrupt Practices Act of 1977. That law forbids American companies from paying off foreign government officials to win or influence business deals outside the United States. “This was bribery,” said John Zhang, a lawyer working for Grace and Digital. “They were paying bribes to government officials and their families. What else could those payments be?” Lawyers representing Fidelity, a division of Fidelity National Financial, strongly dispute the allegations, saying company executives simply reimbursed legitimate business expenses and that Fidelity never violated its contracts or the Foreign Corrupt Practices Act. “The Justice Department says paying for typical business expenses is not against the law,” said David W. Shapiro, a lawyer for Boies & Schiller, which is defending Fidelity in the case. “If the golf game is inappropriate, most of the companies doing business in this country are engaged in inappropriate activity.” In government filings earlier this year, Fidelity acknowledged that the Justice Department and the Securities and Exchange Commission were looking into the allegations. Three weeks ago, a Beijing court sentenced Zhang Enzhao, the 60-year-old former chairman of China Construction Bank, to 15 years in prison for accepting more than $500,000 in gifts and bribes, including gifts that came from a consultant who worked for Fidelity, as well as I.B.M., according to Bloomberg News and Cai Jing, a Chinese business magazine. None of the American companies have been charged with any crimes. Whether or not the lawsuit brought by Grace and Digital stands up in court, the case could force other large American and European companies doing business in China to consider whether they are exposed to similar lawsuits or dangers as they move operations and executives to China, a country where corruption and bribery are endemic. Amanda Garland, a spokeswoman for I.B.M., said the company was investigating the bribery case against Mr. Zhang of China Construction Bank. NCR and Hitachi are also looking into the charges. The case began in December 2004, when Grace and Digital initially sued Fidelity in Superior Court in California, charging in its filing that Mr. Zhang, then the chairman of China Construction Bank, had been paid a $1 million bribe. The case was dismissed after a judge ruled that California was not the proper locale for the lawsuit. The suit was then refiled in Florida. In March 2005, after reports about the suit spread, Mr. Zhang stepped down as chairman of Construction Bank for “personal reasons.” The Chinese police later detained him, just months ahead of the bank’s planned initial public offering. A new chairman was appointed and the bank went ahead with its public listing, which raised over $9 billion in October 2005 in the world’s biggest stock offering of that year. In court filings, lawyers for Grace said they had obtained copies of detailed e-mails and other records that show that Fidelity made a $1 million payment to a Hong Kong company called Prosten Technology. A Chinese consultant named Zou Jianhua, who was a close friend of Mr. Zhang, represented that company. Mr. Zou, the filings said, submitted about $170,000 in expenses that were reimbursed by Fidelity covering an array of gifts, hotels, shopping sprees and entertainment costs. For instance, in May 2002, the suit says, a Fidelity official e-mailed another company executive saying the chairman of China Construction Bank was interested in playing golf at “Cobble Beach,” though he meant Pebble Beach. Soon after, Fidelity paid for Mr. Zhang’s hotel, car services and green fees in Pebble Beach. And in October 2004, after the chairman expressed an interest in seeing Florida, the lawsuit says Fidelity sent its corporate jet to fly him from San Francisco, where he had been visiting with I.B.M., to its headquarters in Jacksonville. The lawsuit also charges that Fidelity reimbursed tickets for Mr. Zhang’s wife and son to travel in China and the United States. It also paid, the lawsuit claims, for his son’s tennis club fees in Shanghai and golfing fees in Shenzhen and for the daughter of the bank’s chief information officer to travel to Europe. Mr. Zou, the Fidelity consultant, accompanied Mr. Zhang’s son to Las Vegas and also escorted the daughter of the bank’s chief information officer on a trip to Europe. Grace lawyers also say that on one occasion, after Mr. Zou’s expenses were questioned by Fidelity, Mr. Zou responded that he was renting a hotel room in Beijing because Mr. Zhang and his wife needed to use the hotel’s gym and swimming pool. Mr. Zhang, the lawyer at Greenberg Traurig who is representing Grace, said the trips were “payoffs” to the family of the banking executives and that among the expenses reimbursed were luxury goods from Dunhill, Versace, Burberry, Mont Blanc and at least nine Sony and Canon cameras bought in Hong Kong. “What kind of business trips are these?” Mr. Zhang asked. Fidelity’s lawyers counter that entertaining government officials and their families is proper promotional activity. The company also says there was no breach of the original consulting contract, which was suspended by the government. A new software contract was later negotiated with another middleman, Mr. Zou, the lawyers said. China Construction Bank officials have refused to comment on the case, saying it was a personal matter involving Mr. Zhang. Citing court documents in the case, Bloomberg News said the Beijing No. 1 Intermediate Court indicated that I.B.M. had paid $225,000 to Success Century Technology, a company registered in Hong Kong by Mr. Zou, who was named by the government as one of the three businessmen who bribed Mr. Zhang. Through Ms. Garland, I.B.M. released a statement: “I.B.M. has been unable to access the court documentation regarding this case, and therefore cannot comment on the allegations. I.B.M.’s Business Conduct Guidelines, to which I.B.M. employees in China certify annually, require I.B.M. employees to comply with all laws and regulations that apply to I.B.M.’s business worldwide. The guidelines also specifically prohibit bribery of any kind.” The statement went on: “We have turned this matter over to our legal team, who are investigating the allegations.” A reporter at the “21st Century Business Herald” says he got special access to the court documents in the bribery case. He says the documents show that Mr. Zhang accepted large gifts and bribes from three Chinese business executives in exchange for helping them secure large loans or software contracts. Those court documents also show, he said, that Mr. Zou met with officials from I.B.M., NCR and Hitachi and that he recommended Hong Kong Hitachi as a supplier to Mr. Zhang and his bank. NCR, based in Dayton, Ohio, issued a statement, which reads: “Under our marketing agent agreement with Mr. Zou, we required him to conduct business activities in a lawful manner. NCR maintains a clear and stringent code of conduct that requires the highest ethical standards and compliance with the local laws in all business dealings.” Hitachi, the Japanese electronics company, released its own statement, saying the case is under investigation and “according to the internal audit, up to now, we find no connection between Hitachi data systems and Mr. Zhang.” The Beijing court documents did not name Fidelity, though Mr. Zou worked as a paid consultant for Fidelity from 2002 to 2005. Gao Zicheng, a lawyer who represented Zhang Enzhao, the banker, in court, said his client admitted to mistakes. “Zhang Enzhao said that as a government official he shouldn’t have received money from friends,” Mr. Gao said, but he declined to comment beyond that on the Fidelity case. In its Florida court filing, Grace charges that Fidelity made a $1 million payment to Mr. Zou and that part of that money was funneled to Zhang Enzhao, partly through the gift of a luxury apartment. Lawyers for Fidelity say Grace helped secure the original $176 million software contract in 2000, when Wang Xuebing was the chairman of China Construction Bank. The software was supposed to allow the bank to track its lending activities. But Mr. Wang was fired and jailed in January 2002, after he was accused of accepting bribes during an earlier tenure, while he was serving at another large state-owned bank, the Bank of China. After the firing of Mr. Wang, the government suspended the huge Fidelity contract. Then, after Zhang Enzhao came in as chairman, Fidelity hired Mr. Zou, a longtime friend, and 18 months later Fidelity signed a new software contract, Fidelity’s lawyers say. Then Fidelity made a $1 million payment to Prosten, which had employed Mr. Zou. Strangely, however, Prosten now denies that Mr. Zou ever worked for the company. An individual who picked up the phone at the Hong Kong headquarters said Mr. Zou had never worked for the company. Mr. Shapiro, Fidelity’s lawyer, said that its payments were legitimate. “It’s only bribery,” he said, “if he promised to do it in exchange for something.” But Patrick M. Norton, a lawyer at O’Melveny & Myers in Washington and an expert on the Foreign Corrupt Practices Act, said the law went further than that. While some promotional activities may be allowed, Mr. Norton said, “the operative language in the statute is you can’t provide a government official anything of value.”

