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AN AIDE’S CLOUT
SHOWS IN OBAMA ADDRESS BY SHERYL GAY STOLBERG New York Times Service
WASHINGTON — Samantha Power took the podium at Columbia University on Monday night sounding hoarse and looking uncomfortable. In two hours President Barack Obama would address the United States on Libya, and Power, the ﬁery human rights crusader who now advises Obama on foreign policy, did not want to get out in front of the boss. “I’m not going to talk much about Libya,” she began, although when it came time for questions she could not help herself. “Our best judgment,”
she said, defending the decision to establish a no-ﬂy zone to prevent mass atrocities, was that failure to do so would have been “extremely chilling, deadly and indeed a stain on our collective conscience”. That the president used almost precisely the same language was hardly a surprise. For nearly 20 years, since her days as a war correspondent in Bosnia, Power has championed the idea that nations have a moral obligation to prevent genocide. Now, from her perch on the White House National Security Council, she is in a position to make that case to the command-
er-in-chief — and to watch him translate her ideas into action. “She is clearly the foremost voice for human rights within the White House,” said Ken Roth, executive director of the advocacy group Human Rights Watch, “and she has Obama’s ear.” The Irish-born Power, now 40, functions as kind of an institutional memory bank on genocide; her 2002 book, A Problem from Hell, won the Pulitzer Prize. While she was by no means alone in advocating military intervention in Libya — • TURN TO POWER, 2A
THURSDAY, MARCH 31, 2011
108TH YEAR I ©2011 THE MIAMI HERALD
Syria’s president blames protests on ‘big conspiracy’ BY EDWARD CODY
New York Times Service
enough,’ ” Assad said, chuckling into his microphone as he anticipated what satellite television commentators would opine. “But I want to tell them, we are not going to destroy our nation.” The long-awaited speech, coming after 12 days of anti-government riots, was a major disappointment for the demonstrators who have added Syria to a growing list of Arab countries facing unprecedented demands for democracy, civil rights and clean government. “What he said today, it will not stop the movement,” said Haitham al Maleh, a veteran human rights activist contacted by telephone. “There is a tsunami going across the Arab world, and it will cover Syria, too.” Malath Aumran, an exiled cyberactivist, said Assad’s response fell far short of the protesters’ demands,
CAIRO — Syria’s President Bashar al Assad declared Wednesday that the wave of angry protests unfurling across his country resulted from a “big conspiracy” by unidentiﬁed enemies seeking to destabilize Syria and push it into sectarian strife. Assad, in a nationally televised speech, did not offer any of the concessions hoped for by protesters, such as abolishing a 48-yearold emergency law that suffocates civil liberties and allows the political system to be monopolized by the ruling Baath Party. Instead, he portrayed himself as a modernizer who has long been engaged in economic and political reforms — and who eventually will get around to altering the hated emergency rules as well. “Some people will come up • TURN TO SYRIA, 2A this afternoon and say, ‘This is not n Tel Aviv may want Assad stay after all, 6A
DANIEL BARRY/NEW YORK TIMES SERVICE
Syria’s President Bashar al Assad speaking in Damascus on Wednesday.
Samantha Power, foreign policy advisor to U.S. President Barack Obama, speaks at Columbia University in New York on Monday.
High radiation levels found in seawater near nuclear plant BY DAVID JOLLY
New York Times Service
TOKYO — Seawater near the crippled Fukushima Daiichi nuclear power plant shows signiﬁcantly higher levels of radioactive iodine than in recent days, Japan’s nuclear safety agency reported Wednesday, and the operator of the plant publicly acknowledged for the ﬁrst time that at least four of the six reactors at the multibillion-dollar complex would have to be scrapped. Hidehiko Nishiyama, deputy director general of the Nuclear and In-
dustrial Safety Agency, said seawater collected about 300 yards from the Fukushima Daiichi station was found to contain iodine 131 at 3,355 times the safety standard, the highest levels reported so far. On Sunday, a test a mile north showed 1,150 times the maximum level, and a test the day before showed 1,250 times the limit in seawater taken from a monitoring station at the plant. Workers have been dousing the reactor fuel rods with emergency infusions of seawater and now from freshwater sources, but the “feed
and bleed” method of cooling the reactors to prevent full meltdown has released harmful amounts of radioactive steam into the atmosphere and set off leaks of highly contaminated water. Iodine 131, one of the radioactive byproducts of nuclear ﬁssion, can accumulate in the thyroid and cause cancer, but it degrades relatively rapidly, becoming half as potent every eight days. The risk can be diminished by banning ﬁshing. Nishiyama said the new readings posed no immediate threat to pub-
Libyan rebels pushed into chaotic retreat BY C.J. CHIVERS AND DAVID D. KIRKPATRICK New York Times Service
BREGA, Libya — Forces loyal to Col. Moammar Gadhaﬁ advanced rapidly on Wednesday, seizing towns they ceded just days ago after intense allied airstrikes and hounding rebel ﬁghters into a chaotic retreat. Having abandoned Bin Jawwad on Tuesday and the oil town of Ras Lanuf on Wednesday, the rebels continued their eastward retreat, ﬂeeing before the loyalists’ shelling and missile attacks from another oil town, Brega, and falling back toward the strategically located city of Ajdabiya. On Wednesday afternoon, residents of Ajdabiya were seen ﬂeeing along the road north to Benghazi, the rebel capital and stronghold that Gadhaﬁ’s forces reached before the allied air campaign got underway nearly two weeks ago. There were few signs of the punishing airstrikes that reversed the loyalists’ ﬁrst push eastward into rebel-held territory. But military experts said they expected the counterattack to expose Gadhaﬁ’s forces to renewed attacks, and a U.S. military spokesman said
WISCONSIN JUDGE BLOCKS ANTI-UNION LEGISLATION, 5A
lic health, and no ﬁshing was being conducted in the area. Tokyo Electric Power Company, which runs the plant, acknowledged that it would write off Reactors 1 through 4 at the facility, a move many analysts have said was inevitable following damage to the units after the March 11 earthquake and tsunami. Until now, even as Tepco’s stock prices plunged to their lowest in decades and debates over nationalizing the company raged, the company had held off explicitly acknowledging that much of its multibillion invest-
McClatchy News Service
that coalition warplanes resumed bombing the pro-Gadhaﬁ units on Wednesday, without specifying either the timing or locations. “The operation is continuing and will continue throughout the transition” to NATO command, said Capt. Clint Gebke. There were 102 airstrikes over a 24-hour period ending at 12 a.m. Eastern time, according to the United States Africa Command. But the airstrikes, such as they
WASHINGTON DEBATES ARMING LIBYAN REBELS, 6A
were, did little to reverse the momentum of the battle. On the approaches to Brega, hundreds of cars and small trucks heading east clogged the highway as rebel forces pulled back toward Ajdabiya, recaptured from loyalist troops only days ago. Some rebels said Gadhaﬁ’s forces, pushing eastward, were within 10 miles of Brega. • TURN TO LIBYA, 2A n Allies count on defiant streak in Libya, 3A
U.S.-COLOMBIA TRADE PACT HINGES ON MAJOR CHANGES, BUSINESS FRONT
• TURN TO JAPAN, 2A
Congress urged to track cancer clusters better BY ERIKA BOLSTAD, BARBARA BARRETT AND LESLEY CLARK
Libyan rebels prepare to leave Ras Lanouf on Wednesday.
ment was irrecoverable. Estimates of the costs of decommissioning a single reactor under normal circumstances run upward of $500 million, and the company faces the likelihood of enormous liability claims from a disaster that has forced the evacuation of tens of thousands of people. “We have no choice but to scrap” the Nos. 1, 2, 3 and 4 units at the Fukushima Daiichi Nuclear Power Station, said Tsunehisa Katsumata, chairman of Tokyo Electric.
“You don’t have to live near a Superfund site to be exposed to potentially harmful chemicals,” said Sen. Frank Lautenberg, D-N.J. “They’re all around us.” Committee Chairwoman Barbara Boxer, D-Calif., and Sen. Mike Crapo, R-Idaho, are co-sponsoring the legislation, which also calls for a stronger and more coordinated federal response to investigating suspected disease clusters and documenting them, led by the Environmental Protection Agency. Brockovich called the system for investigating and identifying disease clusters inadequate. She’s best known for ﬁghting for the people of Hinkley, Calif., who were exposed to chromium-6 in their drinking water, an effort chronicled in a ﬁlm starring Julia Roberts. At Tuesday’s hearing, Brockovich pointed to a map of potential cancer clusters that people across the country have reported to her because she’s a well-known environmental advocate and they had no one else to turn to.
WASHINGTON — Activists are urging the U.S. government to let people post and track cancer cases across communities, a public health effort that they say could lead to discoveries of new chemicalrelated cancer clusters throughout the United States as well as insights into disease management. A doctor, a cancer survivor and high-wattage environmental advocate Erin Brockovich told a Senate panel that no federal agency effectively tracks cancers in a way that easily allows scientists to determine the existence of cancer clusters. The Senate Environment and Public Works Committee took testimony on legislation that’s aimed at helping communities determine whether there’s a link between clusters and contaminants in the environment. Clusters are occurrences of cancer in a small area or a short period of time at rates higher than statistically normal. It’s difﬁcult to link a cluster of cancers to a particu• TURN TO CANCER, 2A lar toxin or effect, however.
INDIA BEATS PAKISTAN IN CRICKET WORLD CUP SEMIFINAL, SPORTS FRONT
INDEX NEWS EXTRA .............3A THE AMERICAS............4A OPINION........................7A COMICS & PUZZLES...6B
3/31/2011 2:50:10 AM
THURSDAY, MARCH 31, 2011
FROM THE FRONT PAGE
THE MIAMI HERALD
An aide’s clout shows in Obama’s address • POWER, FROM 1A
Hillary Clinton, the secretary of state, was a pivotal voice — the president’s decision to pursue that course represents something of a personal triumph for her. It is also a public relations headache. Critics say Power is pushing the United States into another Iraq. (Power, like Obama, was a vocal opponent of that war.) American Thinker, a conservative blog, complains that Obama has “outsourced foreign policy” to Power. Power, who declined an interview, is trying to maintain a low proﬁle, still seared, perhaps, by the memory of how she ﬂamed out as an Obama campaign advisor by calling Clinton “a monster”.
The two women have since patched it up — the late diplomat Richard Holbrooke, friend to Clinton and mentor to Power, arranged a reconciliation — and Power arrived at the White House determined to “stay in her lane”, in the words of one friend, and avoid any encounters with headlines. Yet for all Power’s efforts to shun the spotlight, there has long been a whiff of celebrity about her. Aside from her Pulitzer and two Ivy League degrees (Yale undergraduate, Harvard Law), she has posed in an evening gown for Men’s Vogue and once played basketball with George Clooney. The Daily Beast calls her “the femme fatale of the humanitarian assistance world”.
When she married constitutional law scholar Cass Sunstein — they met on the Obama campaign trail and he now runs the White House Ofﬁce of Information and Regulatory Affairs — Esquire dubbed them “The Fun Couple of the 21st Century” and photographed them on the squash court, in tennis whites. She arrived in Bosnia as a freelance journalist at age 22, “a ﬂame-haired, freckled girl with guts”, in the words of one reporter who knew her. Diplomats admired her intellect and passion. She was not shy about haranguing U.S. ofﬁcials for what she saw as the United States’ failure to act. Power is sensitive to any notion that she has outsize
inﬂuence with the president; the White House took pains on Tuesday to say that her speech echoed the president’s, not the other way around. The United States did not go to war in Libya because “there was some dramatic meeting in the Oval Ofﬁce where everybody tried to persuade the president not to do this, and Samantha rolled in with her ﬂowing red hair and said, ‘Mr. President, I stand here alone in telling you that history calls upon you to perform this act,’ ” said Tom Malinowski, who runs the Washington ofﬁce of the advocacy group Human Rights Watch and is a friend of Power. Obama sought out Power in early 2005, when he was
a new senator and had just read her book. After a fourhour dinner, they found themselves so much in sync that she volunteered to take a leave from her Harvard professorship to work for him. She has been successful in urging the Obama administration to embrace congressional legislation calling for the arrest of the leader of The Lord’s Resistance Army, which enslaves children as guerilla ﬁghters. As of last year, the White House has a full-time staffer devoted to monitoring war crimes and mass atrocities — a position that Power pushed for. But in Darfur, violence has escalated as the administration has shifted its attention to south Sudan. On Libya, Power’s critics
— and even some admirers — suggest she may be helping to set a precedent that will invariably fail. “I think what she is doing is good,” said Bill Nash, a retired Army general who commanded forces in Bosnia. “But I suspect it is more black and white to her than the real world portrays.” In her long-scheduled speech at Columbia on Monday night, Power did not dwell on such questions. Rather, she gave a bland recitation of Obama’s human rights policy. When it was over, she was mobbed by book-toting autograph-seekers. When she spied a gaggle of reporters, she cupped her hands to her temples and lowered her head as if to say: No questions.
Assad blames protests on ‘big conspiracy’ Radiation found in sea near reactor
• SYRIA, FROM 1A
which included an end to the emergency laws and secret police tactics that long have instilled fear among Syrians. “I’m really disappointed by what I heard,” Aumran said. “He is totally ignoring our demands in the streets, like any other arrogant dictator.” The protests have resulted in about 60 deaths, according to human rights groups, and raised the most serious threat to the 45-year-old Assad since he took over from his deceased father 11 years ago. He heads a one-party government based on Arab nationalism, confrontation with Israel and invasive controls by a half-dozen furtive security agencies.
Assad’s speech, at the Parliament building in Damascus, was frequently interrupted by legislators who stood to shout their support. One female member, wearing a scarf over her hair, rose with a coy smile to recite a short poem to Assad and the glory of Syria. Outside, pro-government demonstrators waved their ﬁsts for television cameras. Assad, acknowledging the tributes, said he took heart from the noisy expressions of support in pro-government demonstrations that took place Tuesday in Damascus and several other cities. But people should understand, he added, that the president himself with his soul and his blood supports the Syrian nation.
The internationally televised proceedings, which lasted a little more than an hour, thus gave the impression of a show of support for the Syrian leadership at a time of crisis rather than the moment of serious concessions that many people — Syrian and others — had been led to expect. Assad said reforms announced last week — wage increases and a promise that the emergency laws and political party legislation would be altered at an unspeciﬁed date — were already signiﬁcant advances but were poorly communicated by his government, wrongly giving an impression that things were standing still. Actually, he said, the re-
forms have already been drafted and would have been passed by Parliament long ago, except that the government was too busy dealing with economic and foreign policy problems. But Assad’s overall explanation for the violent protests was that the unnamed plotters were misleading the people. The demands for reform were legitimate, he said, but the protests were the work of enemies trying to foment discord between Syria’s Sunni Muslim majority and the Shiiteconnected Alawite minority from which the Assad family springs and on which it has based four decades of iron-ﬁsted rule.
Libyan rebels forced into chaotic retreat • LIBYA, FROM 1A
forces pulled back toward Ajdabiya, recaptured from loyalist troops only days ago. Some rebels said Gadhaﬁ’s forces, pushing eastward from Ras Lanuf, were within 10 miles of Brega. The retreating force seemed rudderless, a sea of vehicles and ﬁghters armed with rudimentary weapons that have proved no match for Gadhaﬁ’s better trained and better armed forces, which have intimidated the rebels with long-range shelling. As rebels clustered at a gas station and small mosque between Brega and Ajdabiya, a single artillery shell or rocket exploded several hundred yards away, causing the reb-
els, who were chanting “God is great” and waving assault riﬂes, to jump into their vehicles and speed eastward. A rebel military spokesman, speaking of the losses of the last two days, conceded that at Bin Jawwad and Ras Lanuf, rebel ﬁghters had “dissolved like snow in the sand”, though he framed the retreat as a “tactical withdrawal”. The spokesman, Col. Ahmad Omar Bani, said the rebels were still ﬁghting government loyalists on the east and west side of Brega, and vowed that “Ajdabiya will not fall”. The also said that as many as 3,600 Chadian soldiers — members of Chad’s Republican Guard — were now ﬁghting with the Gadhaﬁ loyalists. He did
not provide any evidence for that claim, except to say that it came from three sources. Bani dismissed concerns voiced recently in Washington that members of al Qaeda were ﬁghting with the Libyan rebels. Even if the group’s members were present, he said, “They are Libyans ﬁghting for the liberation of their country. Their associations are non-existent here.” The question of an extremist presence among the rebel forces has become entangled with the issue of whether the West should arm the rebels. On Tuesday, the military commander of NATO, Adm. James Stavridis, created a stir when he told a Senate hearing in Washington that intelligence reports contained “ﬂickers” of
evidence of ﬁghters from al Qaeda and the radical Shiite group Hezbollah among the rebel ranks. The loyalist offensive is the second major shift in battleﬁeld fortunes in recent days. Last week along the same highway, allied airstrikes pounded loyalist forces, enabling the rebels to undertake a lightning advance that carried them toward the Libyan leader’s hometown of Surt — a symbolic and strategically important objective on the long, coastal highway leading to Tripoli. But the advance stalled when pro-Gadhaﬁ forces counterattacked, apparently, seemingly in response to U.S. President Barack Obama’s speech Monday night.
• JAPAN, FROM 1A
He said the Nos. 5 and 6 units were still operational, but said any restart of those would depend on consultation with the government and local residents. Yukio Edano, the chief government spokesman, appeared skeptical of reviving the Nos. 5 and 6 units, telling an afternoon news conference that “the decision is pretty obvious”. In a separate development, smoke was seen rising from a second nuclear power plant run by Tokyo Electric Power, the Fukushima Daini plant, about six miles south of the Fukushima Daiichi complex. Smoke was seen coming from the turbine building of the No. 1 reactor at 5:56 a.m. and ended at 6:13 a.m., a spokesman for the nuclear safety agency said. He said that ﬁreﬁghters determined that the source was a problem with a power panel in the building, and the situation was under control. The Daini plant was not signiﬁcantly damaged by the quake and tsunami and never lost external power to its cooling syste Katsumata, 71, is taking over leadership of Tokyo Electric Power after the president, Masataka Shimizu, 66, was hospitalized on Tuesday. Shimizu was being treated for hypertension and dizziness, the company said. Other than a news conference on March 13 where he apologized to the public, Shimizu has been largely absent since the disaster struck. Japanese news media had been rife with theories on his disappearance with some even reporting rumors that he had committed suicide. Katsumata also offered his “sincere apologies” to those affected by the nuclear crisis, which has forced thousands of people to evacuate the area around the plant and
left farmers unable to sell radiation-tainted produce. In recent days, the announcements of mounting contaminated water in the plant, as well as the discovery of plutonium traces in the soil outside the facility and an increasingly dangerous environment for plant workers, have forced government ofﬁcials to acknowledge the dangerous side effects of measures taken to keep nuclear fuel cool. Edano said on Wednesday that government and nuclear experts were considering new steps to prevent the spread of radiation from the plant, like covering the reactors with a special cloth to reduce the amount of released radiation. Edano also said the government was considering using a tanker to collect contaminated water. Meanwhile, Greenpeace, the antinuclear environmental organization, gave guarded endorsement on Wednesday to the radiation data published by the Japanese government concerning the Fukushima plant. The organization, which has an antinuclear stance, had said it was coming to Japan to provide “an alternative to the often contradictory information released by nuclear regulators”. There has been some public mistrust regarding the ofﬁcial data, with fears deepened by occasionally contradictory announcements. But Jan van de Putte, a Greenpeace ofﬁcial, said Wednesday that its scientists’ ﬁndings largely correlated with the ofﬁcial Japanese data. “There is no contradiction between Greenpeace data and local data,” he said. “The contradiction is between the data, and action to help people” in the affected areas. The organization recommended that the government move more aggressively to evacuate residents near the complex.
Activists urge Congress to track cancer clusters • CANCER, FROM 1A
“This is becoming an alltoo-common occurrence,” Brockovich said. “Protecting the health of our families and our children should be the top priorities for us all. There are simply too many cancers in this country and not enough answers.” An economist who testiﬁed at the request of Sen. James Inhofe of Oklahoma, the top Republican on the committee, said he was concerned about how the bill deﬁned disease clusters. There’s “no credible way” for the EPA to set scientiﬁc priorities for identifying clusters, said Richard Belzer of Regulatory Checkbook, a Virginia organization that works to improve the scientiﬁc and economic information used in public decision-making. False positives create signiﬁcant anxiety, Belzer warned, and “science is
compromised when government tries to legislate science.” Some Republicans on the committee said Tuesday that they thought federal agencies other than the EPA — which the GOP has targeted recently — might be better suited to looking at the disease clusters. Republicans in the House of Representatives have moved to curtail the EPA’s authority in other areas, particularly greenhouse gas emissions. Republicans in the Senate — including Crapo — also support moving in that direction. But Boxer said they chose the EPA rather than, say, the Centers for Disease Control and Prevention because if the causes of cancer clusters were determined to be environmental, the EPA had the ability to address air, water and soil pollution.
3/31/2011 4:13:51 AM
THE MIAMI HERALD
THURSDAY, MARCH 31, 2011
Allies count on defiant streak in Libya BY DAVID D. KIRKPATRICK AND KAREEM FAHIM
New York Times Service
JIM WILSON/NEW YORK TIMES SERVICE
The U.S. federal government is reassessing if foods like Jell-O should carry warnings that the artificial colorings in them worsen behavior problems in some children.
FDA reassessing warnings for artificial food colorings
TRIPOLI, Libya â€” In the alliesâ€™ shadow war in Libya, airstrikes are aimed not just at Moammar GadhaďŹ â€™s tanks and artillery but also at the elite among his remaining armed forces in an effort to convince them to turn against their embattled leader. He may be able to hold out against Western warplanes, but he cannot long survive without the loyalty of certain tribes â€” the Warfalla, the Margaha and his own people, the Qaddafa â€” whose members now dominate the governmentâ€™s only dependable militias.
â€œThe question is, how much pressure can you put on the tribal elements in the armed forces?â€? asked Gary Li, a defense analyst who has studied the Libyan military. â€œCan you turn his own tribe against him? And just who out of the reduced army remaining stays with GadhaďŹ until the bitter end?â€? As GadhaďŹ â€™s militias beat back the rebelsâ€™ advance in eastern Libya on Tuesday, it was clear that the past 10 days of airstrikes had failed to cripple his forces enough to erase their advantage in ďŹ repower. Nor have the strikes renewed the uprising that brieďŹ‚y threatened his
stronghold in Tripoli, the capital, four weeks ago. Li warned that GadhaďŹ might be planning to return to the strategy he used early in the conďŹ‚ict and pull back his forces to his two coastal power bases: to Surt, his tribal hometown, and to Tripoli, where the heavy civilian population would protect the soldiers from allied air power. And within the cities, Li argued, even a few tanks would allow GadhaďŹ â€™s forces to hold off the rebels and elude Western airstrikes. â€œA deadlock,â€? Li called it. The wild card is the divided loyalties of the tribes who dominate the militaryâ€™s
upper echelons. Although GadhaďŹ has surrounded himself with guards drawn from his own tribe and those close to it, a coup would not be a surprise. Some analysts said that GadhaďŹ â€™s fear of betrayal by even his own tribal cousins is one reason that he had turned to his sons to lead his defense. As Defense Secretary Robert M. Gates has made clear in recent days, Western strategists are betting that GadhaďŹ â€™s allegiances will be frayed and ďŹ nally severed by the loss of their tanks, artillery, barracks and, ultimately, by a high death toll.
