Jeb Bush Begins Wooing Donors for a 2016 Bid

Abstract: Jeb Bush on Tuesday delivered a powerful message about two of the most vital ingredients in a presidential campaign, money and ideas, transforming himself from a figure who once seemed paralyzed by ambivalence over a White House run into the most forceful presence within the emerging Republican field. With the flip of a Facebook switch, Mr. Bush, the former governor of Florida, disclosed the formation of a full-time political apparatus that can begin raising money with an eye toward 2016 and laid out a campaign rationale that was striking for its emphasis on big, knotty, bipartisan concepts like immigration overhaul and income inequality. Mr. Bush, 61, a figure indelibly linked to the Republican Party’s past, seems determined to offer himself as an intellectual midwife of its future — a break from the party’s struggle to win over minority voters and the kind of ideological infighting, on display Tuesday when conservatives tried to oust Speaker John A. Boehner, that Mr. Bush could face in primaries. “We will not cede an inch of territory — no issues, no demographic groups, no voters,” he wrote in a statement on the website of his new organization, called Right to Rise . To emphasize the point, and showcase his social media savvy, Mr. Bush appeared on a cellphone video Tuesday speaking both English and Spanish. In the process, he is employing a well-worn playbook of early, aggressive and high-profile maneuvers to deflect attention and resources from his potential rivals, who have remained largely quiet over the past few weeks as the son and brother of presidents commanded the spotlight. “What it is designed to do is provide first-mover advantage to a strong player with the objective of sucking as much oxygen out of the room as you possibly can,” said Dirk Van Dongen, president of the National Association of Wholesaler-Distributors, who is supporting Mr. Bush and was a prominent contributor to the campaigns of his brother, former President George W. Bush. But the tactics carry genuine risk: Mr. Bush, who told friends that he was in no hurry to enter a presidential contest that is still two years off, is now placing himself directly in the cross hairs of both Republicans and Democrats who view him as a threat. As Mr. Bush announced Right to Rise, a group tied to Senator Rand Paul, Republican of Kentucky, bought ads on Google that would direct anyone searching for information about Mr. Bush to a web page about Mr. Paul. And in a sign of how quickly, and inadvertently, messages can be muddled, Mr. Bush posted the video of himself speaking in front of BlackRock, a Wall Street investment firm, on a day when he was trying to highlight the plight of the middle class. Social media lit up with unflattering references to the juxtaposition. In tone and content, Mr. Bush’s message stood out from the white-hot, partisan rhetoric of would-be rivals like Senator Ted Cruz, Republican of Texas. Mr. Bush wrote that “we are optimists,” declared that “the income gap is real” and reached out to the poor who “have lost hope that a path to a better life is within their grasp.” It was a sentiment echoed in his sympathetic remarks on Monday urging respect for same-sex marriage in Florida . Rick Wilson, a political consultant in Florida who has advised presidential campaigns, said he was struck by the absence of any animus from Mr. Bush toward President Obama. “I think he rightly believes most of the candidates will find themselves as the anti-Obama, the cure, the rollback,” Mr. Wilson said. “He’s going to position himself as the guy with bigger ideas and a broader vision.” Even as Mr. Bush sought to broaden the appeal of his party, he also tended to its traditional constituencies. In his blueprint, Mr. Bush deployed the lexicon of grass-roots conservatism, sketching out an economic vision that rewards “merit, hard work and earned success,” not government handouts. The 2016 presidential race is still in a nascent phase, but the competition for major donors, a contest all but invisible to the public, has begun in earnest. The early moves by Mr. Bush appear designed to roil that unseen financial primary, by unsettling both his would-be competitors, most of whom do not have the resources or support to begin campaigning so early, and Republican donors. Until now, with no entity to which they could actually write checks, the bulk of the party’s top donors and fund-raisers outside Mr. Bush’s inner circle of financial backers could remain safely on the sidelines. That changed abruptly on Tuesday with the announcement of Mr. Bush’s PAC, which can accept individual contributions of several thousand dollars, and amid indications that he is preparing to file papers for a new “super PAC” that can accept unlimited contributions. The name of his PAC, Right to Rise, is taken from a phrase popularized by Representative Paul D. Ryan, Republican of Wisconsin, conveying a right to social mobility. “I think there are some people that are sitting back, and if Jeb runs, they’re not going to run,” said Andy Sabin, a New York businessman who is a big donor to national Republican candidates and party organizations. He added: “I don’t feel like we have a great field of uniters. Jeb knows he has to bring left and right together.” Mr. Bush and his top supporters already have begun to press contributors to make financial and fund-raising commitments to the two new entities, which can cover the costs of staff, travel and even advertising in support of the former governor’s political endeavors. Several fund-raising events are planned for Washington in the coming days, and in Manhattan Mr. Bush will hold a meeting at the powerhouse private equity firm KKR. “There are phone calls going out to people like myself right now, from people who know him,” said Richard F. Hohlt, a lobbyist who has raised money for many Republican White House campaigns. Their message: “Can you help Jeb?” So far, Mr. Hohlt said, a lot people are saying yes. “I think he will find a lot of financial support.”

Jeb Bush
2016 Presidential Election
Campaign finance
Republicans


In China, Traffic Jam Is Windfall for Enterprising Villagers

Abstract: HETAOCUN, China — Compared with some of the more spectacular recent traffic jams in China , among them a 60-mile snarl last summer that paralyzed a major artery outside Beijing for two weeks, the thousands of travelers who spent the night trapped on a snow-coated highway in southwest Guizhou Province on Monday did not even warrant a mention in the local news media. The immediate effect of the information vacuum was to suck more unwitting victims — including this reporter — into the morass, which stretched for miles along the four-lane affair linking Guizhou north to Chongqing . Stranded drivers chain-smoked, stomped their feet against the chill and cursed the government for failing to come to their rescue. As the night wore on, fuel lines froze and cellphone batteries died. The residents of Hetaocun, however, saw the unmoving necklace of taillights from their mountain village and got entrepreneurial. They roused children from their beds, loaded boxes of instant noodles into baskets and began hawking their staples to a captive clientele. The 500 percent markup did not appear to dent sales. “It rarely snows here, so this is a good thing,” said Yi Zhonggui, 42, as he wove past stalled vehicles with his wife and 4-year-old daughter lugging thermoses of hot water. As the supply of noodles ran low, residents began gathering up the walnuts that give the village its name. In between cries of “walnuts, walnuts,” salesmen like Chen Xianneng obliged the desperate with snippets of news from the front, even if the information was based on hearsay. “The roadway is frozen, and the trucks can’t get down the hill,” he would say, cracking shells open with his bare hands as a sort of sales pitch. (Later, it became apparent that an overturned truck carrying toilets was largely responsible for the mess.) By noon on Tuesday, more than 12 hours after the blockage began, the frustration and anxiety were mounting. Truckloads of oranges were going bad, and Xi Xinli was nervously eyeing his cargo of 30 hogs, a noisome pile of pink complaining flesh that was bound for the slaughterhouse. “You would be annoyed, too, if you were stuck together like that without food or water,” Mr. Xi said. People were faring no better, especially the busloads of migrant workers who had endured clotted roadways for as long as three days. One especially unlucky bunch left Guangdong Province on Saturday only to find themselves stuck on their bus for eight hours when an earlier bout of freezing rain crippled a portion of southern China. “I’m hungry, but the food they’re selling is too expensive, and I’m tired but too cold to sleep,” said Zhao Ling, 25, a carpenter trying to return home to Chengdu, the provincial capital of Sichuan. Mr. Zhao and his fellow passengers thought they were smart by traveling before the Chinese New Year’s crush, which starts in earnest next week. In 2008, the last time unusually snowy weather buried China’s southern flank, more than six million people were stranded as they tried to make their way home for the New Year’s holiday. That crisis prompted a national debate about the government’s ability to deal with weather-related calamities and led to a rare, well-publicized apology from Prime Minister Wen Jiabao. If the past few weeks are any indication, the coming holiday may be no better. Much of the region has been battered by unusually cold weather, and earlier this month, a storm shut down most of Guizhou’s highways, including the road to Guangzhou, where thousands were stuck for four days. According to local news reports, the government eventually mobilized with emergency food and water, and gave each trapped passenger 100 renminbi, or about $15. Mr. Zhao and the others would not be so lucky. As the hours passed, he fidgeted in his seat and wondered whether the traffic police would ever show up. “Maybe they all went home early for the holiday,” he said with a smirk. Moments later came a cascade of shouts, followed by the honking of horns and then the coughing of starting engines that became contagious. As people scurried back into their vehicles, the bedraggled, frozen column began to creep forward, slowly at first, but then with more resolve. The hawkers from Hetaocun stepped back onto the highway shoulder, their expressions forlorn. But then the snow began to fall again and Mr. Yi, the farmer-turned-noodle vendor, began to smile. He repeated the weather forecast he had heard that morning — several more days of freezing precipitation — and told his wife to stay put. “Don’t worry,” he said. “They’ll get stuck again.”

China
Roads and Traffic
Delays (Transportation)
Entrepreneurship
Hetaocun (China)


Immigration Officials Arrest More Than 3,100

Abstract: In a six-day nationwide sweep, federal immigration agents arrested 3,168 immigrants who had been convicted of crimes or had repeatedly violated immigration laws, officials said Monday. The operation by Immigration and Customs Enforcement involved arrests in all 50 states and was coordinated with the local and state police, in the largest arrest campaign by the agency, officials said. Among those detained were 1,477 immigrants who had served prison sentences for felonies, and 1,063 immigrants with more than one criminal conviction, the agency reported. Those arrested also included 559 immigrants who had returned to the United States illegally after being deported. John Morton, the director of Immigration and Customs Enforcement, said the operation was an example of the agency’s shift in focus, to deporting immigrants in the country illegally who also have been convicted of crimes or who “game the immigration system.” The agency has also been pursuing a program intended to halt deportations of some illegal immigrants without criminal records, by exercising prosecutorial discretion to close their cases in immigration courts. The former felons arrested in the sweep had been released from prison in past years before immigration agents were able to hold them for deportation. “We are addressing the backlog of people here unlawfully who were released to the streets because we weren’t able to respond in time,” Mr. Morton said. The operation was carried out by agents from the deportation unit of the agency, which is known as ICE. The union representing those agents, Council 118 of the American Federation of Government Employees, has been in a protracted standoff with top officials over how to carry out the policy redirecting deportations toward criminals and sparing other illegal immigrants. The arrests, Mr. Morton said, showed that the dispute has not hampered the agents’ work. “It’s hard to say that these issues have affected our performance or results as an agency,” he said.