China
Banks and Banking
Bribery
Suits and Litigation


In Charity Donations via Text, an Imperfect System

Abstract: The earthquake in Haiti was an “aha!” moment for nonprofits, demonstrating within hours the vast potential to raise money by text messaging . Using a simple five-digit code and the word “Haiti,” the American Red Cross raised some $2 million in the first 24 hours after the devastating Jan. 12 earthquake — almost as much as was raised in the previous year by nonprofits with text-to-give programs in 2009. Over all, the Red Cross pulled in more than $30 million by mobile phones for its work in Haiti, setting off a scramble among nonprofits to figure out a way to replicate that success. “We got calls from thousands of nonprofits wanting to get started with mobile giving,” said James Eberhard, founder of Mobile Accord, whose subsidiary, mGive, was behind the Red Cross’s Haiti campaign. “If you want to communicate with the generation under 30” — Mr. Eberhard is 32 — “text messaging is the way to build a relationship, and nonprofit fund-raising is all about building relationships,” he said. “It’s not all about the money.” But replicating that windfall is no easy task for most organizations, in particular because the costs of maintaining a mobile donating program can outweigh the proceeds. “When nonprofits smell money, they tend to jump on the bandwagon without thinking it through,” said Katrin Verclas, a co-founder of MobileAction.org, a nonprofit network of people using mobile phones to advance social welfare. “Mobile giving isn’t a magic bullet. It’s just one of many tools nonprofits can use.” Texted donations currently are limited to $5 and $10 increments and capped by mobile phone companies at five a month from a single phone. Some nonprofits worry that they will cannibalize gifts that might come in larger amounts through more traditional channels like direct mail and online. Thus far, nonprofits have also had to share the five-digit codes, called short codes, which means relying on donors to remember a particular key word like “Haiti” or “aid” to ensure that gifts go to the intended charity. Mr. Eberhard said short codes were expensive, about $12,000 each, and so companies can offer only a few to their clients Perhaps most important, many nonprofits simply cannot afford the kind of promotional campaign needed to publicize mobile giving efforts, nor do they benefit from the kind of exposure that a round-the-clock, disaster-driven news event provides. “The Red Crosses of the world have the urgency of ‘now,’ ” said Suzy Twohig, director of donor relations at Share Our Strength, a nonprofit aimed at alleviating childhood hunger. “The challenge for other organizations is to figure out what the ‘now’ message is and get people to experience that same sense of urgency.” Share Our Strength tried a mobile giving campaign in early 2009. AT&T paid for a substantial portion of the promotional costs, which included advertising in airports and a public service announcement that ran during Sunday morning talk shows, as well as an internal push to its 300,000 employees. Share Our Strength devoted space on its Web page to the campaign and reached out to bloggers and others to publicize it. “We threw a lot of spaghetti on the wall and tried to learn from what stuck,” Ms. Twohig said. The effort raised about $14,000, the group said. In contrast, the Red Cross had the support of the National Football League, which ran ads during the playoffs urging fans to text 90999 and the code word “Haiti” to give $10 to the organization. Michelle Obama taped a public service ad with the same message, and then followed up with a visit to the Red Cross’s disaster operations center with President Obama. “How many of us have the Obamas out fronting for us?” asked Richard M. Walden, executive director of Operation USA, a disaster relief organization that has tried with mixed success to raise money through text messaging. “The State Department hasn’t offered to help me get our mobile giving program off the ground.” The State Department did help put mobile donations on the map. Just minutes after the earthquake hit Haiti, a State Department aide was on the phone to Mr. Eberhard, who is a member of a group of technology executives that advises the secretary of state, Hillary Rodham Clinton. Within three hours, Mobile Accord’s mGive unit had a text program in place for the Red Cross, which did not even have a contract with the company yet. “By the time people had their morning coffee, we wanted this thing up and running,” said Alec J. Ross, Ms. Clinton’s senior adviser for innovation. Mr. Ross and his colleagues then followed up with a promotional campaign conducted largely over Twitter, including enlisting celebrities adept at using social media, like Ben Stiller and Ashton Kutcher. “You can’t just come up with a short code and a good cause,” Mr. Ross said. “It’s like running a political campaign.” Replicating that success will be impossible for most nonprofits, Mr. Ross said, adding “it’s a totally unfair expectation.” The Red Cross has demonstrated that it can raise a significant amount of money using text messaging without the State Department’s support, raising $250,000 to support its work after May floods in Tennessee — or almost one-quarter of the total amount it raised over all. Still, “outside of disaster, we haven’t found a way to make it work as effectively as we’d like,” Peggy Dyer, chief marketing officer at the Red Cross, said of text messaging. One reason for the struggle is the difficulty in amassing a database of donors from another campaign. Groups are not allowed to gather information from a donor to use for other purposes unless the donor (the cellphone owner) agrees. “You don’t get the name of the donor unless they opt in to receive additional communication from us when they make their gift,” Ms. Dyer said. “About 5 percent opted in after making gifts for Haiti.” Donor lists are prized among charities, which often have a lucrative side business in selling such data. But some see this limitation of mobile giving — from which information about a donor cannot be gleaned — as a significant selling point, said Jim Manis, chairman of the Mobile Giving Foundation, a nonprofit that serves as the bridge between the mobile phone companies that collect texted donations and the charities that receive them. “Marketers of all kinds want to get your information, and we know donors don’t always want to give them that information,” Mr. Manis said. “That’s why if you’re going to run a mobile giving program, you’ve got to be able to promote it.” The mobile database that is fast becoming the envy of nonprofits belongs not to a charity behemoth but to a tiny group called Reform Immigration for America, which says its goal is to win “just and humane comprehensive immigration reform legislation.” Its database has more than 150,000 names, but so far the group has not used it for fund-raising, instead relying on it for things like call-in campaigns. Rachel LaBruyere, the group’s online director, said it was likely to raise money via text at some point, but “there are still too many barriers to doing successful cellphone fund-raising.” The Mobile Giving Foundation charges applications providers fees to be part of its operation. Nonprofits contract with those providers and pay the foundation a $350 application fee. The foundation also gets grants from other foundations and corporations but has yet to cover its operating costs. Its competitor, the mGive Foundation, works exclusively with mGive, the service provider. Nonprofits pay an initial fee of $500, monthly fees ranging from $399 to $1,499 and transaction fees of 30 cents to 35 cents plus 3.5 percent of each successfully completed donation. MGive shares the transaction fees with the mGive Foundation, which provides similar services to the Mobile Giving Foundation, founded in 2007 by Mr. Eberhard’s sister, Jenifer Snyder. The company split with the foundation in 2009. Mr. Manis said he had advocated allowing nonprofits to select from among a number of service providers while Mr. Eberhard and his sister preferred to align the foundation with mGive. “By definition, they are driven by their own commercial interests,” Mr. Manis said. Mr. Eberhard said the Mobile Giving Foundation had wanted to expand internationally when he thought it should instead focus on building its domestic operations and becoming financially sound. “We went our separate ways based on differences over the operational focus, service offerings and future direction of the mobile giving channel,” he said.

