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Berlusconi survives no-confidence vote BY RACHEL DONADIO New York Times Service

called in 1,500 police officers to keep order. On Tuesday, the man who brought personality-driven politics to a nation once known for its revolving-door governments once again proved that his personal fate was inexorably entwined with that of his country’s. In spite of the narrow victory, both were plunged into political uncertainty. Although his mandate is set to end in 2013, with a razor-thin majority, Berlusconi no longer has

ROME — Prime Minister Silvio Berlusconi of Italy narrowly escaped the collapse of his government on Tuesday, winning a confidence vote by three votes — avoiding a quick political death, but prolonging the agony. The vote came in a highly politically charged atmosphere. Some protestors clashed violently with police, who fired tear gas, as an estimated 100,000 people marched through Rome calling on Berlusconi to step down. The government • TURN TO ITALY, 2A

The weapon of the future U.S. Navy successfully test fires electromagnetic railgun BY MICHAEL E. RUANE Washington Post Service

WASHINGTON — The red and yellow warning flags were out. The gun range was cleared. The klaxon sounded. “System is enabled,” the voice on the speakerphone said. There was a pause, then a distant thud that could be felt through the floor. “Gun is fired,” the voice said. Inside a cavernous building at the Naval Surface Warfare Center in Dahlgren, Va., on Friday, a gigantic pulse of electricity hurled a 20-pound slug of aluminum out the barrel of an experimental gun at seven times the speed of sound. The slug trailed a pillar of fire as it left the weapon and the building, illuminating the surrounding woods like a giant flashbulb. It streaked down range, generating a small sonic boom, and traveled about 5,500 feet before tumbling to the ground harmlessly. In an adjacent building, there was a round of applause from observing scientists. It was the latest test of the Navy’s electromagnetic railgun — a futuristic weapon that is right out of the latest video war game and could one day change the face of Naval warfare.


CLOSE CALL: Italy’s Prime Minister Silvio Berlusconi, center, is flanked by foreign minister Franco Frattini, left, and economy minister Giulio Tremonti at a confidence vote on Tuesday. Despite numerous scandals, Berlusconi won by three votes.


SUPERWEAPON: The Navy’s electromagnetic railgun project manager Charles Garnett, left, briefs Navy officers last week, following the world record-setting 33 mega-joule shot of the Office of Naval Research’s Railgun, pictured at top. Roger Ellis, the railgun program manager, said people “see these things in the video games, but this is real. This is what is very historical.” The gun is fired with a huge jolt of electricity that can propel a round more than 100 miles and at such velocity that it does not need an explosive warhead. Two tests were conducted last week — the first of which the Navy said generated a world record 33 megajoules of force out of the barrel. The second shot,

witnessed by reporters, produced 32 megajoules. Forty-five minutes after the second shot, a part of the battered bullet that was retrieved from the range was still warm to the touch. The Navy hopes the railgun might bring a sci-fi level of range and firepower to its fleets of the future. “It’s exhilarating,” Elizabeth D’Andrea, the railgun project’s strategic director, said after the test. • TURN TO RAILGUN, 2A

Afghanistan aid workers’ deaths stir strategy debate BY ROD NORDLAND New York Times Service

coalition countries to deliver aid projects. The effort is enormous, dominated by the United States; the U.S. Agency for International Development alone is spending $4 billion this year, most of it through the teams. The so-called PRTs work from heavily guarded military compounds and are generally escorted by troops from the NATO-led International Security Assistance Force, known as ISAF. Traditional aid workers worry that the PRTs and the development companies working for them are compromising their neutrality. Oxfam and 28 other charitable groups signed a report in November, “Nowhere to Turn,” that contends that the practice puts civilians at greater risk.” In many instances, where PRT projects have been implemented in insecure areas in an effort to win ‘hearts and minds,’ they put

KABUL, Afghanistan — At least 100 relief workers in Afghanistan have been killed so far this year, far more than in any previous year, prompting a debate within humanitarian organizations about whether U.S. military strategy is putting them and the Afghans they serve at unnecessary risk. Most of the victims worked for aid contractors employed by NATO countries, with fewer victims among traditional nonprofit aid groups. The difference in the body counts of the two groups is at the heart of a question troubling the aid community: Has U.S. counterinsurgency strategy militarized the delivery of aid? That doctrine calls for making civilian development aid a major adjunct to the military push. To do that there are Provincial Reconstruction Teams in 33 of 34 provinces, staffed by civilians from • TURN TO AID WORKERS, 2A


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Holbrooke, a giant of diplomacy, dies at 69 BY ROBERT D. McFADDEN New York Times Service

very critical condition until his death. Holbrooke’s signal accomplishment in a distinguished career that involved diplomacy in Asia, Europe and the Middle East was his role as chief architect of the 1995 Dayton peace accords, which ended the war in Bosnia. It was a coup preceded and followed by his peacekeeping missions to the tinderbox of ethnic, religious and regional conflicts that was formerly Yugoslavia. More recently, Holbrooke wrestled with the stunning complexity of Afghanistan and Pakistan: how to bring stability to the region while fighting a resurgent Taliban and coping with corrupt governments, rigged elections, fragile economies, a rampant narcotics trade, nuclear

Richard Holbrooke, the Obama administration’s special representative for Afghanistan and Pakistan since 2009 and a diplomatic troubleshooter who worked for every Democratic president since the late 1960s and oversaw the negotiations that ended the war in Bosnia, died Monday evening in Washington. He was 69 and lived in Manhattan, N.Y. His death was confirmed by an Obama administration official. Holbrooke was hospitalized Friday afternoon after becoming ill while meeting with U.S. Secretary of State Hillary Clinton in her Washington office. Doctors found a tear to his aorta, and he underwent a 21-hour operation. Holbrooke had additional surgery Sunday and had remained in • TURN TO HOLBROOKE, 3A

Just one ruling, but an outsize one BY SHERYL GAY STOLBERG New York Times Service

WASHINGTON — By the numbers, U.S. President Barack Obama is beating opponents of his signature healthcare bill two to one in federal court. Of the three district court judges who

have ruled on the merits of constitutional challenges to the landmark Affordable Care Act, two have sided with Obama. But from a political standpoint, the only case that really matters is the one Obama lost Monday. Judge Henry Hudson’s deci-

HOT ISSUE: U.S. District Judge Henry Hudson has declared a key provision of the Obama administration’s healthcare law unconstitutional, in a dispute that will probably ultimately be decided by the U.S. Supreme Court.




sion leaves the White House playing defense for the foreseeable future on an issue it once thought would secure Obama’s legacy. It provides another rallying point for conservatives as they make the case that government is overreaching and must be reined in. And as the Virginia case and others like it make their way through the appeals process and ultimately to the Supreme Court, it ensures that healthcare will remain a topic of intense debate in the new Congress and into the 2012 presidential campaign. Monday’s ruling gives a boost to what Peter Wehner, who advised former U.S. President George W. Bush on domestic policy, calls a “full-scale assault by the Republican Party and conservatives” on the measure. In Washington, congressional Republicans are planning a symbolic vote to repeal the measure when they take control of the House of Representatives in January and are vowing to chip away at it through financial • TURN TO RULING, 2A


INDEX NEWS EXTRA...............3A THE AMERICAS............4A OPINION.......................7A COMICS & PUZZLES.. 6B

12/15/2010 5:07:32 AM






Afghanistan aid U.S. Navy tests superweapon workers’ deaths spark debate • RAILGUN, FROM 1A


individuals and communities at risk,” the Oxfam report said. Michiel Hofman, the head of Doctors Without Borders in Afghanistan, said, “This assistance forces the beneficiaries to choose sides, and many people in the disputed areas do not want to choose sides.” The military and its NATO civilian partners disagree. Earl Gast, the mission director for USAID in Afghanistan, said the United Nations and the ISAF had agreed on a clear distinction and clear rules regarding humanitarian aid — “that it can’t be militarized and it can’t be politicized.” “Those are rules that we follow,” Gast said. Part of the problem is the definition of humanitarian aid. Traditionally it means life-saving emergency assistance, but the distinction is often unclear. Providing medical care for disaster victims, for instance, is clearly humanitarian, but building a medical clinic for war victims could be considered either humanitarian or developmental aid, properly within the scope of the civil-military effort. Further complicating matters, many traditional

relief groups have expanded their efforts into development work, although they take pains to ensure their projects are not connected to the government or the military. Among the contracted aid groups working for coalition government programs, which nearly always employ armed guards and work in fortified compounds or from military bases, the body count has been particularly severe. Eighty aid contractors employed by the USAID were killed and 220 wounded from January through early November of this year. (In the same period, 410 U.S. soldiers and Marines died.) The aid contractors were attacked on average 55 times a month — a sevenfold increase over 2009, Gast said. By contrast, 20 people employed by charitable and humanitarian groups, which refuse to use armed guards or work with the military, were killed during the first nine months of this year. The military and its supporters say the difference in body counts only reflects the fact that the aid contractors work in dangerous areas where many nongovernmental organizations are unwilling to operate.

The gun itself doesn’t look much like a gun. It consists of two rails, along which a surge of electricity runs. They are bolted inside a long oblong box the length of a tractor trailer. Bundles of thick black cables feed into one end of the box, where the slug is loaded between the rails. When the power is fed through the rails it creates a surge that flings the slug along and out the muzzle at tremendous speed. Charles Garnett, the railgun project manager at Dahlgren, said it gets its power the same way a pocket camera builds up energy to operate its flash, but on a much larger scale. The use of electricity to power such a round would change the way naval guns have been fired with explosive propellants like gunpowder for centuries, the Navy said. The electromagnetic railgun was once a focus of the Reagan-era Strategic Defense Initiative, dubbed “Star Wars.” It was a seen as a weapon that might shoot down incoming nuclear missiles. A quarter-century later, the Navy hopes it might soon provide a ship fast, new, long-range fire power. “It’s a very important technology,” said Rear Adm. Nevin Carr, chief

of Naval Research, although “this is not a weapon that’s going to be here tomorrow.” Carr, in a telephone interview Thursday, said it also makes for an excellent defensive weapon against such things as enemy cruise missiles. Carr said the Navy had been working toward a railgun that could fire a 64-megajoule shot, with a range of 200 miles. “I am not as focused on that number today,” he said. “We’re more interested in getting capability to the fleet sooner.” He said he would like to see a railgun demonstrated at sea by 2018 and deployed on ships in the early 2020s. After that, further research could make the gun even more powerful. He said the project has cost about $211 million. Carr said a ship with railguns would need no conventional propellant to fire the weapon, making the vessel safer for the crew and allowing it to carry 10 times more ammunition. “It’s more than just a better way to push a bullet out the barrel,” he said. “Another point . . . is a railgun is not a gun. It’s a launcher.” Carr said the “bullet” is hurled into the atmosphere in seconds and can descend on a target in minutes, at a speed of about Mach 5. “That’s pretty juicy technology,” he said.

‘Missile Ranges, Bullet Prices’

The Navy fired an experimental “railgun” Friday at the Naval Surface Warfare Center in Dahlgren, Va., that uses electricity instead of gunpowder to hurl shells hundreds of miles at Mach 7 speed. The Navy hopes to test the weapon at sea by 2018. How it works

An electric current runs from the positive 1 terminal of the power

Flowing current creates a magnetic field around the two rails. Like a charged wire 2 in an electric field, the projectile experiences

supply, up the positive rail across the armature, and down the negative rail back to the power supply.

a force known as the Lorentz force. Projectile

Moving armature

Power supply


Magnetic field Driving current

Lorentz force direction

Ejected armature

Depending on the amount of current, the projectile could 3 be propelled at very high speed. The gun would not fire an explosive shell, only a metal slug that destroys its target with super-high impact.

Two firing modes

Direct: Projectiles can

Indirect: The launcher can strike targets

strafe targeted ships or incoming missiles in direct combat.

almost 20 times farther away than conventional ship combat systems, correcting the projectile’s path via GPS.

Launcher Projectiles


No explosive warheads or gunpowder, mitigating a firing ship's vulnerability to its own stored weapons. Kinetic energy propels the munition.

Ruling against healthcare bill could have big consequences • RULING, FROM 1A

cuts. Republicans say Hudson’s decision provides a legal underpinning for such efforts. The ruling puts Obama on the defensive over healthcare at a time when he would rather be talking about the economy and forging a relationship with the newly empowered Republicans in Congress. And in addition to energizing Obama’s critics on the right, the decision is reigniting a long-simmering debate on the left about whether Obama should have pushed for a government-run healthcare system to cover the uninsured, without the controversial mandate to buy insurance. White House officials consoled themselves Monday with the relative narrowness of the decision; Hudson ruled only the mandate unconstitutional, and not the whole bill, although stripping out

the mandate would undercut much of the bill’s promise to expand access to healthcare while holding down costs. But Hudson did give Republicans additional ammunition. In his ruling, he took lawmakers and the White House to task for characterizing the penalty facing people who refuse to buy insurance as a tax — a term the White House had been loath to use during the political debate. Republicans were ecstatic; Rep. Trent Franks of Arizona predicted the decision would be the “death rattle” of the health bill. For Obama, who opposed a mandate in the early stages of his presidential campaign, there was a certain irony in the ruling. His fellow Democrats insisted that while it might look like a victory for Republicans, it would galvanize their party as well. “The more heated this be-

comes the more light there will be, because the more this is discussed the more our country will realize that the status quo is simply unacceptable,” Rep. Sander Levin, DMich., outgoing chairman of the House Ways and Means Committee, said. Levin promised that Democrats would fight efforts to undo the measure at “every juncture.” But Democrats are also looking to the president to carry the fight forward with the same vigor he displayed before the bill’s passage — a level of enthusiasm that might be hard for him to muster, given his political circumstances in the aftermath of the drubbing his party took in last month’s mid-term elections. Rep. Jan Schakowsky,D-Ill., said Obama needed to become more aggressive about defending the measure he fought so hard to pass. “The president has to be

the leader in very forcefully explaining and touting this bill, because I think we need to take the offensive on this issue,” Schakowsky said. “He didn’t give up on the fight for healthcare and I think there were a lot of people who thought that he should. The next two years it’s going to be all about leadership from the White House.” Yet there is only so much the president can do. Obama still weighs in on healthcare from time to time, most recently when his administration announced new rules requiring insurance companies to spend at least 80 percent of health premium dollars on medical expenditures for patients. But, try as he might, the president has been unable to bring the public to his side; U.S. citizens remain bitterly split on the health law, nine months after its passage. Surveys do show that the

public likes the law’s popular provisions, such as barring insurers from denying coverage based on pre-existing conditions (a provision that would fall if the Virginia court ruling is upheld) and allowing young adults to stay on their parents’ plans until they are 26. But U.S. citizens are divided over whether to repeal the law. A survey in November by the Kaiser Family Foundation found that about half of all U.S. citizens — 49 percent — wanted to repeal all or part of the law, while 21 percent favored expanding the measure and 19 percent favored leaving it as is. Experts say that division is fueled by persistent confusion about just what the bill would do. “You have all these comments out there that it’s a government takeover of healthcare, that it’s going to be bad for seniors, that it’s

pulling the plug on grandma,” said Jonathan Oberlander, a professor of health policy at the University of North Carolina. “That stuff has stuck politically, and it’s evident in those numbers, in the very divided public support for reform.” So long as Obama is president, Republicans’ only real hope for undoing the health bill rests with the courts. The House repeal measure is all but certain to fail in the Senate, and even if it passed, Obama would simply veto it. For his part, the president sought Monday to play down the significance of the court ruling in Virginia. “Keep in mind this is one ruling by one federal district court,” Obama said in an interview with WFLA, a Florida television station, adding, “You’ve got one judge who disagreed. That’s the nature of these things.”

Berlusconi survives vote of confidence • ITALY, FROM 1A

the margin to govern, and analysts predicted that he might resign in the coming weeks and call early elections anyway. While political chaos is nothing new to Italy, this time around the stakes are far higher since markets are intensely focused on Italy’s high debt and slow growth. Until recently, Tuesday’s outcome would have been unthinkable in Italy, where Berlusconi has had an unshakeable grip on the country’s politics for the better part of the past 15 years and its media for even longer. Starting in the mid-’80s his private television empire helped shape the public imagination. “If I had said two years ago that in a couple of years Berlusconi would be looking for two or three votes for this government to survive, they’d have thought that I was crazy,” said Paul Ginsborg, a historian at the University of Florence whose books include Silvio Berlusconi: Television, Power and Patrimony. But not even Berlusconi was strong — or focused enough — to hold together a fragile and ideologically incoherent center-right coalition that began unrav-

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eling in July after he split with a key ally and lost his parliamentary majority. The ally, Gianfranco Fini, a former neo-fascist turned moderate, accused Berlusconi of being undemocratic and formed a breakaway grouping called Freedom and Liberty. In November, Fini withdrew four cabinet members, formalizing the crisis. Fini’s grouping had enough power to help bring down Berlusconi. But in spite of his statesmanlike demeanor and growing consensus, Fini still does not have enough power to succeed Berlusconi. Indeed, Fini appeared to be the biggest loser in Tuesday’s election, the challenger who ultimately wasn’t up to the challenge. Critics accused Berlusconi of squandering his majority and focusing more on his personal life — not only the now-infamous wild parties, but also his many legal sagas — than on the country’s problems. In January, Italy’s Constitutional Court is set to vote on whether a law passed by Berlusconi’s government granting him and the nation’s top office holders immunity from prosecution violates the Constitutional principle that all citizens are equal before the law.

12/15/2010 5:38:46 AM






Holbrooke was a giant of diplomacy • HOLBROOKE, FROM 1A


QUIET GIVER: Hansjorg Wyss, a publicity-shy billionaire from Switzerland, has quietly donated tens of millions of dollars to the preservation of pristine areas of the United States.

Swiss billionaire puts $35M into U.S. conservation BY MATTHEW BROWN Associated Press

BILLINGS, Mont. — Philanthropist Hansjorg Wyss grew up in Switzerland and now spends the bulk of his time outside Philadelphia, but it is the wild landscapes of the Rocky Mountains where he could leave his most lasting mark. In recent years the publicity-shy billionaire has quietly donated tens of millions of dollars to the preservation of pristine areas of Idaho, Nevada, Utah and other states. Now, what appears to be his most ambitious project to date has come to fruition as conservation groups this month closed a deal to purchase vast tracts of Plum Creek Timber Co. land in western Montana. Backers say the deal — which included $35 million in donations from Wyss — could shield an estimated one million acres from future development. In an interview, Wyss, 75, said he first became enamored of the Rockies as a college student who toured the region in 1958. And he defended his actions against those who chafe at the prospect of an outsider buying up land that in some cases has been logged, ranched or farmed for generations. “Look, these are beautiful landscapes,” Wyss said. “There was controversy when Yellowstone [National Park] was created and when they declared the Grand Canyon as a National Monument. But there are areas in the United States that must be protected.” GENEROUS GIFTS Wyss’ fortune — estimated by Forbes magazine at $6.1 billion — came largely from Synthes, the medical devices company he ran for three decades and still oversees as chairman. He has donated to a range of causes, with the largest single gift apparently a $125 million donation two years ago to create a bioengineering institute at Harvard University. But Wyss said the Rocky Mountains have offered a particular allure since he took a summer job with the Colorado highway department during a break from college. He went on to Harvard Business School and founded Synthes USA in 1974, returning to the Rockies frequently over the last several decades to hike and climb. “I know the West like my back pocket,” he said. Lots of billionaires and megamillionaires have come to Montana and decided to claim a piece of it as their own — from media mogul Ted Turner and software entrepreneur Tom Siebel, to former U.S. Defense Secretary Donald Rumsfeld, who all bought ranches in the state. While Wyss has a daughter in neighboring Wyoming, he has never lived in the region. And the land he helped buy in the recent Montana transaction will not become a private estate. Instead, most of the 310,000 acres of former Plum Creek land are being transferred to the U.S. Forest Service and Montana’s Fish, Wildlife and Parks Department. Because the land ownership was “checkerboard” — meaning the private property was interspersed with public parcels — its preservation will keep intact a much larger swath of the so-called Crown of the Continent, a region anchored by Glacier National Park. The deal is one of the largest private conservation purchases in U.S. history. It was arranged by the Nature Conservancy and the Trust for Public Land and also involved $65 million from the state of Montana and $250 million from the U.S. Department of Agriculture lined up by Montana Democratic Sen. Max Baucus. KEY CONTRIBUTOR Nature Conservancy president Mark Tercek said it might not have happened without Wyss, whose initial $25 million contribution spurred participation from other donors. When extra closing cash was needed, Wyss chipped in $10 million more. Montana Gov. Brian Schweitzer said he met Wyss several years ago, when the Plum Creek purchase was first suggested by conservation groups. At a lodge in Condon, Mont. Schweitzer said he told Wyss and other potential donors that their names might not be remembered by future generations, but their work would be. “Near as I can tell, he [Wyss] is a citizen of the planet that was interested in protecting some of its last best places,” Schweitzer said. As for why he’s targeting his money in the U.S. West, Wyss said it was too late to do much good for his native landscape in the Swiss Alps: “Too many ski lifts, too many resorts, too many hotels.” In Montana, he added, there is still room for grizzlies, wolves and other iconic species to thrive. “In the United States, we have a chance to protect some of them, not only for Americans but for people all around the world to benefit,” he said.