Immigration and Customs Enforcement (US)


Oklahoma: Man Accused of Plotting to Bomb Churches

Abstract: An Illinois man found with bomb-making supplies in an Oklahoma motel room planned to blow up dozens of churches with Molotov cocktails, according to police officials. Gregory A. Weiler II, 23, of Elk Grove Village, Ill., has been charged under a strict antiterrorism law the state put in place after the Oklahoma City bombing in 1995. Mr. Weiler was arrested on Thursday after a worker at a motel in Miami, Okla., spotted bottles and other suspicious items in a garbage bin and alerted the police. Officers found bomb-making materials in Mr. Weiler’s room, the authorities said, along with torn bits of paper that contained directions for making Molotov cocktails, a list of 48 local churches, a hand-drawn map of the churches and an outline of a plan to plant bombs. Mr. Weiler was charged with threatening to use an explosive or incendiary device and violating the Oklahoma Antiterrorism Act.

Terrorism
Oklahoma
Churches (Buildings)
Bombs and Explosives
Weiler Gregory A II


Wright County Egg’s Founder Apologizes for Salmonella

Abstract: WASHINGTON — An Iowa egg producer at the center of a nationwide outbreak of salmonella apologized to a Congressional panel on Wednesday and acknowledged that his family operation had become “big quite awhile before we stopped acting like we were small.” “What I mean by that is, we were big before we started adopting sophisticated procedures to be sure we met all of the government requirements,” the egg producer, Austin J. DeCoster , said in testimony before a House Energy and Commerce subcommittee. He is the founder of an egg empire that has been linked over three decades to outbreaks of salmonella poisoning in many states, some leading to deaths. “We were horrified to learn that our eggs may have made people sick,” Mr. DeCoster, who is known as Jack, said in a shaky voice. “We apologize to everyone who may have been sickened by eating our eggs.” His company, Wright County Egg, based in Iowa, and another company, Hillandale Farms, recalled more than 500 million eggs last month after health officials traced salmonella bacteria that sickened more than 1,500 people to those companies. A subsequent inspection by the Food and Drug Administration found that the barns of the egg producers were infested with flies, maggots and rodents, and had overflowing manure pits. Records unearthed by Congressional investigators showed that tests of Wright County Egg barns had shown the presence of toxic salmonella bacteria for years before the outbreak. Despite such conditions, Peter DeCoster, Austin DeCoster’s son and the chief operating officer of Wright County Egg, told the panel that the most likely source of the contamination was a separate company that supplied ingredients for chicken feed, a contention disputed by federal food officials. He said that some of the filthy conditions documented by the F.D.A. were standard practice in the industry. Documents released by the committee showed that Wright County Egg achieved a “superior” rating and “recognition of achievement” from AIB International, a private inspection company based in Manhattan, Kan., after a June inspection of its processing facility. That came just as the company was causing thousands of illnesses from contaminated eggs . In 2008, AIB gave a “superior” rating to a Peanut Corporation of America plant in Blakely, Ga., that was later found to be riddled with salmonella that caused a nationwide outbreak and the largest food recall in American history. A spokesman for AIB could not be reached. Orland Bethel, the president of Hillandale Farms of Iowa and a longtime associate of the DeCosters, cited his Fifth Amendment rights and declined to testify. But in an Aug. 31 e-mail released by the subcommittee, Mr. Bethel wrote, “Hillandale needs to totally disassociate itself from Jack and it needs to be real. Hillandale has a good business base, but it will all be gone if I don’t move quickly and I will not try to deceive the public.” In another e-mail, Mr. Bethel wrote that his company had been told by Costco and Wal-Mart “that they will not be doing any business if Jack and his people have any involvement in management or ownership.” Duane Mangskau, a Hillandale production manager, told the committee that Hillandale had ended its marketing relationship with Wright County Egg. Representative Bruce Braley, a Democrat of Iowa, asked Austin DeCoster, “How is it possible that after all this time we have another DeCoster egg facility involved in a half-billion egg recall?” Mr. DeCoster responded, “The question is complicated, sir.” Pictures taken at the DeCoster facilities of barns bursting with manure, manure flowing under barn doors, and barns with dead rodents, chickens and flies were shown at the hearing. Members of the panel expressed outrage that inspectors found such conditions even though the DeCosters were alerted days before inspectors appeared that the company’s eggs had been contaminated. “DeCoster farms have had warning after warning” for decades, said Representative Henry A. Waxman, a California Democrat. “Yet they continue to raise chickens in slovenly conditions and to make millions of dollars by selling contaminated eggs.” The hearing was briefly interrupted by two animal welfare advocates who unfurled an anti-egg banner and repeatedly chanted: “All eggs kill!” Police officers escorted them from the room. Dr. Joshua M. Sharfstein, the F.D.A.’s principal deputy commissioner, told the panel that the F.D.A. needed new powers and money to help prevent further food contamination outbreaks, both of which are provided for in legislation that the House passed last year but that has been languishing in the Senate. “We need this bill to help protect the safety of the food supply,” he said. Democratic members of the panel denounced Senator Tom Coburn, a Republican from Oklahoma, who has objected to a Democratic plan to bring food safety legislation to a vote. “This is a public health imperative,” said Representative Edward J. Markey, a Democrat from Massachusetts. “There must be some exceptions for Republicans in the Senate. They must release this bill so that we can protect millions of families.” But Representative Michael C. Burgess, Republican of Texas, said that Mr. Coburn’s objections had not prevented the bill from being considered by the Senate. Mr. Burgess sought to read a statement from Mr. Coburn at the hearing, but Representative Bart Stupak, the chairman of the panel, cut off his microphone, which led to a sharp exchange between the lawmakers. “I voted with you on the dang bill. I’ve worked with you on the dang bill,” Mr. Burgess said. “It is preposterous that the majority has conducted the hearing this way when he’s not the problem.” And then, referring to Mr. Coburn, Mr. Burgess added, “He may become a problem if the majority leader brings it to the floor,” a remark that elicited laughter from the room. Hours after the hearing, Senator Harry Reid, Democrat of Nevada and the Senate majority leader, asked on the Senate floor for the unanimous consent for the body to consider the bill. “There is no excuse to wait any longer,” he said. “Our current food safety system hasn’t been updated in almost a century.” But Mr. Coburn objected. To overcome Mr. Coburn’s objections, Mr. Reid would have to file for cloture, a process that can take a week or more; the Senate has other legislation it must pass before members adjourn to campaign in October. “On a piece of legislation that is this bipartisan, this should be something we can do rather quickly,” said Regan Lachapelle, a spokeswoman for Mr. Reid. “Unfortunately, one senator is saying no.”

Eggs
Salmonella (Bacteria)
Food Contamination and Poisoning
Hillandale Farms
Regulation and Deregulation of Industry
Wright County Egg
DeCoster Austin J
Factory Farming


