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LEGAL STREET NEWS Circulated Weekly To Cities In America

Volume 731 Issue 18

Established 1998

April 30, 2012

In The News This Week Washington Delicate WASHINgTON DeLICATe ABOUT SeCReT SeRvICe SCANDAL

A b o u t Service

The widening Secret Service prostitution scandal has touched off a delicate dance in Washington. Page 1

pended the security clearances of the military personnel being investigated. As many as 20 prostitutes were involved with the group, officials say. None are believed to be underage.

SWISS SCIeNTISTS DeMONSTRATe MINDCONTROLLeD ROBOT Swiss scientists have demonstrated how a partially paralyzed person can control a robot by Page 2 thought alone.

CALIFORNIANS TO vOTe ON ABOLISHINg DeATH PeNALTy California voters will soon get a chance to decide whether to replace the death penalty with life in prison without the possibility of parole. Page 3

The incident came to light after one of the prostitutes argued with a Secret Service agent over her payment in a hallway of the Caribe hotel. Local law enforcement interDavid Chaney partying with Colombian scantily-clad women vened on the prostitute's WASHINgTON (AP) — The widening behalf. Paid sex is legal in Cartagena, but vioSecret Service prostitution scandal has touched lates codes of conduct for U.S. personnel who off a delicate dance in Washington. were working there.

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From President Barack Obama on down, people are loath to criticize an agency whose employees are trained to take a bullet for others.

An aging population and an economy that has been slow to rebound are straining the longterm finances of Social Security and Medicare. Page 4

"The Secret Service, these guys are incredible. They protect me. They protect Michelle. They protect the girls," Obama said Tuesday on NBC's "Late Night with Jimmy Fallon." ''A couple of knuckleheads shouldn't detract from what they do."

ROMNey ON SPeNDINg: gUNS TRUMP BUTTeR Romney's way would mean less money for health care for the poor and disabled and big cuts to nuts-and-bolts functions such as food inspection, border security and education. Page 5

WAL-MART STOReS STOCk SLIDeS ON BRIBeRy PROBe Alleged executives at the company's Mexican subsidiary carried out a vast bribery scheme and tried to hush it up. Page 6

OBAMACARe COLLAPSe WOULD PUT eMPLOyeRS IN CHARge Workers will bear more of their own medical costs as job coverage shifts to plans with higher deductibles. Page7

CHINA OFFICIAL SAyS PROvIeW OWNS IPAD TRADeMARk Apple Inc. risks losing the right to use the iPad trademark in China, a senior official suggested Tuesday, as a Chinese court was seeking to mediate a settlement. Page 8

S e c r e t S c a n d a l

Members of Congress pressing for the juicy stories risk reviving — or having revealed — some of their own. yet all parties claim to want the truth about the extent of sworn officers working for one of the nation's premier law enforcement agencies hiring Colombian sex workers ahead of President Barack Obama's visit there and whether national security may have been compromised. Spinning the facts as they emerge poses more risk: The Secret Service and the military are supposed to be above politics, dedicated to protecting presidents, their families and the nation. "Sure, it creates a problem for President Obama. It adds to the sense that Washington is broken. But if the Republicans try to make this a point in their arguments, they are making a big mistake," gOP strategist karl Rove said on "Fox News Sunday." A dozen Secret Service personnel and another 12 military enlistees preparing for Obama's visit to Cartagena are being investigated for cavorting with prostitutes. Six Secret Service agents have been let go over the incident, and on Monday, Defense Secretary Leon Panetta told reporters his department has sus-