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weapons in Pakistan and the presence of al Qaeda, and presumably Osama bin Laden, in the tribal borderlands. One of his main tasks was to press President Hamid Karzai of Afghanistan to take responsibility for security in his country and to confront the corruption that imperils the U.S. mission there. At times, Karzai refused to see him, but Holbrooke was undeterred. “He’s an enormously tough customer,” Holbrooke said during one of the periodic breakfasts he had with reporters who covered his diplomatic exploits. “As you’ve heard,” he added with a smile, “so am I.” He helped his boss, Hillary Clinton, whom he had supported in her presidential bid, to persuade U.S. President Barack Obama to send more troops to Afghanistan, while pressing for more aid and development projects to improve the United States’ image there. But he died before anyone knew if the experiment would succeed. FORMIDABLE FIGHTER A brilliant, sometimes abrasive infighter, he used a formidable arsenal of facts, bluffs, whispers, implied threats and, when necessary, pyrotechnic fits of anger to press his positions. Obama, who praised Holbrooke on Monday afternoon at the State Department as “simply one of the giants of U.S. foreign policy,” was sometimes driven to distraction by his lectures. But Holbrooke dazzled and often intimidated opponents and colleagues around a negotiating table. Some called him a bully, and he looked the part: the big chin thrust out, the broad shoulders, the tight smile that might mean anything. To admirers, however, including generations of State Department proteges and the presidents he served, his peacemaking efforts were extraordinary. When he named Holbrooke to represent the United States at the United Nations, President Bill Clinton said, “His remarkable diplomacy in Bosnia helped to stop the bloodshed, and at the talks in Dayton the force of his determination was the key to securing peace, restoring hope and saving lives.” Others said his work in Bosnia deserved the Nobel Peace Prize. Few diplomats could boast of his accomplishments. Early on, Holbrooke devoted six years to the Vietnam War: first in the Mekong Delta with the U.S. Agency for International Development, seeking the allegiance of the civilian population, then at the embassy in Saigon as an aide to Ambassadors Max-


PILLAR OF U.S. FOREIGN POLICY: A brilliant, sometimes abrasive infighter, Richard Holbrooke dazzled and often intimidated opponents and colleagues around a negotiating table. To admirers his peacemaking efforts were extraordinary. well Taylor and Henry Cabot Lodge Jr., and finally in the U.S. delegation to the 196869 Paris peace talks led by W. Averell Harriman and Cyrus R. Vance. Holbrooke was the author of one volume of the Pentagon Papers, the secret Defense Department history of the Vietnam War that catalogued years of U.S. duplicity in Southeast Asia. The papers were first brought to public attention by The New York Times in 1971. As assistant secretary of state for East Asian and Pacific affairs in the Carter administration, Holbrooke played a crucial role in establishing full diplomatic relations with China in 1979, a move that finessed the United States’ continuing commitment to China’s thorn in the side Taiwan and followed up on the historic breakthrough of U.S. President Richard M. Nixon’s 1972 visit to China. ZENITH OF A CAREER When President Clinton took office in 1993, Holbrooke was named ambassador to Germany. He helped found the American Academy in Berlin as a cultural exchange center. He returned to Washington in 1994 as assistant secretary of state for European affairs. His top priority soon became the civil war in the former Yugoslavia, a conflict precipitated by the secession of Croatia, Slovenia, Macedonia and Bosnia. Massacres, mass rapes and displaced populations, among other atrocities, were part of campaigns of “ethnic cleansing” against Muslims. After months of shuttle diplomacy, Holbrooke in 1995 achieved a breakthrough cease-fire and a framework for dividing Bosnia into two

entities, one of Bosnian Serbs and another of Croatians and Muslims. The endgame negotiations, involving Serbian leader Slobodan Milosevic, President Franjo Tudjman of Croatia and President Alija Izetbegovic of Bosnia, unfolded in Dayton, Ohio, where a peace agreement was reached after months of hard bargaining led by Holbrooke. It was the high-water mark of a career punctuated with awards, honorary degrees and prestigious seats on the boards of the Asia Society, the American Museum of Natural History, the National Endowment for Democracy, the Council on Foreign Relations, Refugees International and other organizations. He was 59 when he left the United Nations as the Clinton administration drew to a close. But there was to be one more task. As Obama assumed office and attention shifted to Afghanistan, Holbrooke took on his last assignment. He began by trying to lower expectations, moving away from the transformative goals of former U.S. President George W. Bush toward something more readily achievable. While he achieved prominence as a cabinet official and envoy to many of the world’s most troubled arenas, Holbrooke was frustrated in his ambition to be secretary of state; he was the runner-up to Madeleine K. Albright, President Clinton’s choice in 1997, and a contender when Obama installed Hillary Clinton in the post in 2009. EVER THE DIPLOMAT Foreign policy was his life. Even during Republican administrations, when he was not in government, he was deeply engaged, undertaking

missions as a private citizen traveling through the warweary Balkans and the backwaters of Africa and Asia to see firsthand the damage and devastating human costs of genocide, civil wars and HIV and AIDS epidemics. And his voice on the outside remained influential — as an editor of Foreign Policy magazine from 1972 to 1977, as a writer of columns for The Washington Post and analytical articles for many other publications, and as the author of two books. He collaborated with Clark Clifford, a presidential advisor, on a best-selling Clifford memoir, Counsel to the President (1991), and wrote his own acclaimed memoir, To End a War (1998), about his Bosnia service. Holbrooke also made millions as an investment banker on Wall Street. In the early 1980s, he was a co-founder of a Washington consulting firm, Public Strategies, which was later sold to Lehman Brothers. At various times he was a managing director of Lehman Brothers, vice chairman of Credit Suisse First Boston and a director of the American International Group. In 1964, Holbrooke married the first of his three wives, Larrine Sullivan, a lawyer. The couple had two sons, David and Anthony. They were divorced. His marriage to Blythe Babyak, a television producer, also ended in divorce. In 1995, he married Kati Marton, an author, journalist and human rights advocate who had been married to the ABC anchorman Peter Jennings until their divorce in 1993. Holbrooke is survived by Marton; his two sons; his brother, Andrew; and two stepchildren, Christopher and Elizabeth Jennings.

Raid on Islamic groups in Germany BY ALAN COWELL AND MICHAEL SLACKMAN New York Times Service

BERLIN — The German Interior Ministry mounted simultaneous raids in three states on Tuesday against what it called Salafist networks suspected of seeking the imposition of an Islamic state in an apparent sign of growing concern over the radical messages of some Islamic groups. The raids, in Bremen, Lower Saxony and North Rhine Westphalia, were not linked to a recent terror alert reportedly inspired by phone calls from a man who said he wanted to quit working with terrorists and who warned of a pending Mumbai-style attack, the interior ministry said. The ministry statement said the raids were directed at two groups — Invitation to Paradise in the cities of Brunswick and Moenchengladbach and the Islamic Culture Center of Bremen on the North Sea coast. The two groups work

closely together and share the same ideology, a German security official said. The authorities are seeking to outlaw both groups. The ministry statement said the groups were suspected of opposing constitutional order by seeking to “overthrow it in favor of an Islamic theocracy.” One of the leaders of the Invitation to Paradise group had called for the imposition of Sharia law, the statement said, adding that the raids had been carried out under Germany’s laws of association. However, the statement said it remained to be seen whether the raids would confirm suspicions about the groups’ intentions. Dozens of private homes were searched on Tuesday, as well as religious schools and a store belonging to Invitation to Paradise that sells face-covering veils for women and caftans for men. Police said they seized evidence during the raids, but would not comment further.


FACING A BAN: The Masjid As-Sunnah mosque, is home to the Invitation to Paradise association in Moenchengladbach, Germany. Buildings connected to the group were among those raided on Tuesday. German intelligence authorities have said they regard Salafist institutions as a potential source of terrorism. The term Salafist usually denotes an extreme form of Islamic fundamentalism. However, Salafists are divided into several schools

including one that believes Muslims should remain politically disengaged and take up arms only when called to duty in a Muslim-governed country; anything else represents rebellion against the government, which violates Islamic law.

12/15/2010 5:46:18 AM





BY TIM JOHNSON McClatchy News Service


Residents in a boat pass structures submerged by flood waters in Canita, Panama, on Monday. Heavy rains and flooding have killed 10 people and forced more than 4,700 from their homes, according to Panama’s Civil Protection System.

Ex-U.S. billionaire sued for tax evasion Associated Press

KINGSTON, Jamaica — The British Caribbean dependency of the Turks and Caicos Islands has announced Monday that it has begun civil proceedings against a former U.S. billionaire who is ďŹ ghting for what remains of his luxury real estate empire. The territory’s government claims Timothy Blixseth, founder of an exclusive resort in the Montana Rockies that went into bankruptcy after he diverted hundreds of millions of dollars for his own use, helped conceal the true value of his private island retreat called Emerald Cay and signiďŹ cantly underpaid a stamp duty tax on the land deal. Blixseth’s Boston lawyer rejected the charge, however, accusing the Turks and Caicos of an “outright hold-up.’’ He said his client would ďŹ ght the case to the highest court in Britain, if necessary. “This is an extortionate attempt to extract money from Mr. Blixseth because he owns property in TCI while the responsible parties — the corrupt government of Michael Misick and the seller of the property — appear to have played some role in the original

stamp tax transactions,’’ attorney Michael Flynn said Monday. Blixseth bought the ritzy 5-acre island in the Turks and Caicos Islands in 2005, when the territory was governed by Misick, a highying former premier who is being investigated for the alleged misuse of public money and proďŹ ting from the sale of government-owned land to developers. Widespread allegations of corruption against Misick and other local ofďŹ cials led British authorities to impose direct rule in August 2009. The islands’ current government asserts Blixseth paid $28 million for Emerald Cay while land transfer documents recorded the purchase at just $10 million. They accuse him and other defendants of conspiring to avoid payment of taxes of $2.73 million and instead paying $975,000. They are seeking an outstanding stamp duty of $1.75 million as well as a penalty of $7 million. Flynn contends Blixseth does not owe the tax, never signed the land transfer document and is blameless in the entire matter. He puts the fault on the seller, Gary di Silvestre, and Misick’s administration. He said Blixseth intends to “expose all of the corruption.’’

Blixseth’s Emerald Cay property has a nine-bedroom mansion featuring a man-made sandy beach, several docks and a retractable bridge linking it with the island of Providenciales. Blixseth had planned to include the island in his Yellowstone Club World luxury residence group before ďŹ ling for bankruptcy. An advertisement in the Robb Report, a magazine that caters to the wealthy, once said Blixseth would accept $75 million for Emerald Cay or he would be willing to swap it for a Gulfstream jet or a luxury New York apartment. He later lowered his price to $48.5 million. Blixseth was once proclaimed a billionaire in Forbes magazine’s list of the 400 richest U.S. citizens. He founded the Yellowstone Club, a millionaires-only resort that counts former U.S. Vice President Dan Quayle and Los Angeles Dodgers owner Frank McCourt among its members. The ski and golf club fell into bankruptcy two years ago, and CrossHarbor Capital Partners of Boston bought the 13,600-acre resort for $115 million in 2009. About 23,000 people live in the Turks and Caicos, a sparsely populated tourist destination and ďŹ nancial haven near the Bahamas.

Changes in telecommunications law target anti-Chavez TV channel BY FABIOLA SANCHEZ Associated Press

CARACAS — A representative of Venezuela’s sole remaining anti-government TV channel claimed Monday that proposed changes to the country’s telecommunications law are aimed at rescinding the station’s license. The changes, which could be approved as early as this week, would force the owners of all TV and radio stations to reregister with Venezuela’s telecommunications commission — in person. If they fail to do so, the bill says, they will immediately lose their broadcast license. Globovision TV is the last remaining television station in Venezuela that is openly critical of Venezuela’s President Hugo Chavez. The station’s majority owner, Guillermo Zuloaga, recently ed the country after a court issued a warrant for his arrest. Authorities have charged him with usury and conspiracy for storing 24 new vehicles at one of his homes. Zuloaga, who owns several car dealerships, has called the charges bogus, and says that prosecutors are acting on orders from Chavez. Given his legal situation, it would be impossible for Zuloaga to appear in person before the telecommunications commission, Ana Cristina Nunez, a legal advisor

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to Globovision, told The Associated Press. Nunez said she doesn’t expect Zuloaga to return to Venezuela. Lawmakers who support Chavez introduced the bill. If the predominantly proChavez National Assembly passes it as expected, it will force Globovision off the airwaves, Nunez said. Globovision, a 24-hour news network, takes a consistent anti-government stance. It has been the only anti-Chavez channel on the air since another opposition-aligned station, RCTV, was forced off cable and satellite TV in January 2009. RCTV had been booted off the open airwaves in 2007.


U.S. wary of resurgent insurgency in Peru



Other privately owned TV channels have curbed their criticism of Chavez in recent years, raising concerns about self-censorship. The proposed changes to the law also would limit the reach of some channels by allowing them to broadcast only on cable or satellite, even in areas where they have permission to use the open airwaves. Globovision has authorization to broadcast on the open airwaves in the capital and the city of Valencia, about 125 miles east of Caracas. The proposed changes to the law have drawn criticism from numerous media groups and watchdogs.


IN TROUBLE: Globovision TV, owned by Guillermo Zuloaga, above, feels threatened by the proposed changes in Venezuela’s telecommunications law that requires all TV and radio station owners to reregister.

MEXICO CITY — U.S. diplomats in Peru are keeping a close eye on the steady resurgence of the fanatical Sendero Luminoso insurgency but ďŹ nd that corruption in Peru’s army stymies efforts to ďŹ ght the Maoist group, U.S. diplomatic cables show. A U.S. cable written in November 2009 said Lima urgently needed a better strategy “for turning the tide against a re-emergingâ€? Sendero Luminoso, also known as the Shining Path. While the group may number only 2,000 members or so, many of them unarmed, cables indicated that Peru’s armed forces face serious equipment shortages and are plagued by generals seemingly more interested in enrichment than ďŹ ghting leftist guerrillas. Sendero Luminoso arose in the Peruvian Andes in the early 1980s, leading a ďŹ ght that cost some 69,000 lives before the insurgency was largely decimated in the 1990s. As it rekindles strength in remote Andean areas, the insurgency has changed its tactics, although its overarching objectives remain obscure, cables said. “There is no doubt that the [Sendero Luminoso] has adopted a ‘kindlier, gentler’ approach towards the local population,â€? an October 2009 cable said, adding that in the Apurimac Valley the insurgency “prefers to


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bribe peasants and local ofďŹ cials, rather than to terrorize them and even execute them, as they did in the past.â&#x20AC;? Several of the leaked U.S. cables, released by the Madrid daily newspaper El Pais, referred to allegations of links between army ofďŹ cers and drug trafďŹ ckers. One cable, dated March 12, 2009, and sent by then-U.S. Ambassador P. Michael McKinley, suggested that remnants of a â&#x20AC;&#x153;narco-corruption webâ&#x20AC;? dating from more than a decade ago â&#x20AC;&#x153;still exist with the military.â&#x20AC;? It cited a source, whose name was deleted, offering suspicions that army Gen. Paul da Silva, who is now

Peruâ&#x20AC;&#x2122;s army chief, had met in 2004 with a ďŹ sh exporter in the city of Piura in order to plan cocaine shipments. The exporter was arrested in 2007 when authorities found nearly a ton of cocaine in a ďŹ sh shipment. An enraged Da Silva said Monday that he was considering suing McKinley, whoâ&#x20AC;&#x2122;s now the U.S. ambassador to Colombia, because the cable was designed to â&#x20AC;&#x153;harm the prestige of the glorious army of Peru.â&#x20AC;? Peruâ&#x20AC;&#x2122;s civilian defense minister, Jaime Thorne, was more measured, saying that any proven link between the army brass and trafďŹ ckers â&#x20AC;&#x153;will be severely punished.â&#x20AC;?

Haitiâ&#x20AC;&#x2122;s leading candidate takes a hit at the electoral council BY JONATHAN M. KATZ Associated Press

PORT-AU-PRINCE â&#x20AC;&#x201D; Supporters of one of her competitors in Haitiâ&#x20AC;&#x2122;s presidential election set barricades on ďŹ re and threw rubble at cars when initial results put him third. The No. 2 ďŹ nisher urged his partisans to mobilize and his staff warned they could start a war. But during the turmoil since the preliminary vote count, Mirlande Manigat, the 70-year-old law professor and former ďŹ rst lady in ďŹ rst place, has kept her calm and stayed in the classroom and her stucco-walled ofďŹ ce. In an interview Monday, she blamed the discord on a â&#x20AC;&#x153;crisis of conďŹ denceâ&#x20AC;? with Haitiâ&#x20AC;&#x2122;s electoral ofďŹ cials. She also defended her decision not to participate in a recount and said she is open to power-sharing agreements with other parties as a means of emerging from the crisis. â&#x20AC;&#x153;Now we are in a situation which has no relation whatsoever either with the constitution or to the electoral law,â&#x20AC;? Manigat said. â&#x20AC;&#x153;I would like to see my country heading for a true democracy, and I am personally concerned about the whole situation.â&#x20AC;? Manigat is not new to the dirty business of Haitian politics. Her husband, Leslie Manigat, was elected in a criticized 1988 election under a military junta that quickly ousted him in a coup. She won a Senate seat in 2006 but resigned in protest when her husband was denied a runoff in a compromise favoring now-President Rene Preval. Her supporters clashed with U.N. peacekeepers in two provincial cities between the dysfunctional Nov. 28 election and the much-critcized Dec. 7 announcement of results, throwing rocks and burning tires to demand she be declared the winner. Since the vote tally the crisis has boiled down to a ďŹ ght for second place â&#x20AC;&#x201D; the other spot in a Jan. 16 runoff â&#x20AC;&#x201D; between Jude Celestin, the candidate of Prevalâ&#x20AC;&#x2122;s party, and Michel Martelly, a singer who trails him by 6,845 votes. Manigat, all but assured of going on to the next round,


SKEPTICAL: Mirlande Manigat, leading candidate in Haitiâ&#x20AC;&#x2122;s presidential elections has refused a proposal of recounting of tally sheets by the electoral council or CEP, saying she doesnâ&#x20AC;&#x2122;t trust it. has stayed in the background. That changed brieďŹ&#x201A;y when the provisional electoral council, or CEP, proposed creating a commission to recount the tally sheets. Manigat and Martelly declared they were opposed; only Celestin accepted. â&#x20AC;&#x153;Nobody trusts the CEP. Nobody in Haiti,â&#x20AC;? Manigat said Monday. â&#x20AC;&#x153;I cannot accept [the proposal] because there is no indication about the location, the rules, the membership, etc., etc.â&#x20AC;? She was also put off by the way she was invited â&#x20AC;&#x201D; by email received over her faulty Internet connection at 5 a.m. â&#x20AC;&#x153;I did not even answer, because for me it was a very bad way to communicate to someone who is a candidate or supposedly might become the next president of Haiti,â&#x20AC;? she said. Now the electoral council has proposed a second, 72-hour appeals period through Wednesday in which candidates can legally contest the results. That new window was announced late Sunday by a coalition of nine international ambassadors as more protests were expected. Haitiâ&#x20AC;&#x2122;s political stalemate comes as it wrestles with post-quake reconstruction, a cholera epidemic that has killed more than 2,100 and endemic crises of poverty and instability. The election cost $29 million â&#x20AC;&#x201D; including $14 million provided by the United States

â&#x20AC;&#x201D; and ambassadors have told Manigat they are not interested in paying for a do-over. â&#x20AC;&#x153;The Haitians are not enjoying a kind of autonomy with regard to the present situation. Itâ&#x20AC;&#x2122;s a matter of relation of force: economic force, political force,â&#x20AC;? she said. â&#x20AC;&#x153;If ever I was president of Haiti before that I would not ďŹ nd myself in this present situation.â&#x20AC;? Manigatâ&#x20AC;&#x2122;s campaign has promised gradual change and long-term solutions. Her ďŹ rst priorities would be dealing with the cholera epidemic and ďŹ nding ways to house the more than 1 million people still living under tarps and tents nearly a year after the earthquake. Manigat said she believes an agreement between her Assembly of Progressive National Democrats and another party would be essential to resolving the crisis. She said she is open to a pact with Celestin or Martelly supporters, though not necessarily the men themselves. She called Martelly, a carnival singer known as â&#x20AC;&#x153;Sweet Micky,â&#x20AC;? an â&#x20AC;&#x153;intelligent manâ&#x20AC;? â&#x20AC;&#x201D; though she conceded his is â&#x20AC;&#x153;not my type of music, you know.â&#x20AC;? As for Celestin, head of the state-run construction company before being plucked from obscurity to represent Prevalâ&#x20AC;&#x2122;s new Unity party, she said: â&#x20AC;&#x153;It is better not to base an opinion about what people are saying. I donâ&#x20AC;&#x2122;t know him. Thatâ&#x20AC;&#x2122;s all.â&#x20AC;?