BY GARDINER HARRIS
New York Times Service
WASHINGTON â€” After staunchly defending the safety of artiďŹ cial food colorings, the federal government is for the ďŹ rst time publicly reassessing whether foods like Jell-O, Lucky Charms cereal and Minute Maid lemonade should carry warnings that the bright artiďŹ cial colorings in them worsen behavior problems like hyperactivity in some children. The Food and Drug Administration concluded long ago that there was no deďŹ nitive link between the colorings and behavior or health problems, and the agency is unlikely to change its mind any time soon. But Wednesday and Thursday, the FDA will ask a panel of experts to review the evidence and advise on possible policy changes, which could include warning labels on food. The hearings signal that the growing list of studies suggesting a link between artiďŹ cial colorings and behavioral changes in children has at least gotten regulatorsâ€™ attention â€” and, for consumer advocates, that in itself is a victory. In a concluding report, staff scientists from the FDA wrote that while typical children might be unaffected by the dyes, those with behavioral disorders might have their conditions â€œexacerbated by exposure to a number of substances in food, including, but not limited to, synthetic color additives.â€? BEHAVIORAL DISORDERS Renee Shutters, a mother of two from Jamestown, N.Y., said in a telephone interview Tuesday that two years ago, her son Trenton, then 5, was having serious behavioral problems at school until she eliminated artiďŹ cial food colorings from his diet. â€œI know for sure I found the root cause of this one because you can turn it on and off like a switch,â€? Shutters said. But Dr. Lawrence Diller, a behavioral pediatrician in Walnut Creek, Calif., said evidence that diet plays a signiďŹ cant role in most childhood behavioral disorders is minimal to nonexistent. â€œThese are urban legends that wonâ€™t die,â€? he said. There is no debate about the safety of natural food colorings, and manufacturers have long defended the safety of artiďŹ cial ones as well. In a statement, the Grocery Manufacturers Association said, â€œAll of the major safety bodies globally have reviewed the available science and have determined that there is no demonstrable link between artiďŹ cial food colors and hyperactivity among children.â€? In a 2008 petition ďŹ led with federal food regulators, the Center for Science in the Public Interest, a consumer advocacy group, argued that some parents of susceptible children do not know that their children are at risk and so â€œthe appropriate public health approach is to remove those dangerous and unnecessary substances from the food supplyâ€?. In the 1970s, Dr. Benjamin Feingold, a pediatric allergist from California, had success treating the symptoms of hyperactivity in some children by prescribing a diet that, among other things, eliminated artiďŹ cial colorings. And some studies, including one published in The Lancet medical journal in 2007, have found that artiďŹ cial colorings might lead to behavioral changes even in typical children. The consumer science group asked the government to ban the dyes, or at least require manufacturers to include prominent warnings that â€œartiďŹ cial colorings in this food cause hyperactivity and behavioral problems in some childrenâ€?. NO CLUE ABOUT THE RISKS Citizen petitions are routinely dismissed by the FDA without much comment. Not this time. Still, the agency is not asking the experts to consider a ban during their two-day meeting, and agency scientists in lengthy analyses expressed skepticism about the scientiďŹ c merits of the Lancet study and others suggesting any deďŹ nitive link between dyes and behavioral issues. Importantly, the research offers almost no clue about the relative risks of individual dyes, making speciďŹ c regulatory actions against, say, Green No. 3 or Yellow No. 6 almost impossible. The FDA scientists suggested that problems associated with artiďŹ cial coloring might be akin to a peanut allergy, or â€œa unique intolerance to these substances and not to any inherent neurotoxic propertiesâ€? of the dyes themselves. As it does for peanuts and other foods that can cause reactions, the FDA already requires manufacturers to disclose on food labels the presence of artiďŹ cial colorings. A spokeswoman for General Mills refused to comment. Valerie Moens, a spokeswoman for Kraft Foods, wrote in an email that all of the food colors the company used were approved and clearly labeled, but that the company was expanding its â€œportfolio to include products without added colorsâ€?, like Kool-Aid Invisible, Capri Sun juices and Kraft Macaroni and Cheese Organic White Cheddar.
BEN SKLAR/NEW YORK TIMES SERVICE
Tyler Anastopoulos, a student at City View Junior/Senior High School in Wichita Falls, Texas, was sent to the assistant principal for skipping detention and given three swats to the backside with a paddle, causing deep bruises and hospitalization, according to his mother Angie Herring.
U.S. schools under pressure to spare the rod BY DAN FROSCH
New York Times Service
When Tyler Anastopoulos got in trouble for skipping detention at his high school recently, he received the same punishment that students in parts of rural Texas have been getting for generations. Tyler, an 11th-grader from Wichita Falls, was sent to the assistant principal and given three swift swats to the backside with a paddle, recalled Angie Herring, his mother. The blows were so severe they caused deep bruises and the boy wound up in the hospital, Herring said. While the image of the high school principal patrolling the halls with paddle in hand is largely of the past, corporal punishment is still alive in 20 states, according to the Center for Effective Discipline, a group that tracks its use in schools around the country and advocates for its end. Most of those states are in the South, where paddling remains ingrained in the social and family fabric
of some communities. Each year, prodded by child safety advocates, state legislatures debate whether corporal punishment amounts to an archaic form of child abuse or an effective means of discipline. This month, Tyler, who attends City View Junior/ Senior High School, told his story to lawmakers in Texas, which is considering a ban on corporal punishment. The same week, legislators in New Mexico voted to end the practice there. Texas schools, Herring fumed, appear to have free rein in disciplining a student, â€œas long as you donâ€™t kill himâ€?. â€œIf I did that to my son,â€? she said, â€œIâ€™d go to jail.â€? Steve Harris, superintendent of the City View Independent School District in Wichita Falls, declined to comment in detail on the case, but noted that his investigation of the school had found no wrongdoing. Corporal punishment, Harris pointed out, has long
been â€œone of the tools in the tool box we use for disciplineâ€?. In Texas, at least 27 out of about 1,000 school districts still use corporal punishment, said Jimmy Dunne, founder and president of another group that is against the practice, People Opposed to Paddling Students. That is enough to prompt advocates like Dunne to push to end the practice there. One bill being considered would permit corporal punishment only if parents speciďŹ cally consent to it for their children. Another would ban corporal punishment in schools outright. â€œHitting children in our schools with boards is child abuse, and it promotes child abuse at home,â€? said Dunne, a former math teacher in Houston. â€œParents see itâ€™s legal in schools and think itâ€™s OK to do at home.â€? In New Mexico, where more than a third of the stateâ€™s school districts permit corporal punishment, according to a local childrenâ€™s legal
services group, legislators approved a paddling ban this month. Gov. Susana Martinez, a Republican, has not indicated whether she will sign the bill. Opponents of the measure, like state Sen. Vernon D. Asbill, worried that a ban would tie teachersâ€™ hands and make it harder for them to control students. â€œWith parental supervision and parental approval, I believe itâ€™s appropriate,â€? said Asbill, a Republican and a longtime teacher and school administrator from Carlsbad. â€œThe threat of it keeps many of our kids in line so they can learn.â€? But Sen. Cynthia Nava, a Democrat and a school superintendent from Las Cruces, N.M., and proponent of the ban, said schools were no place for violence of any sort. â€œItâ€™s shocking to me that people got up on the ďŹ‚oor and argued passionately to preserve it,â€? she said. â€œWe should be educating kids that they canâ€™t solve problems with violence.â€?
GOP leaders turn to moderate democrats for budget BY PAUL KANE
Washington Post Service
WASHINGTON â€” Unable to ďŹ nd consensus in their own ranks, House Republican leaders have begun courting moderate Democrats on a budget deal to avoid a government shutdown at the end of next week. The basic outline would involve more than $30 billion in cuts for the 2011 spending package, well short of the $61 billion initially demanded by Republican freshmen and other conservatives, according to senior aides in both parties. Such a deal probably would be acceptable to Senate leaders and President Barack Obama as long as the House does not cut social and regulatory programs that Democrats support, Senate and administration aides said. The fact that Republican leaders are turning to Democrats to pass a funding measure shows how divided the GOP caucus remains more than two months after taking
over the House, as well as the difďŹ culty that Speaker John Boehner, R-Ohio, has had in satisfying the demands of the 87 freshmen who came to Washington promising to cut the budget at all costs. Boehnerâ€™s team recognizes that any legislation that meets with approval from his most conservative ďŹ‚ank â€” what Democrats call the â€œperfectionist caucusâ€? â€” would be dead on arrival in the Democratic-controlled Senate. At the same time, conservatives have become increasingly unhappy with recent spending proposals, saying they wouldnâ€™t cut deep enough. Fifty-four of them voted against a stopgap budget measure two weeks ago that passed with signiďŹ cant Democratic support. That led House Majority Whip Kevin McCarthy, R-Calif., to meet with a conservative bloc of Democrats to discuss potential common ground on the budget and other pressing ďŹ scal issues.
Rep. Heath Shuler of North Carolina, a centrist Democratic leader, said McCarthy did not speciďŹ cally ask for their votes on any legislation, saying that the conversation was taking place at â€œ10,000 feetâ€? and that the Republican was â€œfeeling us out.â€? The Democrats left the meeting knowing they could provide the decisive votes, Shuler said, a role they are willing to play. â€œWeâ€™re looking for ways to help,â€? he said. â€œWeâ€™re for real. Weâ€™re not here for the politics.â€? Although a deal with Democrats could avoid a shutdown when funding for the government runs out and point the way for future compromises, it also could come at a steep price for Republican leaders, who would, in effect, be turning their backs on the conservative wing of their party. Such a deal would almost surely deepen the rift between Boehner and Republican freshmen, many of whom
have said they are willing to let the government shut down rather than give in on cuts. What many leaders in Washington may consider a sensible compromise to ensure that the government keeps running is just the sort of deal-making that many Republican voters view as unprincipled capitulation. Some Tea Party groups have promised to target any Republicans they think are not conservative enough on ďŹ scal issues.
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3/31/2011 3:34:04 AM
THURSDAY, MARCH 31, 2011
THE MIAMI HERALD
Mexicans think cartels are winning drug war BY TIM JOHNSON
McClatchy News Service
MEXICO CITY — Mexicans are in a funk over their president, and a majority of them think that he’s losing control of the country, an opinion poll found. Six out of 10 Mexicans think that organized crime gangs are getting the upper hand in the war that President Felipe Calderon launched against drug trafﬁcking when he came to ofﬁce in late 2006, the poll by Demotecnia, released Tuesday found. The poll may augur a change in the country’s approach to its huge drugtrafﬁcking problem when a new administration takes over after elections next year. Calderon, 48, is in the ﬁfth and deﬁning year of a six-year presidential term. His National Action Party is struggling to ﬁnd a suitable candidate for the 2012 presidential elections — Mexico’s presidents serve only one term — and Calderon recently suggested that the
party should look outside its ranks for a candidate. While the army-backed offensive that Calderon launched when he took ofﬁce has disrupted drug gangs and netted a handful of drug barons, it’s coincided with a rising death toll. Last year, 15,273 Mexicans were killed, a spike over the 9,600 killed a year earlier. In total, more than 35,000 people have died in drug violence since Calderon took ofﬁce. In a telephone poll of 500 Mexicans conducted Saturday, Demotecnia found that 59 percent of respondents said the country was as bad off as or worse off than it was when Calderon took ofﬁce. Asked who’s gaining the upper hand in the war against narcotics cartels, 59 percent also said drug trafﬁckers were winning, the Mexico City polling ﬁrm said. In another question, respondents were asked whether Calderon had a ﬁrm grip on the reins of the
country or matters were falling out of his control. Sixty-seven percent picked the latter option. Demotecnia director Maria de las Heras said the poll reﬂected frustrations over Calderon’s policies on organized crime. “The drug war has not worked out well, according to the poll,” De las Heras said in a telephone interview. “He has put all his political capital into this, and the perception at least, maybe not the reality, is that it is going very badly. The majority of people are not satisﬁed.” Even U.S. President Barack Obama has been drawn into Calderon’s woes. On March 19, he and Secretary of State Hillary Clinton accepted the resignation of U.S. Ambassador to Mexico Carlos Pascual, whom Calderon had publicly ﬂayed over leaked diplomatic cables that questioned whether Mexico’s strategy on the cartels was working.
Chavez wins journalism prize from Argentine university BY MICHAEL WARREN Associated Press
Venezuela — for the award is controversial. Inter American Press Association president Gonzalo Marroquin said in an interview that the Venezuelan leader is a “clear enemy of freedom of the press”. “It would take a long time to enumerate the long chain of actions Chavez has taken against the right of the Venezuelan people to receive information,” he said. Chavez began his tour of Argentina, Uruguay, Bolivia and Colombia only days after U.S. President Barack Obama skipped these countries in his ﬁrst visit to South America, a goodwill tour overshadowed by the U.S. attacks Obama ordered on Moammar Gadhaﬁ’s forces in Libya. Both Chavez and Fernandez strongly criticized the air attacks Tuesday. Chavez is a declared ally of Gadhaﬁ, who honored the Venezuelan leader in 2004 with his Al-Gadhaﬁ International Prize for Human Rights, an honor he shares with Fidel Castro (1998), Evo Morales (2006) and Daniel Ortega (2009).
As for the journalism award, Chavez said he is proud to receive it, even though some say “that the dictator Chavez doesn’t deserve it.” “One must ﬁght the media dictatorship. The dominant classes always manipulate the communications media and trick the people through powerful psychological campaigns,” he said. Chavez’s government forced the opposition RCTV channel off airwaves in 2007 by refusing to renew its broadcast license. The telecommunications agency then ordered cable companies to drop RCTV International last year for refusing to carry Chavez’s speeches and other mandatory programming. The government also cited licensing issues in forcing 32 radio stations and two small TV stations off the air. The majority owner of Globovision, Venezuela’s only remaining anti-Chavez TV channel, ﬂed the country rather than be jailed pending a conspiracy trial for keeping two-dozen new vehicles at one of his homes.
BUENOS AIRES — Hugo Chavez, winner of a journalism award? The Venezuelan leader regularly clashes with critical media, but Argentina’s University of La Plata gave him its Rodolfo Walsh Prize “for his unquestionable and authentic commitment” to giving people without a voice access to the airwaves and newspapers. Chavez has bankrolled the growth of the Telesur network, providing a state-funded alternative to privately ﬁnanced broadcast stations across Latin America. He has a sure ally in President Cristina Fernandez of Argentina, who sees privately owned media groups as a bigger threat to freedom of expression than state control of airwaves or newsprint. Fernandez is trying to transform Argentina’s communications industry through a law that would break up media monopolies and force cable TV providers to include channels run by unions, Indians and other activists. “Here there is democracy,” Chavez said Tuesday after arriving in Argentina. He praised the country for having an “open debate just like in Venezuela, and a president who is an absolute defender of human rights and freedom of expression, freedom of the press and freedom of thought”. The two presidents also signed commercial accords dealing with food, transport and energy, and they visited a state-run factory where Argentina will build ships for Venezuela’s oil industry. Venezuela will import thousands of Argentine cars and 600,000 tons of food and agricultural equipment, representing a $400 million investment, Chavez’s ofﬁce said. Argentine companies also will transfer their technology and help build about 20 factories in Venezuela to manufacture small motors and refrigerators. In exchange, Venezuela will keep supplying ArgenJORGE ARAUJO/AP tina with oil. The choice of Chavez — Venezuela’s President Hugo Chavez gestures after who is accused of silencing receiving the Rodolfo Walsh prize at the University opposition-aligned media in of La Plata in Argentina, on Tuesday.
Ecuador reopens New Orleans consulate NEW ORLEANS — (AP) — Ecuador has reopened its consulate in New Orleans and plans to serve about 10,000 Ecuadoreans living in Louisiana, Arkansas and Mississippi. Ecuador’s ambassador to the United States, Luis Benigno Gallegos Chiri-
boga said Tuesday that the Port of New Orleans exports about $500 million in goods to Ecuador annually. The Times-Picayune reported that Ecuador also provides $12 million worth of vegetables, ﬂowers and other goods to the United
States each year through New Orleans. Attorney Luis Quinones has been appointed consul general for New Orleans. Ecuador previously had a consulate in New Orleans, but it closed after Hurricane Katrina.
Cuba’s President Raul Castro, left, sees off former U.S. President Jimmy Carter at the Jose Marti airport in Havana on Wednesday.
Carter leaves Cuba without jailed contractor BY PETER ORSI
HAVANA — Former President Jimmy Carter met with a jailed U.S. contractor Wednesday but said Cuban leaders had made it clear they do not plan to release him. The announcement was a disappointment to supporters of Alan Gross after the trip had raised expectations the former U.S. president would be allowed to bring the Maryland native home. Gross is serving a 15-year sentence after being convicted earlier this month of bringing communications equipment into Cuba illegally. U.S. State Department ofﬁcials have said privately that Cuban authorities indicated they might release Gross on humanitarian grounds following the trial. But Carter said that from the very beginning, he knew Gross would not be freed during the visit. “The Cuban ofﬁcials made it very clear to me before I left my home that the freedom of Alan Gross would not be granted.” He said he met with Gross at an undisclosed location Wednesday morning, and that the 61-year-old contractor told him he had lost 88 pounds since his arrest in December 2009. Carter said Gross’ lawyer plans to appeal his conviction, and if that fails, “perhaps in the future an executive order might be issued to grant him a pardon, a release, on humanitarian grounds”.
Gross’ 26-year-old daughter and elderly mother are both suffering from cancer. The former U.S. president said he believes Gross is “innocent of any serious crime” and did not pose “any serious threat” to the Cuban government. In addition to meeting Gross, Carter also sat down Wednesday with revolutionary icon Fidel Castro, a day after holding talks with President Raul Castro. “We welcomed each other as old friends,” Carter said of the meeting with the former Cuban leader. He said Fidel Castro “seems to be in good health”. Carter later boarded a plane at Havana’s international airport and left the island. Raul Castro was on hand to see him off. During the three-day visit, Carter also met with other senior government and religious leaders. On Wednesday, he had breakfast with members of the island’s small opposition community, including 10 dissidents recently released from prison by the Cuban government and members of the Ladies in White opposition group. Human rights activist Elizardo Sanchez said Carter told the dissidents he “wanted to express his solidarity and his recognition of the movement for civil rights and also the emerging civil society. “Hopefully his visit will be useful even if it is just one
step toward the normalization of bilateral relations between the governments of Washington and Havana.” Before Carter’s news conference, hope had been rising in Washington that the former leader would bring Gross home. Last August, the 39th U.S. president and winner of the 2002 Nobel Peace Prize traveled to North Korea to secure the release of an imprisoned U.S. citizen, and many expected the same sort of result in Cuba. “It is what everyone is hoping for and many of us are expecting,” a congressional staffer who deals with U.S.-Cuba relations told the AP. “To invite Carter to visit Havana strongly suggests a willingness to make a humanitarian release of Alan Gross, but the Cuban government is also looking for signals from Washington, and those signals haven’t always been clear.” The staffer spoke on condition of anonymity. Gross was arrested while working on a USAID-backed democracy-building project and convicted of crimes against state security earlier this month in a case that has blocked improved ties between the United States and Cuba. Gross has said he was working to improve Internet communications for Cuba’s tiny Jewish community. Havana considers such U.S. projects to be aimed at toppling the government.
Haiti election results delayed due to fraud and irregularities BY TRENTON DANIEL Associated Press
PORT-AU-PRINCE — Haitians will have to wait at least a few more days to learn the preliminary results of their presidential election because of alleged irregularities and fraud uncovered at the votecounting center, ofﬁcials said. While not disclosing speciﬁcs, Gaillot Dorsinvil, the president of the Haiti’s Provisional Electoral Council, issued a brief statement on Tuesday, saying ofﬁcials found a “high level” of fraud and irregularities of various kinds at the tabulation center in the capital, Port-au-Prince. Dorsinvil said the discovery has prompted lawyers to adopt “more stringent veriﬁ-
cation measures”, causing a delay in counting. He did not describe the alleged problems. The preliminary results are now expected to be released Monday, according to Dorsinvil. They were expected to be released Thursday. International monitors, who are observing the counting process, praised Haiti’s March 20 presidential runoff, saying it was in sharp contrast to the Nov. 28 ﬁrst round that was marred by disorganization and allegations of widespread fraud. Voters chose between Michel “Sweet Micky” Martelly, a popular musician who has never held public ofﬁce, and Mirlande Manigat, a former ﬁrst lady and senator and
longtime ﬁxture on the political scene. Haitians are eagerly awaiting the announcement of the winner of this month’s runoff vote after last year’s ﬁrst round was delayed because of the chaos and massive irregularities. The announcement of preliminary results from the disputed ﬁrst round sparked nearly three days of rioting that shut down the capital. The Organization of American States eventually determined those results were ﬂawed and Haiti’s Provisional Electoral Council dropped the government-backed candidate from the runoff. Final results are due on April 16.
Duvalier leaves hospital in Haiti PORT-AU-PRINCE —AP — Haiti’s former dictator Jean-Claude Duvalier was discharged from a hospital in the country’s capital where he was examined and treated for chest pains. Duvalier, known as “Baby Doc,” shufﬂed unsteadily out the back door of the Canape Vert Hospital on Tuesday in a dark blue suit, shaking hands and waving at several dozen cheering supporters, mostly older men who served in the military or government under the former “president for life.” “Since Jean-Claude Duva-
lier left the country has lost its values,” said Wilson Alba, 58, who saluted Duvalier as police ofﬁcers escorted him to a waiting car. The 59-year-old former dictator was admitted to the hospital Wednesday after complaining of chest pains. Family friends and associates have declined to discuss details of his health condition. “They ran all sorts of tests yesterday and he’s OK,” said family friend Enzo Alcindor. Duvalier returned under police escort to his villa in the
hills above the Haitian capital where he is under house arrest. He is under investigation on criminal charges that include corruption and human rights abuses during his 1971-86 rule. The former dictator made a surprise return to Haiti in January 25 years after he was forced into exile in a popular uprising against a regime widely considered brutal and corrupt. Like his despotic father, Francois “Papa Doc,” Duvalier used the dreaded Tonton Macoutes, a private militia, to reinforce his rule.
3/31/2011 3:58:57 AM
THE MIAMI HERALD
Virginia Tech fined for response to shooting BY DENA POTTER
RICHMOND, Va. — Virginia Tech will have to pay the maximum $55,000 ﬁne for violating federal law by waiting too long to notify students during the 2007 shooting rampage but will not lose any federal student aid, the U.S. Department of Education announced. Department ofﬁcials wrote in a letter to the school on Tuesday that the sanction should have been greater for the school’s slow response to the deadliest mass shooting in modern U.S. history, when student Seung-Hui Cho shot and killed 32 students and faculty, then himself. The $55,000 ﬁne was the most the department could levy for Tech’s two violations of the federal Clery Act, which requires timely reporting of crimes on campus. “While Virginia Tech’s violations warrant a ﬁne far in excess of what is currently
permissible under the statute, the Department’s ﬁne authority is limited,” wrote Mary Gust, director of a department panel that dictated what punishment the school would receive for the violation. The university avoided the potentially devastating punishment of losing some or all of its $98 million in federal student aid. While that’s possible for a Clery Act violation, the department has never taken that step and a department ofﬁcial said Tuesday it was never considered for Tech. University ofﬁcials have always maintained their innocence and said they would appeal the ﬁne, even though it’s a relatively small sum for a school of more than 30,000 full-time students and an annual budget of $1.1 billion. The amount would cover tuition and fees for one Virginia undergraduate student for four years, or
two years for an out-of-state undergrad. “We believe that Virginia Tech administrators acted appropriately in their response to the tragic events of April 16, 2007, based on the best information then available to them at the time,” spokesman Larry Hincker said in a statement. The Clery Act requires colleges and universities that receive federal student ﬁnancial aid to report crimes and security policies and provide warning of campus threats. It is named after Jeanne Ann Clery, a 19-yearold university freshman who was raped and murdered in her dormitory in 1986. Her parents later learned that dozens of violent crimes had been committed on the campus in the three years before her death. The Education department issued its ﬁnal report in December, ﬁnding that Virginia Tech failed to issue a timely warning to the
Blacksburg campus after Cho shot and killed two students in a dormitory early that morning in 2007. The university sent out an e-mail to the campus more than two hours later, about the time Cho was chaining shut the doors to a classroom building where he killed 30 more students and faculty, then himself. That e-mail was too vague, the department said, because it referred only to a “shooting incident” but did not mention anyone had died. By the time a second, more explicit warning was sent, Cho was near the end of his shooting spree. “Had an appropriate timely warning been sent earlier to the campus community, more individuals could have acted on the information and made decisions about their own safety,” the department said in its letter. A state commission that investigated the shootings
also found that the university erred by failing to notify the campus sooner. The state reached an $11 million settlement with many of the victims’ families. Two families have sued and are seeking $10 million in damages from university ofﬁcials. That case is set for trial this fall. Virginia Tech argues that, relying on campus police, it ﬁrst thought the shootings were domestic and that a suspect had been identiﬁed so there was no threat to campus. The university argued that the Department of Education didn’t deﬁne “timely” until 2009, when it added regulations because of the Tech shootings. S. Daniel Carter, director of public policy for Security On Campus, a nonproﬁt organization that monitors the Clery Act, said it’s “a shame” the department had only really begun ﬁning schools for noncompliance in 2005.