Text Messaging
Nonprofit Organizations
American Red Cross
mGive
Philanthropy


Vice Lands 2nd Investment, to Fuel Expansion

Abstract: Vice Media, the rabble-rouser of the news and entertainment business, has landed a pair of investments totaling $500 million to fuel the expansion of its media empire. The media group, which is based in Brooklyn and is known for its trendy vibe and commando-style news reports, has closed a $250 million investment from Technology Crossover Ventures, the Silicon Valley venture capital company that has invested in Facebook and Netflix. The financing follows a $250 million investment from A&E Networks, the television group owned by Hearst and Disney that is home to the A&E, History and Lifetime cable networks. Vice will maintain its independence through the deals, with both TCV and A&E each making the investments in exchange for an approximately 10 percent stake in the company. The transactions value Vice, which started as a free punk magazine in Montreal 20 years ago, at more than $2.5 billion. “Vice is having a real moment now,” said Tom Freston, the former chief of MTV who is one of Vice’s investors and closest advisers. “It wanted to ensure that it was fully armed so that it could make the most of it.” Vice executives and the group’s new partners said the deals allowed it to bolster its technological capabilities and content production in the United States and the 35 other countries where it operates. The transactions dwarf the recent $50 million investment made in the digital media start-up BuzzFeed, which valued that company at about $850 million. The TCV partnership and investment, which was first reported by Re/code, will be devoted to creating proprietary technologies for distributing media across the web, mobile and social. The A&E partnership and investment will fund Vice’s expansion into a broader array of global programming about news, culture, sports, fashion and more. The deals come after a summer of courtship between Vice and parade of media giants, including Rupert Murdoch’s 21st Century Fox, Time Warner and Disney. Vice has managed to convince many traditional media executives that it is the gatekeeper to a new generation of millennial viewers, especially the elusive young male. Last year, Fox bought a 5 percent stake in Vice for $70 million. “They are a very powerful brand, and it cannot be underestimated their ability to reach a very hard-to-reach audience,” said Nancy Dubuc, chief executive of A&E Networks. Over the years, Vice has steadily expanded into digital, television and film. The group expanded its news operation in 2014 and recently made headlines with a documentary series about the Islamic State in Iraq and Syria. Vice says that it reaches a total of 150 million people each month across the globe, though that figure is difficult to confirm. In the United States, Vice.com attracted 9.3 million unique visitors in July across desktop and mobile, according to comScore. Vice is profitable and on track to make about $500 million in revenue this year, according to a person with knowledge of the company. A large portion of the revenue comes from its advertising business that makes videos for large corporations. Other revenue includes digital ads and television and film production. Shane Smith, Vice’s chief executive, has been outspoken about his quest to expand further into traditional television, where people still spend hours a day on average and which still commands the bulk of media revenue. Vice now makes a 30-minute weekly program for HBO — with the tagline “News from the edge” — and Mr. Smith has said that he would like to operate a 24-hour Vice network. Vice had that chance in discussions with Time Warner, but the two companies could not agree on how much Vice was worth and how much control it would have over the network. Vice’s pair of deals does not deliver a ready-packaged TV network, and it is unclear whether Vice will now land a network of its own. Andrew Creighton, president of Vice, said that the company was evaluating its options for television distribution.