12/15/2010 3:35:21 AM






Atheist ads on Texas buses draw mobile reaction BY JAMES C. McKINLEY JR. New York Times Service

FORT WORTH, Texas — Stand on a corner in this city and you might get a case of theological whiplash. A public bus rolls by with an atheist message on its side: “Millions of people are good without God.” Seconds later a van follows bearing a riposte: “I still love you. — God,” with another line that says, “2.1 billion Christians are good with God.” A clash of beliefs has rattled this city ever since a group of atheists bought ad space on four city buses to reach out to nonbelievers who might feel isolated during the Christmas season. After all, Fort Worth is a place where residents commonly

ask people they have just met where they worship and many encounters end with, “Have a blessed day!” “We want to tell people they are not alone,” said Terry McDonald, the chairman of Metroplex Atheists, part of the Dallas-Fort Worth Coalition of Reason, which paid for the atheist ads. “People don’t realize there are other atheists. All you hear around here is, ‘Where do you go to church?”‘ But the reaction from believers has been harsher than anyone in the nonbelievers’ club expected. Some black ministers organized a boycott of the buses, with limited success. Other clergy members are pressing the Fort Worth Transportation

Authority for a ban on all religious advertising on public buses. And a group of local businessmen paid for the van with the Christian message to chase the buses with atheist messages around town. “We just wanted to reach out to them and let them know about God’s love,” said Heath Hill, president of the media company that owns the van and one of the businessmen who arranged for the Christian ads. “We have gotten some pretty nasty e-mails and phone calls from atheists. But it’s really just about the love of God.” The face-off here follows efforts in other cities by several coalitions of atheists — American Atheists, the United Coalition of Reason

and the Freedom From Religion Foundation, to name a few — that have mounted ad campaigns to encourage nonbelievers to seek out others of like mind. Some have compared their efforts to the struggle of homosexuals to “come out” and win acceptance from society. But nowhere has the reaction of believers been as forceful as in Fort Worth, to the delight of Fred Edwords, the national director of the United Coalition of Reason. The coalition’s local chapter spent only $2,400 for four bus ads, which will run through the month in a city with about 200 buses. “That’s more brouhaha for the buck than we have seen anywhere,” he said.

Some of the fiercest criticism has come from black religious leaders. The Rev. Kyev Tatum Sr., president of the local Southern Christian Leadership Conference, has called for a boycott of the buses, saying the ads are a direct attack during a sacred time in the Christian calendar. “It’s a season to share good will toward all men,” he said. “To have this at this time come out with a blatant disrespect of our faith, we think is unconscionable.” While Tatum and about 20 other pastors have urged their congregations to avoid the buses, a smaller group met recently with the transportation authority’s president to demand that the

policy allowing religious advertising on buses be reversed Wednesday at a meeting of the authority’s board. The bus system in nearby Dallas bans all religious ads. “I’m not against them getting their message out,” said the Rev. Julius L. Jackson, pastor at Macedonia Missionary Baptist Church. “I just don’t think it should be on public transportation.” Dick Ruddell, the president of the Fort Worth Transportation Authority, said churches were free to advertise. The only ads not accepted, Ruddell said, are those that have to do with a few vices, like cigarettes and alcohol. “There is nothing in the policy about religious content,” he said.

Anti-nuclear weapon protesters convicted in U.S. BY MANUEL VALDES Associated Press


DETERMINED: Michael Steele has vowed to seek reelection to lead the Republican National Committee into the 2012 presidential campaign. Steele’s announcement has met with anger and astonishment from an array of Republican officials and it was far from clear that his bid for a second term would be successful.

Steele announces reelection bid BY JEFF ZELENY New York Times Service

WASHINGTON — In the face of overwhelming criticism about his stewardship of the Republican National Committee, Michael Steele, the party chairman, declared Monday evening that he had no intentions of stepping aside and vowed to seek reelection to lead the party into the 2012 presidential campaign. Steele made the announcement in a conference call with members of the Republican committee, many of whom have already pledged their support to one of the half-dozen candidates vying to replace him.

He did not take questions in the 40-minute call or address many of the challenges facing his candidacy, including the financial management of the committee that is ending the year $15 million in debt. “Yes, I have stumbled along the way, but have always accounted to you for such shortcomings,” Steele said, according to participants on the call. “No excuses. No lies. No hidden agenda. “Going forward,” he continued, “I ask for your support and your vote for a second term. Our work is not done and my commitment has not ended.”

The decision by Steele was met with anger and astonishment from an array of Republican officials. And it was far from clear that his bid for a second term would be successful or that he would emerge as one of the leading contenders Jan. 14, when the committee elects a chairman to guide the party through an election cycle where the chief goal is defeating U.S. President Barack Obama. The Republican Party, which is often steeped in discipline and order among the ranks of top leaders, has become a cauldron of controversy. The announcement

by Steele upended the race for chairman and ensured that a fight over the party’s direction would play out even as Republicans assume the majority in the House in January. Steele, the first black chairman of the Republican Party, has been a contentious presence at the Republican National Committee since shortly after he arrived. He vowed to correct what he called a Republican “image problem,” and members of the committee believed the party needed a new face after suffering punishing losses in Congress and at the White House in the 2006 and 2008 elections.

SEATTLE — A federal jury has convicted five anti-war activists, including octogenarians and Jesuit priests, who cut fences at a naval base in 2009 to protest submarine nuclear weapons. Members of the group could face up to 10 years in prison when they are sentenced in March. The five defendants were convicted of conspiracy, trespass and destruction of government property, the U.S. Attorney’s Office said. The group includes 82-year-old Jesuit Rev. Bill Bichsel; 60-year-old Jesuit Rev. Stephen Kelly; 84-year-old Sister Anne Montgomery; 67-year-old retired teacher Susan Crane and 60-year-old social worker Lynne Greenwald. All five remained free Monday under their personal recognizance, the U.S. Attorney’s Office said. “When those who seek to exercise their right to protest violate the rights of others, they must be held accountable under the law,” Assistant U.S. Attorney Arlen Storm said in the statement. Court documents said the five defendants cut through a perimeter fence on Nov. 2, 2009, to reach an area at Naval Base Kitsap-Bangor near where Trident nuclear warheads are stored in bunkers. They cut through two more fences and an alarm system, causing about $6,000 in damage, prosecutors said. Marines responded to the alarm and found the group inside the limited access area displaying a banner

denouncing nuclear weapons, putting their blood on the fence and ground, and kneeling in prayer. They were arrested, hooded, taken to the Naval Criminal Investigative Service office and issued letters barring them from the base. Greenwald and Bichsel had previously been permanently barred from the base. “No, I don’t have any regrets,” said Crane, who recently became a grandmother. “The main thing that we know is that these weapons are just horrendous, grotesque and the base is only there to serve or take care of the trident nuclear weapons.” The guilty convictions didn’t come as a surprise to the defendants, said Anabel Dwyer, an attorney for Kelly. Judge Benjamin Settle had prohibited the defendants from using international law and the lethality of nuclear weapons as a defense. The five defendants believe nuclear warheads stored and on submarines at the base are illegal under international, national and humanitarian law. The trial hinged on straightforward charges relating to trespassing and property damage. “It’s sort of unnecessary prosecution,” Dwyer said. “I’m very sorry about the outcome. What they did was justifiable, pointing out weapons of mass destruction.” Crane and Dwyer didn’t want to speculate on sentences the group might receive in March.

Brown enters office at a critical time for California’s schools BY SEEMA MEHTA Los Angeles Times Service

LOS ANGELES — As Gov.elect Jerry Brown prepares to take office, major headwinds are buffeting the biggest component of his upcoming budget: California’s schools. They are being confronted by a lack of funding that threatens to further harm students and a controversial reform movement that could dramatically reshape how classrooms are run. Most immediate and pressing is the state’s fiscal crisis — a $28 billion gap is forecast for the next 18 months. How that will affect school districts already reeling from years of multibillion-dollar cuts will be the subject of Brown’s second budget forum, which is scheduled for Tuesday in Los Angeles. “Jerry Brown is entering office at a moment when the capacity of the system is weaker than any time in recent memory,” said John Rogers, director of the Institute for Democracy, Education and Access at the University of California, Los Angeles. “I worry we may be reaching a breaking point.” The state’s financial health is intricately tied to schools

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because roughly 40 percent of the state budget is earmarked for K-12 education. In recent years, as legislators struggled to close large deficits, schools have seen round after round of funding cuts — $21 billion in the last two years alone. California’s per-pupil spending is now lower than that in nearly every other state, resulting in widespread teacher layoffs, the cancellation of summer school, the shortening of the school year and the overcrowding of classrooms. Educators say the state is seeing the result of these actions — the dropout rate rose three points, to 22 percent, in the 2008-09 school year — and fear that more cuts could push some districts into insolvency. “I attribute the increase in the dropout rate to some extent on the budget cuts — fewer counselors, fewer classes in music and the arts, less careertechnical education,” said Jack O’Connell, the outgoing state superintendent of public instruction. Brown, who has called finding more funding for schools a “very top priority,” acknowledges the difficulty

of doing so in tough economic times. “I’d like to get as much money for the schools as I can, but there’s only as much money as the economy and the taxpayers make available,” he said in October. His focus on education has evolved during his four decades in public life. Even among his supporters, Brown is viewed as having had little interest in the topic during his previous stint as governor (1975-1983). “I don’t think he had a huge mark on education in his first two terms,” said Michael Kirst, a Stanford University professor and Brown advisor who served on the state Board of Education when Brown was last governor. Brown sought mayoral control of Oakland’s failing schools but never achieved it. He did gain the power to appoint three members to the school board, but failed to have a real effect on the district. Brown’s advisors say his experiences tangling with the district’s bureaucracy, as well as his founding of two charter schools in the city, gave him both an interest in improving education in Cali-

fornia and concrete ideas on how to do it. “That really transformed him,” Kirst said. “When I began discussing education with him again for this race, it was like talking with a school administrator . . . He could talk about teachers

and how to evaluate them. He hired and fired several principals. He has an on-theground operational grasp of education.” Teachers unions, meanwhile, spent millions of dollars supporting Brown against Republican Meg Whitman.

But as mayor, Brown repeatedly clashed with teachers unions, and they don’t expect him to walk in lockstep now. Educators, academics, labor leaders and others will parse the governor-elect’s words and actions to try to get an idea of his focus.


BIG PLANS: Gov.-elect Jerry Brown, centre, has called finding more funding for schools a ‘very top priority,’ when he takes office as governor of California. He however acknowledges the difficulty of doing so in tough economic times.

12/15/2010 4:40:39 AM






Assange’s release on bail is delayed after appeal BY RAVI SOMAIYA AND ALAN COWELL New York Times Service

LONDON — After a week in detention facing possible extradition, Julian Assange, the founder of the WikiLeaks antisecrecy group, was ordered released on $310,000 bail by a court on Tuesday as he challenges a Swedish prosecutor’s demand that he return to Stockholm for questioning about alleged sex offenses. However, Assange remained in custody pending a hearing on an appeal by the prosecutor, which would take place within the next 48 hours. In granting bail, Judge Howard Riddle ordered that Assange appear again in court on Jan. 11. He also said that between then and now he must reside at Ellingham Hall, a Georgian mansion in Bungay, in eastern England, owned by Vaughan Smith, the founder of a club for journalists. Assange must spend every night at the mansion and will be electronically tagged so the police can track his movements, the judge said. Additionally, Assange will be under curfew every day from 10 p.m. to 2 a.m. and from 10 a.m. to 2 p.m. and will be required to report daily to the police from 6 p.m. to 8 p.m. His passport is already with the police and, under the terms of his bail, he is not permitted to travel abroad. Judge Riddle said he granted bail on Tuesday, after denying it a week ago, because Assange was now able to provide an address where he would be staying. The judge described his earlier decision as “marginal” and said that Assange had now met that condition of his bail “handsomely.” Assange was wearing a dark blue suit and a white shirt open at the collar. Reporters said he seemed paler and more fatigued than at the first hearing on Dec. 7

when bail was denied. When the judge announced that bail would be granted on Tuesday, Assange gave a thumbs-up sign to the packed courthouse. An Australian newspaper, the Sunshine Coast News, reported on Tuesday that his mother, Christine Assange, had flown to London to be with him. She was among around 100 people — mainly lawyers and journalists — crammed into Court No. 1 at City of Westminster Magistrates Court for her son’s arrival. Assange arrived in the court building several hours before the afternoon hearing, according to reporters at the court house. While Assange has ascribed the sex offense charges — which he denies — to “dirty tricks” related to his antisecrecy operations, Swedish prosecutors insist there is no link. A week ago, Assange surrendered to British authorities and was jailed after a judge reviewing the extradition request found him to be a flight risk and denied bail. Despite his release Tuesday, a final decision on whether he is to be extradited could take weeks or longer. Speaking about the case in recent weeks, Assange has said that he had consensual relations with two young Swedish women. He said he met them during a trip to Sweden in August that he made in a bid to establish a haven for himself and WikiLeaks under Sweden’s broad laws protecting press freedoms. The charges relate to the question of whether these encounters ceased to be consensual when a condom was no longer being used. Sweden’s request for extradition is designed to enable prosecutors to question Assange about charges of “rape, sexual molestation and unlawful coercion.” The latest twist in the

drama began a week ago when officers from Scotland Yard arrested Assange after he went to a central London police station by agreement with the authorities. In a packed courtroom hearing lasting nearly an hour a week ago, Gemma Lindfield, a lawyer acting for the Swedish government, outlined some of the allegations against Assange made by the Swedish women, both WikiLeaks volunteers. They involved three incidents, including one in which Assange was alleged to have had unprotected sex with an accuser while she was asleep. In court last week, Assange refused to give a current address, giving first a post office box, then an address in Parkville in the Australian state of Victoria, where he lived before adopting a peripatetic lifestyle since founding WikiLeaks in 2006. The exchange appeared to have weighed against his request for bail, which was supported by financial guarantees of more than $150,000 from a cast of well-known supporters present in court, including the filmmaker Ken Loach and Jemima Khan, a political activist.


PROTEST : A supporter of WikiLeaks founder Julian Assange demonstrates outside the court in London during his bail hearing.


‘US AND THEM’: Charlie Gilmour, second right, son of Pink Floyd guitarist David Gilmour, is accused of attempting to damage the Union flag that sits atop London’s main war memorial.

Gangs, hardcore activists behind violence, says U.K. BY DAVID STRINGER Associated Press

LONDON — Britain’s Home Secretary said that street gangs and hardcore activists infiltrated a protest last week in which demonstrators rampaged through London and attacked a car carrying Prince Charles and his wife Camilla. Several hundred people vandalized government buildings, battled riot police and rounded on the royal couple as they drove to a theater — smashing a window of their Rolls-Royce and splattering the car with paint. Home Secretary Theresa May said many of the 15,000 people who gathered last Thursday in central London to protest increases in college tuition fees became involved in the violence. She confirmed that one protester had managed to make contact with Camilla during the attack. “It is quite clear that these acts were not perpetrated by a small minority but by a significant number of troublemakers,” May told the House of Commons.

May said police believe “the protests were infiltrated by organized groups of hardcore activists and street gangs bent on violence.” Forty-three protesters were injured during clashes with riot police — one seriously — and 35 officers were hurt, as well. Britain’s police watchdog is investigating one incident in which a 20-year-old man suffered major head injuries. More protests are expected this week as lawmakers in the House of Lords debate plans to allow universities to raise tuition fees to up to $14,000 a year — three times higher than the current limit. Security has been already been increased at Britain’s Parliament, with barricades erected around the building and extra police guarding entrances. Police have made 39 arrests in connection with Thursday’s protests and have released photographs of about a dozen other people still wanted for questioning. Officers said that Charlie Gilmour, the 21-year-old son of Pink Floyd guitarist David

Gilmour, was detained and is accused of attempting to damage the country’s Union flag that sits atop London’s main war memorial. Demonstrators largely blamed the clashes last week on aggressive tactics by police, including the use of “kettling” — confining protesters to small areas for long periods. An ombudsman report into the policing of demonstrations at the 2009 G-20 summit criticized London police for using the technique. May said police had shown bravery and restraint during the protests last week, and said many demonstrators had turned up armed with makeshift weapons. “The idea that some have advanced that police tactics were to blame when people came armed with sticks, flares, fireworks, stones and snooker balls, is as ridiculous as it is unfair,” May said. Despite the protests, lawmakers in the House of Commons approved the rise in college fees last week in a close vote.

In a bid to shore up popularity, Hamas tries to reach out BY IBRAHIM BARZAK Associated Press

GAZA CITY, Gaza Strip — Gaza’s ruling Hamas movement has politicians sweeping streets to show community spirit, activists distributing chocolates and cards signed “from Hamas with love” and police officers visiting homes and schools to soften the often harsh image of the security forces. The Islamic militants — who mark the anniversary of their movement’s 1987 founding on Tuesday — say the outreach is simply a way to reconnect with Gazans after more than three years in sole control of Gaza. They deny they have been losing ground, though one poll suggests support for the group has been slashed in half since its 2006 election victory. The need to shore up

popularity highlights the dilemma that has vexed Hamas since it seized Gaza from internationally backed Palestine’s President Mahmoud Abbas in 2007: In trying to be both a violent resistance movement and a responsible government, it often ends up satisfying neither its militant core constituency nor people hoping for a better life. Since taking power, Hamas has attempted a balancing act. It has tried to cling to its militant ideology, fearing moderation would render it a politically irrelevant lesser copy of Abbas’ pragmatic Fatah movement. But while maintaining fierce rhetoric, Hamas also largely halted attacks on Israel to avoid the punishing retaliation that makes it more difficult to govern. An informal truce, in place

since Israel’s war on Gaza two years ago, has not been enough to get Israel and Egypt to lift the border blockade they imposed after the 2007 takeover. Without this life is unlikely to return to normal, and Gazans still overwhelmingly depend on handouts and struggle with more than 30 percent unemployment. “Hamas’ popularity has been declining while in power, mostly because of the living conditions under the blockade and mistakes . . . such as human rights violations and restrictions in freedom of speech,” said West Bank-based pollster Walid Ladadweh, who measured a popularity drop in Gaza from 31.7 percent to 23.9 percent from summer to fall of this year. The poll of 1,200 people had a margin of error of 3 percentage points.

Hamas, the Gaza branch of the pan-Arab Muslim Brotherhood, insists it’s more popular than ever, and intends to prove it with a mass rally Tuesday, marking the 23rd anniversary of its founding. “After 23 years, Hamas became No. 1 in the hearts of the Arab and Palestinian people,” said Fawzi Barhoum, a spokesman of the movement. The turnout is closely watched every year, and Hamas has been working hard to ensure a large crowd. Some 200 buses, along with dozens more vans, are to deliver supporters to the site, a sandy lot in Gaza City, where 250,000 plastic chairs are being set up. Since the Hamas takeover, the annual rallies have had large turnouts on a similar scale. In the weeks leading up to the event, Hamas tried to

reach out to every Gaza family, aiming to prove that power has not made the former grassroots movement indifferent to the plight of ordinary people. During a Muslim holiday in November, some 12,000 Hamas activists went door to door, distributing boxes of chocolate to more than 300,000 families, said Ashraf Abu Daya, a Hamas official. “We simply wanted to send a message that Hamas is still close to the street, despite being busy being in power and politics,” he said. The third campaign, to last for 50 days, is aimed at improving the image of the security forces, said Col. Kamal Abul Nada, who heads the effort. He said officers have been visiting schools, mosques and clan chiefs to give talks. “Our aim is to erase the

bad image that some ordinary people might have about the police,” the colonel said. Reactions are mixed. Taxi driver Marwan Abdel Fatah, used to argue with traffic police, said he was shocked to get sweets at a police checkpoint instead of a traffic ticket, and was skeptical the bonhomie would last. Talal Hamad, 45, who owns a warehouse for food supplies, said Hamas has done a good job, considering the tough circumstances. But Maher, a 33-year-old Gaza shop owner and Fatah supporter who would not give his last name for fear of repercussions, said Hamas is trying to mislead the public. “Since they came to power, we have lived under blockade and no one enjoyed a good life, except for Hamas people,” he said.