Audit of Pentagon spending finds $70B in waste BY CHRISTOPHER DREW
New York Times Service
Despite improvements, more than half of the Pentagon’s big weapons systems still cost more than they should, with management failures adding at least $70 billion to the projected costs over the past two years, government auditors said. The Government Accountability Ofﬁce, a congressional watchdog, said Tuesday, the biggest program, the F-35 Joint Strike Fighter, accounted for $28 billion of that increase. Other systems also had signiﬁcant cost overruns, the agency said, adding that the increases could force the Pentagon to cut the number of ships and planes it buys. The auditors said many of the problems occurred because the Pentagon began building the systems before the designs were fully tested. The ﬁndings were signiﬁcant because Congress and the Obama administration have promised to change many of the practices that have long allowed weapons costs to spiral out of control. U.S. President Barack Obama signed a law in 2009 to improve contracting. The accountability ofﬁce said that Pentagon ofﬁcials had done a better job in starting new programs. But the agency also found that most of the new programs were not “fully adhering” to the best procedures, leaving
NEW YORK TIMES SERVICE
The United States’ biggest weapons’ program, the F-35 Joint Strike Fighter, accounted for $28 billion in waste over the past two years. them “at a higher risk for cost growth and schedule delays”. Pentagon ofﬁcials questioned some of the calculations. But Nancy L. Spruill, a Pentagon acquisition ofﬁcial, added in a letter to the
auditors that the military was determined to “address cost growth where it is real and unacceptable”. All told, the accountability ofﬁce said, the projected cost of the Pentagon’s largest programs has risen
Brown ends talks on bipartisan budget BY SHANE GOLDMACHER AND ANTHONY YORK
Los Angeles Times Service
SACRAMENTO — Gov. Jerry Brown of California has abandoned his effort to negotiate a bipartisan budget, charging that Republicans were unwilling to support his plan unless he yielded to “an ever-changing list of collateral demands”. The governor’s announcement that he is walking away from the negotiating table further roils the state’s ﬁnances and marks the biggest setback yet for the 72-year-old Brown. He returned to Sacramento this year for his third term as governor promising that he had the political skills and policy expertise to resolve the state’s chronic ﬁnancial mess. Key GOP lawmakers who had been negotiating with the governor had declared the talks fruitless on Tuesday. “We gave it our best. We’re very disappointed. It’s done,” said Sen. Bill Emmerson, R-Hemet. Budget cuts that lawmakers approved earlier this month closed only $11.2 billion of the estimated $26 billion deﬁcit. Brown wanted
to address most of the rest of the gap with a special election in June, when he hoped voters would agree to continue paying temporary increases in taxes on income, sales and vehicles. All will have expired by July 1; higher income taxes already have stopped. The governor needed at least four GOP votes to get a tax measure on a June ballot. On Tuesday, he said he was giving up his quest for those votes. “Each and every Republican legislator I’ve spoken to believes that voters should not have this right to vote unless I agree to an everchanging list of collateral demands,” his statement said. Administration ofﬁcials and legislative leaders declined to say how they intend to proceed. Among the options they could pursue to raise revenue are gathering signatures for a citizens’ initiative on the tax plan, or attempting to use an untested legal loophole to put the measure on the ballot with a simple majority of the Legislature, which Democrats command. But time is running short. The deadline for balancing
by $135 billion, or 9 percent, to $1.68 trillion since 2008. It estimated that about $65 billion of that increase resulted from decisions to buy more of some systems, like mine-resistant vehicles
and Navy destroyers, than had been planned. But it said the other $70 billion of increases appeared “to be indicative of production problems and inefﬁciencies or ﬂawed initial cost estimates”.
THURSDAY, MARCH 31, 2011
Judge blocks Wis. union bill BY TODD RICHMOND Associated Press
MADISON, Wis. — A Wisconsin judge has barred state ofﬁcials from any further implementation of a law that strips most public workers of nearly all their collective bargaining rights. Dane County Circuit Judge Maryann Sumi issued an emergency injunction Tuesday prohibiting enactment of the law earlier this month. But the Legislative Reference Bureau published the law anyway on Friday. Publication is typically the last step before a law takes effect, but it’s unclear if the bureau’s action amounted to that; the law’s supporters say it did, but opponents say the secretary of state had to designate a publication date. The law strips away workers’ rights to collectively bargain for anything except wages. It also requires most public workers to contribute more to their pensions and health insurance. Sumi stopped short of issuing a declaration saying the law was not in effect during a hearing Tuesday but said her earlier order had either been ignored or misunderstood. She said anyone who violates the new order would face sanctions. State Department of Justice spokesman Steve Means said the agency believes the law was properly published and is in effect. Cullen Werwie, a spokesman for Gov. Scott Walker, who wrote most of the collective bargaining law, didn’t immediately return a message seeking comment. Wisconsin Department of Administration Secretary Mike Huebsch, Walker’s top aide, issued a statement saying the agency will evaluate the judge’s order. “We will continue to confer with our legal counsel and have more information about how to move forward in the near future,” Huebsch said.
Lawmakers seek to learn lessons from Japan’s Fukushima plant BY MATTHEW L. WALD
New York Times Service
JIM WILSON/NEW YORK TIMES SERVICE
Calif. Gov. Jerry Brown said that Republicans were unwilling to support his plan. the budget is in June, and legislative leaders acknowledged Tuesday that they would not be able to place a measure before voters by then. California’s treasurer has warned that the state would face a serious cash crunch if resolution of the budget problem were pushed into the fall, possibly forcing ofﬁcials once again to issue IOUs. Brown lashed out at GOP lawmakers Tuesday for blocking a June election, the linchpin of his budget plan. He cited a demand that he keep rather than jettison, as his budget proposed, a tax break given to California companies that move jobs out of state.
WASHINGTON — Almost all U.S. nuclear power plants have backup batteries that would last only half as long as those at Japan’s troubled Fukushima Daiichi plant did after a tsunami knocked out power there, an expert testiﬁed Tuesday at a Senate committee brieﬁng on nuclear safety. An industry ofﬁcial, addressing the Senate Energy and Natural Resources Committee, conceded that battery life was “one of the obvious places” that nuclear operators would examine for potential improvements. David Lochbaum, a nuclear expert at the Union of Concerned Scientists, which generally takes a critical tone toward nuclear reactors, said that just 11 of the United States’ 104 plants had eight-hour batteries, and 93 had four-hour batteries. The batteries are not powerful enough to run pumps that direct cooling water, but they can operate valves and can power instruments that give readings of water levels, ﬂow and temperatures. After the March 11 tsunami disabled the local elec-
tricity grid at the Fukushima Daiichi plant and the plant’s emergency diesel generators, the failure of the batteries deprived the plant’s operators of those crucial measurements. Addressing the committee with Lochbaum was Anthony R. Pietrangelo, senior vice president and chief nuclear ofﬁcer of the Nuclear Energy Institute, the industry trade association. “To get to 48 hours, or 72 hours, pick a number,” he said of the backup batteries. “We’re going to have to take a hard look and see what resources would be required.” After the committee briefing, Pietrangelo said that one alternative to adding longlasting batteries could be having portable diesel generators available for quick dispatch to a reactor. Some equipment intended to cope with a severe accident or terrorist attack is already centrally stockpiled, he said. Separately, Rep. Edward J. Markey, D-Mass., said Tuesday that he would introduce legislation to require that American plants acquire 72-hour batteries along with 14 days of fuel for the backup diesel generators.
Fukushima reportedly had seven days of diesel fuel, but the tanks were washed away by the tsunami; most American plants bury their tanks for safety, according to industry ofﬁcials. The bill would also impose a moratorium on license renewals and on new plant licenses. Another expert who spoke before the Senate committee, William Borchardt, the chief staff ofﬁcial of the Nuclear Regulatory Commission, said that the Fukushima crisis would have no impact on the commission’s granting of new licenses or license extensions. If Japan’s experience shows that changes in reactors are needed here, he said, those will be ordered immediately, regardless of the status of the plant’s license, license extension or license application. Another American practice that appears likely to be re-evaluated in view of Japan’s crisis is ﬁlling pools with spent fuel to the maximum extent possible. Markey and others called for reducing the risk by moving some fuel to dry casks, something that is done now only when the pool is at capacity.
3/31/2011 2:14:39 AM
THURSDAY, MARCH 31, 2011
THE MIAMI HERALD
Washington debates arming Libyan rebels BY MARK LANDLER, ELISABETH BUMILLER AND STEVEN LEE MYERS
New York Times Service
WASHINGTON — The Obama administration is engaged in a ﬁerce debate over whether to supply weapons to the rebels in Libya, senior ofﬁcials said, with some fearful that providing arms would deepen U.S. involvement in a civil war and that some ﬁghters may have links to al Qaeda. The debate has drawn in the White House, the State Department and the Pentagon, these ofﬁcials said, and has prompted an urgent call for intelligence about a ragtag band of rebels who are waging a town-by-town battle against Moammar Gadhaﬁ, from a base in eastern Libya long suspected of supplying terrorist recruits. “Al Qaeda in that part of
the country is obviously an issue,” a senior ofﬁcial said. These fears surfaced publicly on Capitol Hill on Tuesday when the military commander of NATO, Adm. James Stavridis, told a Senate hearing that there were “ﬂickers” in intelligence reports about the presence of al Qaeda and Hezbollah members among the rebels. No full picture of the opposition has emerged, Stavridis said. While eastern Libya was the center of Islamist protests in the late 1990s, it is unclear how many groups retain ties to al Qaeda. The French government, which has led the international charge against Gadhaﬁ, has placed mounting pressure on the United States to provide greater assistance to the rebels. The question of how best to support the opposition dominated an international
conference about Libya on Tuesday in London, attended by President Nicolas Sarkozy of France, U.S. Secretary of State Hillary Clinton and other coalition leaders. While Clinton said the administration had not yet decided on whether to actually transfer arms, she reiterated the United States had a right to do so, despite an arms embargo on Libya, because of the U.N. Security Council’s broad resolution authorizing military action to protect civilians. In a reﬂection of the seriousness of the administration’s debate, U.S. President Barack Obama said Tuesday that he was keeping his options open on arming the rebels. “I’m not ruling it out, but I’m also not ruling it in,” Obama told NBC News. “We’re still making an assessment partly about what Gadhaﬁ’s forces are going to
be doing. Keep in mind, we’ve been at this now for nine days.” But some administration ofﬁcials argue that supplying arms would further entangle the United States in a drawnout civil war because the rebels would need to be trained to use any weapons, even relatively simple riﬂes and shoulder-ﬁred anti-armor weapons. This could mean sending trainers. One ofﬁcial said the United States might simply let others supply the weapons. The question of whether to arm the rebels underscores the difﬁcult choices the United States faces as it tries to move from being the leader of the military operation to a member of a NATO-led coalition, with no clear political endgame. It also carries echoes of previous U.S. efforts to arm rebels, in Angola, Nicaragua,
Afghanistan and elsewhere, many of which backﬁred. The United States has a deep, often unsuccessful, history of arming insurgencies. Obama pledged Monday that he would not commit U.S. ground troops to Libya and said that the job of transforming the country into a democracy was primarily for the Libyan people and the international community. But he promised that the United States would help the rebels in this struggle. In London, Clinton and other Western leaders made it clear that the NATO-led operation would end only with the removal of Gadhaﬁ, even if that was not the stated goal of the U.N. resolution. Clinton — who met for a second time with a senior opposition leader, Mahmoud Jibril — acknowledged that as a
group, the rebels were largely a mystery. “We don’t know as much as we would like to know and as much as we expect we will know,” she said at a news conference. In his testimony, Stavridis said, “We are examining very closely the content, composition, the personalities, who are the leaders of these opposition forces.” The coalition members discussed other ways to help the rebels, like humanitarian aid and money, Clinton said. Some of the more than $30 billion in frozen Libyan funds may be channeled to the opposition. But a spokesman for the rebels, Mahmoud Shammam, said they would welcome arms, contending that with weaponry they would already have defeated Gadhaﬁ’s forces.
Israel mulls annexing West Bank blocs Tel Aviv may prefer Assad stay after all BY AMY TEIBEL
JERUSALEM — Israel is considering annexing major West Bank settlement blocs if the Palestinians unilaterally seek world recognition of a state, an Israeli ofﬁcial said — moves that would deal a grave blow to prospects for negotiating a peace deal between the two sides. Israel has refrained from taking such a diplomatically explosive step for four decades. The fact that it is considering doing so reﬂects how seriously it is concerned by the Palestinian campaign to win international recognition of a state in the absence of peacemaking. The Palestinians launched
that campaign after peace talks foundered over Israeli construction in West Bank settlements. On Tuesday, the Israeli Interior Ministry said it would decide next month whether to give ﬁnal approval to build 1,500 apartments in two Jewish enclaves in east Jerusalem. Israel captured both east Jerusalem and the West Bank from Jordan in 1967. Israel annexed east Jerusalem, home to shrines sacred to Judaism, Islam and Christianity, immediately after seizing it. But it carefully avoided annexing the West Bank, where 300,000 settlers now live among 2.5 million Palestinians. Although it is widely as-
sumed that under any peace deal, Israel would hold onto major settlements it has built in the past 44 years, any decision to formally annex West Bank territory would be a precedent-setting move that could increase Israel’s already considerable international isolation. The Palestinians claim all of the West Bank and east Jerusalem, in addition to the Gaza Strip, for a future state. The government ofﬁcial who disclosed the possible annexation said he did not know how seriously authorities were considering the option. He said that “adopting unilateral measures is not a one-way street” and added that oth-
er options were also being considered. These could include limiting water supplies beyond agreed-upon amounts and restricting Palestinian use of Israeli ports for business purposes, he said. Israel’s Prime Minister Benjamin Netanyahu was aware of the moves being discussed, he added, speaking on condition of anonymity because no ﬁnal decisions have been made. Netanyahu’s ofﬁce had no comment. Nimr Hamad, an aide to Palestine’s President Mahmoud Abbas, said “these threats are not new. — But we are continuing [our campaign] and are convinced our position is right”.
Medvedev warns Islamic separatists BY MICHAEL SCHWIRTZ AND ELLEN BARRY
New York Times Service
MOSCOW — A day after an unusual air attack on what ofﬁcials here said was a militant base in Russia’s North Caucasus region, President Dmitri A. Medvedev warned separatist ﬁghters in the mostly Muslim region to surrender or “be destroyed”. Speaking on the anniversary of suicide attacks on the Moscow subway that killed 40 people, Medvedev noted with regret that the Islamist militant groups almost always responsible for such lethal suicide attacks were still active, and he ordered his security services to ﬁnish them off. “We need to do this and bring this work to an end,” he said. Russia has been battling Islamist separatists in the North Caucasus for nearly two decades, but violence in the region occurs almost daily, and attacks in Moscow and elsewhere are not uncommon. Medvedev said Monday’s assault on the suspected terrorist base delivered “sufﬁciently impressive results.” The operation, carried out in a wooded area of Ingushetia near the border with Chechnya, was remarkable in its scale and ﬁrepower. At least 17 suspected militants were killed when Russia’s air force bombarded the area, ofﬁcials said. It was unclear whether ﬁghter jets or helicopters were used. Three members of Russia’s security services were also killed. Russia has rarely used air power against militants in
SHIHO FUKADA/NEW YORK TIMES SERVICE
Russia’s President Dmitri A. Medvedev has warned separatist fighters to surrender or ‘be destroyed’. recent years, said Tatyana Lokshina, who researches the North Caucasus with Human Rights Watch. “It’s a huge operation by Russian standards,” Lokshina said, though she cautioned that the effectiveness of such assaults could be difﬁcult to gauge. Ofﬁcials offered a measured assessment of the operation, saying only that they suspected that several militant commanders had been killed. “Among the dead militants there should be the leaders of militant groups,” Nikolai Sintsov, a spokesman for Russia’s National Anti-Terrorist Committee, said Tuesday. “At the moment, an investigation is under way to determine
the identities of the dead criminals.” Several Russian news agencies, citing anonymous law enforcement ofﬁcials, said that Doku Umarov, the self-proclaimed militant leader who has claimed responsibility for a string of attacks, might be among the dead. But there was no ofﬁcial conﬁrmation. In any case, the Investigative Committee, Russia’s top investigative agency, ﬁled charges against Umarov on Tuesday for his role in a suicide bombing in January at Moscow’s Domodedovo airport that killed at least 35 people. Umarov had previously taken responsibility for that attack, as well as for the
subway bombings in Moscow last year, but had never been ofﬁcially charged with a crime. The Investigative Committee also released new details on Tuesday about two brothers arrested recently and charged with accompanying the suicide bomber in the Domodedovo attack. Ofﬁcials announced the arrest of the brothers, Islam and Ilez Yandiyev, on Monday. When detained, they had in their possession a suicide belt and two bombs, the agency said in a statement on its website. “The presence of the explosive devices,” the agency said, “leads to the conclusion that they were preparing a terrorist attack.”
BY JANINE ZACHARIA
Washington Post Service
TEL AVIV — Israel has long complained about Syria’s alliance with Iran, the country’s support for the Shiite militia Hezbollah and its sheltering of leaders from Palestinian militant groups, such as Hamas, in Damascus. But with President Bashar al Assad of Syria facing the most serious threat to his rule since he took power 11 years ago, Israelis have been forced to confront the notion that they may well be better off with him than without him. Assad, like his father before him, has ensured that the Israeli-Syrian border has remained Israel’s quietest front for decades, enabling that country’s northern residents to ﬂourish in an atmosphere of relative peace even as the two nations remain technically in a state of war. The possibility that the Islamic fundamentalist Muslim Brotherhood or radical groups could rise to power in place of Syria’s secular, stable leadership has prompted fear among some Israelis. Watching the Muslim Brotherhood gain a foothold in Egypt’s political system after the ouster of President Hosni Mubarak has only fed an Israeli squeamishness about the prospect of regime change in Damascus. As one member of Israeli cabinet put it, “We know Assad. We knew his father. Of course, we’d love to have a democratic Syria as our neighbor. But do I think that’s going to happen? No.” For now, there is little that Israel can do other than sit and monitor the demonstrations in Syria, which have drawn thousands to the streets over the past 10 days and led to clashes with security services, leaving at least 60 dead. On Tuesday, the Syrian cabinet resigned in an effort to prop up Assad, who is expected to lift a repressive emergency law and ease other restrictions. “We’ve had a dictator, but it’s been very quiet,” a senior Israeli military commander said. “On the other hand, it’s absolutely clear to us that the Syrians play a negative role” in the region. Syria, whose leadership is Alawite, a minority that constitutes an offshoot of Shiite Islam, has long supported Iran and its Shiite ally in south Lebanon, Hezbollah. While Israel sees Iran as Hezbollah’s chief
patron, ofﬁcials regard Syrian support as no less crucial. Israeli military ofﬁcials say the majority of weapons that Hezbollah has stashed in south Lebanon since a 2006 conﬂict with Israel are made or supplied by Syria, including short-range Scud missiles as well as 302mm rockets, which, when ﬁred from southern Lebanon, could reach Tel Aviv. Syrian ofﬁcials have denied supplying weapons to Hezbollah. And in April, after Israel ﬁrst accused Syria of supplying the Scuds to Hezbollah, Hasan Nasrallah, the head of the group, refused to comment. During a visit to Moscow this month, Israeli media reported, Prime Minister Benjamin Netanyahu of Israel pleaded with Russian leaders not to sell Syria anti-ship missiles for fear that they could be transferred to Hezbollah. But his request was rebuffed. Israeli military ofﬁcials said in interviews that most of Hezbollah’s weapons are covertly transferred by truck from arms depots near Damascus to storage facilities in southern Lebanon. Israeli intelligence asserts that Hezbollah has built hundreds of bunkers and ﬁlled them with Syrian-made weapons since 2006, the last time Israel attacked the Shiite militia. A map of alleged Hezbollah installations provided to The Washington Post this week by Israeli military ofﬁcials identiﬁes more than 550 underground Hezbollah bunkers, 300 surveillance sites and 100 other facilities. In releasing the map, the Israeli military appeared to be trying to preempt international criticism of any future offensive against the alleged sites, many of which are located in residential villages alongside hospitals, schools and even in civilian homes. “Our interest is to show the world that the Hezbollah organization has turned these villages into ﬁghting zones,” the senior Israeli commander said. Israeli military ofﬁcials and analysts said Assad’s departure could lead to a break in Syria’s support for Hezbollah. “A different regime is not naturally an ally of Hezbollah and the Iranians,” said Ehud Ya’ari, a commentator on Arab affairs for Israel’s Channel 2 television station.
Iraqi insurgents kill dozens in highly coordinated Tikrit raid BY MOHANNED SAIF AND STEPHANIE MCCRUMMEN Washington Post Service
TIKRIT, Iraq — Uniformed attackers driving military trucks and armed with a car bomb, guns, grenades and suicide belts blasted their way into a provincial government headquarters in this northern city, killing at least 53 people in a highly organized raid, according to witnesses and local ofﬁcials.
Over several hours on Tuesday, the attackers went room to room, tossing grenades down hallways and through doorways and killing local politicians and government workers with shots to the head, according to Iraqi security forces and two witnesses who escaped by jumping out of a secondﬂoor window. More than 90 people were wounded, ofﬁcials said. After an hours-long ﬁre-
ﬁght, Iraqi security forces — who called in U.S. helicopters and soldiers for support — entered the building, but there were no survivors inside. The attackers had either been shot or blown themselves up. Sabah al Bazee, 30, a freelance Iraqi journalist who worked for Reuters news service and other media, was among those killed, Reuters reported. Iraqi ofﬁcials immedi-
ately blamed the attack on al Qaeda-linked insurgents bent on destabilizing Iraq’s fragile government. Tikrit, a predominantly Sunni area and the birthplace of Saddam Hussein, was long a stronghold of groups with ties to al Qaeda, although they have been relatively quiet in recent years. For many Iraqis, the scale and apparent coordination of the attack brought to mind the siege of a Catholic
church in Baghdad in the fall, also blamed on al Qaeda, that killed 68 people. According to a doctor at Tikrit’s Salahuddin Hospital, 53 people were killed Tuesday, while an ofﬁcial at a morgue put the death toll at 75. Although small explosions and, increasingly, assassinations occur almost daily across Iraq, security has improved dramatically. In general, Tikrit and the surrounding Salahuddin
province has become one of the country’s the most secure areas. When attacks come, however, they are often on a large scale. In January, a suicide bomber killed at least 50 people gathered at a police recruiting center in Tikrit. Still, Tuesday’s carnage horriﬁed Iraqis, many of whom fear that violence will worsen after U.S. forces withdraw as scheduled in December.