Secret Service Director Mark Sullivan launched an investigation and requested an independent probe by the Homeland Security Department's inspector general. Sullivan ousted some of those implicated and, perhaps as importantly, he busily briefed key members of Congress who left no doubt they would hold public hearings should they find his investigation insufficient. For now, there's no complaint about the swift pace of the fallout or Sullivan's thoroughness. But there's been much discretion, strategic question-asking and even notable silence from some members of Congress, uncharacteristic restraint in a tense election year sizzling with gender politics. Obama has coolly urged a rigorous investigation and said that if the allegations prove true, he would be angry. For any president, a Secret Service scandal creates discomfort. Members of the agency's elite protective service help the first family feel safe in the public glare. It's a fairly intimate relationship, First Lady Michelle Obama told members of the Secret Service last year. The president, their daughters and she playfully argued at the dinner table over their favorite agents, she said. "We love our detail," Mrs. Obama told the U.S. Secret Service employees in October. "For us, it's like having family around." The Secret Service also shadows presidential candidates and their families. Republican frontrunner Mitt Romney is said to be close to his detail. Aides have said Romney sometimes eats dinner in his hotel room instead of dining in

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S W i S S S C i E N T i S T S D E m o N S T R A T E m i N D - C o N T R o L L E D R o b o T LAUSANNe, Switzerland (AP) -- Swiss scientists have demonstrated how a partially paralyzed person can control a robot by thought alone, a step they hope will one day allow immobile people to interact with their surroundings through so-called avatars.

"Sooner or later your attention will drop and this will degrade the signal," Millan said. To get around this problem, his team decided to program the computer that decodes the signal so that it works in a similar way to the

Similar experiments have taken place in the United States and germany, but they involved either able-bodied patients or invasive brain implants. On Tuesday, a team at Switzerland's Federal Institute of Technology in Lausanne used only a simple head cap to record the brain signals of Mark-Andre Duc, who was at a hospital in the southern Swiss town of Sion 100 kilometers (62 miles) away. Duc's thoughts - or rather, the electrical signals emitted by his brain when he imagined lifting his paralyzed fingers - were decoded almost instantly by a laptop at the hospital. The resulting instructions - left or right - were then transmitted to a foot-tall robot scooting around the Lausanne lab. Duc lost control of his legs and fingers in a fall and is now considered partially quadriplegic. He said controlling the robot wasn't hard on a good day. "But when I'm in pain it becomes more difficult," he told The Associated Press through a video link screen on a second laptop attached to the robot. Background noise caused by pain or even a wandering mind has emerged as a major challenge in the research of so-called brain-computer interfaces since they first began to be tested on humans more than a decade ago, said Jose Millan, who led the Swiss team. While the human brain is perfectly capable of performing several tasks at once, a paralyzed person would have to focus the entire time they are directing the device.

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brain's subconscious. Once a command such as 'walk forward' has been sent, the computer will execute it until it receives a command to stop or the robot encounters an obstacle. The robot itself is an advance on a previous project that let patients control an electric wheelchair. By using a robot complete with a camera and screen, users can extend their virtual presence to places that are arduous to reach with a wheelchair, such as an art gallery or a wedding abroad. Rajesh Rao, an associate professor at the University of Washington, Seattle, who has tested similar systems with able-bodied subjects, said the Lausanne team's research appeared to mark an advance in the field. "especially if the system can be used by the paraplegic person outside the laboratory," he said in an email. Millan said that although the device has already been tested at patients' homes, it isn't as easy to use as some commercially available gadgets that employ brain signals to control simple toys, such Mattel's popular MindFlex headset. "But this will come in a matter of years," Millan said.

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__________________________________________________________Legal Street News Monday, April 30, 2012

CALiFoRNiANS To voTE oN A b o L i S H i N G D E AT H P E N A LT y SAN FRANCISCO (AP) -- California voters will soon get a chance to decide whether to replace the death penalty with life in prison without the possibility of parole.

Police Sergeant Chris Scott says the protesters were sitting in front of the bank at noon blocking customer traffic. They refused to move and were arrested.

If it passes, the 725 California inmates now on Death Row will have their sentences converted to life in prison without the possibility of parole. It would also make life without parole the harshest penalty prosecutors can seek.

They were handcuffed, taken to the police station, booked on a misdemeanor charge and released.