Ahmadinejad fires Foreign Minister Mottaki Japan to continue funding U.S. troops BY RAMIN MOSTAGHIM AND BORZOU DARAGAHI

Los Angeles Times Service

TEHRAN, Iran, and KABUL, Afghanistan — Iran’s President Mahmoud Ahmadinejad announced the firing of the country’s foreign minister as the longtime diplomat was abroad on assignment, pro-government news agencies reported. Manouchehr Mottaki, an Anglophonic career diplomat and relative moderate serving as foreign minister since 2005, has long bristled against Ahmadinejad’s abrasive style. He will be replaced by Ali Akbar Salehi, a U.S.educated former diplomat who has been serving as chief of Iran’s Atomic Energy Organization as well as a vice president in Ahmadinejad’s Cabinet, state television reported. Officials disclosed no reason for the ouster of Mottaki on Monday, who was traveling in Senegal at the time, and the Foreign Ministry’s website did not announce his

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replacement. It was unclear whether Supreme Leader Ali Khamenei, the ultimate arbiter of Iran’s foreign and national security policies, signed off on the dismissal. But Michel Potocki, author of a book on Iran’s Constitution, said: “I very much doubt that Mottaki could have been dismissed without the leader’s approval.” Iran is confronting the United States and other major powers over its nuclear ambitions, the subject of international talks in Istanbul, Turkey, in January. Mottaki’s removal set off a flurry of speculation about what it means. Iran watchers were generally perplexed at what the dismissal means for those seeking to curb the Islamic republic’s nuclear program. “We trust that the talks that have just begun in Geneva will continue and that different political line-ups will not lead to an interruption or a hesitation at those talks,” Germany’s Foreign Minister


Guido Westerwelle said in Brussels, according to Deutsche Presse Agentur, a German press agency. Germany will take part in

the talks. Some said the replacement meant little. “Mottaki was a kind of gray-colored civil servant,” said Francois Nicoullaud, a retired diplomat who served as France’s ambassador to Tehran from 2001 to 2005. “I doubt that his absence will be noticed.” Others speculated that the rising importance of the nuclear issue made Salehi a better choice at the helm of the Foreign Ministry and Mottaki irrelevant. “As the nuclear issue is tied to foreign policy and overshadowing everything else in foreign affairs, Ali Akbar Salehi is becoming a superstar,” said Mashallah Shamsolvaezin, a journal-

ist and political analyst in Tehran. “Salehi is a high-level nuclear scientist, but also an excellent and sophisticated diplomat,” said Nicoullaud, in an e-mail exchange. Within Islamic Republic’s fragmented and competitive political elite, Mottaki was often shoved aside. The foreign minister threatened to quit this year when Ahmadinejad appointed special foreign policy envoys in a move that appeared designed to further bypass him. Western diplomats have long struggled to discern whether Mottaki or any of the other Iranian dignitaries circling the globe spoke for themselves, their faction, Ahmadinejad’s government or Khamenei. “Generally speaking, ba rely 20 percent of foreign policy is decided by Foreign Ministry apparatus,” said Sadegh Zibakalam, a Tehran political scientist and frequent commentator.

BY MARI YAMAGUCHI Associated Press

TOKYO — Japan’s government agreed Tuesday to continue contributing $2.2 billion a year toward the cost of stationing U.S. troops in the country. Under the agreement with the United States, Japan’s share will remain at the current $2.2 billion through March 2016. The current pact expires next March. Japan had sought a cut in its payment during months of negotiations on the renewal because of economic woes. But officials agreed on no reduction after tensions on the Korean peninsula and worries over China’s growing military might highlighted the U.S. military’s role as a deterrent for security threats. “As both Japan and the U.S. are in extremely

tight fiscal conditions, we are striving to act under the spirit of our alliance,” Japanese Defense Minister Toshimi Kitazawa said. “The agreement to maintain the amount is reasonable.” The payment supports the 47,000 U.S. service members based in Japan under a bilateral security pact. Tokyo’s share is about a third of the total, and about three times what Germany pays to host U.S. forces on its soil. The flash point in the debate is the southern island of Okinawa, where most of the nearly 100 U.S. facilities in Japan are located. The pending relocation of an unpopular U.S. Marine base on the island has strained relations between the two countries. Japanese living near U.S. military facilities have long complained about aircraft noise and crime.

12/15/2010 4:42:56 AM






It’s grow-up time in the United States BY KATHLEEN PARKER Washington Post Service

hanks to WikiLeaks, even Vlad the Putin can raise an eyebrow and presume to know more about founding United States principles, democracy and free speech. It is convenient to blame poor little Julian Assange, the cyberkind who published the leaks that someone stole. He is now a martyr to the brat brigades who occupy basements and attics, keeping the company of others similarly occupied with virtual life. Assange is the king brat, but only du jour. He will be displaced soon enough by more ambitious hacks whose delinquent and, worse, sinister inclinations are enabled by technology. Alas, we now are at the mercy of giddy, power-hungry nerds operating beyond the burden of responsibility or accountability. Do I want to hunt down Assange as we do al Qaeda, as one famous caribou hunter suggested? Uh, no. Assange, who is in custody awaiting extradition on (dubious) rape


charges, may be a naughty boy. But he is an irresponsible publisher, a conduit, not the perpetrator of the originating offense. Whatever culpability we may assign to him ultimately will have to be determined in the way that we (but not so much the Russians and those who can see Russia on a clear day) prefer: Due process. Perceived weaklings In the meantime, a few observations are worth considering as we ponder the larger picture. It is human nature to turn on the weak, and we apparently are today’s feast. The world delights in our recoil from the release of classified documents because the big dog has a limp, a weak spine and a soft belly. Our president, though likable, is perceived as weak no matter how many raids we perform in Afghanistan. South Korea, who at least owes us an in-kind favor, at first declined our kind trade offer. China, Russia and others have criticized our monetary policy.

Meanwhile, the world sees our cacophonous Congress unable to move forward with measures to save our economy, while watching our overfed populace stampeding to buy more junk made with cheap labor in unfriendly countries. China holds our debt while we can’t agree on how to stop the hemorrhaging. At the same time, China’s students are kicking our kids’ tushies down the schoolyard. From reading to math, they’re so far ahead we inhale their dust. That is to say, the world sees weakness. This is a stunning recognition for most United States citizens who have grown up amid relative plenty, a sunny national disposition and mantra of good intentions. We’ve always known that we’re the good guys, as even some of our defenders have noted in the wake of WikiLeaks revelations. Writing for the center-right Le Figaro, French journalist Renaud Girard said: “What is most fascinating is that we see no cynicism in U.S. diplomacy. They really believe

in human rights in Africa and China and Russia and Asia. They really believe in democracy and human rights.” Yes, we really do. If U.S. citizens are guilty of anything, he said, it is being a little naive. Let’s plead guilty as charged and get on with it. With gratitude, we even find a friend on the left. Another French journalist, Laurent Joffrin, editor of the leftist Liberation, conceded that we should not necessarily accept a “demand for transparency at any price.” Task ahead It would seem that we face several imperatives at this juncture: First, remain calm. Hysteria is not helpful. Second, accept that our world has changed in terms of what can be expected as “private” and behave accordingly. Third, all hands on deck as we work to reconcile our better angels with our fallen selves. With the exception of our military, we are a flabby lot, and I’m not just talking about girth. We

are merely disgusting in that department. I’m talking about our self-discipline, our individual will, our self-respect, our voluntary order. Note the operative words: self, individual and voluntary. We don’t need bureaucrats and politicians to dictate how to behave; how to spend (or save); what and how to eat. We need to be the people we were meant to be: strong, resilient, disciplined, entrepreneurial, focused, wise, playful, humorous, humble, thoughtful, and, please, self-deprecating. We have all the tools and opportunities a planet can confer. It’s still a jungle out there, however, and the weak lose every time. The lack of respect from other countries, the ridicule from thugs and the WikiLeaks celebration are part of the same cloth. We can do what’s necessary — tighten our belts, get tough, grab our shovels. To do less is to surrender to victimhood and the fates that befall those who decline to govern themselves.

Specter of decline looms over Obama BY E.J. DIONNE Washington Post Service

.S. decline is the specter haunting our politics. This could be U.S. President Barack Obama’s undoing — or it could provide him with the opportunity to revive his presidency. Fear of decline is an old United States story. Declinism ran rampant in the late 1970s and early ’80s. Stagflation, the Iranian hostage crisis, anxiety over Japan’s thencommanding economy and the Soviet invasion of Afghanistan all seemed to be symbols of a United States no longer in control of its destiny.


Zenith of power These apprehensions dissipated in the 1980s and, whatever the shortcomings of his policies, Ronald Reagan presided over a restoration of U.S. morale. His 1984 “Morning in America” advertisement was politically brilliant but it was also a paean to a renewed U.S. confidence. George H. W. Bush followed, and he deserves great credit for his management of the Gulf War and the larger international transition after the collapse of the Soviet Union. Bill Clinton built on Bush’s unpopular but necessary budget and restored the federal government’s solvency while also serving as a careful steward of U.S. influence and our image in the world. Charles Krauthammer, my columnist colleague, likes to refer to the 1990s as a “holiday from history,” but the truth is that U.S. power reached its zenith under Clinton. If that was a holiday, we need more vacations like it. The current declinist sentiment arises from a widespread sense that in the first decade of the new millennium, our country squandered its international advantages, degraded its power with a long and unnecessary engagement in Iraq, wrecked the federal government’s finances — and then saw its economy devastated by the worst financial crisis in 80 years. All this happened as China especially but also India began to challenge U.S. pre-eminence. U.S. citizens feel something is badly wrong, and they are fully justified in their alarm. Reversal of decline Obama was elected for many reasons in 2008, but the country’s underlying desire to reverse this sense of decline was central to his victory. Consider the emphasis in his posters on “Hope” and his “Change We Can Believe In” slogan. Whether by design or luck, the words “hope” and “believe” were precise responses to a spiritual crisis that the fears of lost supremacy engendered and explain

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the almost religious overtones of the Obama crusade. Obama’s biggest failures in his first two years lay in not fully grasping the opportunity this intimation of crisis created and in not appreciating that he was being asked to do more than fix the economy. Of course undertaking practical and difficult measures to prevent economic collapse was Job One for Obama. And, yes, a goodly part of the nation’s ill temper can be explained by miserable unemployment rates. Nonetheless, the rise of rightwing nationalist movements — and the tea party is as much about an assertive nationalism as it is about liberty — speaks to the United States’ longing for reassurance that it can maintain its leading position in the world. So does the insistent talk of his potential Republican rivals about America as an exceptional nation. Obama sprinkles his rhetoric with talk about competing and winning in the 21st century, and he often suggests that China is doing things (in energy, mass transit and education, for example) that we are not. What’s lacking is a coherent call for reform and restoration that is unapologetically patriotic and challenging. New narrative Obama needs a narrative about U.S. exceptionalism of his own. It would not pretend that the United States can occupy exactly the same position it enjoyed before China’s rise. However, his vision would insist that it is not our country’s fate to be another of history’s global powers that looked on helplessly as its influence and living standards declined. Obama should be even more insistent on using the contest with China as a prod, much as John F. Kennedy used competition with the Soviet Union to “get the country moving again” domestically as well as overseas. There are more important priorities than preserving low tax rates for rich people, larger strategic concerns than Iraq or even Afghanistan, and more compelling political purposes than rote attacks on government or a fear of new immigrants, or Islam, or our diversity as a nation. And we will all be in this effort together only if all of our citizens know they will have an opportunity to share in a resurgent United States’ success. For Obama, political renewal requires a bold and persistent campaign for national renewal. This would challenge his political opponents. But more importantly, it would challenge all of us.

Tax U.S. companies into spending BY MIHIR A. DESAI Washington Post Service

ecent tax deal-making has relied on conventional instruments of fiscal stimulus. Yet, we live in unconventional times, and more novel approaches suited to the peculiarities of our current economy are required. In particular, the remarkable cash hoards that United States corporations have amassed have been a saving grace in ensuring that the financial crisis did not cause further damage to the economy. With traditional monetary and fiscal policy instruments seemingly exhausted, the mobilization of that cash hoard can prove critical to reviving the economy. The historically exceptional cash holdings — estimates of the amount held by U.S. public corporations easily exceed $1 trillion; several technology companies alone are sitting on cash balances in excess of $20 billion — are thought to result from the absence of investment opportunities or from indecision among corporate executives. Once such indecision becomes widespread, it can quickly become self-reinforcing. Recent record corporate profits will only exacerbate this situation. If chief executives and chief financial officers are goaded into spending that cash, the economy could benefit from a significant stimulus that, unlike stimulus measures relating to government spending, would stem from decentralized actors responding to private information and incentives.


Cash holdings tax Consider the potential effects of a temporary 2 percent tax on corporations’ “excess” cash holdings. With the returns on their cash holdings approximating zero, managers would have to explain

to their investors why earning a negative 2 percent return would make sense as opposed to either investing or disgorging that cash to shareholders. The definition of “excess cash holdings” will be critical. But such levels easily could be defined relative to industry benchmarks from periods that featured more standard corporate savings behavior. Alternatively, a measure of accumulated nondistributed earnings could also serve as the basis for the tax. Accumulated earnings taxes have been used in the past, although sparingly, with particular reference to individuals who incorporate for business purposes. Implementing such a tax would require measures to prevent some unintended consequences. A large fraction of corporations’ excess cash — as much as two-thirds, according to some estimates — is held outside of the United States to avoid the “repatriation taxes” that occur under the U.S. system of worldwide taxation. Simply put, multinational firms currently have an incentive to keep money abroad. Tax holiday A temporary holiday of the repatriation tax coupled with the tax on excess cash holdings could help ensure that the disgorged cash would be used productively in the United States. A previous repatriation tax holiday in 2004 induced the return of more than $300 billion to this country, and commentators across the political spectrum, including Andy Stern, formerly of the Service Employees International Union, have already begun to call for another repatriation tax holiday. Coupling these policies provides a carrot and stick for managers to begin to repatriate cash

and use it productively at home. The combined revenue effects is likely to be relatively small, given how little revenue is currently collected on unrepatriated earnings and how sensitive corporations are likely to be to facing a negative rate of return on their cash holdings. But the goal would be more to trigger behavior that feeds that economy rather than raising revenue for the government. Spending at home Ideally, firms would invest their excess cash funds in new projects in the United States. U.S. President Barack Obama’s proposal to allow for immediate expensing of investments could help ensure that firms were tilted toward spending that excess cash on new projects within the United States. A reduction in the corporate tax rate that would bring the U.S. rate in line with worldwide norms would also help enormously in directing these cash hoards toward investment. However, even cash disgorged through dividends, share repurchases or mergers would have a potentially stimulative effect compared with corporations banking the funds. It is tempting to pin hopes of an economic recovery on a centralized effort or another significant program by the Federal Reserve. However, a remarkably large pool of unmobilized capital is sitting within our firms and managers appear frozen in their decision-making. A gentle nudge to break this coordination failure — through the combination of the fiscal carrot and stick described above — could shake managers out of their indecision and provide a privatelydirected, revenue-neutral stimulus that could eclipse the effects of any potential stimulus that could emerge from Washington today.

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12/14/2010 9:25:11 PM


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Fed plans boosts stocks NEW YORK — (AP) — Bonds prices fell sharply Tuesday, sending long-term interest rates to their highest level in seven months, after the Federal Reserve said it would continue its efforts to lift the economy. Stocks edged higher after retail sales rose for the fifth straight month in November and a survey showed that large companies intend to hire more workers. The Dow Jones industrial average closed at its highest level of the year. Stock indexes rose modestly. The Dow Jones industrial average rose 47.98, or 0.4 percent, to 11,476.54. Its previous high for the year of 11,444.08 came Nov. 5. AT&T Co. led the 30 stocks in the Dow with a 2 percent gain. The S&P 500 rose 1.13, or 0.1 percent, to 1,241.59. The Nasdaq composite index rose 2.81, or 0.1 percent, to 2,627.72. The Federal Reserve said it would keep up its $600 billion stimulus program because the economy isn’t strong enough to bring down unemployment on its own. The yield on the benchmark 10-year Treasury note jumped to its highest level since May 17. Jeffery Kleintop, chief market strategist at Financial, said some investors were selling Treasurys out of disappointment that the Fed didn’t increase the amount of bonds it would buy. There had been speculation the Fed would do so to offset some of the additional borrowing that will be needed to fund the nearly $900 billion cost of a tax-cut deal brokered by the White House and Congressional Republicans. The heavy selling drove prices down and pushed the yield on the 10-year Treasury note up to 3.45 percent from 3.28 percent the day before. The jump of 17 basis points means the yield increased 5.2 percent — a huge move for one day. It’s the same as the Dow Jones industrial average rising almost 600 points in a day. The higher yield will increase borrowing costs for the government, businesses and consumers. Bond prices have been falling and yields rising over the past two months as investors raise their expectations for economic growth and inflation, both of which diminish the appeal of low-risk fixed income investments. The 10-year yield was as low as 2.39 percent on Oct. 7. A survey from the Business Roundtable, an association of chief executives of big U.S. companies, showed that 45 percent of executives say they expect to add workers over the next six months. That’s the highest percentage since the survey began in late 2002. In corporate news, Best Buy fell 14.8 percent to $35.52 after the retailer said its third-quarter net income fell more than expected as it lost sales of TVs and mobile devices to competitors. The company also cut its full-year outlook. Falling stocks outpaced rising ones by a narrow margin on the New York Stock Exchange. Consolidated volume was 4.2 billion shares.

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Fed decides to stick with bond plan WASHINGTON — (AP) — The Federal Reserve said Tuesday it will maintain the pace of its $600 billion Treasury bond-buying program because a slowly improving economy is still too weak to bring down high unemployment. The Fed’s bond purchases are intended to lower long-term interest rates, lift stock prices and encourage spending. But its decision not to increase its purchases rattled bond investors, who fear a tax-cut plan in Congress could fuel enough growth to drive up interest rates. Chris Rupkey, an economist at Bank of Tokyo-Mitsubishi UFJ, said investors worry the Fed’s bondbuying program won’t achieve its goal of reducing long-term rates. Those rates have been rising in recent weeks as investors have raised

their expectations for growth and inflation. “Maybe bond buyers wanted to hear the Fed say it’s not working, so we will buy more,” Rupkey said. Fed policymakers said they’ll continue to monitor the program. They left open the option of buying more bonds if the economy weakens, or less if it strengthens more than expected. But after the Fed issued its statement, Treasury prices sank, pushing their yields higher. The yield on the 10-year Treasury note jumped to 3.46 percent, its highest level since May and well above the 3.28 percent it traded at late Monday. The yield on the 10-year note helps set rates on many kinds of loans including mortgages. Higher rates could slow the economy.

They could also weigh on the stock market. Stock prices lost some of their gains after the Fed issued its statement. The Dow Jones industrial average rose about 44 points. Broader market averages posted slighter gains. Critics contend that the Fed’s bond-purchase program would do little to help the economy and could hurt it by unleashing inflation and speculative buying in assets like stocks. But the Fed, in its statement, said it saw no threat of inflation. The Fed once again left its key short-term interest rate near zero, where it has been since December 2008. It also repeated its pledge to hold rates at those ultra-low levels for an “extended period.” A broad tax-cut plan emerging in

Congress is easing pressure on the Fed to stimulate growth through its bond purchases. But if interest rates keep rising, the Fed may have to step up its bond purchases to drive those rates back down. In deciding to stay the course, the Fed said the “economic recovery is continuing, thought at a rate that has been insufficient to bring down unemployment.” Other than spotlighting the high unemployment rate, the Fed’s statement was essentially the same as the one issued after policymakers adopted the bond-buying program at their Nov. 3 meeting. Unemployment rose to 9.8 percent in November, a seven-month high. It has exceeded 9 percent for • TURN TO FED, 2B


Austrian bank strikes back

New York Times Service




The lawsuits filed by the trustee seeking money for Bernard L. Madoff’s fraud victims may be a blow for the defendants — but they are catnip for an obscure breed of Wall Street traders speculating on the outcome of the enormous Madoff bankruptcy case. In recent months, hedge funds and other investment firms have been quietly contacting Madoff victims whose loss claims have been approved by the trustee, Irving H. Picard. These funds — specialists in beatendown assets known as distressed securities — are offering to buy those claims immediately for cash but at a sharp discount from their face value. With the latest round of big-ticket lawsuits, however, that quiet market has started to sizzle. “Virtually every sophisticated distressed investor is looking at the Madoff situation,” said Thomas T. Janover, a lawyer at Kramer Levin Naftalis & Frankel who has represented clients who are considering buying claims.