3/31/2011 2:04:39 AM
THE MIAMI HERALD
THURSDAY, MARCH 31, 2011
CHARLES D. SHERMAN, EDITOR-IN-CHIEF
Looking for luck in the Middle East BY THOMAS L. FRIEDMAN
New York Times Service
here is an old saying in the Middle East that a camel is a horse that was designed by a committee. That thought came to my mind as I listened to U.S. President Barack Obama trying to explain the intervention of the United States and its allies in Libya — and I don’t say that as criticism. I say it with empathy. This is really hard stuff, and it’s just the beginning. When an entire region that has been living outside the biggest global trends of free politics and free markets for half a century suddenly, from the bottom up, decides to join history — and each one of these states has a different ethnic, tribal, sectarian and political orientation and a loose coalition of Western and Arab states with mixed motives trying to ﬁgure out how to help them — well, folks, you’re going to end up with some very strange-looking policy animals. And Libya is just the ﬁrst of many hard choices we’re going to face in the “new” Middle East. How could it not be? In Libya, we have to ﬁgure out whether to
help rebels we do not know topple a terrible dictator we do not like, while at the same time we turn a blind eye to a monarch whom we do like in Bahrain, who has violently suppressed people we also like — Bahraini democrats — because these people we like have in their ranks people we don’t like: pro-Iranian Shiite hard-liners. All the while in Saudi Arabia, leaders we like are telling us we never should have let go of the leader who was so disliked by his own people — Hosni Mubarak — and, while we would like to tell the Saudi leaders to take a hike on this subject, we can’t because they have so much oil and money that we like. And this is a lot like our dilemma in Syria where a regime we don’t like — and which probably killed the prime minister of Lebanon whom it disliked — could be toppled by people who say what we like, but we’re not sure they all really believe what we like because among them could be Sunni fundamentalists, who, if they seize power, could suppress all those minorities in Syria whom they don’t like. The last time the Sunni funda-
Will the Fed do too little again? BY DAVID LEONHARDT
New York Times Service
henever ofﬁcials at the Federal Reserve confront a big decision, they have to weigh two competing risks. Are they doing too much to speed up economic growth and touching off inﬂation? Or are they doing too little and allowing unemployment to stay high? It’s clear which way the Fed has erred recently. It has done too little. It stopped trying to bring down long-term interest rates early last year under the wishful assumption that a recovery had taken hold, only to be forced to reverse course by the end of the year. Given this recent history, you might think Fed ofﬁcials would now be doing everything possible to ensure a solid recovery. But they’re not. Once again, many of them are worried that the Fed is doing too much. And once again, the odds are rising that it’s doing too little. Higher oil prices, government layoffs, Japan’s devastation and Europe’s debt woes are all working against the recovery. Already, a prominent research ﬁrm founded by a former Fed governor, Macroeconomic Advisors, has downgraded its estimate of economic growth in the current quarter to a paltry 2.3 percent, from 4 percent. The Fed’s own forecasts, notes that former governor, Laurence Meyer, “have been incredibly optimistic”. Why is this happening? Above all, blame our unbalanced approach to monetary policy. One group of Fed ofﬁcials and watchers worries constantly about the prospect of rising inﬂation, no matter what the economy is doing. Some of them are haunted by the inﬂation of the 1970s and worry it may return at any time. Others spend much of their time with bank executives or big investors, who generally have more to lose from high inﬂation than from high unemployment. There is no equivalent group — at least not one as inﬂuential — that obsesses over unemployment. Instead, the other side of the debate tends to be dominated by moderates, like Ben Bernanke, the Fed chairman, and Meyer, who sometimes worry about inﬂation and sometimes about unemployment. The result is a bias that can distort the Fed’s decision-making. Just look at the last 18 months. Again and again, the inﬂation worriers, who are known as hawks, warned of an overheated economy. In one speech, a regional Fed president even raised the specter of Weimar Germany. These warnings helped bring an end early last year to the Fed’s attempts to reduce long-term interest rates — even though the Fed’s own economic models said that it should be doing much more. We now know, of course, that the models were right and the hawks
were wrong. Recoveries from ﬁnancial crises are usually slow and uneven. Yet the hawks show no sign of grappling with their failed predictions. It is true that the situation has become more complicated in the last couple of months. Some of the economic data has been encouraging, and inﬂation has picked up. In particular, core inﬂation, which excludes volatile oil and food prices, has increased somewhat. (Overall inﬂation obviously matters more for household budgets, but core inﬂation matters more to the Fed, because it’s a better predictor of future inﬂation than inﬂation itself.) Over the last three months, the Fed’s preferred measure of core inﬂation has risen at an annual rate of 1.4 percent, up from less than 1 percent last year. Still, 1.4 percent remains low — considerably lower than the past decade’s average of 1.9 percent, the 1990s average of 2.3 percent or the 1980s average of 4.9 percent. Unemployment, on the other hand, remains high. By any standard, joblessness is a bigger problem than inﬂation. There is also reason to think that inﬂation will fall in coming months. Rising oil prices alone aren’t enough to create an inﬂationary spiral. Workers also need to have enough leverage to demand substantial raises — which then forces companies to increase prices and, in turn, gives workers further reason to demand raises. In today’s economy, this chain of events is pretty hard to fathom. Adam Posen, a U.S. economist who’s now an ofﬁcial at the Bank of England, told The Guardian this week that he was so conﬁdent inﬂation in Britain would decline that he would resign if it did not. His analysis also applies to the United States. “Wages,” Posen said, “will be the dog that doesn’t bark.” It’s still too soon to know what the Fed should do next. Its current plan is to let the program known as QE2 — for quantitative easing, round two — expire in June. The program started late last year, once the economy’s troubles were impossible to ignore, as an attempt to reduce long-term interest rates by buying Treasury bonds. If the economic data improves and inﬂation does not drop, ending QE2 will be the right call. But if the economy continues to weaken, there will be a strong case for doing more. One option would be to buy both Treasury bonds and mortgage-backed bonds, as the Fed did during QE1, as a way to attack the double dip in the housing market. The problem is that some Fed ofﬁcials already seem to have made up their minds, regardless of the data. In their public remarks, ofﬁcials continue to wring their hands about QE2 rather than prepare people for the possibility of QE3. Some hawks have gone so far as to suggest halting QE2 early.
mentalists in Syria tried to take over in 1982, then-President Hafez al-Assad, one of those minorities, deﬁnitely did not like it, and he had 20,000 of those Sunnis killed in one city called Hama, which they certainly didn’t like, so there is a lot of bad blood between all of them that could very likely come to FRIEDMAN the surface again, although some experts say this time it’s not like that because this time, and they could be right, the Syrian people want freedom for all. But, for now, we are being cautious. We’re not trying nearly as hard to get rid of the Syrian dictator as we are the Libyan one because the situation in Syria is just not as clear as we’d like and because Syria is a real game-changer. Libya implodes. Syria explodes. Welcome to the Middle East of 2011! You want the truth about it? You can’t handle the truth. The truth is that it’s a dangerous, violent, hope-ﬁlled and potentially hugely positive or explosive mess — fraught with moral and political
ambiguities. We have to build democracy in the Middle East we’ve got, not the one we want — and this is the one we’ve got. That’s why I am proud of my president, really worried about him, and just praying that he’s lucky. Unlike all of us in the armchairs, the president had to choose, and I found the way he spelled out his core argument Monday sincere and compelling: “Some nations may be able to turn a blind eye to atrocities in other countries. The United States of America is different. And, as president, I refused to wait for the images of slaughter and mass graves before taking action.” I am glad we have a president who sees the United States that way. That argument cannot just be shrugged off, especially when confronting a dictator like Moammar Gadhaﬁ. But, at the same time, I believe that it is naive to think that we can be humanitarians only from the air — and now we just hand the situation off to NATO, as if it were ASEAN and we were not the backbone of the NATO military alliance, and we’re done. I don’t know Libya, but my
gut tells me that any kind of decent outcome there will require boots on the ground — either as military help for the rebels to oust Gadhaﬁ as we want, or as post-Gadhaﬁ peacekeepers and referees between tribes and factions to help with any transition to democracy. Those boots cannot be ours. We simply cannot afford it — whether in terms of money, manpower, energy or attention. But I am deeply dubious that our allies can or will handle it without us, either. And if the ﬁght there turns ugly, or stalemates, people will be calling for our humanitarian help again. You bomb it, you own it. Which is why, most of all, I hope Obama is lucky. I hope Gadhaﬁ’s regime collapses like a sand castle, that the Libyan opposition turns out to be decent and united and that they require just a bare minimum of international help to get on their feet. Then U.S. prestige will be enhanced and this humanitarian mission will have both saved lives and helped to lock another Arab state into the democratic camp. Dear Lord, please make President Obama lucky.
The pro-Social Security case BY EZRA KLEIN
Washington Post Service
othing unites Democrats like Social Security. No program has worked so well, for so many, for so long. But what about making changes to Social Security? Well, that’s harder. A colleague reported that “Democrats are sharply divided over whether to tackle popular but increasingly expensive safety-net programs for the elderly, particularly Social Security”. They shouldn’t be. I’m on record saying Social Security is the last place in the federal government we should look for cuts. It’s a lean, efﬁcient program that, if anything, is too spartan. In 2009, the average monthly beneﬁt was slightly more than $1,000 — hardly lavish. That makes it one of the stingiest national pension programs in the developed world, actually. And once we ﬁnish phasing in the cuts passed in the ’80s, it’ll replace only about 31 percent of the average beneﬁciary’s income. In a time of underfunded 401(k)s and high unemployment, that’s just not enough for many retirees. Saying Social Security is too generous is like saying a Mini Cooper is too roomy. But the program’s problems don’t end there. It’s underfunded, ill-designed for certain features and facts of the modern world, and — probably most important — overused. Beyond Social Security, the United States’ retirement system is, in general, patchy and insufﬁcient, which leaves retirees too reliant on Social Security. They then learn the hard way that the program is not what they’d hoped. We should do better. And we can. Gene Sperling is now the director of U.S. President Barack Obama’s National Economic Council. But in 2005, he was just another Clintonista in exile with a desk at the Center for American Progress, watching in horror as the Bush administration tried to privatize the crown jewel of the New Deal. In response, he released his own proposal for “a true bipartisan agreement on Social Security reform that increases national savings, individual ownership and ultimately retirement security”. Perhaps predictably, Bush ignored it. Obama should not. Sperling correctly sees that there are two separate problems in our retirement system: Social Security has too little money, and so, too, do most retirees. Fixing the former, as it happens, is the easier task. Sperling suggests a 3 percent surcharge on all income over $200,000, which would wipe out half of Social Security’s shortfall. He suggests the rest could be made up through bipartisan agreement on beneﬁts cuts or tax changes. A simpler solution perhaps would be to uncap the payroll tax that funds Social Security. Right now, income over
$106,000 is protected, meaning someone making $80,000 pays payroll taxes on every dollar of income while someone making $1 million pays on barely one of every 10 dollars. Does that make sense to you? Yeah, me neither. An uncapping would pretty much wipe out the shortfall on its own. Add in some changes to the beneﬁt itself — perhaps beneﬁts for the wealthy could grow more slowly, as they rely on them less — and you’re done. Social Security is fully funded. But Sperling then ventures beyond Social Security and into the broader world of retirement security. He suggests a universal 401(k) that would be layered on top of Social Security. Every U.S. citizen would get one, and for low-income citizens, the government would provide a 2-to-1 match for the ﬁrst $2,000 every year, while moderate-income U.S. citizens would get a 1-to-1 match to the same amount. This would give families a strong incentive to start saving for retirement early and aggressively, all but ensuring that they approach old age with a substantial cushion. As he notes, you could more than pay for this by reinstating the estate tax on those worth multiple millions of dollars. If there’s a ﬂaw in Sperling’s proposal, it’s that aside from closing the funding gap, he pretty much leaves Social Security alone. As Christian Weller, also of the Center for American Progress, points out in a new report, the program itself has developed ﬂaws over time: It’s not set up to handle extreme old age, by which point many U.S. citizens have depleted their savings and
need a bigger beneﬁt to stay aﬂoat; its rules for dealing with the divorced are archaic; the minimum beneﬁt often leaves seniors beneath the poverty line; and the rich are a lot richer than when we last looked at how the program divides its payouts. Many of Weller’s reforms would complement Sperling’s by ﬁxing these problems. Too often, however, the folks most resistant to reforming Social Security are also those most committed to its mission. Many of the program’s defenders are so concerned that conservatives will slash beneﬁts — now or down the road — that they are afraid to open the pension plan to any reforms at all. I think they’re wrong. This country is better than that. A political party that tries to tell ordinary U.S. citizens their retirements are too secure and too long will quickly learn its lesson when the election rolls around. Poll after poll shows the vast unpopularity of cutting Social Security beneﬁts, and Republicans can read those surveys as easily as Democrats can. A politician might as well burn a ﬂag on the Capitol’s lawn. At the heart of Social Security is a simple vision: The richest country the world has ever known can guarantee its citizens a decent retirement. That’s vastly truer now than it was in 1935. Adjusting for inﬂation, our gross domestic product that year was $865 billion. In 2009, it was more than $12 trillion. And Social Security itself has proven an extraordinarily popular and efﬁcient program. But today, the vision doesn’t just need to be defended. It needs to be completed.
3/31/2011 1:21:17 AM
THURSDAY, MARCH 31, 2011
THE MIAMI HERALD
Miami-Dade Pending Home Sales Continue to Rise
otal cumulative pending home sales â€“ including single-family homes and condominiums - in Miami-Dade County increased 18 percent in March compared to a year earlier, from 9,751 to 11,544, and 3.24 percent, up from 11,182, compared to the previous month according to the 23,000-member MIAMI Association of REALTORS and the Southeast Florida Multiple Listing Service (SEFMLS). The number of single-family listings that pended in the month of February increased by 17 percent from 1,280 to 1,498 compared to the previous month and by 20 percent from 1,245 compared to the previous year. The number of condominium listings that pended in February increased by 16 percent from 2,168 to 2,511 compared to the previous month and by 55 percent from 1,617 compared to the previous year. â€œAll market trends indicate continued growth for Miami-Dade Countyâ€™s real estate market,â€? said Jack H. Levine, 2011 chairman of the board of the MIAMI Association of REALTORS. â€œThis is very positive for the local real estate market. Increased pending sales reďŹ‚ect the existence of pent-up demand and should result in strengthening home values as distressed housing inventory continues to be absorbed.â€?
Pending Condominium Contract Activity on the Rise In March, pending sales of condominiums outperformed that of single-family homes. Pending sales of single-family homes increased a 10.1 percent compared to a year ago, from 4,345 to 4,782, and increased two percent from 4,685 the previous month. Pending sales of condominiums in March increased 25 percent from the previous year, from 5,406 to 6,762, and 4.1 percent from the
previous month, when pending condominium sales totaled 6,497. â€œIn addition to the strong impact of international buyers unlike in any other market in the U.S., our market is again experiencing multiple offers reminiscent of the real estate boom of the last decade,â€? said 2011 MIAMI Association of REALTORS Residential President Ralph E. De Martino. â€œBuyers who are offering full and above asking price are still losing out to higher bidders, which is evidence of strong demand.â€?
Broward County Pending Home Sales Rise Again in March Total cumulative pending home sales â€“ including single-family homes and condominiums - in Broward County increased 6.02 percent in March compared to a year earlier, from 8,173 to 8,665, and were up 3.27 percent month-over-month from 8,391, according to the 23,000-MIAMI Association of REALTORS and the local MLS systems. The number of single-family listings that pended in the month of February increased by 20 percent from 1,228 to 1,470 compared to the previous month and by 18.3 percent from 1,243 compared to the previous year. The number of condominium listings that pended in February increased by 14 percent from 2,056 to 1,798 compared to the previous month and by 16 percent up from 1,628 compared to the previous year. â€œIn Broward County, savvy buyers are taking advantage of record affordability and boosting home sales,â€? said Terri Bersach, president of the Broward County Board of Governors of the MIAMI Association of REALTORS. â€œThe fact that pending and closed sales continue to rise is evidence that demand exists for local properties.â€?
THE INTERNATIONAL ECONOMIC FORUM OF THE AMERICAS
Cumulative pending condominium sales in Broward again performed better than that of single-family homes in March. Pending condominium sales in Broward were 12 percent higher than they were in March 2010, up from 4,522 to 5,041, and were 3.3 percent above what they were the previous month. Compared to February 2010, Broward pending sales of single-family homes decreased .74 percent, from 3,651 to 3,624, and decreased .74 from 3,298 compared to the previous month. â€œWe are now seeing median sales prices rise in Broward County, which is an extremely positive sign,â€? said Natascha Tello, president-elect of the Broward County Board of Governors of the MIAMI Association of REALTORS. â€œIncreased future sales will contribute to rising home prices and continue to strengthen our market.â€?
U.S. Pending Sales Fall Year-Over-Year Nationally, pending home sales increased in February with notable regional variations, according to the National Association of RealtorsÂŽ. The Pending Home Sales Index, a national forwardlooking indicator, rose 2.1 percent to 90.8 based on contracts signed in February, from 88.9 in January. The index is 8.2 percent below 98.9 recorded in February 2010. Lawrence Yun, NAR chief economist, says itâ€™s important to look at the broader trend. â€œMonth-tomonth movements can be instructive, but in this uneven recovery itâ€™s important to look at the longer term performance,â€? he said. â€œPending home sales have trended up very nicely since bottoming out last June, even with periodic monthly declines. Contract activity is now 20 percent above the low point immediately following expiration of the home buyer tax credit.â€?
Yun notes there could have been some weather impact in the February data. â€œAll of the regions saw gains except for the Northeast, where unusually bad winter weather may have curtailed some shopping and contract activity.â€? The PHSI in the Northeast fell 10.9 percent to 65.5 in February and is 18.4 percent below a year ago. In the Midwest the index rose 4.0 percent in February to 81.1 but is 15.9 percent below February 2010. Pending home sales in the South increased 2.7 percent to an index of 100.3 but are 5.3 percent below a year ago. In the West the index rose 7.0 percent to 105.6 and is 0.6 percent higher than February 2010. â€œWe may not see notable gains in existing-home sales in the near term, but theyâ€™re expected to rise 5 to 10 percent this year with the economic recovery, job creation and excellent affordability conditions providing conďŹ dence to buyers whoâ€™ve been on the sidelines,â€? Yun said. A sale is listed as pending when the contract has been signed but the transaction has not closed, though the sale usually is ďŹ nalized within one or two months of signing. Increased pending sales are an indication of increased future sales.
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The financial crisis has altered the economic landscape in the U.S. and the rest of the world:
Governor, Florida (USA)
Former President, Republic of Panama
Jonathan Spector President and Chief Executive Officer, The Conference Board Inc.
Mickey D. Levy Chief Economist, Bank of America
Dennis P. Lockhart President and Chief Executive Officer, Federal Reserve Bank of Atlanta
Chief Economist and Vice President, the African Development Bank Group
Jim Adams, Vice President for the East Asia and Pacific Region, The World Bank
â€˘ Which economic indicators
Karen Alderman Harbert, President and Chief Executive Officer, Institute for 21st Century Energy, U.S. Chamber of Commerce JosĂŠ Barrios Ng, Deputy Administrator, Panama Canal Authority
should we be looking at?
Carole Cameron Inge, President and CEO National Institute for the Commercialization of Clean Energy (NICCE)
â€˘ Where should businesses and investors turn for stable profits and ROIs?
Hisham El Sherif Chairman, Nile Capital Warren Jestin, Senior Vice-President and Chief Economist, Scotiabank George LeMieux, Former U.S. Senator, Florida
â€˘ How can international trade contribute to wealth creation for local businesses?
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BUSINESS&SPORTS B THURSDAY, MARCH 31, 2011
THE MARKETS DOW 30
10-YR NOTE CRUDE OIL
Market rallies on positive jobs report BY FRANCESCA LEVY AND DAVID K. RANDALL Associated Press
NEW YORK — Telecommunications companies led a broad stock rally Wednesday following a report that private companies are continuing to add workers. All ten sectors of the benchmark Standard & Poor’s 500 index rose. AT&T led the 30 stocks that make up the Dow Jones industrial average with a 2.2 percent gain. The Dow gained 71.60 points, or 0.6 percent, to 12,350.61. The S&P index rose 8.82, or 0.7 percent, to 1,328.26. The Nasdaq composite rose 19.90, or 0.7 percent, to 2,776.79. The ADP National Employment Report said 201,000 new private sector jobs were added in March. That is roughly in line with the 210,000 analysts had expected. Investors were encouraged by a strong gain in small business hiring, said Ryan Detrick, a strategist at Schaeffer’s Investment Research. The report showed “that things are not as bleak as they seemed a few weeks ago,” Detrick said. The ADP report is seen as a precursor to the government’s March payrolls report due Friday, but the two reports don’t always paint the same picture of the overall labor market. Cephalon surged 28 percent, the most of any stock in the S&P index, after Valeant Pharmaceuticals International offered to take over the biopharmaceutical company for $5.7 billion in cash. Valeant, based in Canada, rose 12 percent. The takeover bid is the latest in a string of deal-related news, another positive sign for investors. “It shows that companies still think there are some good deals out there,” said Detrick. “If they are willing to pay a premium, that’s a good sign for the overall stock market.” The market plodded higher against a backdrop of unsettling international news. Concerns about European debt loomed as Portugal moved closer to needing a bailout and Spain’s central bank forecast a lower growth rate and higher deﬁcit than previously predicted. Seawater near Japan’s crippled nuclear facility tested at its highest radiation levels yet and the plant’s owner publicly acknowledged that four of six nuclear reactors would have to be decommissioned. In Libya, NATO forces initiated a new wave of airstrikes against Gadhaﬁ’s troops. Asset manager BlackRock gained 6.6 percent after Standard & Poor’s said the company will replace Genzyme Corp in the S&P 500 index after the close of trading on Friday. PPG Industries gained 5.9 percent after the industrial chemical company announced that its income forecast was well above Wall Street expectations. Three stocks rose for every one that fell on the New York Stock Exchange. Consolidated volume came to 3.9 billion shares.