Seeking a Change, but Finding Few Choices

Abstract: COLUMBIA, Tenn. — The domed courthouse clock tower tolls the hour, but not much else breaks the stillness in this centuries-old county seat where politics seems to have reached equilibrium, balanced between ancient Democratic traditions and newer Republican ones. Beneath the surface peace, though, in the storefronts, diners and offices around the square, there is unease as Tuesday’s primaries approach. A prosperity that has endowed this city of 34,000 with fancy antiques stores and well-appointed personal investment offices is weakening. Unemployment in Maury County is rising as a nearby auto plant declines, unfamiliar candidates are on the ballot and all the history accumulated here over two centuries, in the middle of a politically middling state, is proving to be an unreliable guide. In November, Democrats need to win here in this swing county in the hilly Nashville exurbia, just as they need to win in the rest of Tennessee and in its neighbor Arkansas, Southern states that have voted for the winner in the last eight presidential elections. But the choices available in the coming Democratic primary have led to disquiet among independent voters, Democratic-leaning Republicans and even some traditional Democrats, according to interviews here and across the state line in Arkansas. These states are among four in the South voting in primary elections on Tuesday (the others are Alabama and Georgia) in a region that went solidly for President Bush in the last two elections but where Democrats hope to make inroads this November, capitalizing on dissatisfaction with the Republicans. That hope may be unrealistic, even in the crucial swing states. “I wish there was somebody worth voting for,” said Buford Moss, a retired Union Carbide worker sitting at the back table of Bucky’s Family Restaurant here, with a group of regulars, in a county seat that — as the home of the 11th president, James K. Polk — is one of the ancestral homelands of Jacksonian Democracy. “The Democrats have left the working people,” Mr. Moss said. “We have nobody representing us,” he continued, adding that he was “sad to say” he had voted previously for Mr. Bush. He was considering sitting out this election altogether. “Anyone but Obama-Osama,” he said, chuckling at a designation that met with mirthful approval at the table. In interviews around the courthouse square, voters stuttered over Senators Hillary Rodham Clinton and Barack Obama in matchups with Republicans, particularly Senator John McCain, whose military credentials give him solid regional armoring. Some white voters voiced outright alarm over Mr. Obama, and though he is a Christian, allusions to his supposed Muslim ties were frequent, as were suggestions that he remained a disturbingly unknown quantity. White men, in particular, expressed general fearfulness — over a possible terrorist attack, over an unnamed threat from Muslims, over Hispanic immigrants and over the weakening economy. These fears led them to reflect positively on Republican candidates, perceived as more hard-line on most fronts. “I think our greatest fear is our terrorist enemies,” said Waymon L. Hickman, senior chairman of First Farmers & Merchants bank, whose headquarters building dominates Main Street here. “You get Peloski up there and they say we’ve lost the war, and that just fuels our adversaries,” said Mr. Hickman, incorrectly pronouncing the name of Speaker Nancy Pelosi. He described himself as an “independent” voter but said he could not envision voting Democratic unless it was for a centrist like Gov. Phil Bredesen of Tennessee. As for Mr. Obama, “he’s got to say the things he’s saying, to win the primary,” Mr. Hickman said, expressing disdain. Mr. Obama may fare well in primaries in Alabama and Georgia, where blacks make up roughly a quarter of the overall voting population and perhaps twice that percentage in the Democratic primary electorate, but even if he does, it is unclear how meaningful primary victories in these states would be in November. The voters in Tennessee and Arkansas are already looking past next month’s low-profile primary contests and ahead to the general-election matchup, which many said they were anticipating with keen interest because of the pressing issues of the declining economy and the war and, in some cases, anger at Mr. Bush. The candidates and their campaigns, devoted to larger delegate prizes elsewhere, were nearly invisible in the region until after the South Carolina Democratic primary last Saturday. Even in Arkansas, where Mrs. Clinton lived for nearly two decades, her headquarters is an inconspicuous storefront at the edge of downtown Little Rock, though she is expected to visit the state this week. Still, with a nod to the importance of these states that remain so difficult yet so vital for Democrats, Mrs. Clinton campaigned in Tennessee on Sunday, immediately after the South Carolina primary, and Mr. Obama flew to Birmingham, Ala. Beyond Super Tuesday, there may be trouble for the Democrats. Swing voters perceive both front-runners as too liberal, though Mrs. Clinton has support in Arkansas because her husband remains popular. But here in Maury County, which has voted Democratic and Republican in the last three decades, none expressed enthusiasm for Mrs. Clinton. Similar unease was voiced in Yell County, Ark., another place that has swung back and forth, where some were quick to say that Mr. Obama’s race was not prohibitive for them personally but could well be for others. Only John Edwards, a fellow Southerner but now considered an also-ran, met with broad approval from independents who were interviewed in the Tennessee county; in Arkansas, Mrs. Clinton’s most ardent supporters in the undulating “Free State of Yell” — so called because of a history of electoral eccentricity — conceded that they knew plenty who were just as sharply opposed to her candidacy. Former Bush voters disillusioned with the president said flatly they would not vote for Mr. Obama, while others expressed disappointment with the available choices. Meanwhile, Republicans, even those critical of Mr. Bush, said that the too-liberal Democratic choices left them more solidly than ever with their party, though none voiced great enthusiasm for the field. “Ain’t none of the Republicans got me jumping up and down,” said Ken Sumner, 58, who manages Ken’s River View Cafe in High Falls, Ga. “McCain, I think he’s a good man. I think he means good. I really don’t know if he has the energy to be president.” Political professionals in the border states of the South are skeptical about Democratic prospects this year, without being completely dismissive. “Does a Democratic candidate have any kind of shot?” asked Bruce Oppenheimer, a political scientist at Vanderbilt University in Nashville. Tennessee “potentially could be in play,” Mr. Oppenheimer said, “but a lot of other states might come before it.” Arkansas “will stay on the charts longer for her,” said Jay Barth of Hendrix College in Conway, referring to Mrs. Clinton, but he added that “the odds are not with” her in a matchup with Mr. McCain. In Yell County, in the foothills of the Ouachita Mountains, a place so ornery that tombstones and bird dogs were once said to have taken part in elections, a number of residents said local voters would probably support Mrs. Clinton — former President Bill Clinton is said to have relatives in the county — unless she were matched against Mr. McCain. Mention of Mr. Obama merely provoked discomfort. “Statements I’ve heard, Obama, they’re seriously afraid of him,” said Bobby Rollans, a retired teacher, sitting at Savanna’s, a restaurant perched on the Arkansas River. Bill Mashek, a retired National Guard officer, said, “I’ve talked to some yellow-dog Democrats; they won’t vote for Obama.” Ominously for Democrats, perhaps, even longtime Republican voters dissatisfied with their party are nonetheless still stuck on the fence. “This is the first election that I am more seriously wearing that independent sign,” said Charlotte Battles, the director emeritus of a boarding school in Columbia for children with developmental disabilities. “This year, I think there is a feeling of a need for change,” Ms. Battles said, “whether that’s a Democrat, or a Republican.”

Presidential Election of 2008
Democratic Party
Southern States (US)


With Transit Chairmanship, Fernando Ferrer Slips Back Onstage

Abstract: THE answer was obvious even before the question was posed, but we felt like asking anyway. Given reports that Michael R. Bloomberg has been shopping around for someone he’d like to anoint as the next mayor, is it possible that Fernando Ferrer got a call? Mr. Ferrer smiled. It was a half-smile, one registering both amusement and bemusement. “I mean, if I were he, supposedly a fully grown adult, I’d be embarrassed by it,” he said of the Bloomberg search for a designated successor. “Leave it at that.” Fact is, he said the other day over breakfast at a Bronx diner, his last conversation with the mayor was quite a while back. Mr. Bloomberg had tried to recruit him to take part in a lighthearted video for the annual Inner Circle dinner, where reporters and politicians trade jabs. “I took a pass,” he said. So Freddy Ferrer, to use the nickname he has had since boyhood, won’t be New York’s mayor. But you knew that. Not that he hasn’t reached for the brass ring; he ran three mayoral campaigns of varying intensity. The last time out, in 2005, Mr. Bloomberg beat him soundly. That, it seemed, was that, for him and public service. He’d go off to a consulting group, sit on a few company boards, enjoy his three grandchildren, work on his tennis game, maybe reflect on his years as a city councilman and Bronx borough president. A comfortable life, one that does not require him to speculate, despite urging from his tablemate, on how the city might have been different these last years under a Mayor Ferrer. “I think you get your chance in the context of an election to make your case,” he said. “You fail to make it? Done. Accept the verdict and move on.” But life can take funny bounces. Freddy Ferrer is back. A year and a half ago, Gov. Andrew M. Cuomo put him on the board of the Metropolitan Transportation Authority . Then he was made the authority’s vice chairman. Now, almost out of nowhere, he has ascended to the chairmanship, as visible a position as we have in this city. True, he is only acting chairman, until the governor finds a permanent replacement for Joseph J. Lhota, who left to contemplate a mayoral race of his own . So Mr. Ferrer, who turns 63 in April, will not stay at the top for long. “Yeah, but it’s nice to be the chair,” he said, “because you can ask questions and get quick answers. If you’d like to ask a very drill-down-deep question about service or about a project, you get a really detailed answer. And you can have some impact on policy.” His unexpected re-emergence prompted curiosity about second acts in New York public life. And that led, at his suggestion, to the Tibbett Diner, which still had its Christmas lights up, with candy canes dangling from the wires. The diner sits on Tibbett Avenue, sandwiched between a carwash and an auto repair shop along an ill-defined line that separates the Bronx neighborhoods of Spuyten Duyvil, where he lives, and Kingsbridge. The street may most politely be described as unprepossessing. “I don’t need a menu,” Mr. Ferrer said to the waitress. By now, he practically has it memorized. “He’s a regular,” the waitress said. Indeed, he started coming here in the late 1970s with his wife, Aramina. But on this morning he didn’t mingle much with the other diners, settling into a corner booth. He ordered tomato juice, an onion-and-Swiss-cheese omelet with a side of tomatoes — hold the potatoes — buttered rye toast and coffee. Got to have coffee, Mr. Ferrer said. Image Fernando Ferrer, the acting chairman of the Metropolitan Transportation Authority and former mayoral candidate and Bronx borough president, sat down for breakfast at the Tibbett Diner in the Bronx. Credit Ozier Muhammad/The New York Times “Breakfast of champions,” Mr. Ferrer said when his food arrived. He ended up leaving it half-eaten, though. All right, second acts: How did this one come about? Why even bother at this stage? “Look,” — a lot of his sentences begin with “look” — “I’m very happy with my life,” he said. “Look, if in your DNA there’s a couple of public-service genes, they don’t go away. Public service was always very satisfying. If you can get some good things done and help some people, why else would you want to do this?” His path to the transportation board began with a phone call from Representative Nydia M. Velázquez , one of five leaders of the transition team for the newly elected Governor Cuomo. She asked if Mr. Ferrer wanted to join the administration. “I appreciate it, very flattering, no thanks,” he replied. “She said, ‘Well, then, how about the M.T.A. board?’ I’d been recruited by former Governor Spitzer to be on the S.U.N.Y. board of trustees, but that was the weekend before he imploded. So I was happy to see that nomination go. But the M.T.A. board was intriguing.” “Friends of mine have accused me of needing to run a small country,” he said. In its own way, that’s what the transit system is. This breakfast was not about specific transit policies. Still, it was impossible to resist asking if he had any pet peeves as a regular on the No. 1 subway line and on Metro-North. Naturally, he did. Is he not a New Yorker? His complaints tended, however, to be about other riders, not transit managers. Like this one: “People who eat full-blown meals on the subway — that drives me up the wall. I can’t stand it. Hey, look, a muffin, a candy bar, a cup of coffee? I get that. A meal with noodles? I’m sorry.” Fair enough. “You didn’t ask me what I like,” he said later, in a mild rebuke. All right, we’ll bite. “It’s affordable,” he said. “It’s safe. It’s clean — mostly. And it’s reliable.” Some would give him an argument on those points but, again, this meal was not about policy. Let’s talk instead about facial hair. For years, Mr. Ferrer had a mustache, a feature that made him instantly recognizable. Then he shaved it. Now he has a full beard, which we have to say looks an awful lot like Mr. Lhota’s. “I saw Joe last week,” Mr. Ferrer said, “and he said, ‘What, every M.T.A. chairman has to have a beard now?’ I said, ‘No, I’m hiding out. People will think I’m you.’ ” If he has a regret, it is that this new position came about only a few weeks after the death of his mother, Susan. “She’d have gotten a kick out of seeing this M.T.A. thing,” he said. He grew up in the South Bronx, reared by his mother and his grandmother, Inocencia. When he was running for mayor, he used to talk about his roots, and how his grandmother had toiled in the kitchen of the Waldorf-Astoria hotel. The evening before this breakfast, he happened to be at the Waldorf, for an Andrew Cuomo birthday party cum fund-raiser. It brought him back to when he was a grand marshal in the Puerto Rican Day parade, in 1993, a year before his grandmother died. “I’m really glad she lived to see that,” he said. “The grand marshal’s breakfast was always at the Marriott. I changed it that year to the Starlight Roof of the Waldorf, and then I let people know that morning why.” That one was for Inocencia.