NEW YORK — (AP) — An Austrian bank on Tuesday accused the trustee recovering money for victims of Bernard Madoff’s fraud of demanding nearly $20 billion from the bank, its principal shareholder and others, as part of an “international witch-hunt.” KOHN In a statement out of Vienna, 2020 Medici — formerly known as Bank Medici — blamed court-appointed trustee Irving Picard for unfairly casting blame for Madoff’s epic fraud on the bank and Sonja Kohn. The bank said the claims “are completely unfounded and untrue.” Last Friday, Picard filed papers in U.S. Bankruptcy Court “The uncertainty of the payout from the bankruptcy process creates an opportunity and potentially big returns.” The chances that the trustee will be able to collect more than the $2 billion he has gathered to date have increased in recent days with the filing of lawsuits against deep-pocketed banks like JPMorgan Chase, UBS and HSBC, among others. But bankruptcy lawyers expect those legal fights will take years to resolve, with no guarantee of that any of the

in Manhattan, N.Y., saying that Kohn was in essence Madoff’s “criminal soul mate.” Picard accused Kohn of supporting Madoff ’s fraud since the middle 1980s, claiming she “masterminded a vast illegal scheme” that included money laundering, mail and wire fraud, and financial institution fraud. He also accused her of accepting at least $62 million in secret kickbacks from Madoff for soliciting investors in his scheme. In its statement, the bank said Kohn and the bank were defrauded by Madoff “like so many other leading financial institutions and sophisticated investors.” billions being sought will be recovered. Bankruptcy claims have traded on Wall Street for generations, and active markets have developed around other financial calamities like Enron and Lehman Brothers. The explosion in hedge funds and their pursuit of eclectic investment strategies has expanded that traditional market in recent years. For small investors who were caught in the Madoff fraud and • TURN TO SPECULATORS, 2B

WTO upholds tariffs on tires from China A key figure in the future of Yahoo BY SEWELL CHAN

New York Times Service

not currency valuations, which in the United States is the purview of the U.S. Treasury Department. Kirk applauded the ruling in the tire case, saying it “demonstrates that the Obama administration is strongly committed to using and defending our trade remedy laws to address harm to our workers and industries.” The tariffs were a significant victory for the United Steelworkers, which had requested the tariffs, contending that a surge in imports had threatened domestic manufacturing.

“Since the tariffs have been in effect, U.S. domestic tire production has increased, tire producers have made new capital investments, and new jobs have been created for American tire workers,” the union’s president, Leo W. Gerard, said in a statement after the WTO ruling was issued in Geneva. The imposition of the tariffs was the first time that the United States invoked a special safeguard provision that was part of its

WASHINGTON — The World Trade Organization has upheld the Obama administration’s decision in 2009 to impose tariffs of up to 35 percent on tires from China, rejecting a complaint by Beijing that the punitive duties violated international agreements. The decision, which the U.S. trade representative called “a major victory,” came on the same day that differences on trade and currency between the world’s two • TURN TO TARIFF, 2B largest economies were highlighted on two other fronts. A federal agency found Monday that ineffective enforcement by the Chinese authorities had contributed to widespread trademark, copyright and patent infringement in China. Also on Monday, two senators, Sherrod Brown, D-Ohio, and Olympia J. Snowe, R-Maine, proposed amending the tax bill in the Senate to include a measure that would let the United States impose higher duties on some Chinese imports in retaliation what most economists agree is an undervalued currency. The developments came on the eve of two days of talks here between Wang Qishan, China’s vice premier for economic affairs, and the U.S. commerce secretary, Gary LIU JIN/AFP-GETTY IMAGES Locke, and the trade representative, Ron Kirk. Those talks are ‘A MAJOR VICTORY’: The Obama administration’s had imposed expected to include enforcement tariffs of up to 35 percent on tires from China. A tire shop in of intellectual property rights but Beijing is seen above.

BY ANDREW ROSS SORKIN New York Times Service

shouldn’t make a comment on that,” said Masayoshi Son, the usually voluble serial entrepreneur who is one of the richest men in Japan. “It’s too delicate a question. Too sensitive right now.” We had been chatting for some time on the 26th floor of the headquarters of his company, Softbank, seated in a conference room that offered sweeping views of Tokyo Bay. What had caused Son to turn cagey all of a sudden? I had mentioned Yahoo. If there is one person who holds the key to the future of the U.S. Internet also-ran, it may be Son, the 53-year-old billionaire founder of Softbank. While little known in the United States, Son owns big chunks of Yahoo’s most valuable investment stakes: Yahoo Japan and the Alibaba Group, one of China’s largest Internet companies. Combined, analysts estimate, those assets, along with Yahoo’s cash pile, represent more than half of Yahoo’s $22 billion value. With all the rumors swirling about Yahoo’s future — Will it



12/15/2010 5:34:47 AM



Yahoo to lay off up to 700 workers BY MICHAEL LIEDTKE Associated Press

SAN FRANCISCO — Yahoo is preparing to lay off between 600 and 700 workers in the latest shake-up triggered by the Internet company’s lackluster growth. Employees could be notified of the job cuts as early as Tuesday, according to a person familiar with Yahoo’s plans. The person asked for anonymity because Yahoo hadn’t made a formal announcement. The planned cutbacks represent about 5 percent of Yahoo’s work force of 14,100 employees. It will mark Yahoo’s fourth mass layoff in the past three years. The latest two housecleanings have come under the company’s current chief executive, Carol Bartz, a Silicon Valley veteran hired nearly two years, despite a lack of experience on the Web or in advertising — Yahoo’s main source of revenue. This week’s round of reductions is expected to be concentrated in Yahoo’s U.S. products group, which already has been undergoing an overhaul since Bartz hired former Microsoft executive Blake Irving to run the division last spring. The job cuts won’t come as a shock. News of the looming layoffs was first reported by two popular technology


blogs, TechCrunch and All Things Digital. Yahoo’s feeble financial growth, stagnant stock price and recent management defections have raised questions about whether Bartz herself might be shown the door before her contract expires in January 2013. The company’s revenue had edged up by less than 2 percent to $4.8 billion through the first nine months of the year, reflecting the difficulty Yahoo has had selling ads while other Internet companies such as Google and Facebook are thriving. Google’s revenue climbed 23 percent to nearly $21 billion through the first nine months of the year. Privately held Facebook doesn’t disclose its results but it is growing so fast that it had to move into larger headquarters earlier this year. The malaise has spurred speculation that opportunistic buyout firms might put together a takeover bid for Yahoo, possibly in partnership with another embattled Internet icon AOL. Bartz, 62, has repeatedly insisted Yahoo, which is based in Sunnyvale, is heading in the right direction, although she has cautioned it might be another year or two before there’s a significant improvement in the company’s financial results.


A key figure in the future of Yahoo • SORKIN, FROM 1B

get broken up? Will it be taken private? Will it merge with AOL? — virtually every scheme being contemplated begins and ends with Yahoo selling its Asian crown jewels. (By the way, the chance of AOL ever buying Yahoo is next to never). And that is where Mr. Son comes in, perhaps on either side of a deal. Indeed, behind the scenes, Son has held backchannel discussions with Yahoo, as its chief executive, Carol Bartz, plans strategies about the company’s future, according to people involved in the talks. Son declined to comment, saying only, “She has to make a hard decision.” No deal is imminent — and one may never come — but the betting inside Yahoo is that Bartz has no more than a year before she will have to shake up the company or lose her job. A person close to the board said she had its full support through at least the end of her contract, which runs through 2012. A Yahoo spokesman said, “Our Asian assets and our Asian relationships are very valuable to Yahoo.” Still, Son, a billionaire who most recently brought Apple’s iPhone to Japan, is clearly depressed about the state of the company in 1996, he started Yahoo Japan as a joint venture with Yahoo; now he is its controlling shareholder. In the past de-

cade, Yahoo Japan held onto its dominant position here while Yahoo languished virtually everywhere else. Just this month, in what may be the ultimate symbol of Yahoo’s fall, Son had Yahoo Japan begin using Google as its search engine on its home page. “Yahoo was Jerry Yang’s baby. He did a great job creating the baby,” he said. “Unfortunately, some of the key executives after the foundation of the company couldn’t keep up with the technology innovation of the industry. They thought that Yahoo should become a media company.” As he spoke, he got more and more agitated: “I said from the very beginning, ‘Yahoo should position itself as a technology innovation company, not as a media company.”’ Son is particularly frustrated with the way Yahoo approached international markets. While he persuaded Yahoo to allow him to create a stand-alone site in Japan, Yahoo chose to run its own operations in most other parts of the globe. “You need a local hero,” he said, suggesting that Yahoo was too arrogant with its global approach, especially around media. He said its expansion strategy was the equivalent of saying, “You’re the only smart guy and those slaves in the poor counties are dumb guys.” He added, “If they had listened to me and had equal part-

nerships in China, the U.K., Germany and Brazil, maybe Yahoo in those countries could have become positioned like Yahoo Japan.” Of course, Son has had his own ups and downs. He started Softbank in 1981 as a publisher of software and media. By the late 1990s, Softbank, which was making itself into an Internet company, was worth as much as $180 billion. Today it is worth only $20 billion. Son is said to have lost nearly $70 billion personally. But his stakes in Yahoo Japan and in Alibaba (he is also a board member) — along with the acquisition of Vodafone’s Japanese business in 2006 — have kept him as one of the most influential investors in Asia. Over the last year, Alibaba has sought to buy back Yahoo’s stakes in it, but to no avail. Yahoo owns 40 percent of Alibaba and 35 percent of Yahoo Japan. Bartz has been holding off from trying to sell Yahoo’s investments in Asia — especially Alibaba — because, it is said, she and others on the board believe there will be more value when some of Alibaba’s most profitable parts, Taobao and Alipay, go public. “It would be difficult for Yahoo to get fair market value on these assets given the environment in which they would be divesting,” Gene Munster, an analyst with Piper Jaffray, wrote when speculation surfaced

that Yahoo might seek a deal. Still, if Yahoo were to sell those stakes, it would create a big cash pile, which the company could use to take itself private or make some significant acquisitions. “With Yahoo Japan outsourcing search to Google, Yahoo has several assets that do not have a lot of synergies, and we think the sum of the parts is worth more than the whole,” Justin Post, an analyst with Bank of America Merrill Lynch, wrote in a note to investors. So what would Son do if he were running Yahoo? “If I were Yahoo’s U.S. CEO, I would have my own view and own approach. But my approach is always riskier. I always take bold moves. So it can have great return but with great risk,” he said. “I would be more aggressive to acquire companies or start a new business.” With a laugh, he added that shareholders of Softbank might have more tolerance for risk than Yahoo’s shareholders. Softbank’s shares, he said, “go sky-high and to hell all the time. Our shareholders in Japan are used to it.” And then, having discussed more about Yahoo than he might have wanted to, he hinted ever so slightly that he expected a deal to be made eventually. “Our interests and her interests do not necessarily contradict each other,” he said. “Sooner or later we will have a win-win situation.”

Madoff lawsuits draw Wall Street speculators U.S.

tariffs on tires from China OK, WTO says


cannot afford to wait years for a recovery, the speculative buyers offer them cash now. Even larger investors might decide that it is prudent to take less cash upfront rather than hope for a bigger payoff in the future. The distressed investors, however, are betting that the bankruptcy claims will ultimately be settled for more than what they appear to be worth now. And they are hoping that Madoff investors will allow them to take that bet. One Madoff investor, who declined to be identified to protect his privacy, reported receiving letters from no fewer than six firms in the past two months. He provided copies of those letters, which offered to pay 20 to 34.5 cents for every dollar in claims. The firms making those bids included Contrarian Capital Management, a large Greenwich, Conn., hedge fund; Fulcrum Credit Partners of Austin, and Hain Capital Group of Rutherford, N.J. Another Madoff investor, Burt Ross of Englewood, N.J., said that 30 cents on the dollar was the highest offer he had received in recent months. “People need to understand that people who are offering 30 cents are savvy professionals who fully expect to get 50 to 60 cents when the claims are finally paid,” Ross said. “They’re not offering 30 cents because they expect to get 35.” And it is not just individual Madoff investors who are willing to cut deals with the speculators. A group of investors recently agreed to buy a claim



OPPORTUNISTIC: For small investors who were caught in the Bernie Madoff fraud and cannot afford to wait years for a recovery, speculative buyers offer them cash now. One of the Madoff investors, Burt Ross, center, said that 30 cents on the dollar was the highest offer he had received in recent months. of more than $200 million held by a so-called feeder fund that invested with Madoff. The claim was bought for about $60 million, or about 30 cents on the dollar, according to a person with knowledge of the trade who was not authorized to speak about it. The deal has not yet closed and could still fall apart, this person said. Other prominent distressed investors have decided not to participate in the market for Madoff claims, no matter how compelling the potential returns. David M. Barse, president and chief executive of Third

Avenue Management, an active investor in distressed bankruptcy claims, said in recent months his analysts had pitched the idea of buying Madoff claims. When the investment idea was discussed in October, claims were trading at about 25 cents on the dollar and an analysis showed potential recoveries in the range of 40 cents to 80 cents. But after discussing the idea with his senior management, Barse said he decided that even though the trade sounded promising, Third Avenue would not participate.

“The fraud is just so despicable that we felt that, from a moral perspective, it just didn’t make sense for us,” Barse said. “There are plenty of other ways to make money in this business.” JPMorgan, which actively trades bankruptcy claims, has also shied away from being involved. The bank, which served as Madoff’s primary banker for many years, was among the several large global banks sued by the trustee. JPMorgan has denied the trustee’s allegations that it ignored clear signs that Madoff was operating a fraud.

Some investors say they are not inclined to trade their claims because they believe they will recover more through the court process. Ross, one investor, says he has not been tempted to sell his approved claim because he has noticed that Picard has been successful in settling several cases for substantial amounts of money. Two were settled just last week, for a total of more than $1 billion, he added. “Every time I read that there’s been a settlement, there is more hope,” he said. “And hope is a good thing to have — we need it.”

Fed cites unemployment in sticking with bond program • FED, FROM 1B

a record stretch of 19 months. And some economists predict it could climb to 10 percent by early 2011. Concerns about persistently high unemployment was the main motivation behind the Fed’s decision to launch a second round of economic stimulus in November with the launch of the bond-buying program. Progress on its goal of reducing unemployment has been “disappointingly

15PGB02.indd 2

slow,” the Fed said Tuesday, echoing language it used in November. Looking at other parts of the economy, the Fed said noted that consumer spending is increasing at a moderate pace, but still remains constrained by high unemployment, scant income gains, weak home values and hard-to-get credit. Thomas Hoenig, president of the Federal Reserve Bank of Kansas City, dissented on Tuesday for an eight straight meeting. All year, Hoenig voted against the Fed’s actions to

shore up the economy — from holding rates at record lows near zero to the $600 billion bond-purchase program. Hoenig doesn’t think the economy needs the extra help. He worried that the Fed’s actions will trigger inflation and a wave of speculation in financial markets. In the policy statement released after its meeting, the Fed didn’t make mention of the tax cut plan, which is designed to bolster the economy. Key elements of the taxcut plan include: extending

2001 and 2003 income tax cuts for two years; renewing long-term unemployment benefits for 13 more months; and reducing workers’ Social Security taxes in 2011. Economists say it will boost spending by individuals and businesses. That will strengthen growth and lead companies to hire more. “That surely puts less of the burden to boost growth on the Fed,” Paul Dales, economist at Capital Economics, said of the tax cut package.

Even so, Dales and other economists believe the Fed will carry out its $600 billion purchases of government bonds by the end of June, as scheduled. “With the jobless rate at 9.8 percent, the economy needs all the help it can get,” said Sung Won Sohn, economist at California State University. But if the economy gains momentum next year, it is possible the Fed could reduce its $600 billion program, he said. The Fed’s next meeting is on Jan. 25-26.

agreement to support China’s entry into the WTO in 2001. Under that provision, U.S. companies or workers harmed by imports from China can ask the government for protection simply by demonstrating that U.S. producers have suffered a “market disruption” or have experienced a surge in imports from China. In more traditional antidumping cases, the government would have to determine that a trading partner was competing unfairly or selling its products at less than their true cost. The U.S. International Trade Commission, a quasijudicial independent agency, had recommended that the Obama administration impose the tariffs for three years. According to the steelworkers’ union, a surge in imports from China resulted in sharp declines in capacity, production, shipments and employment by U.S. tire producers between 2004 and 2008. Domestic tire capacity declined to 186.4 million tires, from 226.8 million, during that period, while production dropped to 160.3 million tires, from 218.4 million. The United States already had a 4 percent tariff on Chinese tires. The new duties involved an additional tariff of 35 percent for one year, reduced to 30 percent in the second year and 25 percent in the third. Three days after the administration announced its decision, the Chinese government brought a complaint to the WTO, calling the duties “a serious case of trade protectionism, which China resolutely opposes.” A three-member WTO panel found that the United States “did not fail to comply with its obligations” under world trade agreements. China can appeal the panel’s findings to the WTO’s appellate body within 60 days.

12/15/2010 5:46:49 AM





Tax breaks bring hope for hiring




FIRST LOOK: Media examine the new Russian hybrid concept cars, called Yo, in Moscow on Monday.

To many manufacturing companies, the tax cut proposal now being considered in Washington may be just enough to spur additional spending and hiring. “It’s a chance for us to put it back in the business and grow,” said Michael Greenhalgh, operations manager of Yushin America, a Rhode Island company that makes and maintains robotic manufacturing equipment. It employs 60 people and has annual sales of about $21 million. Tax cuts intended for businesses are a relatively small part of the $858 billion tax bill scheduled for a final

vote in the Senate as early as Tuesday. Many economists are skeptical of the tax breaks’ potential to stoke the economy in any meaningful way. Businesses are sitting on more than $1 trillion in cash but are reluctant to invest because of lagging demand, a problem that tax incentives are not devised to address. But the Obama administration says it believes the measure will help the economy gather strength and the recovery grow more robust. The president has asked a group of top business executives to meet with him Wednesday, when he hopes to rally their support for the tax proposal and to formulate a new strat-

egy for creating jobs and reviving the economy. To many manufacturing companies, the tax deal has the effect of both reducing their own burdens and increasing orders from other businesses that will have incentive to buy equipment and supplies. Company officials at Bison Gear and Engineering, a Chicago area manufacturer of electric motors, said the tax savings would help them expand their payroll. Because Bison is organized as a subchapter S corporation, and its income is taxed at its owners’ individual rate, it will benefit if Congress extends the tax break for the wealthy.

Ron Bullock, company chairman, said three positions in the research and development staff had been vacant for months as he tried to gauge the strength of the economic recovery and the prospects of a double-dip recession. With the tax savings, Bullock said, he expects to hire as well as replace aging equipment. “Other businesses will use their tax incentives to order products from us, which will allow us to hire and, hopefully, expand,” he said. “That’s the way you turn an economy around, and allay the fears people have about whether this economy is a good place to invest.”

Russian millionaire launches hybrid car

Few data firms left after Dell deal

From Miami Herald Wire Services

The number of takeover targets is rapidly dwindling in the fast-growing data storage sector. On Monday, Dell announced plans to buy Compellent Technologies, for $27.75 a share, in a deal that values the company at $960 million. The computer maker said Thursday that it was in talks to buy the data storage maker for $27.50 a share. Shares of Compellent fell 2.5 percent on Monday, to close at $27.98, and Dell’s stock slid 3.9 percent to $13.36. Now, investors are waiting for the next deal to drop. While several private companies are still up for grabs, including Pillar Data Systems and BlueArc, only a handful of public firms are left, namely CommVault and NetApp. Data storage is a lucrative market. With the volume of e-mail, spreadsheets and other documents ballooning, companies need ever more tools and space to manage their data. All of that has raised sales and margins in the group; the overall storage hardware market increased 18.5 percent, to $7 billion, in the third quarter, from a year ago, according to research firm IDC. As the technology giants race to capitalize on the surge in remote, or cloud, computing, Hewlett-Packard, EMC, Dell and IBM have all snapped up data-storage businesses in recent months. Dell lost a battle over 3Par in September to HP, which agreed to buy the high-end storage player for about $2.4 billion. Among the remaining public companies, the software maker CommVault, with a market value of $1.4 billion, may be the easier deal to swallow. In fact, many thought CommVault

Mikhail Prokhorov, the Russian billionaire who owns the New Jersey Nets basketball team, has rolled out another pet project: Russia’s first gas-electric hybrid car. It is called the Yo, for the Russian letter “e,” and it can use either gasoline or natural gas to generate its electric power. Proponents say the Yo makes use of Russian engineering innovations but can be priced for mass consumption because of its bare-bones approach to hybrid automotive technology. While two electric motors propel the Yo, a small petroleum engine that can burn either gasoline or natural gas will run nearly continuously to generate the electricity they consume. The designers say that at about 67 miles per gallon, the Yo will achieve better fuel economy than the Toyota Prius (about 51 miles per gallon), in part because it is lighter. • PETROLEUM VALERO ENERGY TO RESTART ARUBA REFINERY Valero Energy has announced it is restarting its Aruba refinery, which has been idle for a year and a half. The San Antonio-based company shut down the refinery in July 2009 as falling prices for its refined products made the plant less profitable. The refinery had a capacity of about 275,000 barrels a day. The company says it spent more than $90 million in getting the refinery back on line. Restarting the facility is a big boon for the Dutch Caribbean island. The Valero refinery employs more than 650 full-time workers and the company says it represents more than 12 percent of Aruba’s gross domestic product. • VIETNAM SHIPBUILDER CAN’T MAKE DEBT PAYMENT Vietnam’s beleaguered state-run shipbuilding company does not have enough money to make a $60 million loan payment next week, and has asked foreign creditors for more time to pay, state-run media reported Tuesday. Nguyen Ngoc Su, chair of the Vietnam Shipbuilding Industry Group, is quoted in the online newspaper VietnamNet as saying that he informed creditors on Dec. 10 that it will be impossible to make the first repayment of principal due Dec. 20 on a $600 million loan from a group of creditors led by Credit Suisse. The government has said the company, one of Vietnam’s largest known as Vinashin, is responsible for paying its own debts. • TECHNOLOGY THERMO FISHER TO BUY LAB TOOL MAKER DIONEX Thermo Fisher Scientific has agreed to buy the manufacturer of chromatography systems Dionex for $2.1 billion in cash, in a deal applauded by investors at both companies. Dionex — whose equipment is used in medical research, environmental services and food testing — gives Thermo Fisher a stronghold in the applied sciences market and strengthens its position in Asia. Under the agreement, Thermo Fisher will pay $118.50 a share, roughly 21 percent above Dionex’s closing price on Friday. • PRIVATE CLUB UNION LEAGUE LEADER BREAKS GLASS CEILING The glass ceiling at Philadelphia’s tony Union League has finally been shattered. The 148-year-old exclusive social club inducted its first female president on Tuesday. Businesswoman Joan Carter will take office on Jan. 1. The Union League is among the United States’ oldest private clubs. It was founded in 1862 to support the Union and policies of then-U.S. President Abraham Lincoln during the Civil War. Today it’s known as a hub for hobnobbing for the city’s elite. Like many private social clubs, it was long a bastion of wealthy white males. Carter was among the first women to get in, admitted in 1986. • AFGHANISTAN GOVERNMENT APPROVES GOLD MINE DEAL Afghan government officials have approved a multimillion-dollar gold mining venture, the first mining project in Afghanistan backed by private investors in the West. Afghan and U.S. officials hope more deals will follow to jump-start the economy of this impoverished nation in its 10 year of war. About 10 investors — most of them from the United States and Britain — are investing an estimated $50 million in the gold project. • UNITED STATES MADOFF TO SKIP SON’S FUNERAL Bernard Madoff announced Monday that he would not seek to attend funeral services held for his son Mark, who committed suicide early Saturday morning, “out of consideration for the family’s privacy.” According to his lawyer, Ira Lee Sorkin, Madoff said he would conduct a private service at the federal prison in North Carolina, where he is serving a 150-year sentence for running a Ponzi scheme that wiped out more than $64 billion in wealth from his clients’ accounts.