U.S.-Colombia trade pact hinges on major changes BY HOWARD SCHNEIDER
Washington Post Service
WASHINGTON — The government of Colombia must make extensive changes to its laws and bolster its protection of union members before a free trade agreement moves forward, a key Democratic lawmaker said in the most explicit statement yet of the hurdles facing the proposed Colombia-U.S. trade deal. The comments by Rep. Sander Levin, D-Mich., ranking member of the Ways and Means Committee and an important voice on trade issues,
shows the quandary faced by the Obama administration. It is trying to push a recently negotiated agreement with Korea through Congress amid Republican demands that long-pending deals with Colombia and Panama move as well. Levin’s comments in a speech Tuesday at the Peterson Institute for International Economics raise the prospect of Democratic opposition to the Colombia deal in particular. He urged the administration to pursue separate action on the different agreements, and to pressure
the Republican House leadership to vote on Korea now. The work to be done on the other agreements, particularly Colombia, can’t be rushed, Levin said. “They need to change their laws and they have to take steps” to ensure that workers can organize and that violence against union leaders is prosecuted, Levin said. Although Levin said he believes the new administration of President Juan Manuel Santos of Colombia is sincere about improving conditions for unions in the country, the reforms
that are needed are complex and have been stymied in the country’s legislature before. They include, for example, reform of Colombia’s labor laws to restrict the use of what Levin called “shell companies” that insulate larger corporations from collective bargaining agreements, and prosecution of several high-proﬁle cases of violence against union leaders. Until those and other actions are taken, Levin said, the administration • TURN TO TRADE, 2B
SUPPLY SQUEEZE JAPAN QUAKE STIRS UNEASE ABOUT GLOBAL SUPPLY CHAIN
New Suzuki vehicles, destroyed by the March 11 earthquake, are piled on the company lot in Sendai, Japan. BY JOE MCDONALD Associated Press
said Jim Lawton, vice president of D&B Supply Management Solutions, a unit of Dun & Bradstreet. Companies can use more suppliers spread over more countries but that would mean they have less bargaining power to lower costs. Manufacturers may hold more inventories. That might mean higher prices for consumers. Tsunami damage and power shortages that idled thousands of Japan’s factories highlighted its role as a key — and sometimes the only — source of auto parts, graphics chips and other high-end components. Lack of parts from Japan prompted General Motors to temporarily shut down a Louisiana factory that makes pickup trucks. Other companies have warned of
BEIJING — A shortage of auto parts and other components after Japan’s earthquake has stirred unease about two pillars of manufacturing: the country’s role as a crucial link in the global supply chain and “just in time” production. Manufacturers slashed costs by adopting Japanese-style small inventories and close links to a tight circle of suppliers. But that left them without a cushion of raw materials to ride out disruptions, forcing factories as far away as Louisiana to close when the March 11 quake and tsunami battered Japanese producers. “There’s no question people are saying: Look, we may have gone too far. Let’s revisit this and do some different things about just-in-time,” • TURN TO JAPAN, 2B
MIKE CLARKE/AFP-GETTY IMAGES
People scavenge through debris outside a Nissan engineering building in Miyagi prefecture, Japan.
U.S. cellphone users get value for money Regulators BY JENNA WORTHAM AND KEVIN J. O’BRIEN
New York Times Service
low-cost phone plans. Some are urging regulators to block the acquisition, which would leave two major companies, AT&T and Verizon, with nearly 80 percent of the wireless market, followed by the much smaller Sprint. AT&T has said the merger will beneﬁt consumers, in part by improving network quality and reach. As they consider the deal, regulators may look abroad to see how competition affects wireless markets. With only three major network operators, the market in the United States would function sim-
ilarly to some European markets, like France, which also has three operators, said J. Scott Marcus, the former chief technology ofﬁcer at the telecommunications company GTE and former Internet policy advisor at the Federal Communications Commission. “It will deﬁnitely become an oligopoly market,” Marcus said. “That will be less good than what one had before, but not awful.” Of course, using other countries as a guide to how consolidation
For U.S. citizens, complaining about big cellphone bills that seem to only get bigger is standard practice. But they may actually be getting a pretty good deal — globally speaking. While cellphone customers in the United States tend to pay more every month than consumers in other developed countries, they get more for their money in terms of voice and data use. • TURN TO CELLPHONE, 2B For example, U.S. consumers pay an average of 4 cents for a minute of talk time, while Canadians and the British pay more than twice that, according to recent data from Merrill Lynch and Bank of America. In Japan, where the top three wireless carriers control 97 percent of the market, locals pay 22 cents a minute. “Pricing is what sets the U.S. apart from the rest of the world,” said Sam Paltridge, an analyst at the Organization for Economic Cooperation and Development. “Americans spend less than average on communications.” The question for regulators in Washington is how AT&T’s $39 billion bid to buy T-Mobile might change that. Analysts and MIAMI HERALD WIRE PHOTO industry experts worry that the U.S. users tend to talk nearly twice as much as people in most deal could hurt consumers, in particular by eliminating T-Mobile’s other developed countries.
propose rules on securitized mortgages BY BEN PROTESS
New York Times Service
Federal regulators, seeking to outlaw a leading cause of the ﬁnancial crisis, have voted to propose new rules that would prohibit Wall Street banks from selling packages of risky mortgages to investors without holding onto a stake in the loans. The proposed rule would require banks to retain at least 5 percent of the credit risk on securities backed by mortgages on all but the safest loans, leaving the banks with “skin in the game.” So-called qualiﬁed residential mortgages, conservative loans that meet strict underwriting criteria, would be eligible for an exemption. Months of contentious debate, most of it focused on the deﬁnition of qualiﬁed residential mortgage, led up to the vote. Some banks • TURN TO MORTGAGE, 2B
3/31/2011 4:20:48 AM
THURSDAY, MARCH 31, 2011
THE MIAMI HERALD
Two-thirds of oil and gas leases in Gulf inactive BY JULIE PACE
WASHINGTON — More than two-thirds of offshore leases in the Gulf of Mexico are sitting idle, neither producing oil and gas, nor being actively explored by the companies who hold the leases, according to a Department of Interior report. Those inactive swaths of the Gulf could potentially hold more than 11 billion barrels of oil and 50 trillion cubic feet of natural gas, Interior said in the report obtained by The Associated Press. U.S. President Barack Obama ordered the report earlier this month amid pressure to curb a spike in gasoline prices following instability in the oil-rich Middle East. The White House said Obama would outline his
plans for U.S. energy security in a speech in Washington Wednesday. The inefﬁciencies detailed in the Interior Department report also extend to onshore oil and gas leases on federal lands, with 45 percent of those leases deemed inactive. The department said it is currently exploring options to provide companies with additional incentives for more rapid development of oil and gas resources from existing and future leases. “These are resources that belong to the American people, and they expect those supplies to be developed in a timely and responsible manner and with a fair return to taxpayers,” Interior Secretary Ken Salazar said in the report. Congressional Democrats
have already introduced socalled “Use it or Lose it” legislation on Capitol Hill that would impose an escalating fee on the oil and gas companies who hold leases they’re not actively using. The oil and gas industry promptly disputed the administration ﬁndings. “The majority of these leases are always turned back because we can’t ﬁnd resource in commercial quantities,” said Jack Gerard, the president and chief executive of the American Petroleum Institute. “To suggest that we’re sitting on our hands is a pure distraction.” Tuesday’s report comes against the backdrop of rising gas prices as the busy summer travel season approaches. Republicans put the blame for the increased
costs on Obama’s policies, pointing to the slow pace of permitting for new offshore oil wells in the wake of last summer’s massive Gulf spill and an Obama-imposed moratorium on new deepwater exploration, though experts say more domestic produc tion wouldn’t immediately impact prices. Washington Rep. Doc Hastings, Republican chairman of the House Natural Resources Committee, said Tuesday that he would introduce three bills to increase offshore energy production, including one that would set would speed up the permitting process by setting a 30-day timeline for the administration to approve or deny applications. GOP leaders also hit hard on Obama’s comments last
week in Brazil when he said the United States wants to be a “major customer” for the huge oil reserves Brazil recently discovered off its coast. “Here we’ve got the administration looking for just about any excuse it can ﬁnd to lock up our own energy sources here at home, even as it’s applauding another country’s efforts to grow its own economy and create jobs by tapping into its own energy sources,” Senate Minority Leader Mitch McConnell said Tuesday. Obama has rejected the criticism of his energy policies, saying that domestic oil production rose to a sevenyear high last year. “Any notion that my administration has shut down oil production might make
Quake stirs unease about global supply chain • JAPAN, FROM 1B
possible disruption in supplies of cellphones, personal computers and other goods. Chief executives embraced “just in time” production in the 1990s, imitating Japan’s automakers and other manufacturers. They boosted proﬁts by cutting stockpiles of parts and won discounts by buying more parts from a smaller group of suppliers. “All these things have made companies lower-cost and much more competitive but they have made them much more brittle in cases like this,” said Lawton, a former procurement executive for Hewlett-Packard. GM, Nokia and other major companies said they were closely watching their supply chains in Japan but declined to say how their long-term strategy might change. Already, suppliers of electronics and other components in Taiwan and Southeast Asia are seeing a spike in orders as customers look for alternatives to Japan or Japanese companies outsource work from their idled factories. “There has been indeed an increase in our orders because many Japanese chipmakers have suffered damage from the quake and tsunami,” said chief executive Morris Chang of Taiwan Semiconductor Manufacturing. The
company is the biggest contract producer of chips used in cellphones, computers and video games. Taiwan’s Foxconn Technology Group, which manufactures Apple’s iPod and other products, and Wistron have received extra orders from Sony to produce TV screens and digital cameras, according to local news reports. Spokespeople for both companies declined to conﬁrm that. South Korean companies, which compete with Japan in electronics, autos and steel, stand to beneﬁt but have avoided talking about that publicly, possibly for fear of appearing to proﬁt from a disaster that killed as many as 18,000 people. Samsung and Hynix Semiconductor could sell more ﬂash memory chips to Apple and other customers that used to rely on Japanese suppliers, said Lee Min-hee, who follows the industry for Dongbu Securities in Seoul. Samsung said in a written statement it was assessing the impact of the disaster but did not respond to questions about how its business might change. Also in South Korea, LG Chem used chemicals from Japan to make batteries for laptop computers and electric cars but might switch to Korean suppliers or make parts itself once its stock-
lobbied hard to broaden the deﬁnition, but without much luck. Banks did win leeway for choosing how to retain the risk. The Federal Deposit Insurance Corporation’s board voted unanimously in favor of the proposal Tuesday, opening it up to public comment. The proposal was mandated by the Dodd-Frank Act, the ﬁnancial regulatory law signed by President Barack Obama in July. “This will encourage better underwriting by assuring that originators and securitizers cannot escape the consequences of their own lending practices,” Sheila C. Bair, the FDIC chairwoman, said at a public hearing Tuesday. But for now, the proposal is unlikely to cause much of a shake-up in the mortgage
business. It would not apply to securities carrying a government guarantee, which represent more than 90 percent of the market. The new proposal “pretty much preserves the status quo in the mortgage market,” Jaret Seiberg, an analyst at MF Global’s Washington Research Group, said in a report Tuesday. The rules are not yet complete — and industry lobbyists are only getting started. Banks, home builders and other industry groups argue that the new restrictions would cause the private mortgage market to shrink even further, making it harder for consumers to obtain loans. Bair says that will not happen. “The intent of this rulemaking is not to kill private mortgage securitization — the ﬁnancial crisis has already done that,” she said.
Colombia trade pact hinges on major changes • TRADE, FROM 1B
Nissan’s president and chief executive Carlos Ghosn, second from left, inspects a earthquake and tsunami-ravaged plant in Iwaki, northeastern Japan. piles run low, said a company spokesman, Terry Lee. “In the long-term if Japan is struggling it could cause some trouble,” Lee said. Japan’s own makers of autos and electronics already were shifting production to China and Southeast Asia in search of lower costs. That might accelerate as they look for less disaster-prone manufacturing bases. “Thailand stands to beneﬁt from potential relocations of production sites as part of global supply risk management efforts,” said a report by
analyst Julia Goh of Malaysia’s CIMB Research. In the short term, customers face a supply squeeze because manufacturers permanently scrapped production capacity after demand plunged in the 2008 global crisis. Competition for scarce electronics and other parts might push up prices, cutting proﬁts or raising costs for consumers. Companies that need to switch to different components might be forced to redesign products. The supply shock will add to pressure to design prod-
ucts made of standardized, widely available parts. That change already is under way in computers and electronics but automakers still use many customized components. Buyers might need to deal with new suppliers in unfamiliar countries, requiring them to spend time and money to learn about possible political or legal risks. Companies that were caught off guard by the supply disruption are likely to shake up their design and procurement departments, said Lawton.
Regulators propose rules on securitized mortgages • MORTGAGE, FROM 1B
for a good political sound bite, but it doesn’t match up with reality,” Obama said during a White House news conference earlier this month. Obama has long said that oil and gas remain critical components of U.S. energy policy, while also promoting clean energy technologies like wind, solar and nuclear. In January’s State of the Union address, Obama said he wants 80 percent of U.S. electricity to be generated by clean energy sources by 2035. Nuclear power has come under more intense scrutiny in recent weeks after an earthquake and tsunami in Japan severely damaged a nuclear power plant there. Despite the uncertainty at that facility, Obama says he remains committed to developing nuclear power in the United States.
Still, banks are sure to push for a more ﬂexible deﬁnition of qualiﬁed residential mortgages. “I don’t think they’ll go bananas,” said Jason Kravitt, a partner at the law ﬁrm Mayer Brown and founder of its securitization practice. “But the industry will have to work very hard indeed to broaden the deﬁnition of qualiﬁed mortgages.” Under the proposal, a bank could securitize a loan without retaining a stake if a borrower put a 20 percent down payment on a home purchase. Some industry insiders complain that 20 percent is excessive. “By mandating a 20 percent down payment on qualiﬁed residential mortgages, the administration and federal regulators are excluding those without huge cash reserves — which constitutes most ﬁrst-time home
buyers and many middleclass households — from a chance to buy a home,” Bob Nielsen, chairman of the National Association of Home Builders, said in a statement. The proposal also would require borrowers to be current on other loans and to meet an income threshold if a bank wanted the exemption. The proposal would not exempt notoriously risky loans, like interest-only mortgages and adjustablerate mortgages that feature potentially huge interest rate increases. Regulators reassured lenders that the government was open to tweaking the requirements or scrapping them in favor of an alternative. But some banks are at odds on the best approach. And Wall Street, Kravitt said, is unlikely to force an
overhaul of the proposal, which would allow banks to have some choices about how they kept the 5 percent stake. The proposal was drafted as a joint effort by the FDIC and several other federal agencies, including the Securities and Exchange Commission and the Department of Housing and Urban Development. As the lending industry scrutinized the proposal, some securities experts praised the regulators. “There’s nothing wrong with securitization, but it won’t work if you don’t have an honest assessment of the risk of the loans,” said D. Anthony Plath, an associate professor of ﬁnance at the University of North Carolina, Charlotte. “Without skin in the game, you’re playing musical chairs with mortgages.”
should not submit the Colombia deal for ratiﬁcation. “The president has been clear that it is his goal to send three trade agreements to Congress,” said Carol Guthrie, a spokeswoman for the U.S. trade representative’s ofﬁce. Levin’s talk reﬂects the still-deep national divisions over trade, with traditional Democratic voices arguing that existing agreements have cost the U.S. manufacturing jobs, and organized business groups and Republican leaders calling for faster action on a variety of proposed trade treaties. U.S. trade ofﬁcials have held several rounds of talks with the Santos administration in recent weeks. Although they have said they hope to complete negotiations by the end of the year, they have not detailed what they are asking Colombia to do to satisfy what U.S. Trade Representative Ron Kirk has referred to as “core American values” on labor and union rights. Like the proposed Korea deal, the Panama and Colombia free-trade pacts were negotiated by the Bush administration, but have languished without congressional ratiﬁcation. Negotiations between the United States and Korea focused on commercial issues, and Kirk was able over several months of talks to win signiﬁcant concessions, including tariff and regulatory changes that prompted the United Auto Workers to offer an important union endorsement of the pact. Levin also supports it. The issues surrounding Colombia, however, are a more direct test of Obama’s campaign pledge to retool U.S. trade policy so that it does not extend free-trade privileges to countries with lower labor, environmental and other standards. While the approach has a moral dimension, it is also meant to keep U.S. workers from competing against countries where goods can be produced more cheaply because the laws are lax.
As U.S. regulators weigh AT&T’s bid for T-Mobile, a look abroad • CELLPHONE, FROM 1B
may play out is tricky, because every market is shaped by local cultural and business factors. In Japan, for example, the average amount that consumers spend on data is the highest in the developed world — but not because of a lack of competition in the mobile industry. Japanese cellphone owners like to do a lot of browsing on their cellphones, and they are prepared to pay for that, said Steven Hartley, an analyst at Ovum, a research ﬁrm in
London. Hartley said over 40 percent of mobile operators’ revenue in Japan comes from data services, compared with 25 percent in the United States. U.S. users tend to talk nearly twice as much as people in most other developed countries, which led to the popularity of bigger buckets of voice minutes. And plans that offer nationwide calling with no roaming fees have also kept prices low. In Europe, which in theory is one market but is actually divided into many smaller national markets, roaming charges are
a frequent and bothersome reality. Europeans and Asians were quicker than U.S. citizens to embrace so-called prepaid phone service, in which customers do not have a contract and pay for chunks of voice minutes and data capacity as they go. This means phone owners are generally not tied to a single wireless company and have more ﬂexibility to switch among services. Some even carry around multiple SIM cards, the ﬁngernail-size chips that activate a cellphone for use, and decide which one to in-
stall based on which offers the cheapest rate for the country they are calling or visiting. For example, someone living in Spain who often visits family in France might purchase SIM cards for wireless services in both countries. And phone customers outside the United States tend to have more handset choices, since cellphones are less likely to be “locked” for use with one particular carrier. But they have fewer opportunities to upgrade cheaply, because carriers are less likely to offer a free or discounted phone to those who
commit to a one- or two-year contract. Regulators in the United States could require AT&T to make some concessions for the T-Mobile deal to be approved, like giving up wireless spectrum in some cities. The review by the Justice Department and the FCC could take several months, and analysts say it could be a year before the full effect of the deal is clear. Some analysts say that the combined company might actually lower prices to better compete with Verizon. But others warn of side ef-
fects. Paltridge of the OECD said the overall consequence of combining AT&T and T-Mobile might be broader than most consumers think. For example, it would leave only one U.S. carrier using GSM, the world’s most common cellular standard. That means AT&T could raise rates for U.S. citizens using their phones overseas and for foreigners visiting the United States. “If the two merged, there would be an international angle to the competition issue,” he said.
3/31/2011 3:09:26 AM
THE MIAMI HERALD
GE to buy power components firm for $3.2B BY TOM ZELLER JR.
New York Times Service
A limo once belonging to mobster Bugsy Siegel is on display at the Tropicana Hotel and Casino in Las Vegas.
New attraction highlights Las Vegas’ mob roots From Miami Herald Wire Services
Speakeasies, bootleggers, crime bosses and tough-guy accents pay homage to Las Vegas’ mob roots in a pair of new attractions showcasing Sin City’s criminal history. The Tropicana casino and hotel opens its new “Mob Experience” Wednesday. The Las Vegas Strip attraction features gangster memorabilia and commentary from ﬁlm mobsters James Caan, Mickey Rourke and Frank Vincent. A second attraction, the Las Vegas Museum of Organized Crime and Law Enforcement, is slated to open in December. The publicly-funded museum organized by Las Vegas mayor and former mob lawyer Oscar Goodman will highlight money laundering schemes, mob violence and the history of organized crime in Las Vegas and other cities. IRISH LIFE WITHDRAWS SHARES FROM MARKETS Irish Life & Permanent withdrew its shares from Irish and British stock exchanges Wednesday amid speculation that the bank faces imminent nationalization. The move, announced a day after Irish Life & Permanent shares plunged 46 percent to less than ¤0.41 ($0.58), followed media reports that Ireland’s government will be required to inject vast sums into the company after new stress-test ﬁndings on four Irish banks are published Thursday. In a statement, Irish Life & Permanent said the speculation of an imminent bailout and nationalization meant its shares must be withdrawn from trade until the Irish Central Bank unveils the stress-test ﬁndings. VALEANT OFFERS TO BUY CEPHALON FOR $5.7B Canada’s Valeant Pharmaceuticals made a bid to acquire biopharmaceutical company Cephalon for $5.7 billion in cash, and said it would press to install a slate of hand-picked directors to its would-be target’s board next week. Valeant resorted to airing out its proposed takeover bid after Cephalon’s board didn’t engage in talks after a series of behind-the-scene overtures. The proposal by Valeant amounts to $73 a share about a 27 percent premium over Frazer, Penn.-based Cephalon’s closing price before the announcement. U.S. PENALIZES BELARUS FIRM FOR HELPING IRAN The Obama administration has penailized a stateowned energy company in Belarus over a $500 million investment with an Iranian ﬁrm accused of contributing to Iran’s suspect nuclear program. The U.S. State Department announced it had hit Belarusneft with penalties that cut its access to U.S. markets over a 2007 contract it signed with NaftIran Intertrade to develop Iran’s Jofeir oilﬁeld. The penalties include a ban on U.S. export licenses, loans and government contracts. The sanctions were imposed under U.S. laws that seek to punish Iran for failing to prove its nuclear program is peaceful by penalizing foreign businesses that invest in its energy sector. U.K. AGENCY ASKS BAA TO SELL MORE AIRPORTS BAA, the owner of Heathrow airport, must sell another London airport and one in Scotland to promote greater competition, Britain’s anti-monopoly agency said Wednesday. In a preliminary ruling upholding a decision two years ago, the Competition Commission said it believed passengers and airlines would beneﬁt if BAA sold London Stansted and either one of its Edinburgh or Glasgow facilities. The commission said it planned to make a ﬁnal ruling in May or June. BAA, which had already been forced to sell London Gatwick airport two years ago, said it believed conditions had changed since 2009 but gave no indication whether it would appeal. AIRLINES REDUCE FLIGHTS TO JAPAN Cathay Pacific Airways and Qantas Airways have cut ﬂights to Japan as concerns about possible radiation leaks from a crippled nuclear-power plant deter travelers from visiting the world’s third-largest economy. Cathay predicted “several months” of weak demand on Japan routes as it announced plans to pare Tokyo, Osaka and Nagoya services for two weeks starting April 1. Qantas’s mainline unit and its budget arm Jetstar will both cut ﬂights within the next six weeks, the Sydney-based company said today. Japan Airlines, Singapore Airlines and China Airlines have also cut capacity to Tokyo as engineers struggle to repair the Fukushima Daiichi nuclear plant, north of Tokyo, following a March 11 earthquake. TIME WARNER CHIEF’S PAY CLIMBED 35% IN 2010 Time Warner chairman and chief executive Jeffrey Bewkes received compensation for 2010 valued at $26.1 million, up 35 percent from what he took home in 2009 as the media company beneﬁted from strong demand for its television content and cost cuts in publishing. Bewkes, 58, received a salary of $2 million in 2010, up 14 percent year-over-year. His performance-based bonus of $14.4 million marked a 19 percent increase from 2009 levels. Bewkes received stock valued at $5.5 million on the day it was granted and options valued at $4.1 million — an increase of 81 percent and 74 percent, respectively, over his 2009 awards.
THURSDAY, MARCH 31, 2011
General Electric announced that it plans to spend $3.2 billion for a 90 percent stake in Converteam, a company based in Massy, France, that specializes in highefﬁciency electric power conversion components like motors, generators, drives and automation controls. The components are used across a variety of industries at the core of GE’s industrial and energy operations, including its oil and gas initiatives, as well as solar and wind power. Under the agreement, which is expected to close during the third quarter of 2011, executives at Converteam would retain a 10 percent stake in the company, and management at both companies would buy
any remaining shares over the next two to ﬁve years. In a statement, GE said the price for those shares would vary but would probably be no more than $480 million. The move is the latest in a string of energy infrastructure acquisitions for GE, which also picked up the well-support unit of the John Wood Group for $2.8 billion last month, as well as Wellstream Holdings, the British oil services company, for $1.3 billion in December. It also bought Dresser, a manufacturer and servicer of natural gas engines, fueling systems and other components, for $3 billion last fall. Joseph R. Mastrangelo, a vice president with GE’s oil and gas division, said the acquisition would allow the company and its industrial and offshore oil and gas cus-
tomers, for example, to readily replace inefﬁcient ﬁxedspeed drive technology with Converteam’s more ﬂexible variable-speed systems, saving energy and reducing costs. Converteam also makes converters that smooth the intermittency bumps that make solar and wind power difﬁcult to integrate with other sources of electricity. Roughly a quarter of the world’s electricity is used to turn rotating machines in all manner of industrial and power generating applications, according to GE. Making highly engineered components designed to make those processes as efﬁcient as possible is an increasingly competitive — and lucrative — ﬁeld, the company said. The sector was valued at roughly $30 billion last year,
and alongside Converteam, companies like ABB, Siemens, Emerson and Rockwell are trying to capture a piece of the market. Many analysts agreed that the acquisition was in keeping with GE’s overall quest to expand its energy infrastructure operations — though some noted that Converteam’s earnings before interest, taxes, depreciation and amortization for 2010, about $240 million, were much smaller than the deal’s $3.2 billion price. “It seems a bit expensive,” said Daniel Holland, an analyst with Morningstar. “The company has been very forthright about wanting to build out its exposure into more end markets, so it’s not entirely unexpected. It’s just a little bit on the pricey side, that’s all.”