Vice
News media,journalism
A&E
TV
Venture capital


Crises in Japan Ripple Across Global Economy

Abstract: In the wake of Japan’s cascading disasters, signs of economic loss can be found in many corners of the globe, from Sendai, on the battered Japanese coast, to Paris to Marion, Ark. Container ships sit in the Pacific or at docks in Japan, wary of unloading tons of pork and steak because of that nation’s fractured electric grid. Any break in the “cold chain” of refrigeration can spoil meat. LVMH Moët Hennessy Louis Vuitton, the luxury goods maker based in Paris, shut more than 50 of its stores in Tokyo and northern Japan. And Volvo, the Swedish carmaker, was working with a 10-day supply left of Japanese-built navigation and climate control systems. “It’s hour-by-hour work to get a grip on the situation,” said Per-Ake Froberg, chief spokesman for Volvo, as it girds for a production halt. The uncertain economic picture has mirrored the churning developments in Japan as it tries to recover from the devastating earthquake and tsunami that struck it 10 days ago. On Sunday, even as workers made some progress in stabilizing the situation at the crippled Fukushima Daiichi nuclear plant, the government said there were new signs of radioactive contamination in some agricultural produce and livestock. Uncertainty hangs like a cloud over the future of the global and American economy. Only weeks ago, many economists foresaw a quickening of the recovery. Now tsunamis, radioactive plumes, Middle East revolutions, a new round of the European debt crisis and a still weakened United States economy could derail a tenuous bounceback in the United States, Europe and Japan. Some global ills, like the spike in oil and food prices , can be quantified. But a clearer picture depends on indicators yet to come, like the March unemployment numbers and trade numbers. “The problem is not Japan alone — it’s that Japan reinforces all the negative repercussions and our own weak recovery,” said Stephen S. Roach, nonexecutive chairman of Morgan Stanley Asia and a professor at Yale. “It’s difficult to know the tipping point for the global economy, but there are difficult headwinds now.” Only a few weeks ago, economic forecasters suggested first-quarter growth in the United States would exceed 4 percent, and similar estimates edged toward 5 percent for global growth. Those estimates now seem in danger of being outdated. Morgan Stanley’s tracking estimate for the United States’ growth in the first quarter has slipped in the last month to 2.9 percent from 4.5 percent, and that was before the troubles in Japan. Goldman Sachs in a report Friday suggested that global uncertainty might shave a half point off American gross domestic product for 2011, which its economists view as a flesh wound rather than a dire blow. But other economists point to the uncertainty created by Reactors No. 1, 2, 3, and 4 at the stricken power station in Japan and say it adds to a sense of global foreboding. In Libya, American missiles are flying and the oil wells stand silent. Saudi troops have marched into Bahrain, across the Persian Gulf from Iran. In Europe, finance ministers warn that hundreds of banks still carry billions of dollars in bad loans. A recent survey of prominent global economists by The International Economy magazine found that a majority view it as likely that some combination of Greece, Ireland and Portugal will default on debt and force bond investors to take heavy losses. Oil prices have risen nearly 11 percent this year. Japan already is the largest importer of liquefied natural gas, and as it searches for energy to replace a fractured nuclear grid, analysts expect these prices to rise as well. Finally, there is the United States, an economic colossus burdened by a foreclosure crisis and the worst long-term unemployment situation in nearly a century. If Japanese companies and investors retrench, selling some Treasuries and investing fewer yen overseas, the pain here could grow. Bernard Baumohl, chief global economist with The Economic Outlook Group, was until recently quite the economic bull. No more. “The uprisings, the Persian Gulf, Japan: It’s very likely that the global economic impact will be larger than most people currently imagine,” Mr. Baumohl said. “Electricity and gasoline prices will stay high and consumers are nervous. Guess what, that’s not an atmosphere conducive to corporations wanting to hire workers.” There are some more optimistic forecasts. A report by the World Bank to be released Monday predicts that growth in Japan and its East Asian neighbors would pick up in the second half of this year. The country’s past experience, the report said “suggests an accelerated reconstruction effort” that will limit the short-term impact. Indeed, some disruptions, even in Japan, could prove of short duration. Nissan said on Sunday it would reopen five of six plants in Japan this week, and Toyota and Honda are also in various stages of resuming production. Analysts expect Japan to cobble together a workable energy grid in the next few weeks. That will allow dockworkers to unload those pallets of pork and steak, not to mention bags of corn and soybean. Japan’s appetite for American meat is considerable. It consumes 30 percent of American pork exports. “American hog prices took a real fall here this week,” said David Miller, research director for the Iowa Farm Bureau Federation. “But supermarket shelves are pretty empty in Japan; we could see a surge in demand soon.” The global economy remains an adaptive animal. But the speed and efficiency of this adaptation is easily overstated. Japanese electronics, auto adhesives, and silicon-production facility require highly skilled labor and cannot take root overnight in another southeast Asian nation. Nor is the speed of the global economy, and its intricate interlacing, necessarily a comfort. General Motors last week announced that it would suspend product at its 923-employee factory in Shreveport, La., which manufactures Chevrolet Colorado and GMC Canyon models, because it has already run short of Japanese made parts. The human face of this disaster presents its own challenge. Many European and American companies in Tokyo dealt last week with a double emergency: They tried to cobble together supply chains even as they evacuated native-born workers to southern Japan, and repatriated foreign workers to their homelands. Volvo, the Swedish automaker, is the most reliant of the European car companies on Japanese parts — seven of its suppliers are based in the region ravaged by the earthquake and tsunami, including one on the cusp of the radiation zone. Volvo managers are trying to determine how many parts already were loaded on ships. “We are preparing ourselves for a shortage,” Mr. Froberg added. “If we can’t build any cars, we can’t sell any cars.” Travel now half way around the world, to Marion, Ark., a city of 8,900 just west of the Mississippi River. As officials in Japan try to stave off nuclear catastrophe, the fate of a 10-inch round gear might seem inconsequential. But the gear, manufactured in Japan and shipped to the Hino Motors Manufacturing plant in Marion, symbolizes the multitude of disruptions affecting supply chains. The plant employs 335 workers, who assemble rear axles for the Tundra pick-up truck as well as rear suspension parts for the Tacoma pick-up and Sequoia S.U.V. The factory imports about 20 percent of its parts from Japan. Even its suppliers in the United States purchase parts from smaller suppliers based in Japan. Some of those are in Sendai, the northern Japan city that was badly battered. Last Wednesday, workers of forklifts zipped down the aisles of the 361,000-square-foot factory, ferrying parts to the assembly lines. Stacks of bright blue plastic crates stood on pallets labeled “Made in Japan.” Each crate held a ten-inch round gear and steel pinion that form an essential part of the Tundra rear axles. “We are monitoring everyday which suppliers actually have a problem,” said Shinichi Sato, treasurer and secretary of Hino’s United States operations. The company typically gets a shipment of gears from Japan every other day. For now, shipments continue to arrive, because many crates are stacked up in warehouses in Long Beach, Calif., where the components are unloaded from Japan. No one knows how long the boxes will keep coming. In Japan, the Hino plant is undergoing three-hour rolling blackouts. Its suppliers draw power from the now-disabled nuclear plants. And limited train service means many employees cannot get to work. Managers in Marion talk about searching elsewhere for parts. But that’s not a long-term solution. “Some parts are possible to get elsewhere, but our parts are very important parts,” noted Mr. Sato, who takes a quiet pride in the quality of the Japanese parts. “So it is not easy to ask other suppliers to produce them.”

Economic Conditions and Trends
International Trade and World Market
United States Economy
Japan Earthquake and Tsunami (2011)
Japan