15PGB03.indd 3

BY EVELYN M. RUSLI New York Times Service


STORAGE SPACE RACE: As technology giants race to capitalize on the surge in remote, or cloud, computing, Dell, Hewlett-Packard, EMC and IBM have all snapped up data-storage businesses in recent months. Above, a customer examines Dell laptops at a store in New York City. — not Compellent — would be No. 2 on Dell’s wish list after the loss of 3Par. While CommVault management recently said it preferred to remain independent, a tie-up with Dell would make sense. The two have a longstanding relationship. Dell is one of CommVault’s largest customers, accounting for roughly 25 percent of revenues. With $14 billion in cash, Dell could still make a play for CommVault, said Eric Martinuzzi, an analyst at Craig-Hallum Capital. HP is also a potential bidder. Shares of CommVault, which specializes in backup and recovery software, have risen more than 70 percent since mid-July. NetApp has been the subject of takeover speculation for years. In September, Oracle’s chief, Lawrence J. Ellison, told financial analysts that he would “love” to have

part of NetApp’s storage business, at the least. His desire is understandable. NetApp’s revenue has jumped more than 30 percent in each of the last three quarters. And the company now ranks behind EMC and IBM in terms of market share, according to IDC. While NetApp would be the big prize, it would not be easily or cheaply won. At $55.58 on Monday, shares of the company were up more than 80 percent since February. It is now one of the industry’s behemoths, with a market value of $19.6 billion. A buyer would need deep pockets, and be eager to take on an extensive suite of datastorage products. Along with Oracle, Cisco Systems also fits that description, analysts said. Both lack a significant data-storage business, and the two have plenty of money for deal making. Cisco is sitting on $39 billion in cash, and Oracle has $24 billion.

“The one piece Oracle is missing is a broad and deep storage offering,” said Alex Kurtz, an analyst at Merriman Curhan Ford. “It’s just a question of how badly Oracle wants it.” But Oracle may not be able to take on a large purchase now. It is still busy digesting its $7.4 billion takeover of Sun Microsystems, a transformative deal that moved Oracle into the hardware business for the first time. With Oracle preoccupied, Cisco may have the edge, Martinuzzi said. A deal for NetApp would dovetail nicely with the company’s longterm strategy to become a one-stop information technology shop. “Since March 2008, Cisco has said that we want to be about unified computer systems,” said Martinuzzi. “But in order to do that you need to have networking, servers and storage. Cisco only has two of those three pieces.”

Piracy fight shuts down music blogs BY BEN SISARIO New York Times Service

Thanksgiving Day had barely begun when Kevin Hofman’s BlackBerry buzzed. It was one of the technical operators of, Hofman’s popular hip-hop blog, telling him that the site had gone mysteriously blank just after midnight. “At first I thought it was hackers,” Hofman said. But within hours a notice went up on the site saying that its domain name had been seized by the Immigration and Customs Enforcement unit of the U.S. Department of Homeland Security; it was one of dozens of sites shut down, accused of copyright infringement and selling counterfeit goods. But Hofman, a brawny Long Islander in his early 30s who formerly worked for a major record label, does not think of himself as a pirate. and the handful of other music blogs shut down by the government post brand-new songs and videos without licenses, but much of that material is often leaked to them by managers, music labels and even the artists themselves.


CRACKDOWN: Dozens of music sites including,, and have been shut down since Thanksgiving as the U.S. government gets tough on piracy. As a result, these sites have a complex symbiosis with the music business. While the Recording Industry Association of America wants to shut them down, the rank and file of the record labels — particularly in hip-hop circles — uses them as marketing tools and publicity outlets. Apart from, the music sites, and were shut down.

Another,, is a search engine for users of BitTorrent, a file-sharing system that can be used for any kind of data. The seizures over Thanksgiving weekend — most of the 82 sites involved were shut down for selling knockoff handbags, sunglasses and other goods — were made without warning. Internet advocacy groups like the Electronic Frontier Foundation have expressed alarm

at the precedent the action might set. Victoria Espinel, the White House’s intellectual property enforcement coordinator, said on Dec. 6 that more shutdowns could be expected soon as the government pursued “pirates and counterfeiters.” More than a decade since the advent of the file-sharing service Napster, the big labels are still struggling to reconcile the promise and the threat of digital music. Immigration and Customs Enforcement has not explained how it selected sites that deal in downloadable music, but a spokesman for the Recording Industry of Association of America, which represents the major music labels, said it had worked with ICE and other federal agencies in identifying infringing sites. “The sites and services we identify are flagrantly violating federal copyright laws, illegally offering songs of wellknown artists or pre-release content not commercially available online or in any store,” said the trade group spokesman, Jonathan Lamy.

12/15/2010 2:38:34 AM




DOW 11,476.54


S&P 500 1,241.59






6-MO T-BILLS .19%


30-YR T-BONDS 4.55%


Dow Jones industrials


Nasdaq composite


Close: 11,476.54 Change: 47.98 (0.4%)


Close: 2,627.72 Change: 2.81 (0.1%)





2,700 2,600


2,500 2,400


2,300 2,200


2,100 9,500





DOW DOW Trans. DOW Util. NYSE Comp. NASDAQ S&P 100 S&P 500 S&P 400 Wilshire 5000 Russell 2000

DOI;D7I: 1,795 1,795 1342 1294 157 25


<eh[_]d ;nY^Wd][ The dollar rose against most currencies after the Fed said it would not step up its $600 billion bond-buying program, which was designed to lower interest rates to support the economy.











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11476.54 5037.07 400.40 7855.22 2627.72 558.64 1241.59 895.61 13169.84 771.66

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4.25 5.36 3.40 9.33 5.31 2.20 4.62

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IjeYaie\Iekj^ <beh_ZW?dj[h[ij D7C;:?LBWij9^]9^] AMR (AMR) AT&T Inc (T) Alico (ALCO) AmExp (AXP) Assurant (AIZ) AutoNatn (AN) Avatar (AVTR) BB&T Cp (BBT) BE Aero (BEAV) BkofAm (BAC) BankAtl A (BBX) BeasleyB (BBGI) Benihana (BNHN) BenihanaA (BNHNA) Bluegreen (BXG) Carnival (CCL) CatalystPh (CPRX) CerusCp (CERS) Chicos (CHS) CitrixSys (CTXS) Comcast (CMCSA) CnsTom (CTO) Continucre (CNU) CrssCtryHl (CCRN) Darden (DRI) Decoratr (DII) Disney (DIS) Dreams (DRJ) Dycom (DY) h (DIET) EqtyOne (EQY) FedExCp (FDX) Flanign (BDL) GeoGrp (GEO) HackettGp (HCKT) HarrisCorp (HRS) Heico s (HEI) Heico A s (HEI/A) IntlSpdw (ISCA) IntervalLs (IILG) IsleCapri (ISLE) IvaxDiag (IVD) LadThalFn (LTS) LennarA (LEN) Macys (M) MAKO Srg (MAKO) MarineMx (HZO) Mastec (MTZ) McClatchy (MNI) Mednax (MD) Motorola (MOT) NABI Bio (NABI) NatlBevrg (FIZZ) FPL Group (NEE) OcwenFn (OCN) OfficeDpt (ODP) OpkoHlth (OPK) Parlux (PARL) PerryEllis (PERY) PetMed (PETS) Protalix (PLX) RJamesFn (RJF) RepubSvc (RSG) RylCarb (RCL) Ryder (R) SBA Com (SBAC) SFN Grp (SFN) StJoe (JOE) SeacorHld (CKH) SpanBdc h (SBSA) SunTrst (STI) TIB Fncl (TIBB) TenetHlth (THC) Terremk (TMRK) TevaPhrm (TEVA) Tongjitng (TCM) TradeStatn (TRAD) 21CentHld (TCHC) UltimSoft (ULTI) UPS B (UPS) VectorGp (VGR) Vonage (VG) Watsco (WSO) Winn-Dixie (WINN) WorldFuel (INT)

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7.79 29.08 23.94 46.47 38.48 27.02 18.63 26.80 37.59 12.60 .87 4.71 8.00 8.19 2.75 43.00 .97 2.19 11.87 68.54 21.99 28.05 4.99 7.99 48.17 1.14 37.36 2.80 14.79 .61 16.97 94.53 8.45 25.09 3.51 46.02 56.23 40.92 25.42 16.95 10.08 .59 1.34 17.56 25.14 15.10 8.43 14.21 4.54 65.78 8.47 5.63 13.46 51.82 9.30 4.74 3.61 2.77 25.88 18.13 9.05 31.80 30.44 41.76 46.92 39.80 9.75 18.00 104.54 .76 27.11 .33 6.52 12.76 52.85 4.38 6.47 3.25 47.03 72.97 17.86 2.41 64.19 6.98 32.29

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9>= -35.73 -1.99 +30.46 +113.58 +10.43 +6.70 +22.88 -383.30 -15.78




Prime Rate Fed Funds Target 3-month T-bill 6-month T-bill 52-wk T-bill 2-year T-note 5-year T-note 10-year T-note 30-year T-bond

The yield on the 10-year Treasury rose to 3.45 percent. Changing yields affect interest rates on consumer loans.


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24.31 23.64

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14.08 14.03

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12.42 8.97 10.31 11.19 10.73 10.73 10.73 10.73 10.73 10.73

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114.80 114.76 24.27 10.87 10.87 5.68 53.18 125.97 10.02 25.49 10.38 12.97 114.04 114.05 28.27 19.51 19.62 20.27 13.22 11.00 15.87 65.79 68.30 10.76 10.76 19.15 12.57 22.30 13.19 12.72 10.57 10.57 10.57 10.57 15.82 31.28 31.28 31.26 21.68 52.54 30.94 53.44 45.36 13.27 25.56

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D;J'OH O;IJFLI9>=7=E Unleaded Gas (gal) 2.30 2.32 -.02 1.83 Crude Oil (bbl) 88.28 88.61 -.33 69.51 Gold (oz) 1403.60 1397.30 +6.30 1123.30 Platinum (oz) 1713.90 1697.30 +16.60 1447.00 Silver (oz) 29.76 29.60 +.16 17.33 Coffee (lb) 2.16 2.17 -.01 1.46 Orange Juice (lb) 1.60 1.67 -.07 1.33 Sugar (lb) 0.31 0.31 ... .25

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BWij 9^] 67.49 86.57 31.99 28.70 19.54 4.75 136.12 60.73 76.57 62.62 57.70 12.59 25.80 80.57 26.82 63.98 69.68 80.75 20.70 41.01 39.55 31.29 35.13 40.73 87.52 49.04 22.20 83.98 65.79 43.02 49.64 21.41 28.18 58.85 57.74 35.24 24.40 89.98 47.36 18.95 91.61 12.78 71.21 51.51 27.12 45.32 123.60 40.67 67.52 42.17 33.75 38.64 59.63 108.71 17.54 25.76 11.39 46.41 45.72 71.11 44.56 79.92 82.87 18.80 72.61 13.31 13.03 19.49 36.28 33.75 53.83 13.27 73.98 73.90 66.02 36.49 52.10 40.25 19.21 42.08 36.61 18.41 40.83 67.26 30.52 55.88 42.21 83.04 58.56 17.48 58.10 34.25 37.13 41.77 83.40 49.09 17.68 11.20 80.52 15.61 30.75 22.65 44.45 91.39 43.52 19.00 81.95 99.31 31.48 10.37 49.38 44.10 38.61 78.51 13.58 32.91 5.83 18.45 15.79 24.69 30.85

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BWij 9^] 29.88 57.94 57.29 61.16 55.40 28.48 36.41 46.33 71.06 39.24 50.83 29.34 24.00 51.93 70.99 41.03 35.11 84.32 51.04 10.78 63.53 113.59 78.87 86.65 19.04 41.06 25.57 56.05 54.86 72.41 133.65 27.39 80.01 88.26 93.15 49.33 58.99 76.40 16.46 13.96 27.77 14.27 13.44 137.04 36.18 59.68 7.80 116.88 62.44 22.24 56.33 19.09 16.43 52.01 32.71 36.39 61.95 72.79 32.89 21.57 117.45 115.20 59.42 48.00 9.29 14.03 29.74 21.69 15.60 21.01 70.94 31.32 32.59 69.97 17.69 15.45 36.36 33.73 15.05 29.17 50.94 13.18 70.20 13.80 30.06 37.21 39.88 44.44 15.07 18.37 46.42 169.40 86.31 594.91 134.97 19.44 31.75 24.97 20.44 47.46 29.03 33.43 165.77 52.80 41.47 51.04 33.84 47.12 12.86 25.89 49.17 45.15 11.27 50.22 48.22 60.06 69.24 47.57 13.79 73.99 41.68

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BWij 9^] 50.06 17.75 34.72 38.21 52.64 51.21 56.68 17.23 21.95 61.22 12.30 23.72 56.66 39.82 6.30 15.88 17.46 49.36 71.06 78.50 10.38 62.50 50.43 34.10 39.95 51.42 65.50 38.71 35.03 31.16 38.08 43.72 71.30 45.62 18.53 49.48 21.47 116.93 19.60 145.67 55.76 16.85 26.61 9.81 76.00 11.16 48.48 260.00 22.89 24.62 22.94 24.82 13.68 41.02 17.02 43.36 33.35 31.22 26.05 62.74 38.45 81.79 80.21 35.87 51.60 29.69 13.45 39.20 21.39 48.29 50.95 39.25 8.27 62.09 16.97 70.67 64.63 41.95 14.21 18.72 53.85 13.00 31.46 20.95 49.15 103.90 71.06 31.10 18.10 23.04 33.65 5.87 85.32 52.33 38.16 43.78 39.22 95.79 26.86 35.74 22.48 28.28 36.01 36.34 34.49 15.81 61.45 68.34 30.51 54.72 35.05 30.91 28.00 34.53 36.37 4.34 70.18 38.96 19.54 82.52 25.02

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BWij 9^] 107.92 67.80 29.25 32.06 84.41 20.34 13.20 64.49 36.85 44.94 55.71 50.38 40.35 63.62 16.71 35.19 369.60 42.40 41.60 27.03 5.77 93.04 19.13 13.04 51.49 255.80 25.46 24.32 46.97 19.94 77.20 36.50 69.01 46.94 62.24 26.09 28.10 63.67 36.49 5.59 70.84 36.73 30.79 44.03 12.45 157.78 34.59 8.06 46.05 27.62 90.87 26.31 5.18 322.25 3.45 20.04 58.20 49.55 61.08 24.59 27.55 26.96 65.75 71.70 20.68 44.18 18.73 16.80 13.97 677.55 18.73 29.68 22.87 32.20 22.48 1.88 64.61 44.38 36.87 64.95 26.04 13.62 34.66 31.03 59.60 13.53 53.49 37.72 178.45 7.15 9.54 104.27 17.73 17.54 71.11 62.16 14.40 16.17 22.44 51.82 17.37 25.93 89.17 22.57 35.67 82.36 9.96 6.29 26.17 87.63 41.88 62.76 28.82 31.91 54.50 64.72 14.71 55.81 32.52 109.14 42.26

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BWij 9^] 18.65 43.16 71.27 14.59 45.17 61.81 94.58 75.54 63.33 13.38 24.39 46.75 9.01 54.86 80.71 30.51 46.70 35.61 29.23 30.54 47.75 60.83 105.05 81.47 25.69 57.22 49.79 39.82 14.30 104.30 86.36 20.20 80.19 30.15 21.57 30.55 61.75 15.80 13.10 23.14 32.85 35.84 13.39 18.36 65.62 25.87 65.88 129.00 18.70 31.25 34.25 39.58 17.22 26.50 59.27 55.74 30.24 66.92 41.22 85.34 23.84 62.38 30.49 37.14 112.50 39.03 3.01 13.64 137.50 92.56 141.00 62.78 400.24 32.41 32.23 63.51 44.14 20.58 13.83 56.72 20.94 31.55 99.94 37.49 19.92 49.18 20.11 51.93 17.40 7.51 20.14 31.84 63.06 89.97 42.19 52.57 45.67 34.10 47.95 24.78 33.38 41.12 26.48 6.35 53.50 49.56 63.66 28.45 60.45 34.46 32.13 70.61 34.25 30.59 72.11 58.26 41.98 34.32 19.39 77.92 56.16

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BWij 9^] 34.01 52.29 13.10 66.03 66.04 54.56 30.11 15.40 49.95 40.79 23.86 18.66 64.71 12.29 54.44 71.50 10.26 51.34 20.92 41.96 137.05 49.38 33.24 16.20 48.39 82.05 16.83 51.34 52.13 34.68 14.71 24.66 68.22 51.66 29.36 20.78 34.76 79.15 86.88 70.57 17.02 122.31 66.58 42.75 5.89 39.32 99.06 20.68 68.67 51.10 1.39 26.89 51.43 19.91 65.79 57.00 52.96 51.34 34.06 35.71 44.87 37.96 47.00 24.86 12.96 36.17 35.70 24.95 4.36 64.45 21.99 32.11 59.56 45.74 22.84 17.06 80.40 9.67 15.06 54.18 6.73 30.36 36.70 39.47 17.26 58.33 26.86 29.25 24.28 18.62 17.15 33.60 44.56 53.81 11.88 20.37 59.20 29.62 48.31 57.42 14.55 25.36 8.00 13.24 10.97 23.42 69.80 15.46 15.61 44.38 47.01 42.57 27.66 39.42 16.99 32.68 24.01 55.33 36.73 85.53 20.36

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BWij 9^] 63.37 40.49 65.10 31.64 47.77 17.10 18.69 61.55 73.06 53.85 15.24 78.44 47.75 37.70 21.40 52.79 71.14 73.38 55.69 40.76 47.82 16.98 34.26 42.11 17.21 16.83 22.96 31.96 9.63 43.43 48.00 62.01 31.45 30.73 92.42 25.16 3.13 26.17 54.99 78.99 62.92 36.70 41.78 24.12 36.34 87.56 34.76 30.48 29.03 21.48 29.39 34.46 68.89 49.67 29.53 40.98 35.49 33.19 34.50 34.20 39.24 14.21 26.47 81.05 30.98 88.47 26.97 82.52 46.99 60.56 54.23 34.06 54.38 36.86 117.96 21.61 425.56 27.39 36.46 80.30 49.51 20.98 50.06 23.59 58.22 30.07 25.28 34.68 18.86 115.11 17.90 88.35 113.83 48.78 24.14 47.16 34.91 34.20 31.99 14.20 14.64 59.50 37.97 30.17 99.60 20.80 23.77 11.91 28.53 44.25 16.63 12.68 28.77 30.94 49.66 53.53 22.69

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12/15/2010 5:44:10 AM






‘As always, Julia’ Friends who didn’t mince words


INIMITABLE: The letters portray the chef, author and television personality Julia Child as full of funny and forthwright opinions about food and life in general.