Backers of the measure say abolishing the death penalty will save the state millions of dollars through layoffs of prosecutors and defense attorneys who handle death penalty cases, as well as savings from not having to maintain the nation's largest death row at San Quentin State Prison.

The measure is dubbed the "Savings, Accountability, and Full enforcement for California Act," also known as the SAFe California Act. It's the fifth measure to qualify for the November ballot, the secretary of state announced Monday. Supporters collected more than the 504,760 valid signatures needed to place the measure on the ballot. "Our system is broken, expensive and it always will carry the grave risk of a mistake," said Jeanne Woodford, the former warden of San Quentin who is now an anti-death penalty advocate and an official supporter of the measure. The measure will also require most inmates sentenced to life without parole to find jobs within prisons. Most death row inmates do not hold prison jobs for security reasons. Though California is one of 34 states that authorize the death penalty, the state hasn't put anyone to death since 2006. A federal judge that year halted executions until prison officials built a new death chamber at San Quentin, developed new lethal injection protocols and made other improvements to delivering the lethal threedrug combination. A separate state lawsuit is challenging the way the California Department of Corrections and Rehabilitation developed the new protocols. A judge in Marin County earlier this year ordered the CDCR to redraft its lethal injection protocols, further delaying executions. Since California reinstated the death penalty in 1978, the state has executed 13 inmates. A 2009 study conducted by a senior federal judge and law school professor concluded that the state was spending about $184 million a year to maintain Death Row and the death penalty system. Supporters of the proposition, such as the American Civil Liberties Union, are portraying it as a cost-savings measure in a time of political austerity. They count several prominent conservatives and prosecutors - including the

P r o t e s t e r s b l o c k i n g We l l s F a r g o b a n k A r r e s t e d DeS MOINeS, Iowa (AP) — Ten protesters blocking the entrance to a downtown Des Moines Wells Fargo bank have been arrested.

A measure to abolish capital punishment in California qualified for the November ballot on Monday, Secretary of State Debra Bowen said.

Those savings, supporters argue, can be used to help unsolved crimes. If the measure passes, $100 million in purported savings from abolishing the death penalty would be used over three years to investigate unsolved murders and rapes.

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Iowa Citizens for Community Improvement says its members were protesting the company's refusal to give them speaking time at the company's annual meeting tomorrow in San Francisco. The group wants to discuss the company's record on home foreclosures, lending practices, political contributions, and CeO bonuses. author of the 1978 measure adopting the death penalty - as supporters and argue that too few executions have been carried out at too great a cost. "My conclusion is that he law is totally ineffective," said gil garcetti, a former Los Angeles County district attorney. "Most inmates are going to die of natural causes, not executions." garcetti, who served as district attorney from 1992 to 2000, said he changed his mind after publication of the 2009 study, which was published by Judge Arthur Alarcon of the 9th U.S. Circuit Court of Appeals and law professor Paula Mitchell.

Bank spokeswoman Angie kaipust says the bank has a long history of responsible lending and community support. She says for anyone to say otherwise is simply not true.

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Opponents of the measure, such as former Sacramento U.S Attorney Mcgregor Scott, argue that lawyers filing "frivolous appeals" are the problem, not the death penalty law. "On behalf of crime victims and their loved ones who have suffered at the hands of California's most violent criminals, we are disappointed that the ACLU and their allies would seek to score political points in their continued efforts to override the will of the people and repeal the death penalty," said Scott, who is chairman of the Californians for Justice and Public Safety, a coalition of law enforcement officials, crime victims and others formed to oppose the measure. The Criminal Justice Legal Foundation, meanwhile, remains one the biggest backers of the death penalty in the state and opposes the latest attempt to abolish it in California. The foundation and its supports argue that federal judges are gumming up the process with endless delays and reversals of state Supreme Court rulings upholding individual death sentences. The foundation on Thursday filed a lawsuit seeking the immediate resumption of executions in California. The foundation's lawsuit, filed directly with the state Court of Appeal, argues that since the three-drug method has been the subject of so much litigation - and the source of the execution delays - a one-drug method of lethal injection like Ohio uses can be substituted immediately.