Iran Nuclear Talks to Resume This Month

Abstract: WASHINGTON — Breaking a deadlock over the location and timing of new talks on its disputed nuclear program , Iran has agreed to resume its stuttering dialogue with world powers later this month in Kazakhstan, Iranian and Western officials said on Tuesday. The agreement to meet in Almaty on Feb. 26 follows the imposition of punishing sanctions by the United States and its allies that has led to the devaluation of Iran’s currency. There is a general sense among experts that 2013 will be a make or break year for the negotiations. President Obama has repeatedly said that he will not allow Iran to become a nuclear weapons state and indicated that military action is an option. William Hague, the British foreign secretary, said Tuesday, “The need to make progress is increasingly urgent.” His statement said “Iran continues to enrich uranium in contravention of U.N. Security Council resolutions and on a scale that has no plausible civilian explanation.” Mr. Hague said that the world powers would present Iran with an “updated and credible offer,” but provided no details on the proposal. Iran’s negotiating team last met with the outside powers —the United States, Russia, China, France, Britain and Germany — for high-level talks in Moscow in June, which ended in frustration. At that encounter, Iran demanded the lifting of ever-tightening international economic sanctions as a precondition for discussions about reducing or eliminating its growing inventory of enriched uranium. But the outside powers want Iran to suspend its enrichment program and satisfy the International Atomic Energy Agency, the United Nations nuclear watchdog, that it does not have a nuclear weapons program. Iran denies Western accusations that its nuclear program is intended to provide access to the technology for nuclear weapons. At the same time, Iran told the I.A.E.A. last week that it plans to install more sophisticated centrifuges at its principal nuclear enrichment plant at Natanz, enabling it to greatly accelerate processing of uranium. Outside nuclear negotiations experts have suggested that Iran purposely timed that announcement to increase its diplomatic leverage at the coming talks. Given how unproductive and unwieldy the talks have been, some experts say that the best approach would be to have one-on-one negotiations between the United States and Iran. Vice President Joseph R. Biden Jr. offered such discussions when he spoke at a security conference in Munich last weekend. Iran’s foreign minister, Ali Akbar Salehi, said on Sunday that his country was open to direct talks. But an American official indicated such direct talks have not yet been agreed to. The agreement on the meeting in Kazakhstan follows months of haggling over venues and dates. At one point late last year, the United States and its partners proposed a meeting in Istanbul only to see Iran counter with an offer to meet in Cairo. That proposal was part of Iran’s effort to forge warmer ties with Egypt, a move that was reflected in President Mahmoud Ahmadinejad’s visit to the Egyptian capital on Tuesday. An overwhelmingly Muslim state and former Soviet republic, Kazakhstan voluntarily gave up a large cache of enriched uranium in 1994. Wendy R. Sherman, the under secretary for political affairs at the State Department, will lead the American delegation to the talks. Dennis Ross, a former senior Obama administration official who is an expert on the Iranian nuclear issue at the Washington Institute for Near East Policy, said that Iran might hint at some modest movement in the upcoming talks, perhaps to try to encourage divisions among the United States and the other powers involved in the talks. One possibility, he said, was that Iran would press for the lifting of sanctions, a recognition of its right to enrich uranium while also signaling that it was ready to limit the production of uranium that is enriched to 20 percent. But that, he said, would not change the basic character of Iran’s nuclear program. “My immediate expectations would be that they will do enough to justify another meeting afterwards,” Mr. Ross said of the Iranian position. “I do not have high expectations on what this meeting will produce.”

Nuclear weapon
International relations
Iran


Former Yankee Tones Down Comments as Fans Weigh In

Abstract: Gary Sheffield sat in the Detroit Tigers’ dugout while the Yankees were completing batting practice. Sheffield started to step onto the field but sat down again for an interview. That decision prevented Sheffield from being near several Yankees players and coaches, something that did not matter to him. “Communicating with guys before a game, I’m really not into that anyway,” Sheffield said. But communicating about guys, like Manager Joe Torre and his former teammate Derek Jeter, is something that Sheffield has done and something he continued to do yesterday. Sheffield said he stood behind his comments that Torre favored white players over black players during Sheffield’s three seasons in New York. But Sheffield, who has played for seven teams in 20 seasons, retreated when he was asked if his relationship with Torre was the worst he had experienced with a manager. “It wasn’t all that bad,” Sheffield said. “You had a couple of incidents that I stated and a lot of people took it and ran with it and made it bigger than what it is.” While Sheffield modified his accusations of racism against Torre to a couple of incidents, he declined to elaborate about how he thought the news media had made his comments more controversial than they already were. “No, I don’t have to,” Sheffield said. The fans at Yankee Stadium offered their critique of Sheffield last night. Before his name was announced in the first inning, they booed him. They continued booing as Sheffield walked to the plate and dug his cleats into the batter’s box. Sheffield did not speak to catcher Jorge Posada. When Sheffield rapped a potential double-play grounder to third base, the fans seemed poised to roar. But Alex Rodriguez did not field the ball cleanly and Sheffield reached on the error. The Tigers scored four runs in the first, three of them unearned, and went on to an 8-5 victory. One fan derisively called Sheffield — who went 0 for 3 with two walks and a run scored — Gary Steroids during his second at-bat. “Like they always say, you have to be a heck of a player to get people to react to you, so it’s pretty special,” Sheffield said. Sheffield said he has a strong relationship with Tigers Manager Jim Leyland, who managed Sheffield when the Florida Marlins won the 1997 World Series. By lauding Leyland, perhaps Sheffield was taking another jab at Torre. “He’s real,” Sheffield said about Leyland. “That’s all there is to it. You get it both ways. You get the positive and you get the negative, and he’s real about both sides.” Sheffield insisted that in 2004 Torre repeatedly spoke to the news media about his preference for signing Vladimir Guerrero over Sheffield. Torre and General Manager Brian Cashman wanted to sign to Guerrero to play right field, but George Steinbrenner, the team’s principal owner, signed Sheffield instead. If Torre had spoken about Guerrero as often as Sheffield said, there would have been articles about Torre’s comments on an opposing player. Reporters who covered the Yankees regularly in 2004 recalled no such stories. Although Sheffield said that he did not disguise his feelings for Torre, he was not publicly critical of Torre during his time with the Yankees. Sheffield also discussed his relationship with Torre in his book, “Inside Power,” which was released in April, and never mentioned that he thought Torre favored whites over blacks. Sheffield said last month on HBO’s “Real Sports” that Jeter was not “all the way black,” and he and Jeter did not speak again until last night’s game. While Sheffield called Jeter his closest friend on the Yankees, Jeter had declined to discuss what Sheffield said about him. Jeter’s mother is white and his father is black. Sheffield said his remark about Jeter was factual. But Sheffield’s remark could be interpreted as a criticism of Jeter for not experiencing what an African-American experiences. Sheffield called Jeter “an icon,” while saying that Jeter’s experience as a Yankee differs from other black players. “Jeter is not going get the same treatment as Shawn Chacon, Gary Sheffield, nobody else, because he’s bigger than Cashman, he’s bigger than Joe Torre; he’s this organization, period,” Sheffield said. “That’s why he don’t get the same treatment.” Sheffield said that he and Jeter spoke during the game when he was on second base and that they were “cool” with each other. At first, Jeter declined to discuss Sheffield, saying, “The less you talk about it, the quicker it’ll be over.” He later smiled and said, “I have no problem with anyone.” Cashman said the Yankees would have retained Sheffield for 2007 if he had agreed to play first base. But Sheffield did not want to move from the outfield to first. So the Yankees dealt him to the Tigers for three young pitchers. Sheffield received a two-year, $28 million extension from the Tigers and was moved to designated hitter, a less taxing position. “What I did you’ll never see done again,” Sheffield said. “I was 38 years old and I had just come off not playing the whole year. I got three years on my contract and a raise to do less. You’ll never see that done again.”