BY DWIGHT GARNER New York Times Service

The story of Julia Child’s life — how a gawky and outgoing diplomat’s wife from Pasadena, Calif., came to write the classic Mastering the Art of French Cooking (1961) — has been told so many times and in so many ways (biographies, memoirs, histories of American eating, movies, PBS documentaries, blogs) that it’s not clear there’s more worth knowing. This potato has been peeled. Now comes As Always, Julia: The Letters of Julia Child and Avis DeVoto, a book for

completists, the sort of pathetic losers who’d line up to buy a book of Child’s grocery lists, were it available. Well — full miserable disclosure — I am exactly that type of pathetic loser. So I picked up As Always, Julia with a modest tingle of anticipation. A good book of letters beats an almost-good novel any day. That modest tingle turned into deepening sense of appreciation. The pleasures of As Always, Julia are modest but real. This book feels like chick lit — or should I call these women very game hens? — of an exalted order.

The sound it makes is that of two housewives, each in her 40s, becoming pen pals and then ecstatic soul mates in the dreary 1950s. They let rip about all kinds of things, from shallots, beurre blanc and the misery of dried herbs to politics, aging and sex. Sex? “Before marriage I was wildly interested in sex,” Child wrote DeVoto in 1953, “but since joining up with my old goat, it has taken its proper position in my life.” After reading the libidinous best seller Peyton Place, Child wrote to her friend: “Those women, stroked in the right places until they quiver like old Stradivarii! Quite enjoyed it, though feeling an underlying abyss of trash.” The correspondence between Julia Child and Avis DeVoto began in 1952, and almost by chance. Child had admired a column that DeVoto’s husband, the journalist Bernard DeVoto, had written for Harper’s magazine about knives. When Child, who was living in Paris at the time, composed a fan letter to Bernard DeVoto, Avis, who handled much of her husband’s correspondence, wrote back. The two clicked instantly. The DeVotos were intellectuals and bons vivants in Cambridge, Mass. Bernard DeVoto had won both a Pulitzer Prize (in 1948) and a National Book Award (in 1953) for his histories of the American West and was a boisterous defender of civil liberties. (He seems to be making a

As Always, Julia: The Letters of Julia Child and Avis Devoto Edited by Joan Reardon Illustrated. 416 pages. Houghton Mifflin Harcourt. $26. comeback. The editors of The Atlantic just named his book The Hour: A Cocktail Manifesto, published in 1948 and reissued this year, one of the best books they read in 2010.) Avis DeVoto worked as her husband’s secretary but had a firm life and mind of her own. She regularly reviewed mystery novels for The Boston Globe and was an accomplished cook. Later in her life she was a book scout for Alfred A. Knopf, read manuscripts for Houghton Mifflin and worked in the dean’s office at Radcliffe College. The DeVotos’ many friends included Arthur Schlesinger,

Walter Lippmann and their families. As Always, Julia has a dramatic arc. It charts the beginnings of the book that would become Mastering the Art of French Cooking, from when it was a gleam in the eye of Child and her co-authors Louisette Bertholle and Simone Beck to their signing a contract (with Avis DeVoto’s help) for the book, then untitled, with Houghton Mifflin in 1954. The company ultimately rejected the book as being too unwieldy. Again with DeVoto’s help, it was published by Knopf. This book has an emotional arc too. Bernard DeVoto’s death from a heart attack in 1955, at 58, arrives out of the blue and is a devastating moment. Most readers, however, will graze As Always, Julia for these women’s funny and forthright opinions about food and life. In an early letter Child describes herself to her new friend. “I had intended to be a great woman novelist,” she writes, “but for some reason The New Yorker didn’t ask me to be on its staff.” About her body Child writes: “Bosom not as copious as I would wish, but have noticed that Botticelli bosoms aren’t big either. Legs O.K., says the husband. Freckles.” Child and DeVoto bond most fully around food, and mostly share the same tastes. (“People who love to eat are always the best people,” Child writes.) They begin to trade items — knives, truf-

fles, omelet pans — in the mail. DeVoto counsels Child on what’s available in U.S. supermarkets. Fennel was widely found then only in drugstores, DeVoto reported, in dried form used for poultices. When DeVoto mailed her dried chives, Child was horrified by them: “Tastes like hay with onion flavor.” They tweak each other too. DeVoto complains, in an early letter, when Child’s recipe for eggs piperade has “too much fat in it.” Child shudders when DeVoto declares that she likes Accent seasoning. “I don’t use it at all as I sort of hate the idea,” Child writes. “But I am sure it is useful in the USA where vegetables have probably lost some of their freshness from being shipped under refrigeration for days and days.” DeVoto read many drafts of Child’s book, and was an excellent first editor. She writes: “Page 5 — cleaning eggs. Wire wool — what do you mean? First place we never have eggs that dirty. Second place there’s steel wool only nobody uses it in kitchens any more — only for stripping paint and so on. Death on the hands.” From the beginning, DeVoto recognized that Mastering the Art of French Cooking would be a “profound book.” This volume of letters makes it plain that it would never have appeared in the United States, at least in the form it did, without her devotion to it and to Child.

Life among the upper crust, seen from two generations BY JANET MASLIN New York Times Service

As a girl Deborah Mitford weathered the Great Depression with her parents and was forced to leave Swinbrook House, the Oxfordshire manse that she loved. “I minded more than I can say,” she says about this transition. At Swinbrook “the woods belonged to my father and we never met a soul.” At a more modest family home, Old Mill Cottage in High Wycombe, outside London, the Mitfords had to take walks on footpaths that were open to the public. Yet Debo, as she was known within her family, would later become responsible for turning one of the Devonshire’s great private houses into a virtual theme park. Under her aegis as Duchess of Devonshire, the 297-room Chatsworth House became a national treasure. It was opened to tourists, expanded to include a restaurant and so successfully equipped with lavatories that it won a Loo of the Year award. As she writes in her latest book, “we also did well meeting the revived fashion for wooden lavatory seats, whose middles we made into cheeseboards.” Like many an aristocrat before her, this dowager duchess understands how well blue blood sells. Any family with a title and tiara in its history has marketing potential, and if there are family troubles and secrets, so much the better. All things Mitford have been so exhaustively memorialized that Deborah has written an introduction to Pipe Lids and Hedgehogs, a memoir by a man who tended the vegetable garden of Pamela, another of the five Mitford sisters. The duchess herself has written books ranging from The House: A Portrait of Chatsworth (1982) to Chatsworth: The House (2002). Now 90 and a national treasure in her own right, she has finally written a soup-to-nuts autobiography, Wait for Me! It overlaps interestingly with the much

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more contemporary memoir of Ivana Lowell, whose tiaratopped grandmother Maureen was one of three blond heiress sisters known as the Golden Guinness Girls and one of Deborah Mitford’s contemporaries. Some of the same people turn up in both Wait for Me! and Lowell’s Why Not Say What Happened? Among them: Ian Fleming’s wife, Ann; Evelyn Waugh; the person familiarly known as ‘Cake’ (i.e. the Queen Mother); and the painter Lucian Freud, who married Lady Caroline Blackwood, Lowell’s glamorously notorious mother. One of Freud’s portraits of Lady Caroline, Girl in Bed (1952), depicts a hugeeyed, hedonistic, dangerouslooking young beauty. Not long afterward, his Woman in a White Shirt (1956-57) presented Deborah Mitford as a frightening vision of age and decay. The duchess is such a gracious character that she avows pride in having been painted by an artist of Freud’s caliber and says she has come to look more and more like the picture as she grows older. She’s also funny enough to repeat an anecdote involving her husband, Andrew Cavendish, Duke

of Devonshire, who died in 2004. “Who is that woman?” he heard someone ask about the person in the picture. “It’s my wife,” he said. The first man replied, “Well, thank God it’s not mine.” The duchess’ description of her husband is scant and generally flattering. She includes a few pages about his alcoholism because it has been mentioned elsewhere. It is mentioned, for instance, in Lowell’s book, which describes how the drunken and abusive duke had to be evicted from one of her mother’s parties, even though this kind of behavior seemed to be standard operating procedure in her mother’s circle. Lowell’s book qualifies as an addiction memoir about alcohol abuse, but not a dull or maudlin one. She is far more concerned that she grew up deceived about the identity of her father. Raised with the last name of her mother’s third husband, the poet Robert Lowell, Lowell would eventually resort to DNA testing to find out who her father really was. This mystery is willfully exploited to give her book a sense of drama. But the real interest lies in Lowell’s wideranging latter-day observations about culture clash,

privilege and bad behavior, from her grandmother’s unfunny scatological stunts to the movie mogul antics of recent times. “Before I could scream ‘Sex, Lies and Videotape’ his office door would be slammed shut,” she writes about working for Harvey Weinstein at Miramax, “and he would be playfully chasing me around his desk as though we were in some Feydeau farce.” At a much less farcical

moment Lowell had a wedding at the Rainbow Room in Rockefeller Center while the place was being picketed for hiring nonunion workers. “I haven’t seen a crowd this angry since my mother married Oswald Mosley,” her cousin Desmond Guinness told her. The world spanned by these two books includes all manner of royalty and celebrity. (The duchess is a big Elvis Presley fan and was a friend of former U.S.

President John F. Kennedy; she had interesting opinions about both Graceland and the White House. Her fascination with Presley’s mockregal regalia actually makes sense, since she has dealt with so much patrician regalia of her own.) But that world is still small. Oswald Mosley, the British fascist and member of Parliament, was the husband of the duchess’ sister, Diana Mitford.

From the Miami Herald International’s London Bureau Chief comes

IQ: How Psychology Hijacked Intelligence    

Out in Paperback, from Duckworth Press 


‘Zestily polemical’ Guardian ‘Engaging and lively…a page-turner’ Independent Why Not Say What Happened? A Memoir By Ivana Lowell 285 pages. Alfred A. Knopf. $27.95.

Wait For Me! Memoirs By Deborah Mitford, Duchess of Devonshire 345 pages. Farrar, Straus & Giroux. $28.

‘Well-informed…consistently interesting…powerful’ J o h n C a r e y , S u n d a y T iim mes Should you wish to order a copy at the promotional rate, please contact

12/15/2010 4:11:08 AM







For more comics & puzzles, go to


Opening lead — ♥ four

NORTH ♠K973 ♥QJ72 ◆— ♣AKQ87



When Germany met Norway in last year’s Junior European Championships, the Germans got to an extremely WEST EAST unlucky slam. The Norwegian ♠J852 ♠ 10 6 4 North-South stopped in five ♥ 10 6 5 4 ♥3 ◆KJ953 ◆ A 10 8 4 hearts. However, our featured ♣— ♣ 10 9 5 3 2 table saw North show his diamond void early on. Then, SOUTH with repeated inquiries, ♠AQ North showed one keycard, ♥AK98 followed by the trump queen ◆Q762 and spade king. Finally, North ♣J64 appreciated his good clubs at Vulnerable: North-South the end to jump to the grand Dealer: West slam. In seven hearts, Martin The bidding: Rehder would have been South West North East unable to make the grand Pass 1 ♣ Pass 1♥ Pass 3 ◆* Pass slam on a spade lead because 3♠ Pass 4 ◆ Pass of the terrible breaks in 4 ♠** Pass 4 NT Pass trumps and clubs. 5 ♣** Pass 5 ♠ Pass The more mundane low 5 NT** Pass 7 ♥ All pass trump lead let declarer win *Short diamonds in hand and ruff a diamond; **Keycard inquiry

then a top trump from dummy revealed the position. Now declarer had a choice: he could lead a club to hand to ruff a second diamond, or he could cross to a spade to ruff a second diamond, come back to hand with a second spade, and draw trumps. Either of those lines would fail if the chosen black suit broke badly. Instead, declarer made what looks to be the normal and hugely unlucky play of relying on clubs to split simply by drawing trumps. There was no squeeze, and Norway had an undeserved 11 IMPs. In retrospect, although a 6-1 spade break is in abstract slightly more likely than a 5-0 club break, maybe with silent and nonvulnerable opponents, one should assume no one could hold six spades.







WHITE WINS THE BISHOP Hint: Pawn promotion is key. Solution: Simplest is 1. e6! (It intends e7 and e8=Q) fxe6 2. Rc7ch Kg6 3.Rxa7 [adapted, Nakamura-Eljanov ’10].








Dear Abby: I am a 34-year-old woman who finally beat a 13-year battle with drugs. I now have a job, a car, a place of my own and a bank account. My problem is, while I was on drugs I prostituted myself in order to support my habit. Now I’m terrified I have AIDS, and afraid I’ll be told I don’t have long to live. I’m not dating right now, but I’ve had a couple of boyfriends since getting sober. I’m scared for them, but so afraid of getting a death sentence that I’ve never mentioned my fears to anyone. I know I’m being selfish with these guys’ lives, but I’m paralyzed by my fear. What am I going to do? Terrified in the USA What you are going to do is get yourself tested! Please understand that the fear you are dealing with is the same that anyone who has had multiple sex partners has had to face. You must realize that being exposed to HIV and having AIDS are not the same. If you have been exposed to HIV — and therefore test “positive” — you need to know it ASAP so you can be prescribed anti-viral medications that can prevent you from getting aids. Getting on those meds can save your life. And you can save the lives of your former boyfriends, too, if you are HIV positive, by telling them to get tested.

volume turned up so high? Arguing with him won’t help. He should be checked by an audiologist — a hearing specialist — so that he doesn’t damage his hearing further, and yours won’t be affected. Protecting your hearing is important. That’s why you should consider using ear plugs when you drive with him. P.S. And when you get to the gas station, offer to pump the gas for him. If he refuses, then leave the car with him. Dear Abby: My husband is 7 feet tall and we recently became parents of a beautiful baby girl. Everywhere we go, people make comments about my husband’s height. He is used to being the target of stares and comments, having experienced it his whole life. Our daughter may grow up to be tall; how would you handle this? Angela in Bethlehem, Pa. I would teach my daughter — regardless of her height — to be proud of who she is. If your daughter turns out to be tall, she’ll have plenty of company, because each generation seems to be growing taller than the last one. A woman’s height does not have to be a disadvantage unless she views it that way. If you stress the qualities you feel are important, chances are that’s the person she’ll grow up to be.


Dear Abby: I have known my husband for eight years and have been married to him for three. He is a unique and funny man, but he does have a few annoying quirks. The biggest one, and the reason I’m writing to you, is his need to have music blaring in our car. It’s not just when we’re driving, but also when we’re going through drive-thru restaurants, banks and gas stations. Gas stations are the worst because he turns the volume up even louder so he can hear it outside. Not only is it painful to my ears, but it’s embarrassing. I have asked him a number of times to turn it down, but it just leads to arguments. Can you help me talk to him before I lose my hearing? Bleeding Ears in Spring Valley, Calif. Could it be that your husband suffers from hearing loss (probably from listening to too-loud music), which is why he needs the

HOROSCOPE IF TODAY IS YOUR BIRTHDAY: Two is company and three may be a crowd, but there is nothing wrong with a crowd and group activities might be your favorite venue between now and the first of February. • SAGITTARIUS (Nov. 22-Dec. 21): Get out and mingle to break the ice with new acquaintances. A friendship could evolve. • CAPRICORN (Dec. 22-Jan. 19): A ratty old shirt may be comfortable, but it’s not going to impress anyone.


• AQUARIUS (Jan. 20-Feb. 18): Expand your mind. Your feet are planted firmly on the ground, but that doesn’t mean you can’t let your mind soar. • PISCES (Feb. 19-March 20): It’s not always opposites that attract. Find a common ground upon which you can build lasting friendships. • ARIES (March 21-April 19): Good poker players know that their opponent may give away their hand with an inadvertent tell. • TAURUS (April 20-May 20): The best thing about the most trying days is that they always end. Let your hair down a bit tonight and go out and have some well-earned fun. • GEMINI (May 21-June 20): Raise the bar for today’s productivity. Keep money where it belongs: in your pocket. • CANCER (June 21-July 22): The early bird gets the worm. Meet the day with gusto and attack all obstacles head-on. • LEO (July 23-Aug. 22): No matter how smart you are, or think you are, there will always be someone smarter. • VIRGO (Aug. 23-Sept. 22): A new perspective may be all that is required to level the playing field. • LIBRA (Sept. 23-Oct. 22): Success is nothing without someone to share it with. A heart-toheart with a romantic interest could yield fascinating revelations. • SCORPIO (Oct. 23-Nov. 21): Oysters may not be much to look at, but sometimes they hold pearls. All is not as it appears.

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CROSSWORD ACROSS 67 Musical melodrama 1 A pencil may be 68 Mal de ___ parked behind here (sea sickness) 4 Watercolorist’s pomes 69 Mayflower Compact 9 Song used in worship signer John 14 Charlotte of “The 70 Minuscule Facts of Life” 71 “Permission granted” 15 Go around the world 16 Archimedean DOWN world mover 1 Wear through 17 Bobby of hockey weathering 18 Feudal figure 2 Wrecker of a Ruth record 19 Polygon calculations 3 Encore presentation 20 Activity for a foursome 4 Future frog 23 Ho-hum feeling 5 “... 15 miles on the 24 Belfry’s locale ___ Canal” 28 Some lab specimens 6 Still under cover 32 Comparatively unoriginal 7 Baltic capital 33 Mammal’s triplets? 8 “Dele” opposites 36 Eyed lecherously 9 It goes around annually 38 Pinot ___ (dry red wine) 10 The Beatles’ Pepper, 39 Fading, fashion-wise for one 43 Discipline with poses 11 “Ciao, Caesar” 44 Medium for FDR’s 12 Jersey milieu speeches 13 Old Miss? 45 Thoroughly blue 21 “50 Ways to Leave Your 46 Like some screams Lover” transportation 49 Childhood taboos 22 It is in most dialogue? 51 Sent a message an 25 Artful dodges old-fashioned way 26 Priestess in Bizet’s “The 53 Trick alternative Pearl Fishers” 57 Hallucinating 27 Acted human? 29 “A long, long 61 Address for a woman time ___...” 64 Low-lying lands 30 Out-of-focus image 65 Big Band, for one 31 ___ example (be a 66 Ragtime’s Eubie

role model) 33 Arab League charter member 34 One of the Bond portrayers 35 Seal or signet 37 Featherbrain 40 Junior, to Senior 41 Shark’s appendage

42 47 48 50 52

Predict Guitar heroes Grant’s counterpart ___ Lanka Gouged-out fairway piece 54 Nemesis 55 What verbs and nouns should do

56 Russian leaders before 1917 58 Scruffy location? 59 Jubilant feeling 60 Bird over the waves 61 Many a Wharton grad’s degree 62 ___in a day’s work 63 Family man

12/14/2010 9:03:31 PM



S. Africa inspired bidders • WORLD CUP, FROM 8B

Qatar, their reaction has been muted compared with the reaction in England, which was eliminated on the first ballot for 2018. Blazer said the British news media, especially a Sunday Times bribery sting that ensnared executive committee members Amos Adamu of Nigeria and Reynald Temarii of Tahiti, had alienated members of the committee who were not involved in the scandal. “I was with Prince William in Cape Town,” Blazer said of the royal member of England’s bid committee. “He asked how they were doing. I said other than the press, pretty well. The strangest part is him saying, ‘You’re telling me.’ ” FIFA’s president, Sepp Blatter, was in South Africa on Monday to announce a $100 million legacy fund for South Africa, a part of FIFA’s estimated $3.5 billion take from the tournament. Blatter has long supported taking the World Cup to new outposts. He defended the votes for Russia and particularly Qatar. “It’s another culture and another religion, but in football we have no boundaries,” Blatter said. “We go to Eastern Europe, to Russia where the World Cup has never been. And later on, we go to the Middle East, we go to the Arabic world, we go to the Islamic world. This is the development of football and don’t speak about money. This has nothing to do with money, as it had nothing to do with money here in Africa.” Questions remain about how an Islamic country will deal with boisterous soccer fans from around the world. Blatter did little to tamp down concerns about plans to accommodate visitors when he said Monday that homosexual fans “should refrain from sexual activities,” which are illegal in Qatar.


Costs imperil San Francisco’s America’s Cup bid BY KEN BELSON New York Times Service

The organizers of the next America’s Cup said they would accelerate negotiations with other potential hosts for the next event if San Francisco’s board of supervisors does not amend its proposal, which was to be voted on Tuesday. The threat came after a flurry of proposals and counterproposals during the past week that call broadly for the Cup organizers to spend tens of millions of dollars to repair part of the San Francisco waterfront in return for development rights there after the event concludes in 2013. The organizers and the city, though, are in a dispute about how much should be spent on the repairs and by whom, what property the developers can develop, and other matters. As the holders of the Cup, the BMW Oracle Racing team has the right to choose the site of the next race. The team, which is led by Larry Ellison, the billionaire founder of Oracle, is based in San Francisco and, along with the America's Cup Event Authority, has been negotiating with the city for months. To begin the long and complex preparation of the event, the organizers want to announce a host city by the end of the year. To give themselves enough time

to pursue talks with other potential host locations, including Rome and Rhode Island, the organizers have told the officials in San Francisco that they can wait no later than Friday to reach an agreement. On Tuesday, the San Francisco Board of Supervisors is expected to approve an alternative plan that was developed by the supervisors and the Port of San Francisco. A representative for the event organizers claims that plan is insufficient. “I will talk with the city, but I've also told them the clock is ticking,” said Stephen Barclay, the chief operating officer of BMW Oracle Racing and a member of the America's Cup Committee. “If the board goes through with the agreement, then a train wreck will not be avoided.” Mayor Gavin Newsom has said he wants to win the America's Cup bid before he becomes lieutenant governor next year. He expects the event to generate about $1.4 billion in economic benefits during its two-year run, including tens of millions of dollars spent to improve many piers along the city's northern waterfront. The event would draw thousands of racers and their families to the city for months at a time, as well as tens of thousands of spectators and more than 1,000 members of the news media for races.