I.R.S. Scrutiny of Big Firms Plummets, Study Says

Abstract: Most Americans dread tax season. But corporate America seems to have less to fear from the Internal Revenue Service than it used to, according to a new study. The I.R.S.’s scrutiny of the nation’s biggest companies is at a 20-year low, according to the study, conducted by Transactional Records Access Clearinghouse, or TRAC, a research group affiliated with Syracuse University . The study, made public Sunday, points to “a historic collapse in audits.” It found that major corporations — defined as those with assets of at least $250 million — have about a one in four chance of being audited, down from about three in four in 1990. For Americans with incomes above $100,000, the chances of being audited in 2006 were 1 in 59. Above $1 million, the odds increased to 1 in 16. The study’s findings stand in sharp contrast to the tough talk coming out of the I.R.S. in recent years. The report suggests that the agency is shifting its focus away from big corporations to smaller companies, private partnerships and other private entities, a move that tax lawyers said was consistent with trends they were seeing. But I.R.S. officials, who reviewed the report before its release, said Friday that TRAC had misinterpreted a basic shift in corporate America in recent years. Companies of all sizes, as well as wealthy individuals, have embraced the use of partnerships and other opaque entities in an effort to minimize taxes, the officials said. Sometimes those arrangements cross the line into tax abuse; Enron used hundreds of them to commit fraud. Because large companies increasingly use such partnerships, the I.R.S. has stepped up scrutiny of these entities. “These aren’t mom-and-pop grocery stores we’re auditing,” said Barry Shott, a deputy I.R.S. commissioner. The I.R.S. has not reduced its scrutiny of large corporations, he said. Instead, it is focusing on the private partnerships some of these companies use to avoid paying taxes. Mr. Shott said that the I.R.S. supplied data to TRAC but that the group, which gathers information from government agencies under the Freedom of Information Act, had misinterpreted it. TRAC, which has gone to court to force the I.RS. to turn over more detailed data on audits, stood by its findings. While the report singled out the I.R.S.’s increased focus on partnerships, it also said that the agency was increasingly focusing on smaller corporations, or those with less than $50 million in assets. Such companies require less time and money to investigate — and the I.R.S. has long complained that it is underfunded. Such investigations, however, typically bring in fewer unpaid tax dollars than audits of large corporations. The focus on smaller companies upset some tax professionals. “I’m still trying to find my jaw on the ground from the finding that audit rates for the big boys are plummeting,” said Dean Zerbe, the national managing director of Alliant Group, a tax planning company. While corporations account for a small percentage of all taxes paid to federal coffers, their share of the total has been rising in recent years. Last year, corporations of all sizes accounted for nearly 23 percent of all federal income taxes paid, or around $395 billion, according to previously released data from TRAC. That is up significantly from 2001, when corporations accounted for 13.7 percent of all taxes paid, an all-time low. Individuals paid the rest. Despite the shift in focus, the I.R.S. is bringing in more money from corporations of all sizes through audits. Last year it brought in more than $59 billion in unpaid tax revenues, according to agency statistics. That is nearly twice the level of 1998 and is consistent with a steady climb since then. Larry Langdon, who ran the I.R.S.’s large and midsize business division from 1999 to 2003, called those amounts “phenomenal” and said that the number of dollars brought in, rather than the type or size of company audited or the amount of time spent on audits, might be a better indicator of how well the I.R.S. is doing.

Internal Revenue Service
Corporations
Tax Evasion
Frauds and Swindling
Syracuse University


Accusations of Delays in Releasing Drug Results

Abstract: CHICAGO — The lead outside investigator on a crucial trial of two widely used heart drugs said in an e-mail message last July that Merck and Schering-Plough , the companies that make the drugs, were deliberately delaying the release of the trial results “to hide something.” The companies did not release the preliminary results of the trial, called Enhance, until January, almost two years after the trial was finished. When they were finally released, the trial’s results showed that the drugs, Vytorin and Zetia, did not work to reduce plaque in arteries. The results led a panel of cardiologists to recommend on Sunday that the drugs be used only as a last resort. The new information was contained in e-mail messages to executives at Schering-Plough that were released Monday by Senator Charles E. Grassley of Iowa, the ranking Republican on the Senate Finance Committee. The committee has been investigating the delay in the release of the Enhance trial results. It is likely to inflame the controversy over the way that Merck and Schering-Plough handled the Enhance trial, as well as their heavy promotion of Vytorin and Zetia. The drugs are used to lower cholesterol and are among the most widely prescribed medicines in the United States, with sales of $5 billion last year. Shares of Merck and Schering plunged on Monday. The Enhance investigator, Dr. John J. P. Kastelein, also complained last July that Merck and Schering had not consulted him on the reasons for the delay and threatened to resign as the main study investigator. A spokeswoman for Schering-Plough said the messages had been presented out of context and that Dr. Kastelein’s complaints had been resolved months ago. Zetia lowers cholesterol by blocking its absorption in the intestine. Vytorin combines Zetia with simvastatin, another cholesterol-lowering drug sold under the brand name Zocor . Dr. Kastelein is a Dutch cardiologist and scientist whom Merck and Schering hired to conduct the Enhance trial, which consisted of images of the arteries of 720 patients taking either Vytorin — the combination of Zetia and Zocor — or Zocor alone. Because Vytorin lowers cholesterol more than Zocor alone, the companies expected that the trial would show that patients who took Vytorin had less growth of plaque in their arteries than those who took Zocor. Arterial plaque is closely correlated with heart attack and strokes. The trial ended in April 2006, and its results were initially expected in late 2006 or early 2007. The companies repeatedly delayed releasing the results of the trial, however, saying publicly that many of the images of the arteries were unclear and might need to be re-examined. By July 2007, Dr. Kastelein was privately furious with the companies for the delays, his messages show. “Is it correct that SP has decided not to present at AHA?” he said July 6 in an e-mail message to Dr. Rick Veltri, a vice president at the Schering-Plough Research Institute, referring to the American Heart Association conference in November. “If this is the case, our collaboration is over,” he wrote, adding, “This starts smelling like extending the publication for no other [than] political reasons and I cannot live with that.” The next day, according to the text of the messages released by Senator Grassley, Dr. Kastelein complained that the companies seemed to be trying to slow the release of the results by including data that was not relevant and would take more time to compile. By doing so, he wrote, “you will be seen as a company that tries to hide something and I will be perceived as being in bed with you!” Dr. Kastelein did not respond to requests for comment. Rosemarie Yancosek, a spokeswoman for Schering, said, “The e-mails selectively excerpted in the letter concern an issue that Merck-Schering-Plough and — we believe, also Dr. Kastelein — consider long resolved.” Dr. Harlan M. Krumholz, a cardiologist at Yale, said Dr. Kastelein’s messages raised new concerns over the nearly two-year delay in the release of the Enhance results. “What raises concerns here is the possibility that the delay was being imposed by the companies against the wishes of the principal investigator, who should be the leader of the study,” Dr. Krumholz said. “I hope that there was a good scientific explanation, endorsed by a steering committee of credible scientists at the time of the decision to delay, which explains why the public and the profession had to wait so long.” On Sunday, Dr. Krumholz and three other cardiologists told an audience of more than 5,000 people at the annual American College of Cardiology scientific convention that Vytorin and Zetia should not be used except as a last resort. The two major cardiology associations seconded those recommendations on Monday, leading to a plunge in shares of Merck and Schering. Merck fell $6.56, or 15 percent, to $37.95. Schering, which is smaller and even more dependent on profits from Zetia and Vytorin, fell $5.06, or 26 percent, to $14.41. Prescriptions for the medicines have already dipped about 15 percent since January, when preliminary results from the Enhance trial were first disclosed. Still, the drugs are widely used, with about three million prescriptions written each month in the United States alone. LDL cholesterol, the harmful kind, is known as a risk factor for heart disease, and so doctors have generally assumed that lowering LDL cholesterol by any means would reduce the risk of heart attacks and strokes. But proving that a drug actually cuts those risks requires an expensive, multiyear clinical trial enrolling 10,000 or more patients. Those studies, called outcomes trials, have been conducted for statins, and they have proved that patients taking those drugs do have a reduced risk of heart disease. No such outcomes trials exist for Vytorin and Zetia. In 2006, four years after Zetia reached the market, Merck and Schering began enrolling patients in their own outcomes study, which compares people taking Vytorin with those taking Zocor alone. But the results of the trial are not likely to be available until 2012, or possibly later.