Sheffield Gary
Torre Joe
Baseball
Blacks
New York Yankees


G.E. Makes It Official: It Will Sell NBC to Comcast

Abstract: After nearly nine months of negotiations, Comcast , the nation’s largest cable operator, announced an agreement on Thursday to acquire NBC Universal from the General Electric Company . The deal valued NBC Universal at about $30 billion. The agreement will create a joint venture, with Comcast owning 51 percent and G.E. owning 49 percent. Comcast will contribute to the joint venture its stable of cable channels, which includes Versus, the Golf Channel and E Entertainment, worth about $7.25 billion, and will pay G.E. about $6.5 billion in cash, for a total of $13.75 billion. For now, the network will remain NBC Universal, but ultimately Comcast could decide to change the name. Almost immediately, the transaction reshapes the nation’s entertainment industry, giving a cable provider a huge portfolio of new content, even as it raises the sector’s anxieties about the future. In a joint statement announcing the agreement , Brian L. Roberts , the chief executive of Comcast, said the deal was “a perfect fit for Comcast and will allow us to become a leader in the development and distribution of multiplatform ‘anytime, anywhere’ media that American consumers are demanding.” The deal’s genesis lies in frequent flirtations over the last several years between Comcast and General Electric, although serious talks began in March. For Comcast, the purchase is the realization of its long-held ambition to be a major producer of television shows and movies. News of the negotiations broke in late September, and in the ensuing weeks G.E. worked to resolve details with Comcast, while simultaneously negotiating to buy out a 20 percent stake in NBC Universal held by Vivendi , the French telecommunications conglomerate. It was this last part that proved difficult. G.E. and Comcast’s part of the transaction has essentially been complete for weeks, but the final step was held up by the negotiations between G.E. and Vivendi. Vivendi will receive about $5.8 billion for its stake. Jeff Zucker , the current head of NBC Universal, will stay on as chief executive and report to the chief operating officer of Comcast, Steve Burke. In a statement released by the companies Thursday morning, Mr. Zucker called the deal the “start of a new era” for NBC . The deal could take up to 18 months to pass regulatory muster. Although Comcast is based in Philadelphia , NBC’s headquarters will remain in New York, the joint release said. Most of NBC’s value is in its lucrative cable channels — USA, Bravo, SyFy, CNBC and MSNBC. These networks, along with the channels that Comcast will contribute to the joint venture, will compose 82 percent of the company’s cash flow. The NBC network and Universal Studios will account for only a small portion of the joint venture’s cash flow. In some respects, G.E.’s decision to sell reflects a desire to exit a business that never quite meshed with its industrial side. “It’s something I always thought about,” said Jeffrey R. Immelt , G.E.’s chief executive, in an interview. “In some ways my thinking gets shaped by the totality of G.E.” He said that the economic recession also affected his thinking, adding, “you never have an epiphany.” NBC has been mired in fourth place among the major broadcast networks, and the economics of the broadcast television business has deteriorated in recent years amid declining overall ratings and a decline in advertising. By contrast, cable channels have continued to thrive because they rely on a steady stream of subscriber fees from cable companies like Comcast. Mr. Roberts, the Comcast chief executive, failed in 2004 with a hostile takeover bid for the Walt Disney Company . Since then, the company has taken a less ambitious approach to content, buying a stake in MGM and building up smaller cable channels and regional sports networks. On Thursday, Mr. Roberts said, “I believe our company is strategically complete.” Shortly after news of the deal leaked in September, G.E. and Comcast signed a standstill agreement, which effectively blocked other bidders from entering the fray. Previously, G.E. had sought to entice Time Warner . More recently Rupert Murdoch , who controls the News Corporation , considered making an offer for NBC Universal. On Capitol Hill, a number of lawmakers said they would hold hearings to examine the deal in detail. Herb Kohl, Democrat of Wisconsin and the chairman of the Senate Antitrust, Competition Policy and Consumer Rights Subcommittee, said he would convene a hearing about the deal “so that consumers can get a better sense of how this deal could affect their access to diverse programming and information, especially as they more often look to the Internet for such services.” Michael J. Copps, a commissioner of the Federal Communications Commission who regularly opposes media consolidation, said in a statement that “every citizen has a stake here,” given the size of the combined entity. “The lodestar for this review must be the public interest,” he said. Foreseeing a long regulatory fight, Comcast published a letter on Thursday that outlined commitments to enrich and extend programming for children and minority groups. It also said policies would remain in place to ensure independence for NBC’s news division. Asked about the NBC broadcast network and its affiliate structure, Mr. Roberts said in an interview, “We’re committed to free, over-the-air broadcast television continuing.” But he and other Comcast executives acknowledged that broadcasters faced continuing threats to their business model. Mr. Zucker reassured employees of NBC Universal that given the regulatory hurdles ahead, “for now, it remains business as usual.” Mr. Immelt said G.E. may consult its future partners on occasion over certain deals. G.E. will still be managing the company when certain significant television rights deals come open for bid within the next year. Under G.E., NBC has become the exclusive rights holder to every summer Olympics since 1988 and every winter Olympics since 2002. Referring to the coming games in Vancouver and London , which NBC already owns the rights to, Mr. Zucker said, “We’re excited for next year and 2012,” and stressed the company would remain in the bidding for the games in 2014 and 2016. Mindful of past deals that failed on their promise of synergies, Comcast made sure to point out that the financial projections underlying the deal took no account of any potential cost savings from combining the various assets. For the thousands of employees of both companies, that is good news. Comcast has about 100,000 employees, while NBC Universal employs about 30,000. Mr. Burke, the Comcast executive who will oversee the joint venture, said, “99.9 percent of those employees are in businesses that don’t overlap.”