COVETED: As the holders of America's Cup, the BMW Oracle Racing team has the right to choose the site of the next race. Above, James Spithill, skipper of BMW Oracle, is seen with the America's Cup. But San Francisco expects to run a $380 million deficit in the fiscal year that begins next July, and the State of California has even larger financial problems, so paying the America’s Cup organizers a fee to secure the event was deemed impossible. In its place, the city offered building rights along a scenic stretch of waterfront

that others had tried and failed to develop. “From the beginning, we've said we’re not in a position to offer hundreds of millions in subsidies,” said Tony Winnicker, a spokesman for Newsom. “Instead, we're offering the opportunity to share in the upside of developing San Francisco's iconic waterfront. It's

The Lions tried to make things as friendly as possible for the home team Vikings, repainting the end zones with their name in purple, putting their logo at midfield, and loading all of their

NATIONAL FOOTBALL LEAGUE AMERICAN CONFERENCE East x-New England N.Y. Jets Miami Buffalo South Jacksonville Indianapolis Houston Tennessee North Pittsburgh Baltimore Cleveland Cincinnati West Kansas City San Diego Oakland Denver

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back on the field for the remainder of the season and maybe the next,” he said before the suspension was announced. “The player didn’t get hurt, but who’s to say he wouldn’t? I’d also fine him.” In 1954, Maegle played running back for Rice. In the Cotton Bowl against Alabama, with Rice ahead in the second quarter, 7-6, he broke free around right end, juked the future Green Bay

in-game graphics and sound effects. l Batimore 34, Houston 31: Josh Wilson intercepted Matt Schaub’s pass and returned it 12 yards for a touchdown in overtime, lifting the Baltimore Ravens to a 34-28 win over the Houston Texans on Monday night. The Ravens (9-4) stayed one game behind Pittsburgh in the AFC North despite blowing a 28-7 lead in the second half. Schaub threw a 5-yard touchdown pass to

quarterback Bart Starr and dashed up what looked like an open sideline. At least until an Alabama player named Tommy Lewis ran onto the field and tackled Maegle, who finished with 265 rushing yards, a game record at the time, in Rice’s 28-6 triumph. Lewis, Maegle said, appeared to recognize the magnitude of his mistake instantly, as he sat at the end of the bench and dropped his head into his hands.

Soon afterward, Ed Sullivan invited both players to Manhattan, N.Y., to appear on his television show. Maegle went, against his wishes, because Rice wanted the publicity, and he flew on propeller planes from Dallas to Atlanta to Washington to New York. Maegle said Lewis had apologized after the Cotton Bowl, with tears streaming down his face. Lewis seemed “convivial, nice and polite,” and “very Southern.” Mae-

gle said Lewis told him that he was “so full of Alabama,” he could not stand to watch Maegle score again. But that went only so far. After the show, Sullivan told Maegle he had booked the two players a single room at the Waldorf Astoria. Maegle requested and received not only separate rooms, but rooms on separate floors. “I could have ended my career in a wheelchair,” Maegle said. “I had ac-

East W N.Y. Giants 9 Philadelphia 9 Washington 5 Dallas 4 South Atlanta 11 New Orleans 10 Tampa Bay 8 Carolina 1 North Chicago 9 Green Bay 8 Minnesota 5 Detroit 3 West Seattle 6 St. Louis 6 San Francisco 5 Arizona 4 x-clinched playoff spot

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Andre Johnson and a 2-point conversion to Jacoby Jones with 21 seconds left in regulation to cap the unlikely rally. Baltimore lost fourthquarter leads in each of its four losses and had to punt after its only offensive series of overtime. Houston started from its 12, and Schaub was trying to connect with Jones on second down when WilBOB LEVEY/GETTY IMAGES son picked it off and ran into CORNERED: Andre Johnson, center, of the Houston the end zone. Houston (5-8) has lost six Texans is brought down by Ed Reed, right, and his of its last seven. Baltimore Ravens teammates during their game.

Streak ends; shoulder injury stops Favre • FAVRE, FROM 8B


a great deal for the team, but also consistent with the city’s goals.” Even if it is approved by the Board of Supervisors, the plan could be amended to satisfy the race organizers, who complain that the city has reneged on an earlier agreement, and that other locations would pay far more money upfront to host the race. On Monday, a committee of supervisors made additions to their plan that they said would please the race organizers. Despite the tug of war between the city and the Cup organizers, San Francisco remains a logical place to host the event, which has not been held in the United States since San Diego hosted the races in the mid-1990s. San Francisco Bay is a windy location, and there are many vantage points for spectators. Parts of the shoreline will need to be dredged, but there is already an infrastructure in place to accommodate large sailboats. Still, the event organizers would be spending about $300 million to host the race, so they would need to be sure they could recoup their investment. “We’re not in a buoyant time, and there’s no one on the horizon looking to develop the piers,” Barclay said. “But we won't put the race at risk.”

Jets suspend coach for season for sideline trip

Wilson stars in Ravens victory • NFL, FROM 8B



fans had ever heard of the second-year quarterback from Southern Mississippi. “Ahhh, I feel bad for him,” said Vikings season-ticket holder JoAnn Brown, who drove 12 hours to see the game against the New York Giants in Detroit, where it was moved after the Metrodome roof collapsed from heavy snow Sunday. “I wish he could’ve just got out there for the first play and just tossed the ball once to keep the streak.” It’s uncertain if Favre will play again in this, his third comeback season from a brief retirement. But for 18-plus seasons, with the game and the position he plays getting more dangerous by the year, Favre stayed out there. Every week. Injuries couldn’t slow him; neither could a broken heart. He played one game in 2003 after the sudden death of his father and again the next year after his wife, Deanna, was diagnosed with breast cancer. The toll it has taken has shown, and not only through the growing palette of gray beneath the 41-year-old quarterback’s helmet. Passes that once found

the hands of receivers were getting picked off more and more. Seasons that ended at the Super Bowl were coming up an agonizing game or two short — sometimes ending, literally, with an interception, as they did last season in Minnesota and in 2008 with Green Bay, both in the NFC championship game. Meanwhile, a body that could bounce back from almost any beating was taking longer to shake off the blows. This week, he couldn’t heal in time to beat the clock. Regardless, the man known as much for his skill as his stubbornness, as much for his greatness as his grit, will always have his special place in history. He’ll be right alongside Cal Ripken, perhaps the ultimate modern-day sports iron man, who played 2,632 straight games for the Baltimore Orioles, a record that spanned 17 seasons — one fewer than Favre’s. But Ripken, of course, never had a 270-pound opponent stick a helmet in his ribs from the blind side. “Brett has had an incredible career and his consecutive games streak is remarkable,” Ripken said in a statement through his spokesman, John Maroon.

“As a football fan I cannot fathom his accomplishment and I appreciate his dedication to and passion for the game. He is a true gamer and has provided us all with a lot of wonderful memories.” Ricky Rudd started 788 straight races in NASCAR. A.C. Green played in a record 1,192 straight NBA games with four teams over 15 seasons. Doug Jarvis played in 964 straight hockey games for the Canadiens, Capitals and Whalers. Then there are the wondrous streaks that have little to do with longevity: Joe DiMaggio’s 56-game hitting streak and Byron Nelson’s 11 straight PGA Tour wins come to mind. Favre’s “297” belongs on that list — maybe at the top. “There’s no comparison in my mind,” said Titans quarterback Kerry Collins, a 16-year veteran himself. “Just the physical abuse a starting quarterback takes over the course of a season and the course of a career is just beyond comprehension.” Before Favre, the record for most consecutive games started by a quarterback belonged to Ron Jaworski, set in 1984. Favre surpassed that record in 1999 and doubled it seven years later.

“I think about my streak of 116 games, and all the injuries I had to play through,” Jaworski said. “To go to 297, with the players now, bigger and stronger and faster, what he’s had to play through during that streak has been just unfathomable.” Manning holds the second-longest streak at 205 games. He would need to keep it going for another 51/2 years to surpass Favre. “There’s no human explanation for it,” Collins said. “It’ll never be done again.” After Favre and Manning, the next two longest current streaks belong to Manning’s brother Eli (100) and Philip Rivers (77). Since Favre’s streak began, 239 other quarterbacks have started in the NFL, according to STATS LLC. That’s an average of 7.4 per team — if you count all 32 teams; back when Favre’s streak started, there were only 28. His longevity, to say nothing of his skill, has put him at the top of the NFL record book for almost all of the most highly regarded passing stats: 71,775 yards, 507 touchdowns, 6,295 completions. He also threw 335 interceptions during the regular season, the most of any quarterback.

cepted his apology, but who knows? He might have had a nightmare and thrown me out the window.” The Dolphins took similar issue with Alosi’s actions after he tripped Carroll, who was covering a punt return in the third quarter. Carroll limped to his sideline but later returned. He told reporters the trip “was not important,” but linebackers Channing Crowder and Karlos Dansby disagreed. Crowder told reporters, “I would have gotten up and broken the old man’s leg” and said it spoke “to the character of the Jets.” The notion surfaced Monday that the Dolphins' puntreturn gunners had continually run up the Jets' sideline, out of bounds, and perhaps Alosi and others had been instructed to stand closer to the field, acting like a barricade. Alosi and Jets coach Rex Ryan denied that.

NBA EASTERN CONFERENCE Atlantic Boston New York Toronto Philadelphia New Jersey

W 19 16 9 8 6

L 4 9 15 15 18

Pct GB .826 — .640 4 .375 101/2 .348 11 .250 131/2

Southeast Miami Orlando Atlanta Charlotte Washington

W 18 16 16 8 6

L 8 8 9 15 16

Pct GB .692 — .667 1 .640 11/2 .348 81/2 .273 10

Central Chicago Indiana Milwaukee Cleveland Detroit

W 15 11 10 7 7

L 8 12 13 17 18

Pct GB .652 — .478 4 .435 5 .292 81/2 .280 9

WESTERN CONFERENCE Southwest San Antonio Dallas New Orleans Memphis Houston

W L Pct GB 20 3 .870 — 19 5 .792 11/2 14 10 .583 61/2 11 14 .440 10 9 14 .391 11

Northwest Utah Oklahoma City Denver Portland Minnesota

W 18 17 14 12 6

Pacific L.A. Lakers Phoenix Golden State Sacramento L.A. Clippers

W L 17 7 11 12 8 16 5 16 5 20

L 8 8 9 13 18

Pct GB .692 — .680 1/2 .609 21/2 .480 51/2 .250 11 Pct .708 .478 .333 .238 .200

GB — 51/2 9 101/2 121/2

MONDAY’S GAMES Miami 96, New Orleans 84 Chicago 92, Indiana 73 Memphis 86, Portland 73 Milwaukee 103, Dallas 99 Utah 108, Golden State 95

12/15/2010 5:21:09 AM






Jets coach suspended for trip of a Dolphin

Lee choses Phillies over riches BY TYLER KEPNER AND MICHAEL S. SCHMIDT New York Times Service

BY GREG BISHOP New York Times Service

FLORHAM PARK, N.J. — Minutes before the Jets’ strength coach, Sal Alosi, expressed remorse for purposely tripping a Miami Dolphins’ player on the sideline on Sunday, Dicky Maegle answered his telephone in Katy, Texas. Maegle predicted exactly what Alosi would say in his defense: that he was not thinking, that he made a mistake, that it took place in the moment. Maegle knew this because something similar happened to him in the 1954 Cotton Bowl, and when he watched the replay of Alosi’s gross misconduct, the memories came rushing back. “People don’t understand,” said Maegle, 76, who changed the spelling of his name from Moegle to make it phonetically correct. “It’s not funny. When someone blindsides you like that, you could be injured for life. That’s why they ALOSI put the chalk lines on the field. To keep your butt behind them.” After spending Monday afternoon engaged in damage control, an art they have practiced with relatively high frequency this season, the Jets punished Alosi. They suspended Alosi without pay for the remainder of this season, including any possible playoff games, and fined him $25,000. General manager Mike Tannenbaum said he did not expect further discipline from the NFL. “We take full responsibility,” Tannenbaum said. “We’re going to hold Sal accountable for his actions.” Alosi said, “I accept responsibility for my actions and respect the team’s decision.” When asked if the Jets would fire Alosi, Tannenbaum said: “I’m not going to get into hypotheticals. We felt it was the appropriate action to take.” Alosi became perhaps the first strength coach in league history to draw national attention in season on a Monday — for the wrong reason. He offered another mea culpa from behind the lectern, apologized to Miami cornerback Nolan Carroll and labeled his behavior inexcusable and irresponsible. He added, “You’re asking me to give you a logical explanation for an illogical act.” Maegle, the victim of another illogical act, had firm ideas on Alosi’s punishment. “I don’t think they can allow him


DECISION: Cliff Lee’s agent informed the Yankees that he was headed to Philadelphia, where he never wanted to leave after a dominant postseason run for the Phillies.

All along, the Yankees knew they were fighting the Texas Rangers for Cliff Lee. But they also had a sense of dread, a feeling that a stealth team might steal the latest pitcher of their dreams. They had reason to be worried. The Philadelphia Phillies agreed to terms late Monday with Lee, the prized left-hander who pitched for them in the 2009 World Series, according to a baseball official told of the deal. The official, who said he believed the deal was for at least five years and $100 million, was granted anonymity so he could speak freely about a contract that was not finalized. The Yankees had bid seven years and about $150 million for Lee, who also had a strong offer from the Rangers. But in the end, Lee’s agent, Darek Braunecker, informed the Yankees that Lee was headed to Philadelphia, where he never wanted to leave after a dominant postseason run for the Phillies. Jon Daniels, the Rangers’ general manager, told that Lee had called him to tell him his decision personally. Lee helped

the Rangers reach their first World Series in October. “People rag on players for following that last dollar,” Daniels said. “Cliff didn’t do that. I have a lot of respect for him.” In returning to Philadelphia, Lee will join a staggering rotation that could rival some of the greatest in history. Lee, a former Cy Young Award winner, will join the two-time winner Roy Halladay, along with Roy Oswalt and Cole Hamels. The Phillies were said to be trying to trade another starter, Joe Blanton, to help fit Lee’s salary into their budget. Salary concerns were part of the logic behind the Phillies’ notorious trade of Lee to the Seattle Mariners last December. The Phillies, who had acquired Lee from Cleveland for four prospects in July 2009, decided to trade for Halladay, who took a three-year, $60 million contract extension through 2014 as part of his move from Toronto. As Halladay arrived, Lee departed, sent to Seattle for three prospects, ostensibly to replenish the Phillies’ depleted farm system. But those prospects fizzled, and while Lee prospered with the Mariners, the team fared poorly and dealt him to Texas in July.

The Yankees badly wanted Lee then, offering their top prospect, catcher Jesus Montero, as part of a trade package. But the Mariners leveraged their offer to get more from the Rangers, and the Yankees never did get their man. In losing out on Lee, the Yankees are spared another long-term commitment to their already swollen payroll. But the fact that they were willing to make such an offer to Lee, who is 32, had a whiff of desperation. In an interview Monday, before Lee’s decision, general manager Brian Cashman disputed that idea. “People think we’re desperate, but I’ve got Sabathia as an ace and a 23-year-old, 18-game winner right behind him,” Cashman said, referring to C.C. Sabathia and Phil Hughes. “That’s a pretty good one-two punch to start the season. It doesn’t mean we’re not going to get someone, but it means we’re not desperate. Cliff Lee is a rare opportunity.” If he missed out on Lee, Cashman said he was sure something else would come along — maybe before the season but certainly during it, as teams drop from contention. For several years, the Yankees have had the depth in prospects to make almost any deal they want. JEFF KOWALSKY/EFE

End of the streak

MILESTONE MAN: Brett Favre, the man known as much for his skill as his stubbornness, as much for his greatness as his grit, will always have his special place in history.

Shoulder injury stops Favre BY EDDIE PELLS Associated Press

Every Sunday he was there, starting on Sept. 27, 1992. Freezing rain, sleet, blowing snow. Nothing stopped Brett Favre. Through separated shoulders, concussions and sprained knees, broken thumbs, torn biceps and twisted ankles, he played. He began as the fresh-faced hero of the Cheeseheads, then became their Super Bowl champion and MVP, until the Green Bay Packers wearied of his on-and-off retirement and cut him loose. He has worn two different uniforms since then — Jets and now Vikings — and he’s had surgery after the last two seasons. Still, he’s been there, on the field, for every game. Until now. A stretch of 297 straight starts, 321 counting playoffs, ended Monday because of a shoulder injury that not even the indestructible one could overcome. It goes down as one of the most incredible streaks in all of sports — one that began back when Peyton Manning was in high school, when Steve Young was the league’s best quarterback and when only the most die-hard of • TURN TO FAVRE, 7B


S. Africa’s soccer success Giants at home with win over Vikings was boost for Russia, Qatar BY JOANNE C. GERSTNER

New York Times Service

BY JACK BELL New York Times Service

in some unknown term. We started out with a much simpler view, the best candidate.” Qatar, the small Middle Eastern country on the Persian Gulf, defeated the United States’ bid, 14 to 8, in the fourth round of voting. Before the vote, Blazer, who said he voted for Russia for 2018, was quoted in The Wall Street Journal saying that Qatar might be able to aircondition its stadiums, but it could not cool an entire country. Summer temperatures in Qatar exceed 100 degrees Fahrenheit, which has prompted talk of playing the World Cup in January, when temperatures would be lower. (Blazer said the weather has been “wonderful” in Abu Dhabi this month.) “Early on, they made a statement about their plans for the stadiums,” Blazer said. “But when I asked them to address the rest of the country, I was pretty well ignored. It made good sense; why would they talk about the negative? At the start, no one took Qatar’s bid seriously, and the U.S. was more focused on Australia. As time went on, Qatar’s ascendancy grew.” As disappointed as Blazer and the members of the U.S. bid committee are with the choice of

The formula for selecting a World Cup site was reconfigured because of the successful and entertaining tournament in South Africa this year. And after the surprising (to some) and controversial (to some) choices of Russia and Qatar as hosts of the tournament in 2018 and 2022, there has been a lot of explaining over the selections. “Going into South Africa, we, meaning FIFA, weren’t sure how it would be,” said Chuck Blazer, executive secretary of the regional confederation CONCACAF and the only U.S. member of FIFA’s 24-member executive committee. (Two members were suspended for ethical violations, so only 22 voted on Dec. 2 in Zurich.) Blazer was speaking by telephone Monday from Abu Dhabi, United Arab Emirates, where he is attending the Club World Cup. “It was a great success; everyone said, ‘Wow,’ ” Blazer said. “In many respects, it just changed everything. We started out with the idea that we wanted safe places.” He added: “Until South Africa happened, the mode of thinking, still pretty strong, was in favor of guaranteed success. People have the freedom to think about legacies • TURN TO WORLD CUP, 7B

15PGB08.indd 8

DETROIT — The Minnesota Vikings had to do without a lot Monday night. No Brett Favre. No home-field advantage at the Metrodome. The New York Giants, who played the Vikings Monday night

at Ford Field, were their own disadvantage, finally getting to play a football game after a weekend odyssey of having their plane diverted to Kansas City, Mo., getting to Minneapolis after a delay, and then having the game relocated to Detroit. The game was moved to Ford


Field, which holds 65,000, after the early Sunday morning collapse of the Metrodome roof due to heavy snowfall. The Giants found a way to successfully navigate through this unique situation, thanks to an effective running game, to beat the Vikings 21-3. Most of the tickets were given away in Detroit on the day of the game, resulting in a decidedly pro-Lions crowd of 45,910. “I’m proud with the way our guys handled the inconvenience, if you will, of the changes that were made of the start times, the location of the game,” Giants coach Tom Coughlin said. “We won the game, which is what we came here to do, and under these circumstances to leave with a win is a huge plus for us.” The Giants rushing game made the difference, racking up 213 yards. By contrast, the Vikings collectively rushed for 61 yards, with star Adrian Peterson limited to 26. The Giants (9-4) had issues early at quarterback, as starter Eli Manning was not sharp. Manning, who came into the game 0-4 against the Vikings, had two interceptions and only four completions in the first 16 minutes of the game. He finished with 187 yards passing and one touchdown.

PILE-UP: New York Giants’ Brandon Jacobs is stopped by the Minnesota Vikings during second-half action, Monday, at Ford • TURN TO NFL, 7B Field in Detroit. Giants won 21-3.

12/15/2010 5:13:31 AM







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edition 15 december 2010

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