S&P cuts rating for Portugal, Greece BY MATTHEW SALTMARSH
New York Times Service
Standard & Poor’s said that it has cut its sovereign credit ratings for Portugal and Greece, piling further pressure on the two countries with heavy debt loads, weak economies and moribund banks. S&P cut Portugal’s rating to BBB- from BBB, with a negative outlook, the agency’s second downgrade of the country since Friday. BBBb- is the agency’s lowest investment grade rating, and is just one notch above junk. The Greek rating, which had already been cut to junk, was lowered to BB- from BB+. Richard McGuire, a ﬁxed income strategist at Rabobank in London, said the steps conﬁrmed investor perceptions that Greece would have to default on some of its debt and that a similar outcome was “increasingly likely” for Portugal. He added that the European bailout mechanisms were inadequate, likening them to attaching a ﬁrst-aid bandage “to a festering wound”. The Portuguese government collapsed last week after it was unable to push further measures through Parliament to plug its deﬁcit and fend off the need for outside aid. The country now faces weeks of political uncertainty before holding national elections. S&P said Portugal would probably need an international bailout. Lisbon has about ¤9 billion ($12.7 billion) of bond redemptions falling due in April and June. Portugal’s cash position is sufﬁcient to cover the April redemption, but not the one in June, analysts said. The yields on benchmark eurozone government bonds pushed higher after the an-
Borrowing rates hit new highs LONDON — (AP) — Portugal’s hopes of avoiding a ﬁnancial bailout are fading as the country’s borrowing rates continue to spiral to new euro-era highs. The yield on the ten-year government bonds rose another 0.03 percentage point to 8.02 percent, the nouncement of the downgrades. The yield on the Portuguese 10-year note hit 7.8 percent, around its highest level since the inception of the euro. McGuire said that investors had been dumping short-dated Portuguese debt this week to protect themselves from default, making it harder for Lisbon to raise money by issuing short-dated bills and hence
highest level since the country joined the 17-nation euro currency in 1999. Analysts estimate Portugal would need a bailout of up to ¤80 billion ($113 billion). Portugal faces a key test in April when it has to rollover ¤4.5 billion. make it to June without a bailout. If the other credit agencies, Fitch and Moody’s Investors Service, both downgrade Portugal by one more notch it will cost investors 5 percent more to use its debt as collateral in exchange for loans from the European Central Bank. S&P said Portugal was likely to have to turn to the European Stability Mecha-
nism, which is being set up by European countries, for aid. Unlike Greece, Portugal might be able to avoid restructuring its debt, but the agency said that the government’s unsecured debt, or debt issued without the security of an underlying asset, would probably be subordinated to future loans from the mechanism. The agency also cited “growing risks to Greece’s budgetary position”. Recently released provisional data on the government’s 2010 balance indicated “a relatively higher cash deﬁcit and larger outstanding spending arrears than planned,” it said. That suggests that the 2010 deﬁcit could exceed the government’s goal of 9.6 percent of gross domestic product. It also said the government was unlikely to hit its 2011 budget deﬁcit goal of 7.5 percent of GDP.
Portugal’s Prime Minister Jose Socrates talks with journalists in Lisbon.
Former Galleon worker tells of insider trades BY PETER LATTMAN
New York Times Service
Despite his impeccable pedigree, Adam Smith still thought he needed an edge on Wall Street. A Boston native, Smith earned undergraduate and business degrees from Harvard. At the peak of the dotcom boom in 1999, he landed a prestigious post as a technology banker at Morgan Stanley. Three years later, Raj Rajaratnam invited Smith to join his ﬁrm, the Galleon Group, which was considered one of the industry’s elite hedge funds. But Smith, in U.S. District Court on Tuesday, described how he helped Rajaratnam add to his prodigious wealth by trading on illegal stock tips. “I was tasked with doing research, getting an edge,” said Smith, the ﬁrst former Galleon employee to testify in the insider trading case against Rajaratnam. Smith, who has pleaded guilty, faces up to 25 years in prison. But by cooperating with the government in its case, he hopes to obtain a lesser sentence. Smith, 39, wearing wire-rimmed glasses, a Hermes tie and oxfords, told the jury how he routine-
ly bought and sold shares of technology companies based on inside information gleaned from contacts in Asia and the Silicon Valley. “I shared it with Raj,” Smith said multiple times on the witness stand, explaining that whenever he received conﬁdential information about a company, he passed it on to his boss. Smith took the jury through six vignettes involving technology companies like Intel and Advanced Micro Devices. In one incident, he described developing a relationship with an executive in Taiwan who worked at Intersil, a semiconductor company. Once a quarter, Smith traveled to Taiwan to meet with the executive, Jason Lin. The two initially discussed industry issues and “more qualitative types of information”, Smith said. Over time, Smith said that he asked Lin to be more speciﬁc, and eventually Lin started giving him Intersil’s quarterly revenue numbers in advance of the company’s public announcement. Andrew Michaelson, the prosecutor, asked Smith why he trafﬁcked in inside information.
“I was getting an edge on a company,” Smith said. “My motivation was to improve the proﬁtability of my ﬁrm and to help Raj.” Michaelson asked Smith to deﬁne “an edge”. Smith said “an edge” was a source that provided insights into buying or selling a stock that would vary from the Wall Street consensus. “It’s the key component to arbitraging consensus, which was essentially our strategy,” he said. “Whenever an event would occur that would vary from consensus, we would want an edge.” Lin’s information helped Smith in his research on Intersil. It would help “build my Excel model,” Smith explained. When Michaelson asked Smith if he also did actual security analysis on Intersil, Smith said that he did, adding that he really did not consider the conﬁdential revenue numbers provided by Lin to be legitimate research. “Getting the number is more like cheating on the test,” Smith said. Smith also said he received advance word on merger deals from a former investment banking colleague at Morgan Stanley. He testiﬁed that the
banker, Kamal Ahmed, told him about Integrated Device Technology’s planned acquisition of Integrated Circuit Systems in 2005. When the deal was announced in June 2005, Smith said he had a tinge of regret about his misdeeds. “I was concerned that I had been responsible at least in part for Galleon being involved in a stock trade based on inside information,” Smith said. “I remember after the announcement having a sinking feeling in my stomach that this might be a problem, but the reality of it caused me to reﬂect, and I had a moment of worry.” But, Smith added, “No one spoke to me about it so I moved on.” Although Smith was serious during his testimony, his wit was on display when the government showed a series of incriminating instant-message exchanges between Smith and a Galleon colleague. Smith’s instant-message user name was “smithinvshand” — an apparent reference to another Adam Smith, the 18th-century economist who coined the phrase “invisible hand”.
3/31/2011 4:06:22 AM
THURSDAY, MARCH 31, 2011
S&P 500 1,328.26
30-YR T-BONDS 4.52%
CRUDE OIL $104.27
6-MO T-BILLS .16%
THE MIAMI HERALD GOLD $1,423.80
Ced[oCWha[ji 1,360 1,300
Close: 1,328.26 Change: 8.82 (0.7%)
Close: 2,776.79 Change: 19.90 (0.7%) 10 DAYS
IjeYaiH[YWf NYSE Vol. (in mil.) 3,885 Pvs. Volume 3,532 Advanced 2220 Declined 824 New Highs 263 New Lows 11
NASD 1,779 1,610 1831 786 191 23
HIGH DOW 12383.46 DOW Trans. 5307.37 DOW Util. 415.40 NYSE Comp. 8432.17 NASDAQ 2779.95 S&P 500 1331.74 S&P 400 985.89 Wilshire 5000 14140.06 Russell 2000 840.76
LOW 12280.07 5262.67 409.60 8345.38 2763.77 1321.89 978.59 14003.19 832.76
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Chg +2.06 -.18 +.50 +.01 +.64 +.18 -1.19 +.52 +.72 +.84 +.28 +.43 +2.92 +.13 -.16 +.68 +.66 +.43 +1.74 +.16 -.33 +.80 +1.10 +1.32 +1.20 +.08 +.59 -.42 +.02 +.19 +.37 +.26 +.82 -.10 +.46 +.44 +.05 +.21 +.21 +.10 +.71 +3.57 -.06 +.18 -.21 +.82 +1.15 +.95 -.20 +.29 -.36 +.81 +.50 +.68 +.32 +.38 +.14 -.09 -.59 +.03 -.65 +.04 -.01 +.51 -.46 +.99 +.30 +1.15 +.60 +.54 +.85 +.69 +.33 +.73 +.08 -.08 -.15 +.40 +1.95 -.02 -.09 -1.37 +.47 +.44 +.06 +.17 +.26 +.52 +.10 +.14 +.52 +.45 +.51 +.12 +.34 -.18 +.12 +.99 -.07 +.47 -.05 +.52 +.63 +.29 +.90 +1.60 +.44 -.80 +.71 +.33 +.71 +.05 +.09 +.21 +.23 +2.45 +.31 -2.36 -.26 +.29 +.57
Name NY CmtyB NewellRub NewﬂdExp NewmtM NewsCpA NewsCpB Nexen g NextEraEn Nidec NielsenH n NikeB NipponTT NobleCorp NobleEn NokiaCp Nomura Nordstrm NorﬂkSo NoestUt NorTrst NorthropG Novartis NovoNord NuanceCm Nucor Nvidia OReillyAu OcciPet Omnicom ONEOK Oracle Orix PG&E Cp PNC POSCO PPG PPL Corp Paccar PallCorp Panasonic ParkerHan Paychex PeabdyE Pearson PennWst g Penney PepsiCo Perrigo PetChina Petrohawk PetrbrsA Petrobras Pﬁzer PhilipMor PhilLD PhilipsEl PioNtrl PlainsAA PlumCrk Polo RL PortglTel Potash s Praxair PrecCastpt PriceTR priceline PrideIntl PrinFncl ProctGam ProgrssEn ProgsvCp ProLogis Prudentl Prud UK PSEG PubStrg QEP Res n Qualcom QstDiag QwestCm Randgold RangeRs Raytheon RedHat ReedElsNV ReedEls plc RegionsFn RepubSvc RschMotn ReynAm s RioTinto s Riverbed s RockwlAut RockColl RogCm gs Roper RossStrs Rovi Corp RoyalBk g RBScotlnd RylCarb RoyDShllB RoyDShllA Ryanair SAIC SAP AG SK Tlcm SLGreen SLM Cp STMicro SABESP Safeway StJude Salesforce SanDisk Sanoﬁ SaraLee Sasol Schlmbrg Schwab ScrippsNet SeadrillLtd
17.16 -.21 19.36 +.10 76.07 -.38 54.12 +.63 17.51 +.25 18.56 +.27 24.98 +.38 54.98 +.30 21.83 +.52 27.82 -.12 76.75 +.39 22.72 +.09 46.12 +.65 98.00 +.30 8.62 -.06 5.28 +.13 44.90 +.90 68.99 -.57 34.77 +.52 51.12 +.57 68.59 +.38 54.46 +.02 124.44 +3.02 19.55 +1.29 46.63 +.01 18.45 -.72 57.85 +1.02 103.76 -.03 48.86 +.54 65.93 +.62 33.05 -.11 47.46 -.49 43.99 +.43 62.93 +.90 117.57 +1.32 95.93 +5.34 25.14 +.34 51.89 +1.58 56.79 -.21 12.73 +.14 94.65 +.33 31.31 +.15 72.28 +.51 17.86 +.30 27.82 +.33 36.64 +.46 65.05 +.89 78.54 +1.55 150.40 +4.15 24.11 +1.33 35.41 +.37 40.41 +.26 20.34 -.04 65.70 +.44 53.37 +4.26 32.06 +.19 102.81 +.04 63.47 +.39 43.14 124.85 +1.53 11.72 -.04 58.18 +1.03 101.02 +.10 147.72 -.43 66.19 +1.02 504.00 +12.31 43.18 -.08 31.79 +.09 61.97 +.69 46.36 +.40 21.15 +.07 15.90 +.41 61.03 +.43 23.25 +.42 31.69 +.38 110.30 +1.24 40.11 -.07 54.51 +.60 57.35 +.39 6.93 +.04 74.02 +.22 57.55 +1.60 50.44 -.26 46.10 -.81 25.70 +.49 34.51 +.86 7.23 +.08 30.14 +.15 57.03 -.02 35.97 +.32 71.56 +1.44 37.78 -.06 94.03 +.13 63.97 +.47 36.47 +.21 85.73 -.04 71.71 +1.53 54.78 -.01 61.92 +.67 13.30 -.21 42.21 +.81 73.20 +.48 72.80 +.50 27.70 -.02 16.83 -.13 61.38 +.74 18.57 +.24 74.56 +1.39 15.49 -.02 12.63 +.21 57.34 +1.64 23.56 +.39 51.71 +.16 134.49 +7.09 45.41 -.45 35.13 +.47 17.70 -.22 56.98 +1.48 93.65 -.71 18.32 +.45 49.89 +1.00 36.72 +.43
SeagateT SearsHldgs SempraEn SensataT ShawC gs Sherwin Shinhan Shire SiderNac s Siemens SigmaAld SilvWhtn g SimonProp Sina SiriusXM SkywksSol Smith&N Smucker SocQ&M SonyCp SouthnCo SthnCopper SwstAirl SwstnEngy SpectraEn SprintNex StanBlkDk Staples Starbucks StarwdHtl StateStr Statoil ASA Stericycle Sterlite Stryker SumitMitsu SunLfFn g Suncor gs Sunoco SunTrst Symantec Syngenta Sysco TD Ameritr TE Connect TIM Partic TJX TRWAuto TaiwSemi TalismE g Target TataMotors TeckRes g TelNorL TelItalia TelItaliaA TelSPaulo TelefEsp s TelMexA TelMexL Telus g Tenaris Teradata Ternium TevaPhrm TexInst Textron ThermoFis ThomsonR 3M Co Tiffany THorton g TW Cable TimeWarn TorDBk g Total SA Toyota TrCda g Transocn Travelers TrimbleN Turkcell TycoIntl Tyson UBS AG UltraPt g UnilevNV Unilever UnionPac UtdContl UtdMicro UPS B US Bancrp USSteel UtdTech UtdhlthGp UnumGrp VF Cp Vale SA Vale SA pf ValeantPh ValeroE VarianMed Ventas VeoliaEnv Verisign VerizonCm VertxPh ViacomB VimpelC n VirgnMda h Visa VivoPart VMware Vodafone Vornado VulcanM WPP plc WalMart Walgrn WalterEn WarnerCh s WsteMInc Waters WatsnPh WeathfIntl WellPoint WellsFargo WDigital WstnUnion Westpac Weyerh Whrlpl WhitingPt s WholeFd WmsCos WmsPtrs WillisGp WimmBD Windstrm Wipro s WiscEn s WooriFn Wyndham Wynn XL Grp XcelEngy Xerox Xilinx YPF Soc Yahoo Yamana g YanzhouC YumBrnds Zimmer
Last 14.71 83.29 53.75 34.12 21.26 84.19 89.12 87.69 16.65 135.70 63.89 44.01 106.68 108.12 1.72 32.65 56.52 71.26 54.47 32.28 38.12 40.25 12.81 43.24 27.27 4.56 76.80 19.75 36.72 58.33 45.07 27.41 88.18 15.31 60.76 6.29 31.30 44.63 46.13 29.21 18.05 64.77 27.71 20.79 34.65 42.84 50.09 54.24 12.11 24.62 50.26 28.16 54.25 17.62 15.47 13.66 23.62 25.29 17.66 17.79 48.19 48.73 50.40 36.64 50.02 34.74 27.15 54.91 39.52 92.47 61.60 45.66 71.43 35.61 88.94 60.73 80.96 40.32 78.95 59.39 50.00 15.12 44.89 19.71 18.27 49.04 31.28 30.51 97.87 23.84 2.73 74.50 26.68 56.31 84.23 45.40 26.61 99.17 32.92 29.11 50.08 30.73 67.18 53.75 31.24 36.45 38.46 48.48 47.00 14.07 27.65 74.23 39.02 82.48 29.20 86.85 45.62 62.87 52.36 40.00 135.19 23.70 37.18 86.81 56.09 22.14 69.65 31.91 37.71 21.12 125.07 24.62 84.19 74.40 65.93 31.45 51.39 39.98 33.35 12.83 14.54 30.50 38.76 32.13 127.66 23.65 23.93 10.66 32.82 43.45 16.74 12.34 36.20 51.73 60.95
Chg +.43 +3.04 +.98 +.62 +.51 +.32 +2.35 +.86 +.04 +2.63 -.06 +1.11 +.75 +.47 -.01 +.06 +.83 -.55 +.86 +.37 +.42 -.18 +.30 +.74 +.33 -.06 +.03 +.18 -.14 +.82 +1.16 +.17 -.12 +.10 -.33 -.02 +.55 +.35 +.29 -.11 -.16 -.17 +.01 +.11 +.05 +.32 +.61 +.19 +.05 +.29 +1.10 +.50 +.97 +.22 +.13 +.26 +.01 +.13 +.08 +.16 +.13 +.84 -.30 +.90 +.02 -.22 +.16 +.28 +.50 -.37 +.86 +.10 +.98 +.64 +1.89 +.39 +1.25 +.54 -1.10 +.13 +.09 +.11 +.15 +.11 +.04 +1.68 +.10 +.12 -.94 +.97 +.65 +.03 -.47 +.11 +.92 +.32 +2.79 -.05 +.19 +5.69 +.29 -.17 +1.08 +.65 +.01 +.17 -.42 +.73 -.06 +.08 +2.03 +.09 +2.30 -.02 +1.60 +.58 +1.21 +.10 +.07 +3.05 +.36 +.01 +.82 +.38 -.01 +.30 +.32 +.66 -.07 +.92 -.01 +2.65 +2.30 +1.58 +.70 +.46 +.54 -.04 +.07 +.20 +.39 +.69 +.84 +1.78 -.19 +.30 +.01 -.18 +.63 -.01 +.20 +1.70 +.43 -.01
JehedjeIjeYa;nY^Wd][ Name LundinMng CdnOilSands TeckResBSV BombdrBSV FlintEngySrv ViterraInc PotashCorp CdnNatRes EqnoxMnrlso
Last 7.96 32.30 52.75 6.30 16.85 11.75 56.59 47.99 5.63
Chg +.37 +.05 +.82 +.04 -.04 +.14 +.89 +.41 +.15
Name DetourGoldo PacRubialeso SunLifeFin AirCdaBV BankersPeteo KinrossGold AvionGoldo TransCdaCorp DenisonMines
Last 31.34 25.87 30.45 2.43 8.12 15.35 1.70 39.18 2.34
Chg +.28 -.15 +.49 -.02 +.29 +.41 +.05 +.40 -.09
Name ResrchInMotn CelticExpl ManulifeFin EasternPlato HrznNtGsBul GabrielReso AngleEnergy RockgateCapo RoyalBank
Last 55.47 20.52 17.19 1.37 5.99 7.26 9.42 1.40 60.16
Chg -.18 +.32 +.29 +.03 +.28 +.10 +.42 -.37 +.39
EnCanaCorp 33.69 +.33 YukonNevadao .65 -.05 B2GoldCorpo 2.90 +.10 YamanaGld 11.97 +.13 LegacyO GInc 14.75 +.26 ISharesS P60 20.26 +.20 T D Bank 86.40 +1.56 BarrickGold 50.08 +.70 TuscanyDrill 1.55 +.09
Nexen Inc CamecoCorp AllianceGrn QuadraFNX IvanhoeEngy PrecisionDrl SuncorEngy WesternCoalo GoldcorpInc
24.28 29.00 26.00 13.34 2.72 13.05 43.37 11.86 48.09
Chg +.31 +.09 +.24 +.14 -.11 +.19 +.17 +.07 +.75
Name EldoradoGld UraniumOneo OsiskoMngo SullidenGldo Sino Forest HrznNatGsBr Bk NS OrleansEgyo NeoMatTech
Last 15.78 3.84 14.51 1.99 25.01 8.10 59.55 2.57 9.30
Chg +.38 +.08 +.07 +.02 +.84 -.42 +.48 ... +.61
Interestrates TREASURIES 3-month T-bill 6-month T-bill
The yield on the 10-year Treasury fell to 3.45 percent Wednesday. Changing yields affect interest rates on consumer loans. PRIME RATE YEST 3.25 PREV 3.25 WK AGO 3.25
10-year T-note 30-year T-bond
NET 1YR PVS CHG WK MO QTR AGO
Barclays LongT-BdIdx 4.24 Bond Buyer Muni Idx 5.71 Barclays USAggregate 3.13 Barclays US High Yield7.03 Moodys AAA Corp Idx 5.18 Barclays CompT-BdIdx 2.31 Barclays US Corp 4.09
1YR WK MO QTR AGO
FED FUNDS .00-.25 .00-.25 .00-.25
4.26 5.69 3.09 7.03 5.12 2.34 4.06
-0.02 +0.02 +0.04 ... +0.06 -0.03 +0.03
0 0 0 0 0 0 0
COMMODITY CLOSE PVS. Unleaded Gas (gal) 3.06 3.04 Crude Oil (bbl) 104.27 104.79 Gold (oz) 1423.80 1416.20 Platinum (oz) 1771.40 1740.60 Silver (oz) 37.50 36.98 Coffee (lb) 2.65 2.62 Orange Juice (lb) 1.62 1.62 Sugar (lb) 0.27 0.27
Argent (Peso) .2469 Brazil (Real) .6123 Britain (Pound) 1.6069 Canada (Dollar) 1.0296 Chile (Peso) .002076 Colombia (Peso) .000532 Dominican Rep (Peso) .0264 Euro (Euro) 1.4121 Japan (Yen) .012065 Mexico (Peso) .083855 Uruguay (New Peso) .0519
-.0003 +.0079 +.0079 +.0041 -.000000 -.000000 -.0001 +.0033 -.000066 +.000204 -.0000
1 0 0 0 0 0 0
0 0 1 1 0 0 1
%CH. +0.60 -0.50 +0.54 +1.77 +1.40 +1.28 -0.09 +0.70
%CHG. -.12 +1.29 +.49 +.40 -.00 -.00 -.38 +.23 -.55 +.24 -.00
4.50 5.27 3.47 8.45 5.37 2.45 4.53
%YTD +24.9 +14.1 +0.2 -0.1 +21.3 +10.1 -6.3 -15.3
.2524 -.0114 .5904 +.0554 1.5716 +.1008 .9729 +.0485 .002067 +.000177 .000554 +.000015 .0272 -.0011 1.3643 +.0702 .011990 +.001291 .079189 +.003301 .0493 +.0007
1328.26 +8.82 7057.15 +122.71 5948.30 +16.13 23451.43 +391.07 4024.44 +36.64 9708.79 +249.71
+0.67% +1.77% +0.27% +1.70% +0.92% +2.64%
0 0 0 0 0 0
0 1 0 0 1 1
0 0 1 0 0 1
+5.62% +2.07% +0.82% +1.81% +5.77% -5.08%
IEKJ>7C;H?97%97D7:7 Buenos Aires Merval 3376.44 +52.25 Mexico City Bolsa 37210.27 +414.38 Sao Paolo Bovespa 67997.40 +578.60 Toronto S&P/TSX 14083.58 +153.23
+1.57% +1.13% +0.86% +1.10%
0 0 0 1
1 0 0 1
1 1 1 0
-4.18% -3.48% -1.89% +4.76%
ASIA Seoul Composite 2091.38 Singapore Straits Times 3095.32 Sydney All Ordinaries 4912.70 Taipei Taiex 8646.31 Shanghai Shanghai B 318.52
+0.93% +1.26% +1.27% +0.58% -0.27%
0 0 0 0 1
0 0 0 0 0
0 1 0 1 0
+1.97% -2.97% +1.36% -3.64% +4.66%
S&P 500 Frankfurt DAX London FTSE 100 Hong Kong Hang Seng Paris CAC-40 Tokyo Nikkei 225
+19.25 +38.37 +61.50 +49.74 -0.86
12-MO NAV CHG %RTN NAME
American Funds AMCAPA m 19.85 +.10 +13.3 BalA m 18.67 +.09 +13.4 BondA m 12.18 +.02 +5.8 CapIncBuA m 51.14 +.38 +11.2 CapWldBdA m20.55 +.02 +6.7 CpWldGrIA m 36.97 +.31 +12.0 EurPacGrA m 42.85 +.54 +13.0 FnInvA m 39.00 +.22 +16.4 GrthAmA m 32.06 +.20 +13.4 HiIncA m 11.51 +.01 +13.8 IncAmerA m 17.23 +.10 +14.2 InvCoAmA m 29.34 +.16 +12.1 MutualA m 26.43 +.15 +13.9 NewPerspA m29.84 +.31 +14.9 NwWrldA m 55.00 +.66 +14.7 SmCpWldA m 39.84 +.42 +19.8 WAMutInvA m28.81 +.16 +15.8 Artio Global IntlEqIII 12.70 +.18 +9.7 Artisan Intl d 22.57 +.32 +13.3 MdCpVal 22.09 +.16 +21.6 BlackRock BasicValA m 27.36 +.17 +13.5 BasicValI 27.54 +.17 +13.9 GlbDynEqA m 13.02 +.11 +14.5 GlbDynEqI d 13.03 +.12 +14.9 GlobAlcA m 20.10 +.15 +11.9 GlobAlcC m 18.74 +.13 +11.1 GlobAlcI d 20.20 +.15 +12.3 Columbia AcornZ 31.78 +.39 +23.0 DFA EmMktValI 36.20 +.45 +18.2 IntSmCapI 18.20 +.19 +19.1 USLgValI 21.95 +.16 +19.5 USSmValI 27.76 +.36 +26.0 Davis NYVentA m 35.92 +.24 +12.8 NYVentY 36.32 +.25 +13.1 Delaware Invest GrowOppA m 24.31 +.30 +45.7 Dimensional Investme IntlSCoI 17.90 +.20 +22.6 Dodge & Cox Bal 73.46 +.32 +11.7 Income 13.26 +.02 +6.3 IntlStk 36.75 +.35 +13.2 Stock 114.13 +.63 +12.9 Eaton Vance LrgCpValA m 18.78 +.13 +7.5 Fairholme Funds Fairhome 34.89 +.13 +8.8 Fidelity AstMgr50 15.90 +.08 +13.0 Bal 19.01 +.11 +13.8 BlChGrow 47.93 +.32 +19.0 CapInc d 9.79 +.02 +16.7 Contra 70.99 +.59 +18.3 DiscEq 24.09 +.29 +10.3 DivGrow 30.24 +.26 +20.7 DivrIntl d 31.15 +.33 +12.9 EqInc 47.28 +.41 +15.7 FF2015 11.74 +.06 +12.1 FF2035 12.03 +.09 +15.3 FF2040 8.41 +.06 +15.5 Free2010 14.05 +.07 +12.0 Free2020 14.33 +.09 +13.4 Free2025 12.02 +.08 +14.5 Free2030 14.39 +.10 +14.6 GNMA 11.45 +.02 +5.4 GrowCo 90.11 +.88 +22.7 HiInc d 9.16 +.01 +13.0 IntlDisc d 33.70 +.42 +12.4 LowPriStk d 40.72 +.41 +17.8 Magellan 75.57 +.55 +12.6 MidCap d 30.84 +.35 +18.8 Puritan 18.79 +.12 +14.3 ShTmBond 8.46 ... +2.9 StratInc 11.19 +.01 +9.5 TotalBd 10.75 +.02 +6.9 USBdIdx 11.30 +.03 +5.0 Value 73.84 +.64 +20.3 Fidelity Advisor BalB m 15.51 +.09 +12.5 NewInsI 21.06 +.17 +17.5 Fidelity Spartan IntlIdxIn d 36.53 +.42 +11.1