Comcast
NBC Universal
Mergers and Acquisitions
NBC
GE
TV


Plotting Doubted in WikiLeaks Case

Abstract: STOCKHOLM — Although Swedish prosecutors have yet to complete their review of sexual abuse accusations that two Stockholm women made last week against Julian Assange, founder of the WikiLeaks Web site, those who say they have detailed knowledge of the case discount conspiracy theories linking it to efforts to discredit WikiLeaks. Mr. Assange had suggested over the weekend that the tortured sequence of events at the Stockholm prosecutor’s office had been prompted by the Pentagon as part of what he called a program of “dirty tricks to ruin us.” The prosecutors had issued a warrant for Mr. Assange’s arrest on suspicion of rape on Friday night, which was followed within 24 hours by the cancellation of the warrant and a formal retraction of the implication that a rape had occurred. But the conspiratorial view has found no backing from the prosecutor’s office, where the senior prosecutor in charge of the case, Eva Finne, said Monday that nothing she knew of the case suggested that there had been any outside involvement in the events that led the two women to make their accusations against Mr. Assange. “I have no indication at all in that direction,” Ms. Finne said in a telephone interview in which she confirmed that a lesser charge mentioned in the original prosecutor’s statement — molestation of the two women — remained under investigation. She said she hoped to decide by the end of the week whether to proceed with a molestation charge against Mr. Assange, which carries a maximum penalty under Swedish law of a year in prison. The developments over the weekend set off a new flurry of the interest that has focused on WikiLeaks and its founder after the organization posted 77,000 secret Pentagon documents on the Afghan war on the Internet in late July. The Defense Department’s general counsel, Jeh Charles Johnson, said last week that WikiLeaks had acted illegally in obtaining the secret documents and thousands of others that it has not yet posted on the Web, and Justice Department lawyers have been exploring the possibility of criminal charges against WikiLeaks and Mr. Assange. Mr. Assange, a 39-year-old Australian, left Britain for Sweden this month as the long-distance confrontation with United States authorities intensified, saying he intended to establish a more secure base for himself and WikiLeaks under the wide protections afforded to whistle-blowers by Swedish law. The organization already had a strong base of support here, and it uses Sweden as a base for some of the multiple Web servers it uses to store and disseminate its caches of secret documents. Mr. Assange and one of the two women, an activist in her early30s who is associated with a group that works with WikiLeaks in Sweden, did not respond to requests for interviews on Sunday and Monday. Efforts to contact the second woman, an artist who is in her mid-20s, were also unsuccessful. Around the time the rape accusation was made, Mr. Assange traveled to northern Sweden, where he remains, according to an account he gave on Sunday to the Stockholm newspaper Aftonbladet. The newspaper announced recently that it planned to establish a formal relationship with Mr. Assange as a contributing columnist, an arrangement that friends said would enable him to acquire a work permit to stay in Sweden. In the interview, he declined to answer questions about his relationships with the two women. “I don’t want to drag anybody’s private life into the dirt without first understanding the whole situation clearly,” he said. “Why are they going to the police? What’s behind it? What I can say is that I have never, in Sweden or any other country, had sex with someone in a way that did not build on total consent from both sides.” He contended in the interview, as he has in Twitter feeds and e-mails, that the accusations of sexual impropriety involved “dirty tricks.” “I don’t know what’s behind this,” he said. “But we have been warned that the Pentagon, for example, is thinking of deploying dirty tricks to ruin us. And I have also been warned about sex traps.” He added that he thought WikiLeaks had suffered “major damage” from the allegations. “There have been headlines all across the world that I am suspected of rape,” he said. “They do not disappear. And I know from experience that WikiLeaks’ enemies continue to trumpet things even after they have been retracted.” But one of Mr. Assange’s close friends in Sweden, who said he had discussed the case in detail with Mr. Assange and one of the women, said he was “absolutely sure” that what was involved were personal animosities and grievances that flowed out of brief relationships Mr. Assange had with the women. The man, who spoke on the condition of anonymity because of the delicacy of the issues, said that the volatile mix that led to the two women’s seeking criminal charges against Mr. Assange involved his celebrity in Sweden and the ill feelings that erupted when the two women discovered they had been competing for his attentions. “This wasn’t anything to do with the Pentagon,” he said. “It was just a personal matter between three people that got out of hand.”

Classified Information and State Secrets


Volleyball in Kevin Love’s Future

Abstract: Kevin Love, the N.B.A.’s leading rebounder, plans to play in next month’s Manhattan Beach (Calif.) Open on the professional volleyball tour. Love, an All-Star for the Timberwolves, does not have a partner yet but says he hopes to survive the first day of the three-day, $200,000 event to be held from Aug. 26 to 28.


Style Makeover at Hotel Aims to Dress Up the Guest Experience

Abstract: LE MERIDIEN, the hotel chain, is trying to shake its image as a faceless stopover for European business travelers. In the future, Le Meridien would like to be viewed as a haven for hipsters and other creative types — perhaps a European version of the W Hotels chain. Both are part of Starwood Hotels and Resorts Worldwide, which also includes brands like Sheraton and Westin. Le Meridien has hired a French contemporary art expert, Jérôme Sans, for a newly created position as cultural curator. His job will be to pull together artists, photographers, filmmakers and chefs who will work with Le Meridien and help imbue it with some concrete brand attributes. The goal of the branding initiative — which the company calls LM 100 — is to have about 100 design experts signed up as consultants by 2012. So far two of the better-known people involved are Jean-Georges Vongerichten, the chef, and Andrea Illy, the coffee maker. The movement toward lifestyle branding in the hotel industry was started by the W chain, said Jez Frampton, the chief executive of Interbrand, which has done work for two other hotel companies: InterContinental and Holiday Inn. He says the industry is ripe for change, that most big-name hotels are reviewing the guest experience rather than simply their operational processes. “We went through a period where the hotel business specialized in building blands, not brands. You never knew where you were,” Mr. Frampton said. The W, he said, was one of the first chains to create a different kind of experience, and for a long time it was used as a case study. “It stands for something and it executes differently, like the music when you walked into the room,” he said. “They were trailblazers for the industry, and Le Meridien is using the same kind of thinking to make it stand out.” Already Le Meridien has its own fragrance, created by a perfume design firm, Le Labo, as well as a distinct sound for its elevators, lobby and rooms, composed by the musician Henri Scars Struck. Instead of a chocolate on their pillow, future guests might find a bedtime book of fairy tales. Key cards will be decorated with artwork, and the hotel hopes that people will collect them. Guests will also get separate cards with information about exhibits at nearby cultural institutions that are partners of Le Meridien. • For guests more concerned with the quality of their sleep, Nick Dine, a furniture designer, will help Le Meridien introduce a new bed next year. Eva Ziegler, the senior vice president of Le Meridien who is directing these changes, is an advertising industry official who was lured to Starwood from Toyota, where she played a role in creating a green showroom on the Champs-Élysées in Paris. “Starwood’s mission is to transform the hotel industry from a functional business to a lifestyle business,” Ms. Ziegler said. “Each of its brands is aiming to occupy a different lifestyle.” Le Meridien is catering to guests who are “well-informed, individualistic, techno-savvy with a creative mind-set,” she said. The brand, she added, is striving to be “chic, cultured and discovery-oriented.” Le Meridien worked with iKône, a marketing agency based in Paris, on its branding makeover. Nicolas Kenedi, the agency’s president, said in a telephone interview from Japan that he had sought out Mr. Sans, a well-known art curator in Paris, because of the attributes Ms. Ziegler said she was seeking. “I told Eva, chic we can manage, discovery we can manage, but culture we need an external warranty,” Mr. Kenedi said. “We need someone that’s going to stand for that.” Mr. Sans, who was the curator of a popular contemporary art exhibition in Paris called Palais de Tokyo, said he was surprised to be approached by Le Meridien, a brand he remembered from the 1970s when it was introduced as a subsidiary of Air France. “Le Meridien was seen as a futuristic new approach for a hotel, and it was identified with Air France and the Concorde, which was a beautiful design object,” he said. • Mr. Sans stresses that his vision for the LM 100 project is to help make taste and style feel accessible to the average guest. “Culture is not just deluxe,” he said. “For once, companies understand that dealing with culture is a key issue, and it needn’t be intimidating.” Ms. Ziegler said that Le Meridien would communicate its new image primarily through marketing events at the hotel, like art exhibits and lectures on coffee preparation. “When a person leaves Le Meridien, we aim to give them a feeling that their life has grown,” she said.