Drugs (Pharmaceuticals)
Tests and Testing
Cholesterol
Zetia (Drug)
Vytorin
Statins (Cholesterol-Lowering Drugs)
Merck & Company Inc
Schering Plough Corp
Medicine and Health


Amid Efforts to Expand Marine Preserves, a Warning to Focus on Quality

Abstract: SAN FRANCISCO — A generation ago, when Tommy Remengesau Jr. went fishing off the beautiful island nation of Palau, the seas were so rich, he said, that “I could see great stocks of fish.” Such bounty has since dwindled, in Palau and worldwide. “Reckless and destructive fishing practices, overfishing, and illegal, unreported, and unregulated fishing have robbed us of our resources,” Mr. Remengesau, now Palau’s president, told the United Nations General Assembly this month. “They must be stopped.” That grim pronouncement lies behind a new plan by Palau to ban commercial fishing in a vast area off its coast. The reserve will cover 230,000 square miles, which is about the size of Ukraine. Palau is far from alone — other nations are also engaging in efforts to create marine reserves. New Zealand, which already has a number of protected areas, is establishing a new conservation area in its far southern region that is off-limits to fishing, mining and oil exploration, though it is smaller, at 1,680 square miles. Over all, 2.8 percent of the world’s oceans have been committed to conservation reserves , according to the International Union for Conservation of Nature, a global environmental group. That remains far short of an international goal of 10 percent . The reserves are often called marine protected areas, or M.P.A.s. “There is a trend toward creating more M.P.A.s in recent years,” said Samantha Murray, director of the Pacific program at the Ocean Conservancy, an environmental group. But the percentage of ocean territory that is protected is far lower than the comparable figure for land, she said. A big problem is that the quality of the reserves varies. A new study in the journal Nature found that of 87 marine protected areas surveyed, 59 percent “were not ecologically distinguishable from fished sites.” The reality may be even more dismal, because the survey included some of the world’s most effective reserves. A different study, to be published next week in the journal Aquatic Conservation: Marine and Freshwater Ecosystems, finds that countries often seek to create marine reserves in areas that are the least used, rather than focusing on maximizing biodiversity. Achieving targets for protecting a certain amount of the ocean could therefore result in a “false sense of achievement for conservation,” it warns. “It’s almost universal, the fact that whenever there’s negotiations over marine protected areas, the areas with most fish are retained by the fishing areas,” said Graham Edgar, a professor at the Institute for Marine and Antarctic Studies at the University of Tasmania in Australia. Professor Edgar was involved in both studies. Relatively few marine protected areas include a blanket ban on fishing and other commercial activities. Some may allow only certain types of fishing. Most have been created relatively close to coastlines, rather than in the open ocean. According to the Nature study, reserves are more successful if they are large (at least 100 square kilometers, or almost 40 square miles) and enduring (established for at least 10 years). In addition, effective reserves generally include — and enforce — a ban on fishing and other activities harmful to marine life, like mining and drilling. Ecological isolation of the reserves, for example by sand barriers, also helps so that fish do not swim away. Marine areas with all of these characteristics contained 840 percent more large fish, measured by mass, than comparable areas open to fishing, the Nature study found. They also contained an impressive 1,990 percent more shark mass. Some of the world’s most effective protected areas, according to the Nature study, surround small ocean islands. These include the seas around Cocos Island National Park in Costa Rica, which are frequented by sharks and turtles and other large creatures; an area around Malpelo Island, a few hundred miles off the Pacific coast of Colombia; and, in the South Pacific, areas near the Kermadec Islands of New Zealand and Middleton Reef off Australia. Conservationists hope several more large areas will win protection soon. In the southeastern part of the Pacific, excitement is building around proposed protections near the Pitcairn Islands, controlled by Britain, and also Easter Island, controlled by Chile. In the Atlantic, parts of the Sargasso Sea and also a large area around Bermuda are under consideration. So is an area in the Ross Sea in the Antarctic Ocean, though objections from Russia and Ukraine are proving hard to surmount . Reserves on the high seas, outside nationally controlled waters, generally need international approval and may be administered by groups of governments. But large, remote areas may face a particular challenge in enforcing fishing restrictions, according to Ms. Murray of the Ocean Conservancy. Regions where restrictions vary from one section to another, like a patchwork, also are difficult to police. Illegal fishing is “a huge problem” and affects a majority of marine protected areas, Dr. Edgar said. Still, he added, enforcement “doesn’t necessarily have to have patrol boats going past; it can be the good will of the local community.” Technology can help. Vessel monitoring systems for big boats and digital photography are two tools. Palau, a tiny nation with just one patrol boat to police its vast offshore territory, has tested drones as a means of spotting illegal activity. Mr. Remengesau, Palau’s president, says his nation will focus on drawing tourists to its still-wondrous seascape, while hoping that other countries will join the preservation effort. “I return again and again to a question my forebears never conceived of,” Mr. Remengesau told the General Assembly. “How much will Palau’s efforts matter if the world is not on the same page?”


Foreign Donors Pledge $3 Billion to Help Rebuild Quake-Ravaged Nepal

Abstract: KATHMANDU, Nepal — As foreign donors and agencies pledged more than $3 billion in aid for Nepal on Thursday to support its post-earthquake reconstruction, the government sought to assure would-be contributors that the funds would be used effectively. “We will share periodically the use of the funds to maintain transparency because you are accountable to your own citizens,” Prime Minister Sushil Koirala told an international donors’ conference in Kathmandu, the Nepalese capital, where most of the pledges were announced. More than 8,800 people were killed in the earthquakes in April and May, and over half a million homes were destroyed, making the construction of housing a pressing need. India, which borders Nepal and quickly mobilized an emergency response after the first earthquake, was the single largest donor, with Sushma Swaraj, India’s external affairs minister, pledging $1 billion for reconstruction at the meeting. Thursday’s commitment was on top of a previously announced $1 billion over the next five years. Maps of the Damage From the Nepal Earthquakes Maps show the landscape of temporary shelters, the epicenter of the earthquake and its aftershocks. “Nepal and India are joined in both their joys and sorrows,” Ms. Swaraj said in Kathmandu. “Therefore, we need to closely coordinate our disaster response and help each other in the wake of such calamities.” Foreign Minister Wang Yi of China promised $483 million, while the Japanese government pledged $260 million. Further commitments came from the Asian Development Bank, Britain, the United States, the European Union and other countries. The World Bank on Tuesday pledged a loan of up to $500 million, partly for the reconstruction of housing in rural areas and for the government’s budget. The total promised, including previously announced commitments from India and China, was about $4.4 billion, Nepal’s finance minister, Ram Sharan Mahat, said, more than half of what Nepal has said it needs, while the largest governmental pledges came from the country’s neighbors in Asia. In a report released last week, the Nepal Planning Commission estimated the cost of reconstruction at $6.7 billion, about a third of the country’s annual economic output of just over $19 billion. The report detailed additional areas of focus for reconstruction, including schools, roads, government buildings, agriculture and heritage monuments. Chandan Sapkota, an economist at the Asian Development Bank who is based in Nepal, said concerns remained over the capacity of the Nepalese government, mired in bureaucratic delays, to use the aid effectively. How to Rebuild After an Earthquake Like Nepal's Experts offer tips on how a country like Nepal can rebuild after an earthquake with whatever materials are available. The Nepalese government announced on Monday that it would set up a new autonomous authority to oversee the spending of donated reconstruction funds, but it has not yet provided a road map for how the authority would operate. “We need a plan from the government that we can spend the money within four to five years,” Mr. Sapkota said. “And that’s a very tall order.” Nepal’s finance minister, Ram Sharan Mahat, said on Thursday that the trade deficit for the current fiscal year, set to end next month, would grow in the earthquake’s aftermath, deepening the need for donor funds. Even as the central government made assurances that the funds would be implemented efficiently, officials in earthquake-affected districts have said that the government’s plan to immediately provide $2,000 to families for home rebuilding is mired in red tape. It has also been difficult to verify the identity of quake victims, said Devendra Raj Lamichhane, the chief district officer of Dolakha, which was hard-hit by the second earthquake on May 12, when nearly 200 people in the district died. Mr. Sapkota, the economist, said the donors had “played their part — they’ve pledged a lot of money.” He added that the Asian Development Bank’s commitment of up to $600 million would largely go to reconstructing government schools. “Now, it’s up to the government to spend it,” he said.