12-MO NAV CHG %RTN NAME
USEqIndxAg 47.20 +.32 +15.4 USEqIndxI 47.19 +.31 +15.4 First Eagle GlbA m 47.95 +.44 +16.5 FrankTemp-Franklin CA TF A m 6.56 -.03 -1.5 Fed TF A m 11.29 -.03 ... Income A m 2.26 +.01 +15.2 Income C m 2.28 +.01 +14.4 FrankTemp-Mutual Discov A m 30.36 +.23 +10.4 Discov Z 30.74 +.23 +10.8 Shares Z 21.89 +.15 +11.5 FrankTemp-Templeton GlBond A m 13.69 +.05 +8.3 GlBond C m 13.72 +.05 +7.9 GlBondAdv 13.65 +.04 +8.5 Growth A m 18.95 +.15 +13.3 GMO QuVI 20.86 +.10 +7.7 Harbor Bond x 12.13 -.08 +6.5 CapApInst 38.44 +.30 +13.3 IntlInstl d 63.17 +.81 +16.7 Hartford CapAprA m 35.54 +.26 +10.9 CpApHLSIA 44.47 +.36 +15.7 INVESCO CharterB m 16.50 +.07 +8.9 EqIncomeA m 8.97 +.06 +11.3 Ivy AssetStrA m 25.51 +.28 +14.3 AssetStrC m 24.75 +.27 +13.4 JPMorgan CoreBondSelect11.46 +.02 +6.2 HighYldSel d 8.36 +.01 +13.9 ShDurBndSel 10.96 ... +2.5 Janus OverseasJ d 51.20 +.64 +10.6 PerkinsMCVJ 23.91 +.18 +14.9 RMCrJ d 14.16 +.09 +18.7 John Hancock LifBa1 b 13.43 +.08 +13.5 LifGr1 b 13.44 +.10 +15.4 Lazard EmgMkEqtI d 21.46 +.38 +14.5 Longleaf Partners LongPart 30.82 +.23 +20.8 Loomis Sayles BondI 14.56 +.05 +12.1 BondR b 14.51 +.05 +11.8 Lord Abbett AffiliatA m 12.24 +.08 +13.0 Manning & Napier WrldOppA 9.05 +.09 +12.3 Masters’ Select SmallerCos d 14.28 +.13 +25.9 Oakmark EqIncI 29.00 +.20 +9.3 Intl I d 19.95 +.22 +13.8 Oppenheimer DevMktA m 35.89 +.43 +21.5 DevMktY 35.53 +.43 +21.9 GlobA m 63.89 +.62 +15.8 IntlBondA m 6.54 ... +7.3 PIMCO AllAssetI 12.35 +.05 +14.5 ComRlRStI 9.50 +.02 +34.7 HiYldIs 9.45 +.01 +12.3 LowDrIs 10.44 +.02 +4.2 RealRet 11.49 +.04 +9.0 TotRetA m 10.88 +.02 +6.6 TotRetAdm b 10.88 +.02 +6.8 TotRetC m 10.88 +.02 +5.8 TotRetIs 10.88 +.02 +7.1 TotRetrnD b 10.88 +.02 +6.7 TotlRetnP 10.88 +.02 +6.9 Permanent Portfolio 47.36 +.24 +20.3 Pioneer GlobHiYA m 10.83 +.02 +15.9 Schwab S&P500Sel d 20.76 +.14 +15.3 Scout Interntl d 33.45 +.35 +14.3 T Rowe Price BlChpGr 40.34 +.23 +17.6 CapApprec 21.25 +.08 +12.6
12-MO NAV CHG %RTN
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3/31/2011 4:48:14 AM
THE MIAMI HERALD
THURSDAY, MARCH 31, 2011
Robert Mugabe and the martyrdom of Zimbabwe BY MARTIN MEREDITH
Washington Post Service
The list of African dictators determined to cling to power is a long one. This year popular uprisings in North Africa have triumphed over two of them: Ben Ali’s 23-year-long regime in Tunisia and Mubarak’s 30-yearlong grip in Egypt. In Libya, Col. Gadhaﬁ is battling popular resistance and U.S. and allied air strikes to maintain his 41-year-long lock on power. But many other dictators remain in place. Robert Mugabe is unusual among them in that he has always been blunt about his ambition. “No matter what force you have,” he declared in 2001, “this is my territory and that which is mine I cling [to] until death.” Peter Godwin, the author of two best-selling memoirs set in Zimbabwe, where he was born, is a veteran observer of Mugabe. In The Fear, he describes Mugabe as an “African Robespierre” — highly educated and utterly ruthless. He cautions against viewing him as a case of a good leader who turned bad. “His reaction to opposition has invariably been a violent one,” Godwin writes. Now another Zimbabwe election is coming, and it is an event viewed with dread rather than hope. The violence has already started. For anyone wanting to know how bad it can get, Godwin’s eyewitness account of the last election, in 2008, provides graphic detail of the terrorism that Mugabe habitually uses to keep himself in power. No one doubts that he will employ the same methods of murder, torture, rape and arson once again. Using violence to win elections has become Mugabe’s trademark. He ﬁrst set out his views on electoral democracy in a radio broadcast in 1976 during the guerrilla war against white
THE FEAR: THE LAST DAYS OF ROBERT MUGABE By Peter Godwin 371 pages Little, Brown. $26.99
Peter Godwin’s new book Fear gives an account of how Zimbabwe’s leader Robert Mugabe unleashed the government forces to beat the electorate into submission for the second round of presidential elections. minority rule in Rhodesia, as Zimbabwe was previously called. “Our votes must go together with our guns,” he declared. Since coming to power in 1980, he has held fast to this creed, readily resorting to the gun to deal with whatever challenge his regime has faced. He even has boasted of having “a degree in violence”. What propels Mugabe is his obsession with holding power. His overriding ambition, he once admitted, was to achieve total control, and he has pursued that objective with relentless singlemindedness, crushing opponents and critics at will, violating the courts, suppressing the independent press, trampling over property rights and subjecting every arm of government to his whim.
His campaign to eliminate opposition in the southern province of Matabeleland in the 1980s culminated in mass murder. As many as 20,000 civilians are estimated to have died. Despite the risks, since 2000 popular resistance to his corrupt and incompetent regime has continued to grow. At each successive election, Mugabe has managed to maintain his position only by resorting to violence and intimidation and by rigging the results. In 2008, however, it seemed for a few brief days of euphoria that the long night of his rule was ending. In the ﬁrst round of presidential elections, he came in second and lost control of Parliament. It was at this point that Godwin, now based in New York, returned to Harare
fully expecting “to dance on Robert Mugabe’s political grave”. His account of how Mugabe unleashed the army, police, security agencies and party militias to beat the electorate into submission in time for the second round of presidential elections is not for the faint-hearted. Among the electorate it was known simply as “chidudu” — The Fear. Villagers were beaten en masse and told to “vote Mugabe next time or you will die”. Rape, arson attacks and false arrests were commonplace. Mugabe was open about his intentions. “We are not going to give up our country because of a mere ‘X,’ ” he told supporters at one election rally. “How can a ballpoint ﬁght with a gun?” Traveling around Zimba-
bwe, Godwin interviewed opposition activists, churchmen, diplomats and beleaguered white farmers and spent much time recording the ordeals of Mugabe’s victims. On one occasion, he accompanied the U.S. Ambassador James McGee, a hard-nosed black Vietnam veteran, to a hospital ﬂooded with victims of the violence. Armed police tried to prevent McGee’s convoy from leaving by shutting the gates, but he ignored their threats. “What you gonna do? Shoot me?” McGee demanded. “Go ahead.” Then he pulled the gate open and waved the convoy through. Five days before voting was due to start, the opposition candidate Morgan Tsvangirai decided to pull out of the election to avert
further savagery. He said he could not “ask his supporters to come out and vote for him ‘when that vote would cost them their lives,’ ” Godwin writes. So once again, Mugabe’s terror triumphed. What stands out from Godwin’s gripping narrative is not just the scale of death and destruction that Mugabe is willing to inﬂict on his country for the sake of staying in power, but the extraordinary courage of Zimbabweans who defy his tyranny, knowing full well the consequences of doing so. In one remarkable passage, Godwin describes the “insane bravery” of an opposition candidate who continued to taunt his attackers even while they were beating him and who then, defying doctors’ orders, turned up in plaster casts to take his place at the swearing-in ceremony at a local council, confounding Mugabe’s supporters there, who assumed he was dead. If there is any hope for the future of this benighted land, it lies in such remarkable resilience.
‘The Troubled Man’: A detective meets his end, sort of BY JANET MASLIN
New York Times Service
At the end of The Troubled Man, Henning Mankell needs only six short lines of narrative to pull the plug on his enormously popular series of Kurt Wallander detective novels. Mankell doesn’t do this delicately. “After that there is nothing more,” the swan song reads in part. “The story of Kurt Wallander is ﬁnished, once and for all.” As an irritable kiss-off to his readers this couldn’t be any more abrupt. The Wallander career needn’t have ended this way. On other occasions when famous characters and series are bid adieu, their creators may contrive a cliffhanger, an actual tumble (a la Sherlock Holmes, Professor Moriarty and Reichenbach Falls in Conan Doyle’s Final Problem) or a moment of passionate and intense surprise (a la Ian Rankin’s John Rebus in Exit Music). No matter how eager these authors were to extricate themselves, they were able to retire well-loved characters suspensefully, without sounding fed up and bored. But Mankell isn’t one to worry about niceties. His brusque, gloomy Swedish police inspector can be downbeat even by the standards of Sweden, where the bar for brooding is already set so high. And in The Troubled Man, Wallander has a whole new set of problems to worry about. He is preoccupied not only with the crime story around which The Troubled Man revolves but also with his diminished prospects and deteriorating state of mind. Wallander’s morbidity does help to make The Troubled Man a successful standalone book. That’s because it makes him remember old events and recapitulate them. Even readers who are not up to speed on the nine ofﬁcial Kurt Wallander novels that have preceded it will ﬁnd
much evidence of his history in the new book. Family members, old cases, the women in his life: They all come back to haunt him in The Troubled Man. And just as the past becomes more vivid for him, the present grows ever more threatening. Much is made by both Wallander and Mankell of the fact that Wallander has turned 60. He faces deteriorating health, increasingly frightening lapses of memory, loneliness and the prospect of a bleak, empty future. To belabor the point, Mankell writes of Wallander’s feeling “as if he were turning into an hourglass with the sand silently running out”. Then there’s “a darkness in which he could ﬁnd no lamps to light”. And the terrible questions: “Was he already getting close to his devastating dotage, when he would become increasingly helpless?” Fortunately Mankell gives Wallander a few things to live for. The best of them is his new granddaughter, Klara, born during the course of this book to Wallander’s unmarried daughter, Linda (who
THE TROUBLED MAN By Henning Mankell 367 pages. Alfred A. Knopf. $26.95.
is also on a police force), and Hans von Enke, a ﬁnancier. Klara gives Wallander common ground with his longtime colleagues, who by now are doting grandfathers themselves. Haken has a 75th birthday party in Stockholm to which Wallander is invited. During the course of the party Haken conﬁdes in Wallander about some of what he witnessed as a naval ofﬁcer in the 1980s, when foreign submarines had a distressing way of showing up in Swedish waters. Before Wallander has had a chance to ponder these revelations, Haken does something shocking. He disappears. This isn’t a police case for Wallander. But how can he resist it? Soon he is investigating the secretive life of Klara’s other grandfather, the man who was supposed to be his future in-law. Hakan’s friends, colleagues and wife, Louise, all seem mystiﬁed about why he would vanish. But Wallander keeps pushing doggedly into Hakan’s past, using his vacation time to venture away from his quiet home in Ystad, Sweden, and do some sleuthing. Then another of the book’s characters becomes an apparent victim of foul play, and an important ﬁgure in Hakan’s story appears almost out of nowhere. Thus prompted by a string of jolts, Wallander goes into his phlegmatic version of high gear. But the mysteries of The Troubled Man are not what make it compelling. And they are never entirely resolved. The book’s gruff remark that the missing can take their secrets with them becomes Mankell’s excuse for leaving a lot of loose ends messily untied. But this novel’s main interest isn’t really the disappearance of Hakan von Enke. The disintegration of Wallander is its primary concern. The methodical Mankell (via his stiff translator, Laurie
Thompson) strews this book with danger signs about Wallander’s well-being. We learn a lot about his health problems and his health habits (not great). The story follows him through some alarming lapses, like his taking his gun to a restaurant while off duty and then forgetting to bring
it home. And the other characters who serve as points of reference, like Wallander’s alcoholic ex-wife and mortally ill ex-lover, only heighten his fear of inﬁrmity. It hardly helps when Linda persuades him to buy a dark suit so he can wear it to funerals. Late in the book Wallander
shakes off his torpor and leaps into the business of mystery solving. He’s still good at it. It’s an antidote to his secret terror. And it gives Mankell one last chance to show how Wallander’s doggedness, acuity and ﬁerce dedication to justice have kept this character and his exploits alive.
3/31/2011 3:13:50 AM
THURSDAY, MARCH 31, 2011
THE MIAMI HERALD
BY JIM DAVIS
NORTH ♠ A K J 10 6 ♥A ◆Q852 ♣K52
BY SCOTT ADAMS
For more comics & puzzles, go to www.MiamiHerald.com/comics.
ACES ON BRIDGE
Opening lead — ♥ king
In today’s deal most declarers, if pressed, would admit that they would be unlikely to go down in six WEST EAST ♠3 ♠94 spades unless they lost two ♥ K Q J 10 6 5 2 ♥874 diamond tricks. Accordingly, ◆3 ◆ K 10 9 7 they should direct their ♣J763 ♣ Q 10 9 4 efforts to catering for bad splits in that suit. SOUTH ♠Q8752 The normal way to play ♥93 the slam is to take the heart ◆AJ64 king with the ace and draw ♣A8 trumps in two rounds. Then come the club ace and king, Vulnerable: Neither a club ruff to strip off the Dealer: South clubs, and a heart ruff in The bidding: dummy to get rid of that suit. South West North East The stage is set to play dia1♠ 3♥ 4♥ Pass monds to best advantage. 4♠ Pass 4 NT Pass At this point declarer 5 ♠* Pass 5 NT Pass 6♣ Pass 6 ♠ All pass leads a diamond to his jack. If it loses to a singleton king, *Two of the five aces (counting the trump king as an ace), West must concede defeat at once by giving a ruff-sluff. If plus the trump queen 3-31
West could play back the diamond seven, declarer inserts dummy’s eight and is protected against any lie of the cards. If West could return the 10, declarer runs this around to his ace and can finesse against West if he has the two remaining diamonds. What if the diamond jack scores, as it would do in the diagramed layout? Declarer now must take care to lead a low diamond from hand and duck in dummy (or if feeling really greedy, cross to dummy with a trump to lead a diamond toward his ace, intending to duck unless the king appears). This line ensures the contract. Either the diamonds will be split, or East will be endplayed to lead a diamond into the split tenace or give a ruff-sluff. —BOBBY WOLFF
CHESS QUIZ ZITS
BY JIM BORGMAN AND JERRY SCOTT
BY CHARLES SCHULZ
BLACK’S BEST MOVE? Hint: Better than ... Qxh5ch.
Solution: 1. ... Qh1ch! 2. Kg3 Ne4ch! (wins the queen) [from Gelfand-Kramnik ’11].
BY HECTOR CANTU AND CARLOS CASTELLANOS
BY GARRY TRUDEAU
BY RICK KIRKMAN AND JERRY SCOTT
Dear Abby: I am in my late 30s and have been dating “Rick” for six years. The problem is his daughter, “Janet.” We used to get along, but now she hates me. She calls me awful names and says she wishes I would go away. I recently asked Rick to marry me. Now Janet says I am “desperate” and she refuses to talk to either of us. I don’t know what to say to her. I’m appalled at her attitude toward me, the language she uses and the things she’s saying about me to her friends on the Internet. She won’t listen to her dad. Her mother is encouraging her behavior and has been threatening me. I can’t get Janet to understand that her dad and I love each other, that it’s all right for a woman to ask a man to marry her and it’s not out of “desperation.” Please help. Not Desperate in Louisiana Toughen up. Recognize that for all of the joy Rick brings you, Janet is his extremely immature daughter and she’s part of the package. How old is the girl? She appears to have years of growing up to do. You can’t change her behavior, so go on with your life without seeking her approval. Unfortunately, nasty ex-wives are nothing new. If the ex does anything beyond “threaten” you, file a police report and let them deal with her.
as much or more than your worry about not having common sense. If it’s any comfort, people usually acquire common sense in the school of life. In other words, they learn from the mistakes they make. I’m sure you have done that and will continue to do so. Dear Abby: My 34-year-old daughter blames me for her poor penmanship. When she was a baby, she started grabbing things with her left hand. Her pediatrician advised me to force her to use her right hand. Could she have had better penmanship if she had not been forced to use her right hand? Guilty Mom in Madison, Ala. Probably. Your pediatrician must have been very old or very “old school.” I am also left-handed, and when I was a child, educators had stopped forcing children to write in a way that was unnatural for them. I was taught to properly hold a pencil, we practiced printing and cursive penmanship, and I am told my handwriting is beautiful.
ANSWER TO WEDNESDAY’S PUZZLE:
Dear Abby: Can common sense be learned or taught? Some people seem to be born with it. Others have “book smarts” but struggle with everyday common sense. I fail to grasp simple connections, and I sometimes ask questions that have obvious answers — for someone else. I know other people who share the same problem, and I admire those who simply seem to “get” what’s happening around them. Is there any way to improve? I’m 38 and married to a man who has strengths in both areas. Bookworm in Montana Nobody has everything. Your strength is your intellect. Not everyone is a good student, and it can affect their self-esteem
HOROSCOPE IF TODAY IS YOUR BIRTHDAY: When inspiration calls, answer the phone. You may find that true love enters the picture this year, or you may find the job of your dreams. It is possible that your path toward bliss is blocked. • ARIES (March 21-April 19): You are ready to take charge of your life and make changes you once thought impossible. • TAURUS (April 20-May 20): Deep inside you may be restless for a change or ready to try something new.
• GEMINI (May 21-June 20): Mercury might be retrograde, but your brainpower is anything but backward. • CANCER (June 21-July 22): Do do that voodoo that you do so well. Apply your skills in new and perhaps even shocking ways. • LEO (July 23-Aug. 22): Busy beavers build the best barricades. If you want positive results you can’t simply rest on your laurels. • VIRGO (Aug. 23-Sept. 22): Your sign ruler, Mercury, has entered a retrograde period. This will actually help you to make sound decisions. • LIBRA (Sept. 23-Oct. 22): Your home is your castle; take time to fix the things that are broken or cut costs that have put you in a precarious position. • SCORPIO (Oct. 23-Nov. 21): Seek good advice and wise counsel. Discuss problems at work or the latest trends in investments. • SAGITTARIUS (Nov. 22-Dec. 21): Learn which way the wind is blowing. Some good news might reassure you or solve a dilemma. • CAPRICORN (Dec. 22-Jan. 19): The home might be a hub of frantic activity but you can find a few moments to be glad for the people and things that are there to comfort you. • AQUARIUS (Jan. 20-Feb. 18): Change is inevitable. No matter how dull and boring your regular routine seems, rest assured that things will make a change for the better very soon. • PISCES (Feb. 19-March 20): It may be time to take the bull by the horns. You can be in charge and take control of the results.