Starwood Hotels & Resorts Worldwide Inc
Le Meridien
Advertising and Marketing
Hotels and Motels


Car Bomb Kills 8 Afghans From Unit Linked to C.I.A.

Abstract: KABUL, Afghanistan — Eight Afghan paramilitary soldiers were killed during an assault on a Taliban hide-out in eastern Afghanistan , Afghan officials said Wednesday. It was the latest of several clashes to take a heavy toll on the security forces as American combat forces leave the country. The deaths, caused by a car bomb, occurred during a raid by the Khost Protection Force, a C.I.A. -trained paramilitary unit that has carried out operations along the border with Pakistan for more than a decade. Fighters with the force, who operate in Khost Province, swooped on a remote compound believed to house suicide bombers, killing three people including one woman, the Khost governor’s office said in a statement. But once they had secured the compound, a car bomb exploded, killing eight of the militiamen and wounding five. The governor’s spokesman, Mohammad Mubarez Zadran, confirmed in a phone interview that the troops belonged to the Khost militia force, established by the C.I.A. and American Special Operations forces after 2001, and which The Associated Press reported in May had up to 3,500 fighters. The future of the Khost Protection Force, and others like it in various Afghan provinces, has been unclear as the C.I.A. withdraws from remote Afghan bases in concert with the broader drawdown of American combat troops from Afghanistan. Some of the units were earmarked to be handed over to the Afghan intelligence service, the National Directorate of Security, after this year. The Khost force operates on the border with North Waziristan, the Pakistani tribal belt that is a major hub for the Taliban and the allied Haqqani Network , which has leveraged its ability to straddle the border to carry out numerous attacks on high-profile Western and Afghan targets in Afghanistan. The Khost Protection Force, which generally maintains a low profile, has until recently been one of the largest of several C.I.A.-sponsored paramilitary forces along the border. During the Obama administration’s troop surge in 2010 and 2011, some American news reports said it had carried out illegal cross-border raids, with support from armed American drones, to attack Qaeda and Taliban fighters in North Waziristan. Those attacks came at a time of high tension between the United States and Pakistan over the situation in North Waziristan. American officials were angered by close ties between the Haqqani Network and Pakistani military intelligence, while Pakistanis privately complained of cross-border interference from American forces and spies based in southern Afghanistan. Drawn from local tribes, the Khost Protection Force initially enticed recruits with the promise of higher pay and better conditions than the regular Afghan Army. “The food, the training, everything is better,” Mohammed Yousuf, a medic with the force, told Newsday in 2004. Until recently, it had been unusual for Afghan officials to publicly acknowledge its operations. In an interview in July 2011 the outgoing commander of American forces in Afghanistan, Gen. David Petraeus , described it as “a border force that is quite effective and well supported.” The deaths in Khost occurred as the Taliban stepped up a renewed assault on government forces across the country in recent days, following a relative lull in violence that coincided with last week’s Eid al-Adha religious holiday. In the southern province of Helmand, Taliban fighters killed Muhammad Anwar, the district governor of Nad Ali district, in an ambush on his vehicle late Tuesday. Nad Ali district is a major center of opium poppy cultivation and was the scene of heavy fighting between Western and Taliban fighters during the American troops surge in 2010-11. Mr. Anwar was considered a staunch anti-Taliban force in the area and had personally participated in battles against the insurgents. Zabiullah Mujahid, a Taliban spokesman, took responsibility for the attack, in which at least two policemen were also killed.

Afghanistan War
Taliban
CIA
Afghanistan
US Military


German Prosecutors Side With Satire, Not Turkish President

Abstract: BERLIN — In the end, German prosecutors decided that a satirical poem was just that, an act of hyperbole in the name of art — not a criminal attempt to insult a foreign leader, President Recep Tayyip Erdogan of Turkey. An announcement Tuesday by state prosecutors in the western city of Mainz that they were dropping charges against Jan Böhmermann, who read aloud a profanity-laced poem about Mr. Erdogan on late-night TV in March, brought to a partial close an international dispute over freedoms of speech and artistic expression that had threatened to unravel a major diplomatic deal and drove the German comedian underground for weeks. In a lengthy statement, prosecutors said their investigation, begun in April, had failed to turn up sufficient evidence of criminal intent on the part of Mr. Böhmermann, 35, an award-winning voice of Germany’s millennials . Instead, they determined that “it is characteristic of the art form of satire and caricature to work with exaggeration, distortion and disassociation.” Mr. Böhmermann, who returned to the screen in May after a hiatus — albeit without further mention of Turkey, or Turkish politics — said on Twitter that he would respond to the ruling on Wednesday. His lawyer, however, criticized Chancellor Angela Merkel for initially calling his poem “deliberately offensive.” Ms. Merkel later apologized for her first comments about the poem, calling her response “a mistake.” She nevertheless allowed the Turkish leader to pursue his legal suit against Mr. Böhmermann under a little-used 19th-century law, declaring her faith that the protections provided under Germany’s Constitution would prove themselves in the end. Image Jan Böhmermann Credit Britta Pedersen/Agence France-Presse — Getty Images The dispute over the poem earned the chancellor criticism that she was abandoning Europe’s core vales of free expression. It came only weeks after she helped orchestrate a deal between the European Union and Turkey aimed at preventing migrants and refugees from reaching Europe’s shores by boat in return for billions in aid to Turkey and other concessions. Weeks earlier, Mr. Erdogan’s government had seized the opposition newspaper Zaman . His objection to the poem caused fears among many Germans that he was seeking to extend his repression of free speech beyond the borders of his own country. The prosecutors upheld the argument of Mr. Böhmermann and the producer of his show, the public broadcaster ZDF, that the poem was satire. “An average, well-informed public could expect that any comments made there would involve exaggeration and hyperbole and lack in seriousness,” their statement said. And they said Mr. Erdogan appeared to have been aware of this fact because he frequently referred to Mr. Böhmermann’s television show as a “nonsense program.” The decision was resoundingly welcomed by journalists and widely celebrated by many Germans over social media. “This is the only correct decision,” said Frank Überall, the head of the German Journalists Association. “It makes clear that in Germany, the freedom of satire is valued above the touchiness of an autocrat.” Thomas Bellut, director of ZDF, welcomed the decision, noting that the detailed explanation makes clear “that an exceptionally high value is placed on the freedom of art and speech in our society.” The Mainz prosecutors’ decision not to press charges will not affect a separate legal proceeding by a state court in the northern city of Hamburg, where Mr. Erdogan is seeking an injunction against the poem. That trial is expected to begin next month.

Jan Bohmermann
Recep Tayyip Erdogan
Turkey
Comedy
Germany