Nepal
Earthquake
Foreign Aid
India
China
Japan


Obama Hears Parting Advice as Power Shifts

Abstract: WASHINGTON — As he played host to his successor and three predecessors for a luncheon meeting of the world’s most exclusive club on Wednesday, President Bush offered their collective support. "We wish you all the very best," he told President-elect Barack Obama as the cameras rolled in the Oval Office. "And so does the country." With that, the junior White House aides in charge of corralling the pool of reporters and cameramen called out, "Thank you," turned down the lights and began trying to hustle them out of the room. But suddenly Mr. Obama interjected. He had a few words to say, so the reporters hustled back into place and the lights were turned back up. "I just want to thank the president for hosting us," Mr. Obama said, with the cameras now trained on him. "This is an extraordinary gathering. All the gentlemen here understand both the pressures and possibilities of the office and for me to have the opportunity to get advice, good counsel and fellowship with these individuals is extraordinary. And I’m very grateful to all of them." It was a small moment, inconsequential perhaps, yet also revealing — one more tiny signal of the shifting power in Washington that will culminate with Mr. Obama’s inauguration in 12 days. Typically when reporters are brought into the Oval Office, the president talks; guests speak only if invited to. When the president is done, the press pool is quickly extracted from the room. But Mr. Bush is no longer the paramount figure in town, and Mr. Obama no ordinary guest. Mr. Bush held the luncheon on Wednesday so that all the living figures who have sat in his chair could offer their counsel and camaraderie to the next man who will occupy it. Mr. Bush’s father was there, as were Bill Clinton and Jimmy Carter . And it was only one of many ways in which Mr. Bush, and members of his team, have been offering their advice to their successors in recent days, sometimes heeded, sometimes not. Wednesday was filled with departing Bush administration figures leaving behind their thoughts. Vice President Dick Cheney gave an interview in which he urged Mr. Obama not to jettison the policies he and Mr. Bush enacted to fight terrorism. Stephen J. Hadley , the national security adviser, delivered a speech detailing the challenges he sees around the world for Mr. Obama. And Kenneth Wainstein, the homeland security adviser, gave a separate talk in which he urged continued vigilance. "If I had advice to give, it would be, before you start to implement your campaign rhetoric, you need to sit down and find out precisely what it is we did and how we did it, because it is going to be vital to keeping the nation safe and secure in the years ahead," Mr. Cheney told Mark Knoller of CBS Radio. "And it would be a tragedy if they threw over those policies simply because they had campaigned against them." Mr. Cheney was referring specifically to the administration’s surveillance and interrogation programs that have proved so controversial but that in his view were "absolutely essential" in preventing any terrorist attack on American soil after Sept. 11, 2001. "They need to proceed very cautiously before they begin to change the policies that are in place," Mr. Cheney said. "They need to know what they’re doing." Over at the Center for Strategic and International Studies , Mr. Hadley provided his own assessment of events in the world and how American relations with each region stand, arguing that Mr. Bush has put in place the building blocks for future progress that Mr. Obama could expand on. In particular, he urged Mr. Obama to continue pressing for greater freedom and democracy in places like the Middle East . Mr. Hadley acknowledged that Mr. Obama is being left with many challenges to confront. "I think ’loose ends’ is putting it mildly," he said in answer to a question from the audience, provoking laughter. "Look, there has, I think, rarely been a president who has had more challenges — he would say opportunities — than President Bush. And that means that there rarely has been an incoming president who has as many challenges and opportunities as President-elect Obama." Like many of his colleagues at the White House, Mr. Hadley has been working closely with the incoming Obama administration to try to provide a more informed transition. He told the audience at the center that his staff has prepared memorandums on 40 major issues for Mr. Obama’s advisers, each describing what the Bush team inherited, what it did about them and what it is leaving behind. Although he did not discuss it in detail, Mr. Hadley’s staff has also put together contingency plans for Mr. Obama’s administration outlining options for responding to potential crises that could arise in the opening hours or days of the next presidency when new officials are still trying to figure out how to make the telephones work. "I was in the transition from President Ford to President Carter and I must say I was surprised," Mr. Hadley recalled. "I stayed on with the new team for about three weeks and all the vaunted secure filing cabinets in the Old E.O.B. were empty. There was not a single piece of paper that was transitioned to the new team. And I’ve always thought this was very — not good governance at its best." (The Old E.O.B. was the Old Executive Office Building next to the White House where most of the president’s staff works. Today it has been renamed the Eisenhower Executive Office Building.) Mr. Wainstein gave his own summation of the fight against weapons of mass destruction during a talk at the Washington Institute for Near East Policy, outlining all that he said the Bush administration had done to prevent a cataclysmic attack through nuclear, biological or chemical weapons. He urged Mr. Obama’s administration to follow the Bush lead in this area. "They are inheriting a comprehensive W.M.D. strategy, one that is being implemented by strong counterterrorism institutions, far-reaching initiatives and cooperative international relationships," he said. All this advice, public and private, is being well received by Mr. Obama’s advisers, who have uniformly praised the outgoing Bush team for going out of its way to be helpful. But in the end, it will be up to Mr. Obama to make the decisions soon enough. And the lights will not be turned down in the Oval Office until he has had his say.

Barack Obama
President of the United States


Serena Williams Plans to Play at Wimbledon

Abstract: PARIS — After nearly a year away from competitive tennis, Serena Williams has confirmed that she plans to return to the circuit next week at the Aegon International Tournament in Eastbourne and then compete at Wimbledon, where she is the defending champion. Williams, 29, was the sport’s dominant player a year ago when she won her 13th Grand Slam singles title at Wimbledon. Four days later, according to Williams, she severed a tendon in her right foot after stepping on broken glass when leaving a restaurant in Munich, Germany. She has since had two operations and in February was hospitalized in Los Angeles because of a pulmonary embolism, a blood clot in her lungs. “I am so excited to be healthy enough to compete again,” she said in a statement released by her agent, Jill Smoller. “These past 12 months have been extremely tough and character building. “I have so much to be grateful for. I’m thankful to my family, friends, and fans for all of their support. Serena’s back!” Williams resumed practicing in April but later withdrew from the French Open . Williams has won Wimbledon four times, and her older sister Venus Williams, a five-time Wimbledon champion who has not competed since January because of a hip-flexor problem, is also expected to return for the grass-court season and attempt to play at Wimbledon. Serena Williams, who could not be immediately reached for comment, remains the highest-ranked American woman at No. 25 in the world.

Wimbledon Tennis Tournament
Tennis
Williams Serena


New York Agrees to $1.5 Million Settlement in Death of Patrick Miller, Bellevue Inmate

Abstract: New York City has agreed to pay $1.5 million to settle a lawsuit filed by the mother of a mentally disturbed inmate whose lawyers charged that he was beaten to death after a struggle with correction officers in the prison ward at Bellevue Hospital Center in 2007. The inmate, Patrick Miller, had punched a correction officer and was subdued by other officers and handcuffed behind his back, according to a memorandum by the Department of Investigation, one agency that investigated the episode. That part of the altercation was captured on video, the memo noted. But lawyers for the mother, Billie Ann Miller, contended that Mr. Miller was then taken into a holding cell without video coverage and was fatally beaten there. One of Ms. Miller’s lawyers, Jonathan S. Abady, said that while no payment could ever compensate for the loss of her son, the amount showed “something horribly wrong happened here, and was worthy of compensation.” “I think there was a need on the part of the family to move forward, to have closure, to be able to complete the grieving process,” said Mr. Abady, whose firm, Emery Celli Brinckerhoff & Abady, handled the suit, along with the Legal Aid Society. A Legal Aid lawyer, Jonathan Chasan, said Mr. Miller’s death was “a manifestation of a longstanding problem at Bellevue, which was the use of inappropriate physical force on prisoner-patients.” After Mr. Miller’s death, he said, video cameras were installed in the two cells where hospitalized inmates are held during intake on the prison ward. Curt P. Beck, a city lawyer, said on Wednesday: “We feel the settlement was in all parties’ best interests. We hope it brings a measure of closure to the family.” The city admitted no fault in the settlement. An autopsy by the medical examiner’s office found evidence of “multiple blunt trauma” on Mr. Miller’s head, neck and upper body, and said the cause of death was “probable cardiac arrhythmia following a struggle.” The manner of death was undetermined, the report said. A plaintiff’s expert, Dr. Charles V. Wetli, a former Suffolk County medical examiner, concluded that Mr. Miller’s death had been a homicide. No charges were brought in the death, which was also investigated by the Manhattan district attorney’s office, the city’s medical examiner and the Police Department. Federal prosecutors in Manhattan and the F.B.I. also opened an investigation . In a May 15 letter to the judge, Katherine B. Forrest of Federal District Court in Manhattan, Mr. Beck wrote that he had been told by federal prosecutors that the federal investigation had been concluded. Neither federal agency would comment.

Prisons and Prisoners
Suits and Litigation
Bellevue Hospital Center
Miller Patrick
New York City


Judge Urges President to Address Prison Strike

Abstract: WASHINGTON — A federal judge ruled on Monday that she had no power to order the military to refrain from force-feeding a detainee at the prison at Guantánamo Bay, Cuba. But in an unusual move, the judge made a direct appeal to President Obama to address issues raised by the hunger strike at the prison that has lasted months. In a four-page ruling, Judge Gladys Kessler of the Federal District Court for the District of Columbia, rejected a request by the detainee, Jihad Ahmed Mujstafa Diyab , a 41-year-old Syrian man, to issue an injunction barring the military from forcing him to eat through a gastric tube inserted in his nose after restraining him in a chair. Judge Kessler noted that the force-feeding of detainees had been condemned as a violation of medical ethics and human rights by groups as varied as the American Medical Association and top United Nations officials. And while the Obama administration defended its treatment of detainees as compassionate, she wrote, “it is perfectly clear” that “force-feeding is a painful, humiliating and degrading process.” Nevertheless, Judge Kessler said she could not issue an injunction because Congress had barred the courts from intervening on issues involving conditions at the prison. But Mr. Obama, she wrote, “does have the authority to address the issue,” and she cited a speech in May in which he appeared to lament force-feedings. She noted that as commander in chief, Mr. Obama would seem to have the power “to directly address the issue of force-feeding of the detainees at Guantánamo Bay.” Still, the judge also noted that transfer restrictions imposed by Congress had made repatriations to countries with troubled security conditions difficult, and she did not say what she thought Mr. Obama should do. A White House spokeswoman declined to comment. A Pentagon spokesman, Col. Todd Breasseale, said it was humane not to let prisoners commit suicide and noted that at a news conference in April, Mr. Obama had explained , “I don’t want these individuals to die.” Mr. Diyab, who has been held at Guantánamo for nearly 11 years, was recommended for transfer four years ago if security measures could be met. He is among 45 detainees who are “approved” for force-feedings if they refuse to eat, out of the 106 detainees participating in the hunger strike, according to the military. He is also one of at least four detainees who have asked judges to halt the practice. Jon Eisenberg, a lawyer working on the case with the British human-rights group Reprieve , said they were considering appealing but were waiting for a ruling about the other detainees. But he noted that “not often do you see a federal judge appealing to the president to do something the judge would like to do but feels she lacks jurisdiction to do.” The judge wrote that her ruling was brief because she had dealt with a similar request in 2009, which she cited, and because Mr. Diyab had also asked for an injunction barring the military from force-feeding him during daylight during Ramadan — the Islamic holy month that began on Monday and during which observant Muslims fast from sunrise to sunset. Col. Gregory Julian of the United States Southern Command, which oversees Guantánamo, said that prison guards and medical staff members would administer meals to detainees who wished to observe Ramadan at night — and that the prison had the capacity to carry out mass force-feedings of some of the hunger strikers after sunset as well. Colonel Julian said that fewer than half of the 45 prisoners approved for force-feedings were actually being fed that way because the others either ate in private or swallowed a nutritional supplement to avoid the nasal tube insertions. Colonel Julian also said that about 40 detainees who had not joined the hunger strike and were otherwise compliant with prison rules were being put back into communal housing conditions. In April, guards raided the communal cellblocks amid the growing protest and forced most of the detainees into single-cell lockdown.