CROSSWORD ACROSS 1 Porgy 5 Obscuring hazes 9 Pappy Yokum’s boy 14 Highest rating 15 Cut and paste 16 Do watercolors 17 Part of a healthy meal 20 Athlete in a crease 21 Lincoln Center production 22 Nixon has two 23 “La la” lead-in 25 Workplace for an actor 26 Drone, for one 29 “The Twelve ___ of Christmas” 31 Suffix with “critic” 33 Intelligence, slangily 35 Hard-to-predict outcome 38 Establish as law 39 False leads 41 Experimented with 43 2010 Super Bowl champs 44 Takes pieces from? 46 Third bk. of the Bible 47 Male turkeys 51 Skirted square dancer 52 “Caught in the act!” 54 Make the kayak move 56 Scot’s not
57 Garden dwarf 59 Common antiseptic 61 It’s followed in a classic movie 65 Farewell 66 “The Auld Sod” 67 “Ella Enchanted” star Hathaway 68 Choral piece 69 Wetlands plant 70 Autocrat of old DOWN 1 Drooped 2 Solar halo 3 On pins and needles 4 Banana discard 5 Like a flu sufferer 6 Dedicated composition 7 Programmer’s “you reap what you sow” 8 Staircase components 9 Rented pad 10 “___ O’Riley” (song by The Who) 11 Soccer shutout 12 Wind dir., sometimes 13 They may be human or civil (Abbr.) 18 Young louse 19 Titleist supporters 24 Long-eared beasts of burden 26 Victoria’s Secret
selections Catchall abbr. Slow finish? Take the wheel Many a commissioned artwork 34 Uneasy feeling 36 Elimination method 37 Snoopy sort
27 28 30 32
39 40 41 42 45 48 49 50 53
Omani’s currency Billed Harbor sight Threadlike molecule Point out Vidalia veggies Tomorrow, in Tijuana Sowing machine “For ___ waves of
55 57 58 60 61 62 63 64
grain ...” Chinese frypan School singing club Cleveland’s lake “Blast the luck!” Thanksgiving side dish Former name for Tokyo Touched a match to Angry feeling
3/30/2011 9:30:40 PM
THE MIAMI HERALD
THURSDAY, MARCH 31, 2011
Michael Clarke named Australia’s cricket captain
India’s Sachin Tendulkar, left, plays a sweep shot as Pakistan’s Kamran Akmal looks on during their cricket World Cup semifinal in Mohali, India, on Wednesday.
India outclasses Pakistan • CRICKET, FROM 8B
Interest increased further over the weekend when Pakistan’s Prime Minister Yousuf Raza Gilani accepted an invitation to attend, raising the prospect of progress in improving ties between the two nations. Pakistan had done well earlier to peg India back to 260-9 despite some sloppy ﬁelding, with left-arm pace bowler Wahab Riaz taking a career-best 5-46. The victory continued a streak for India, which has beaten Pakistan in all ﬁve World Cup meetings dating back to 1992. The game was touted as a face-off between India’s batting lineup and Pakistan’s bowling attack, but Pakistan’s shoddy ﬁelding was eventually the difference between the two sides. Tendulkar was let off four times, giving him the opportunity to knit together a challenging total for India and the bowlers then ensured a third World Cup ﬁnal appearance for the 1983 champion. “Going back to Mumbai, especially for this event, is a wonderful occasion,” Tendulkar said of playing a
World Cup ﬁnal on his home ground. “All I want to say is, we want to be calm, focus on our job and get the job done.” India piled the pressure on a Pakistan batting lineup which failed to produce a single century in the tournament. Pakistan’s early promise was slowed down in the middle overs as Yuvraj Singh made inroads and the bowlers slowly took control, marshaled well by captain Mahendra Singh Dhoni. All ﬁve Indian bowlers ﬁnished with two wickets each. The only time Pakistan looked capable of winning was when openers Kamran Akmal and Mohammad Hafeez were at the crease. Kamran Akmal slashed a ball from Zaheer Khan straight to Yuvraj at point after making 19, while Hafeez went for an unnecessary scoop off Munaf Patel and was caught behind for 43. Yuvraj then dismissed Asad Shaﬁq and Younis Khan and Pakistan was reduced to 106-4 by the 26th over. Umar Akmal added some interest with a 24-ball 29 and Misbah ul Haq made a late charge of 56, but with the ball not coming on to the
bat too well later in the day, it was always going to be difﬁcult for them. “I want to say sorry to my nation. We tried our level best,” Pakistan skipper Shahid Afridi said. “I want to congratulate the Indian [cricketers] and all of the Indian nation for this great victory. We wish them well in the ﬁnal.” Critics condemned the ﬁelding performance — Pakistan dropped six catches in all — and wondered why Afridi didn’t use its batting powerplay earlier in a bid to throw the Indian bowlers off their rhythm and give the big-hitting lower-middle order a chance with the ﬁelding restrictions in place. Afridi said it was difﬁcult getting the strategy right with wickets falling too frequently. He also refused to sign off without some encouraging words for his squad, which had been given little chance before the tournament started. “We really played well in this competition — the boys did a great job,” he said. “I’m proud I’m the captain of these guys.” In the ﬁrst innings, Riaz exposed India’s traditional weakness against left-arm
seamers, striking at crucial junctures. He accounted for a dangerous looking Virender Sehwag and an inform Yuvraj Singh among others, as the famed Indian batting struggled against his swing. Pakistan also made Tendulkar wait for his 100th international century despite dropping the world’s best batsman four times. Tendulkar also had an lbw decision overturned on referral and survived a close stumping appeal in what has to be one of his luckiest innings ever. Tendulkar faced 115 balls and hit 11 fours even as Riaz pegged back the Indian middle order with the dismissals of Virat Kohli (9) and Yuvraj (0) off successive deliveries. Kohli was caught at point and Yuvraj Singh was bowled off a swinging full toss, while captain Mahendra Singh Dhoni was trapped lbw by Riaz a little later for 25. Tendulkar continued to work the ball around in the face of some tight bowling in the middle overs and was lucky to see two clear spilled catches off Afridi, the tournament’s leading wicket-taker.
SYDNEY — (AP) — Michael Clarke has been named Australia’s 43rd test cricket captain, replacing Ricky Ponting who has stepped down after a nine-year reign. Clarke’s appointment as test and one-day captain was announced at a news conference Wednesday along with the appointment of allrounder Shane Watson as vice-captain. Cameron White will continue to captain the Australian Twenty20 team, with Watson as his deputy. Cricket Australia chairman Jack Clarke said Michael Clarke had proven to be an excellent captain when standing in for Ponting, notably during Australia’s recent 6-1 Commonwealth Bank Series win against England. Clarke, 29, will ﬁrst lead Australia on its tour to Bangladesh next month which comprises three one-day internationals. He will lead the test team for the ﬁrst time when Australia tours Sri Lanka in August, though he stood in for the injured Ponting in the ﬁfth Ashes test against England this summer. “Michael has shown himself to be excellent with his on-ﬁeld tactics when heading the national side,” Jack Clarke said. “To captain your country is a great honor and responsibility and I congratulate Michael and wish him the best in what will be an exciting and challenging time.” Michael Clarke said he was looking forward to the opportunity to lead the Australian team. “It is a great honor to be appointed captain of Australia, but at the same time, a great surprise as I wasn’t expecting Ricky Ponting to stand down,” he said. “I have always respected those who have come before me in this role and humbled to think of my name being mentioned alongside theirs.” Ponting endorsed Clarke as his successor while announcing his retirement. Clarke, a right-handed batsman who has played 69 tests, scoring 4742 runs at an average of 46.49, has been
seen as Ponting’s likely successor since cementing his place in the Australian team after it’s 2006 Ashes whitewash of England. He said he foresaw no problems with Ponting remaining in the test and oneday teams as a player and expected to take advice from his former captain. “I think Bangladesh will be a great test for that to see how it all unfolds,” Clarke told a news conference in Sydney. “I’m conﬁdent that if he can continue to play for as long as he has done, I’m sure it will work.” Watson, 29, said he was looking forward to the added responsibility and working closely with Clarke. “Playing cricket for Australia has been a great honor for me and to now be appointed vice-captain is really exciting,” Watson said. “I look forward to doing what I can to help and support Michael Clarke in the test and ODI teams, and Cameron White with the Twenty20 group. “There are challenges ahead but also opportunity and I look forward to being part of the leadership group as we work together to grasp that opportunity.” The chairman of the Australian selection panel, Andrew Hilditch, paid tribute to Ponting while welcoming Clarke’s appointment. “Ricky has been an inspirational leader of men,” Hilditch said. “He has led the side with skill, courage, passion, determination and integrity at all times. “Michael [Clarke] has shown great leadership and tactical skills in the opportunities he has had to lead the side when Ricky has been injured or not available. The time is right now with Ricky stepping down for Michael to assume the leadership of the Australian cricket team.” Hildith also announced Australia’s squad for the Bangladesh tour, which includes a warmup match on April 7 and ODIs against Bangladesh on April 9, 11 and 13. All matches will be played in the capital Dhaka.
Players detail dealings with Barry Bonds’ trainer • BONDS, FROM 8B
mail under the name Johnny Bench, so Giambi assumed he should keep the transactions secret. Giambi said the items called “the clear” — a liquid administered under the tongue — and “the cream” were used to raise testosterone levels, then mask the heightened testosterone from drug tests. After 35 minutes of testimony, Jeremy Giambi testiﬁed about his own interactions with Anderson, whom he had been introduced to by Jason. He said Anderson told him the drugs he sent him were undetectable steroids. At one point, he looked so bothered that the defense lawyer Cris Argue-
das apologized to him. She asked about him testing positive for nandrolone after undergoing an initial drug screening by Anderson. She asked if it was a steroid. He whispered yes. “I’m sorry, I’m taking you through something that’s embarrassing to you,” she said. Giambi answered, “No, it’s not,” but did not sound convincing. Benard, Bonds’ former Giants teammate, ended the day by testifying that he sought out Anderson in 1999 because he had questions about veterinary steroids he had bought in Mexico. “I believe I brought back some steroids that were dirty because they used it mostly for animals,” he said. “I asked him about it, and he’s the one who let me know
that’s not the best thing I’m using.” Bernard testiﬁed that he usually administered those injections on his own in his left buttock. Baseball has had other low moments with players under oath. Drug trials in the mid1980s in Pittsburgh revealed cocaine use among major league players, leading to the suspension of 11 of them. In 2005, several players — including Mark McGwire and Sammy Sosa — testiﬁed before a congressional committee investigating steroid use in baseball. In the end, though, the players’ testimony at the Bonds trial will provide perhaps the most jarring look at the era and the nonchalance with which players used performance-enhanc-
ing drugs. Similar testimony is expected when Clemens’ trial begins in July. He has been charged with lying to Congress. “Baseball has had its embarrassing moments before, and this will be one of them, but I think these trials will actually give them some closure,” said Michael McCann, a professor at Vermont Law School and director of its Sports Law Institute. “When the Clemens and the Bonds cases are over, the steroids chapter for baseball on some level will be written.” Jurors at the Bonds trial have already heard intimate details about Bonds. Kimberly Bell, his former girlfriend, testiﬁed Monday that Bonds developed acne, bloating, testicular atrophy and trouble maintaining an erection
— all documented symptoms of steroid use. On Tuesday, Stan Conte, the former Giants head trainer, testiﬁed that Bonds put on a substantial amount of lean muscle starting in 1999. He also said he observed Bonds’ acne because Bonds often picked at it. Still, Philip K. Anthony, the chief executive of DecisionQuest, a nationwide jury consulting ﬁrm, said the jury would consider the testimony of the players as weightier than anyone else’s. He said it would be “a crushing blow for the defense” that other players are testifying against Bonds. “The players’ testimony will be shocking to most jurors because of their underlying natural belief that conspiracies exist,” Anthony said.
Brazil rejects FIFA’s criticism of World Cup preparations BY TALES AZZONI
SAO PAULO — The Brazilian football federation rejected criticism from FIFA president Sepp Blatter over delays in preparations for the 2014 World Cup, saying that the country is on track to successfully host the tournament. Federation president Ricardo Teixeira said Tuesday that preparations are going as planned and wants Blatter to personally visit the country to see the improvements. “Again, I would like to in-
vite FIFA’s president to come to Brazil to see the progress from up close,” Teixeira said in a statement. Teixeira said he was surprised to hear the criticism because Blatter had lauded the preparations after a meeting with the local organizing committee in Zurich earlier this month. Blatter urged Brazil on Monday to speed up preparations. He said Brazil’s project is “not progressing very quickly” and even lags behind South Africa, which fell behind with its construc-
tion schedule for last year’s tournament. Teixeira said there is no need to put pressure on local authorities because construction work is going as scheduled. Blatter claimed plans for World Cup stadiums are still in the process of being discussed between city mayors and state governors and run the risk of facing delays, but Teixeira dismissed such concerns. “I’m not aware of any conﬂict between mayors and governors in any of the 12
World Cup host cities,” the Brazilian ofﬁcial said. Teixeira also dismissed Blatter’s worries regarding the “slow progress” in Rio de Janeiro and Sao Paulo, which could be left off the program for the 2013 Confederations Cup. “I afﬁrm again that it was never announced that Maracana [Stadium] would not be delivered on time,” he said. “Regarding the stadium in Sao Paulo, although the construction work hasn’t started yet, we are working to solve the technical issues and we
have guarantees from everyone involved that the stadium will be delivered as scheduled.” Brazil Sports Minister Orlando Silva also downplayed Blatter’s criticism, but acknowledged that the country would likely face difﬁculties if some projects scheduled to begin this year end up being delayed. “Seventy percent of the urban mobility projects need to start in 2011,” he said. “It’s crucial for the success of the World Cup that they get underway now.”
EASTERN CONFERENCE Atlantic y-Boston Philadelphia New York New Jersey Toronto
W 51 38 36 23 20
L 22 36 38 50 53
Pct GB .699 — .514 131/2 .486 151/2 .315 28 .274 31
Southeast x-Miami x-Orlando x-Atlanta Charlotte Washington
W 51 47 42 31 18
L 23 27 32 42 55
Pct GB .689 — .635 4 .568 9 .425 191/2 .247 321/2
Central y-Chicago Indiana Milwaukee Detroit Cleveland
W 53 33 29 26 15
L 20 42 44 47 58
Pct GB .726 — .440 21 .397 24 .356 27 .205 38
WESTERN CONFERENCE Southwest x-San Antonio x-Dallas New Orleans Memphis Houston
W 57 52 42 41 39
L 17 21 32 33 35
Pct GB .770 — .712 41/2 .568 15 .554 16 .527 18
Northwest x-Oklahoma City Denver Portland Utah Minnesota
W 49 44 43 36 17
L 24 29 31 39 57
Pct GB .671 — .603 5 .581 6“ .480 14 .230 32
Pacific y-L.A. Lakers Phoenix Golden State L.A. Clippers Sacramento
W 53 36 32 29 21
L 20 37 43 45 52
Pct GB .726 — .493 17 .427 22 .392 241/2 .288 32
x-clinched playoff spot y-clinched division TUESDAY’S GAMES Cleveland 102, Miami 90 Houston 112, New Jersey 87 Oklahoma City 115, Golden State 114, OT Sacramento 116, Phoenix 113
3/31/2011 4:51:36 AM
THURSDAY, MARCH 31, 2011
THE MIAMI HERALD
FOR LATE GAME SCORES, GO TO MIAMIHERALD.COM/SPORTS
Players detail dealings with Bonds’ trainer BY JULIET MACUR
New York Times Service
SAN FRANCISCO — With only his ruddy face betraying any nervousness, Jason Giambi, the Colorado Rockies player and former Yankees slugger, calmly testiﬁed at Barry Bonds’ perjury trial, describing the items he received from Bonds’ trainer, Greg Anderson, as if reciting items on his grocery list. Injectable testosterone and syringes. White pills. Yellow pills. A clear liquid and a cream to be taken together so they would be undetectable by drug tests. A calendar advising him exactly
which drugs to take and when to take them. “He said that if I needed growth hormone that he could send it to me,” Giambi said of his transactions with Anderson in late 2002 through summer 2003. “But I had told him that I had had it already.” So began testimony on Tuesday from current and former major league players who prosecutors say will establish that Anderson gave his clients — including Bonds, baseball’s home run king — steroids, told them what they were and told them exactly how to administer them.
Bonds, who sat emotionless at the defense table as his contemporaries testiﬁed, is charged with lying to a grand jury in 2003 when he said he never knowingly used steroids. He said he thought Anderson was giving him ﬂaxseed oil and arthritis balm. Bonds played his last game for the San Francisco Giants in 2007 and, in some ways, baseball could be forgiven for believing that the worst of the steroid scandal is behind it. Many of its tainted stars have retired. Drug testing, absent before 2003, is now in place. Pitchers just had a dominant year and
home runs were down, some evidence that steroid use has waned. But this week may make for one of the worst weeks for baseball and its steroid woes: Three of the seven players on the government’s witness list — Giambi, his younger brother Jeremy and a former Bonds teammate, Marvin Benard — gave detailed testimony on Tuesday about their own steroid use and relationship with Anderson. Jason Giambi, who testiﬁed to a grand jury in 2003 about his steroid use, had the unenviable position of leading off. He said he met Anderson on a
baseball trip to Japan after the 2002 season. Impressed with Bonds’ performances, he asked Anderson about his training methods. Giambi said he later provided Anderson with blood and urine samples that were screened for a variety of things, including steroids. He tested positive for the steroid Deca-Durabolin. Giambi said he eventually paid Anderson $10,000 for performanceenhancing drugs, including testosterone that he injected into himself. At least two packages came in the • TURN TO BONDS, 7B
PRAKASH SINGH/AFP-GETTY IMAGES
Indian cricketers celebrate victory over Pakistan in the semifinal of the cricket World Cup in Mohali, India, on Wednesday.
INDIA VANQUISHES PAKISTAN CO-HOST DEFEATS ARCH RIVAL TO REACH THE FINAL OF THE CRICKET WORLD CUP
Miami Herald Wire Services
MOHALI, India — A fortuitous 85 from Sachin Tendulkar was followed by a disciplined bowling effort as India beat Pakistan by 29 runs in a high-stakes semiﬁnal Wednesday to progress to the World Cup ﬁnal against Sri Lanka. Pakistan was dismissed for 231 in the last over chasing 261 to beat the pre-tournament favorites. The 28,000 fans inside the Punjab Cricket Association Stadium went wild in celebration, shouting, dancing and waving national ﬂags after India carved out a memorable victory against its traditional rival in the presence of the prime ministers of both countries. Hundreds of Pakistani nationals had crossed the border to watch the most-awaited semiﬁnal clash. According to the Indian newspaper Deccan Herald, dozens of citizens in Chandigarh and Mohali had opened their doors to the vis-
iting fans, who stayed with them as guests, free of cost because hotel rooms in and around the city were full. However, the visiting fans were mightily disappointed after the colossal loss that saw their team go out of the tournament. In Pakistan, disappointment and anger settled over the country after the loss, the latest blow for a nation already struggling with a weak economy and rampant militant attacks. Some Pakistani fans who had celebrated their team’s performance with cheers and gunﬁre during the match fell silent as the game ended. Others ﬁred into the air in anger and cursed their team, which was mired in a betting scandal in recent months. “It seems that all the top order batsmen presented their wickets to the Indian side,” said 51-yearold Mohammed Iqbal after watching the match with a crowd in
the southern port city of Karachi. In contrast there were celebra“They seem to have sold them- tions all around India with people selves to the bookies.” There were partying on the streets till late into no indications of any impropri- the night. eties during the game though. Cricket is immensely popular
Supporters in Ahmedabad, India, take to the streets after their country’s win in the semifinal on Wednesday.
in both Pakistan and India, and the rivalry between the neighboring countries meant that much more than simply reaching the World Cup ﬁnal was on the line. The countries have strong cultural, linguistic and ethnic ties, but they also share a recent history of war, mistrust and enmity. Indians and Pakistanis crowded around television sets at tea stalls and screens erected in markets and stadiums as the cricket-crazy nations stopped work Wednesday to watch their teams vie for a place in the World Cup ﬁnal. Banks, ofﬁces and shops emptied out as the game began in the north Indian town of Mohali. The build-up to the match had been intense, with unrelenting media coverage and public prayers for the teams. • TURN TO CRICKET, 7B
At the Houston Open, Fish wins to become No. 1 in U.S. Lefty has Masters on mind BY STEVEN WINE
BY DOUG FERGUSON Associated Press
ORLANDO, Fla. — It’s become a tired phrase that players have the Masters on their mind at this time of the year. For Phil Mickelson, it has never been more true. Mickelson is playing the Houston Open this week because he prefers to compete in the week before a major. But given his disdain for the works of Rees Jones, who designed Redstone Golf Club, he said he will play shots that might not make a lot of sense, all to get ready for his title defense at Augusta National. “Houston is not going to set up well for me,” Mickelson said recently. His biggest complaint was that the Redstone fairways narrow after about 285 yards off the tee, which
tends to limit power players to a 3-wood off the tee. Mickelson plans to hit driver, anyway. “It’s not going to be a course where I’m going to play the most strategic and expect to really score well,” he said. “I’m just not going to hit 3-woods off the tee and play that course strategically the week before Augusta. And then when it gets windy and I’m trying to hit high balls for Augusta, and it requires a low, knockdown shot — it’s not going to work.” This is a week where he’s not interested in results. Mickelson doesn’t believe he has to win before he gets to the Masters — last year was proof of that — as long as he feels good about his game. He recalls starting to feel conﬁdent at Houston a year ago.
KEY BISCAYNE, Fla. — Mardy Fish is the new No. 1 in the United States, and he’s among the ﬁnal four at the Sony Ericsson Open. Fish claimed the top U.S. men’s ranking for the ﬁrst time Wednesday by reaching the semiﬁnals when he beat No. 6-seeded David Ferrer 7-5, 6-2. A Minnesota native who grew up in Florida, the 29-year-old Fish will climb to at least 11th, a career best, in the next rankings. Good friend Andy Roddick will fall from eighth to 14th after losing his opening match last week. “I don’t think I would ever feel like I was the No. 1 American,” Fish said. “Andy has had a pretty good career. You can put his career on top of mine about six times. He’s
eva became the ﬁrst the women’s semiﬁnalist when she beat No. 9 Agnieszka Radwanska 7-5, 6-3. Fish, seeded 14th, dominated with his serve and took the lead for good when Ferrer hit back-toback double-faults to lose the 11th game. At 29, Fish is into the Key Biscayne semiﬁnals for the ﬁrst time. His opponent Friday will be the winner of Wednesday night’s match between No. 2-seeded Novak Djokovic and unseeded Kevin Anderson. The No. 3-seeded ZvonarAL BELLO/GETTY IMAGES eva overcame a set point with an Mardy Fish has reached the ace in the ﬁrst set against Radwanska, and won four consecusemifinals at Key Biscayne. tive games to take control of the always going to be the top dog in second set. my generation.” Zvonareva improved to 4-0 in No. 3-seeded Vera Zvonar- quarterﬁnals this year.
3/31/2011 4:57:26 AM
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