Gladys Kessler
Barack Obama
Detainees
Hunger strike
Guantanamo Bay
Pentagon


Worries About a Recovery Push Markets Lower

Abstract: Stocks posted modest losses Friday after a disappointing monthly jobs report renewed concerns that a recovery in the troubled labor market might be a long way off. The Dow Jones industrial average fell for a fourth day, losing 22 points a day after tumbling 203 points on Thursday. The latest weak economic report came from the Labor Department, which said employers cut 263,000 jobs last month. That was more than the 201,000 cut in August and worse than the 175,000 economists were expecting. The unemployment rate rose to 9.8 percent, in line with forecasts. “There’s been a lot of talk particularly in the last couple of months that we’re seeing a turnaround in unemployment, and obviously that’s not the case,” said Dan Cook, senior market analyst at IG Markets in Chicago. Meanwhile, an unexpected drop in factory orders extended the recent string of disappointing economic readings. The Commerce Department said factory orders fell 0.8 percent in August after a 1.4 percent gain in July. Analysts had been expecting a 0.7 percent increase. The market’s optimism has been tested this week by several indicators that have either weakened or fallen short of expectations, a disappointment after several months of hopeful signs on crucial industries like housing and manufacturing. That has led investors to question whether the 50 percent surge in stocks in the last six months can be sustained. With nerves running high, stocks have fallen in seven of the last eight days. The Dow Jones industrials have pulled back about 4.3 percent since coming within 82 points of the 10,000 level last week. “People have had a long, hard week,” said Bruce Shalett, managing partner at Wynston Hill Capital in New York. Many found the relatively calm response to the jobs report encouraging, taking it as a sign that there were still investors willing to use the dips to pick up stocks they considered cheap. “Pullbacks are going to constantly be used as opportunities to get into the market,” said Hank Smith, chief investment officer of equity at Haverford Investments in Radnor, Pa. The Dow fell 21.61 points, or 0.2 percent, to 9,487.67, after being down as much as 79 points. The Standard & Poor’s 500-stock index fell 4.64 points, or 0.5 percent, to 1,025.21, and the Nasdaq composite fell 9.37 points, or 0.5 percent, to 2,048.11. For the week, the Dow and the S.& P. 500 index each lost 1.8 percent, while the Nasdaq fell 2 percent. Two stocks fell for every one that rose on the New York Stock Exchange, where volume came to 1.4 billion shares Friday compared with 1.6 billion Thursday. Stocks are coming off a banner third quarter. Both the Dow and the S.& P. 500 gained 15 percent in the July-September period. It was the Dow’s best quarter since 1998. The fourth quarter may not be as stellar. Analysts expect the market to drift over the next couple of weeks as investors await quarterly earnings reports and company forecasts on business activity. The last meaningful pullback in the market since the rally began in March came during the four weeks leading up to second-quarter reports this summer, when the major indexes lost about 7 percent. “October is shaping up to be a challenging month for investors,” said Brent McQuiston, a vice president at WealthTrust-Arizona. Strong earnings could help offset growing concerns about a recovery and stabilize the market, he said, but solid revenue growth is what is needed to put the market on firm footing. In the meantime, the market will get reports on the service sector, retail sales and wholesale trade inventories next week. Yields on long-term Treasuries moved off their lowest levels since the spring. The Treasury’s benchmark 10-year note fell 11/32, to 103 13/32, and the yield rose to 3.22 percent, from 3.18 percent late Thursday. Crude oil fell 87 cents to settle at $69.95 a barrel on the New York Mercantile Exchange.

United States Economy
Stocks and Bonds
Unemployment


Federation Leader Fills a Class Instead of Stadiums

Abstract: Sunil Gulati was sitting inside his office at Columbia University late Monday morning when a student walked in and began to cry. This, Gulati later explained, was not particularly unusual this time of year. Since 2006, when Gulati was voted president of the United States Soccer Federation, his public profile and his professional commitments have steadily risen. In 2013, he was elected to the executive committee of FIFA, the powerful governing body of world soccer, and he began to distinguish himself as a reformer. Among his professional goals, he harbors a desire to bring the World Cup back to the United States. But in that time, Gulati has also cultivated a separate identity — also celebrated, if less widely known — in academia as a lecturer in the Columbia economics department. A major element of this renown, wholly apart from soccer, has been a rousing lecture that he has delivered for years on the final day of each semester in his introductory-level course, principles of economics — which students often refer to simply as principles. After 27 class sessions barreling through course material, the last lecture is his opportunity to remind students of the inequality in the world, point out their relatively privileged position in it, entreat them to have compassion for others and, as the often-emotional students make clear, tug a bit at their heartstrings. “It’s about getting students to understand that the things we talk about in market economics aren’t the only pieces that matter,” Gulati said Monday in his office, which is covered in soccer memorabilia, after he delivered his last lecture of the semester. “The distribution issues matter. Equity issues matter. And it’s not only to get them to think about those issues but to potentially act on those issues.” The material, which Gulati slyly referred to as “change-the-world stuff,” is mostly drawn from his travels and his encounters with global poverty. On Monday, it seemed to touch a latent nerve in Srishti Sinha, a first-year student who felt compelled to find Gulati after the class even though she had a paper due that afternoon. Sinha worked in Bangalore, India — her hometown — last summer for Storybook Me, a group that promotes reading among children by making them personalized books. Her year at Columbia had given rise to an internal debate, she said, between “helping myself and helping others.” The lecture revived it. “I’ve always wanted to do more,” Sinha said, smiling as she wiped tears from her face, “and Gulati’s lecture sort of brought me back that and made me realize that maybe what I was thinking before is the right way to go.” Gulati, 55, teaches another lecture course called global economics and a small seminar focusing on sports business that drew guest speakers this semester like N.B.A. Commissioner Adam Silver. But it is the final lecture of principles of economics, which has about 200 students, that seems to stick with students. Adam Stansell, who has been a teacher’s assistant for Gulati and will graduate this year with a bachelor’s degree in economics, said students gave Gulati a standing ovation when Stansell first attended the lecture. Aditi Sriram, an adjunct professor of English at the State University of New York College at Purchase, returned to Columbia with an old classmate in 2013, six years after they had graduated, just to hear the semester-closing lecture again. “You leave on this high,” Sriram said, “because he says, ‘Stop taking notes; put your notebooks and pens away,’ and suddenly he’s extemporizing about his family.” Gulati spent the first half of class on Monday in a Socratic exercise, asking students if they would rather create a world in which half the people lived in the slums of Kolkata, India, and the other half in Scarsdale, N.Y., or one in which everyone were a farmer in Argentina. Gulati had about a dozen students chime in as he paced the room, guiding the discussion. “I believe that the people in Scarsdale could give to the people of Calcutta to improve their infrastructure and their quality of life,” one student said, using the Indian city’s former name. Gulati said, bluntly, “Somebody has to have a response to that,” a remark that made the students laugh. Then, as he does every semester, Gulati turned the discussion to his personal experiences. He spoke about going to Calcutta in 1983 as a graduate student — “I wanted to be shocked” — and visiting a hospital there where half the patients died within 48 hours of being admitted. Days later, as he was watching the sun rise from an opulent hotel in Bombay, the discrepancy between the two environments ate at him. He recalled his trip to Mexico City for the World Cup in 1986, one year after a major earthquake, to serve as a spotter for the broadcaster Charlie Jones, who needed real-time tutoring in soccer during games. Before the first game, Gulati gave a match ticket to a 10-year-old boy, who froze, confused, because he did not know what was expected of him in return. Years later, while working for the World Bank in Gambia, Gulati visited a medical clinic where the supplies, he said, were akin to those in a basic first-aid kit. He thought of this years later during the birth of his daughter as six doctors and nurses attended to his wife. Gulati, who also has a son, suggested that mothers in Gambia loved their babies no less but were far less likely to have them survive. “I used to think that I gave this talk because it would let me sleep better at night,” Gulati told his students. “Then I thought it really was making sure all of you didn’t sleep well at night. Maybe it’s some bit of both.” Gulati consciously steers clear of inserting sports into his class. But to make his final point, he invoked the idea of an athlete who could tolerate pain in a big game. “It seems to me the mark of a great person is not a tolerance of pain,” Gulati said, “but an intolerance of pain in others.”

Soccer
Sunil Gulati
College
FIFA
Columbia


Q. and A. With Stuart Elliott

Abstract: Stuart Elliott, the advertising columnist, answers questions from readers each week. Questions can be sent to stuarte@nytimes.com . Q. I enjoyed your recent column in The New York Times about new advertising for AT&T . It stimulated some thoughts to share with you. After AT&T was purchased by SBC, the headquarters was moved to Texas. And so many top-management shuffles occurred in the last half decade that the brand and its current agency, BBDO, really seem to have amnesia. The new campaign, and the phrase it introduces, “It’s what you do with what we do,” appears little more than a restatement of AT&T’s widely acclaimed campaign of 1997-98 that carried the theme “It’s all within your reach.” The strategic intent then was identical to what it is now: a wide range of AT&T’s technology and products deliver personal empowerment to consumers, defined through cute and inspiring creative stories. That message was relevant back in the late 1990s, with the then-explosive growth of wireless and the advent of e-mail. And it is now even more relevant with all the newest tech services and products we have. You probably also remember some of the famous TV spots associated with the previous campaign, including one named “Beaches .” So AT&T’s newest statement, “It’s what you do with what we do” is therefore not “breakthrough” at all. Rather, it is updated language for “It’s all within your reach.” AT&T and BBDO apparently arrived at this strategy with no mention or acknowledgement that the approach is actually a strategic revival. I can’t help but think how powerful the AT&T brand would be if only it had stayed the course with “It’s all within your reach” for the last 14 years. It is such a timeless line. I’m quite happy AT&T has now returned to its spirit. A. Thanks, dear reader, for the comments. I would not hold my breath waiting for a marketer, or an agency, to acknowledge that new work is inspired by previous work, particularly if was created by a previous agency rather than the current agency. (“It’s all within your reach” was created by Y&R New York, part of the Y&R division of the Young & Rubicam Group, owned by WPP. BBDO Worldwide is part of the Omnicom Group.) But it is also increasingly common for marketers to revive previous themes, slogans, jingles and brand characters as part of what is known as comfort marketing, which resonates with consumers during hard times . So perhaps someday there will be some kind of hat-tip to previous ads when current ads echo them. Q. Forgive me if you’re already familiar with this. I recently bought a cup of coffee at Penn Station, complete with sleeve. There was an advertisement for Jennifer Love Hewitt ’s new Lifetime cable show, “The Client List,” printed on the sleeve, featuring a racy photo of Ms. Hewitt. When I got to my office, and the coffee had cooled, the photo was gone. I suspected what had happened and refilled the cup with hot water and voilà ! The image was back. Very clever. A . The idea for the cardboard salute to Ms. Hewitt’s, er, um, hotness was brought to Lifetime by its media agency, Horizon Media, “who we’re always challenging to be a little more innovative,” says Tim Nolan, senior vice president for marketing at Lifetime, part of A&E Networks, which is owned by the NBCUniversal unit of Comcast, Walt Disney and Hearst. Mr. Nolan is pleased enough with the idea, and how it turned out, to share a video clip showing how it works . The sleeves are a product of a company named the Brite Media Group, he says. About 500,000 sleeves were distributed to 200 coffee shops and coffeehouses, 100 in New York and 100 in and around Los Angeles. There were also “coffee break” events at some of those stores, where patrons received free coffee. Anecdotally, there has been a good deal of buzz generated by the promotion, Mr. Nolan says, so it seems like “they’re penetrating.” For instance, “some of our salespeople got a response when they went on calls,” he adds, and there was even word that “friends of Jennifer Love Hewitt” were aware of the promotion. The sleeves were part of an extensive campaign for “The Client List,” which prominently featured Ms. Hewitt in poses that some deemed provocative . The campaign apparently made an impact. The premiere episode of “The Client List,” on April 8, drew an average of 2.8 million viewers, Nielsen reported , a total that far exceeded the average viewership for other recent Lifetime premieres like “The Protector,” at 1.9 million. The total viewers for “The Client List” in a Nielsen measure called live plus three — for live viewing plus DVR viewing within three days — was larger, at 3.4 million.

Advertising and Marketing
AT&T Inc
BBDO Worldwide
Y&R
Hewitt Jennifer Love


100,000 Units of Housing Are Planned in New Jersey

Abstract: TRENTON, Aug. 9 — Acknowledging that housing in New Jersey is becoming increasingly unaffordable, the Corzine administration says in a report to be made public on Thursday that it plans to build 100,000 homes and apartments over the next 10 years for poor, working-class and middle-class residents. In the state’s first attempt at outlining a comprehensive housing strategy, the 44-page report evaluates the shortcomings of current housing programs and sets the stage for Gov. Jon S. Corzine to announce the details of a comprehensive housing program — with specific recommendations and price tags — by the end of the year. “This is the foundation,” Susan Bass Levin, the state’s commissioner of community affairs, said about the report, which was prepared by her department. “It looks at what we’ve done. It looks at the challenges in terms of what we need to do.” In scope and in approach, the plan is analogous to one undertaken by Mayor Michael R. Bloomberg of New York in December 2002 to build or preserve 65,000 units over five years Mr. Corzine has frequently said he admires the governing approach of Mr. Bloomberg, and like him says he intends to emphasize the shortage of housing not just for the poorest residents, as housing advocacy groups have historically emphasized, but also for working-class and middle-class people. And Ms. Levin said, “We need to provide a full range of housing.” Mr. Corzine has made references to 100,000 units in the past— as early as last year in the governor’s race and as recently as June during an event with the Housing and Community Development Network of New Jersey here — although in general terms. The report says that New Jersey has actually exceeded a goal, set four years ago, of building or financing 20,000 units of housing. But that pace is not fast enough, the report adds, and now, “the gap between supply and demand of affordable housing is one of New Jersey’s biggest challenges.” In particular, the report says that the costs to create housing, like land, construction and labor, are increasing far more quickly than expected, at a time when federal financing for housing has been stagnant or decreasing. And given the fact that housing and land are so expensive, “New Jersey has consistently ranked as one of the least affordable states for rental housing.” Yet New Jersey does not have an effective program to encourage home ownership among moderate-income residents, the report concludes. The report also delves into deed-restricted housing, referring to housing initiatives, like the federal Section 8 program, which deliberately keep housing units at an artificially low price, usually for periods of 10 to 30 years. “The state is currently experiencing its most significant wave of expiring deed restrictions, resulting in the potential loss of thousands of units of housing per year,” the report warns. “Many of these units are in healthy real estate markets where affordable housing is the most difficult and costly to replicate.” One housing advocate who saw an earlier draft of the report, Diane Sterner, executive director of the Housing and Community Development Network of New Jersey, said that she found the analysis to be sound and the approach to be refreshing. “You’re always a little concerned when there’s any dilution of attention of resources from the people who have traditionally had the greatest housing needs,” she cautioned. “But as long as they figure out the appropriate strategies, and become more comprehensive in their thinking to promote a mix of income groups, I think it’s a good thing for New Jersey.”


Cash in Hand, Technology Giants Go Shopping

Abstract: SAN FRANCISCO — Most consumers do not want to get a PC by purchasing microprocessors, hard drives and operating system software from different suppliers and assembling them all into a working computer. They prefer to buy a complete, customized machine from one supplier. Corporate customers increasingly want the same thing: a one-stop shop for hardware, software and services. And the largest technology companies are deploying their huge cash hoards to make acquisitions to bolster their ability to be that single provider. That trend drove Oracle , a leader in business software, to announce Monday that it was spending $7.4 billion to buy an ailing Sun Microsystems and get into the computer hardware business. Oracle beat out rival I.B.M., which considered buying Sun to enhance its own software offerings but ended serious acquisition talks about two weeks ago. “Oracle will be the only company that can engineer an integrated system — applications to disk — where all the pieces fit and work together so customers do not have to do it themselves,” Oracle’s chief executive, Lawrence J. Ellison, said Monday. The drive to consolidate has made life difficult for independent companies like Sun, and the fall of such an industry stalwart highlights the mounting pressure on smaller firms in the computer, storage and software industries to find buyers. Even larger companies like EMC and Dell could be vulnerable, industry observers say. “I believe that we are in the fifth inning of a nine-inning consolidation game,” said William T. Coleman III, a former Sun executive and co-founder of BEA Systems, who is now chief of the software start-up Cassatt. “It’s not over by any stretch of the imagination, and there are drastic things that still have to happen.” Five years ago, Oracle bought PeopleSoft for more than $10 billion, igniting a furious rush to scoop up other business software makers. Oracle alone has since bought more than 40 other companies, spending close to $15 billion for BEA and Siebel Systems alone. Many of the companies purchased by Oracle had carved out a niche for themselves during the Internet build-out, providing unique functions that assisted a rapid infrastructure expansion. In the years after the dot-com bust, however, customers grew weary of visits from hordes of software salesmen peddling isolated wares. A simpler model evolved, in which a handful of companies like Oracle, I.B.M. and Hewlett-Packard bought dozens of smaller players and then competed to sell most of the software needed to run a modern business. “The core just keeps getting denser and denser,” said Randall N. Spratt, the chief information officer at McKesson, one of the nation’s largest health care companies. “We welcome large-scale players at the core.” While software companies led the last round of consolidation, the hardware industry now appears poised for its own reshaping. “I think we’re at an inflection point,” said Patricia C. Sueltz, a former I.B.M. and Sun executive, who runs the start-up LogLogic. For example, Rackable Systems, a smaller server computer maker, announced plans this month to buy Silicon Graphics for $25 million. Like Sun, Silicon Graphics started in 1982, and had been one of the fastest-growing businesses in America during its heyday, selling billions of dollars of computers a year. As the computer business has matured, companies that handcraft products for top performance face a harsh reality: Standard equipment can now handle most business tasks, and what matters most to customers now is large scale — and the low prices that come with it. Over the last decade, H.P. has driven much of the consolidation through a series of large acquisitions. It bought Compaq Computer in 2001, which affected both the PC and server markets as other companies fought to expand and match H.P.’s reach. For example, the Chinese computer maker Lenovo bought I.B.M.’s PC business, and Acer, based in Taiwan, acquired Gateway, which had already acquired eMachines. Last year, H.P. purchased Electronic Data Systems, one of the largest technology services companies, in a bid to counter I.B.M.’s immense services organization. The E.D.S. purchase also threatened the businesses of Sun and Cisco Systems, which have sold large amounts of equipment to E.D.S.’s customers. Most recently, the largest technology companies have decided to encroach on each other’s turf. For example, H.P. has increased its investment in networking technology, hoping to pull business away from Cisco, and Cisco has countered by building its own server products. Oracle’s purchase of Sun is an even more drastic lurch into its rivals’ territory, as Oracle will find itself in the unfamiliar position of selling hardware, while also picking up Sun’s prized software assets, like its Solaris operating system, Java programming language and open-source MySQL database. Lurking behind all of these moves is the rise of virtualization software, which makes it possible to shuffle software around a data center rather than keeping it locked onto specific physical systems. The technology has eroded the boundaries between server, storage and networking hardware, forcing the large players to have a hand in all of these businesses. Both Oracle and Sun have made their own virtualization technology in a bid to catch up with the market leader VMware. The recent uptick in the stock market may be enough for companies that had been sitting on the sideline to act. Bullish analysts postulate that valuations of vulnerable tech companies will not go much lower. With $34 billion on hand, Cisco has more funds at its disposal than any other technology company and has been mentioned as a suitor for storage makers like EMC and NetApp. H.P., too, has come up as a potential buyer for NetApp. And Dell has pledged to spend some of its billions on server, storage and services companies. “I think people have been a little more fearful, but there’s still a ton of cash out there,” said Peter Falvey, the co-founder of Revolution Partners, an investment bank centered on technology companies.

Enterprise Computing
Computers and the Internet
Oracle Corp
Sun Microsystems Inc
Mergers Acquisitions and Divestitures