NeW ORLeANS (AP) — The Justice Department said on Tuesday it filed the first criminal charges in the Deepwater Horizon disaster in the gulf of Mexico, accusing a former BP engineer of destroying evidence. kurt Mix, of katy, Texas, was arrested on two counts of obstruction of justice. The Justice Department says the 50-year-old Mix is accused of deleting a string of 200 text messages with a BP supervisor in October 2010 that involved internal BP information about how efforts to cap the well were failing. BP officials did not immediately respond to emails seeking comment. Justice Department officials said Mix would make an initial appearance in federal court in Houston on Tuesday afternoon. On Wednesday, a federal judge in New Orleans is expected to consider a motion to approve a $7.8 billion civil settlement between BP and a committee of plaintiffs in a civil case. The BP-leased rig Deepwater Horizon exploded the night of April 20, 2010, killing 11 workers and setting off the nation's worst offshore oil disaster. More than 200 million gallons of crude oil flowed out of the well off the Louisiana coast before it was capped.


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Legal Street News Monday April 30, 2012 ___________________________________________________________

A G i N G W o R k F o R C E STRAiNS SoCiAL SECuRiTy Secretary Hilda Solis, Health and Human Services Secretary kathleen Sebelius and Social Security Commissioner Michael Astrue. There are also two public trustees, Charles Blahous and Robert Reischauer. More than 56 million retirees, disabled workers, spouses and children receive Social Security. The average retirement benefit is $1,232 a month; the average monthly benefit for disabled workers is $1,111. About 50 million people are covered by Medicare, the medical insurance program for older Americans. One bright spot for Medicare is that the pace of cost increases has eased somewhat, even as baby boomers are turning 65 at the rate of 10,000 a day and becoming eligible for the program. So instead of speeding toward a budget cliff, Medicare is merely steering toward insolvency.

By STEPHEN OHLEMACHER Associated Press WASHINgTON (AP) -- An aging population and an economy that has been slow to rebound are straining the long-term finances of Social Security and Medicare, the government's two largest benefit programs. Those problems are getting new attention Monday as the trustees who oversee the massive programs release their annual financial reports. Medicare is in worse shape than Social Security because of rising health care costs. But both programs are on a path to become insolvent in the coming decades, unless Congress acts, according to the trustees. Last year, the trustees projected the Medicare hospital insurance fund for seniors would run out of money in 2024. Social Security's retirement fund was projected to run dry in 2038, while the disability fund was projected to be drained by 2018.

money in 2016. Social Security's trustees are again urging Congress to shore up the disability system by reallocating money from the retirement program, just as lawmakers did in 1994. If the Social Security and Medicare funds ever become exhausted, both programs would collect only enough money in payroll taxes to pay partial benefits, the trustees said. "I don't know how to make it clear to the public, but in my mind the sirens are going off," said Mary Johnson, policy analyst for the Senior Citizens League. "I wouldn't say we're under attack, but we are in a very, very serious position." Don't expect the finances to look much better, if at all, in the new report. Tax revenues have started to rebound but they are still below pre-recession levels. Also, this year's cost-ofliving adjustment, or COLA, was much higher than the trustees projected it would be.

New projections in March gave a more dire assessment of the disability program, which has seen a spike in applications as more disabled workers lose jobs and apply for benefits.

Last spring, the trustee's projected that Social Security recipients would get a benefit increase of 0.7 percent for this year, but higherthan-expected inflation pushed it to 3.6 percent. That was good news for seniors but it drained more resources from the system.

The nonpartisan Congressional Budget Office said the disability fund would run out of

The trustees who oversee the programs are Treasury Secretary Timothy geithner, Labor

"The trends in Medicare are more modest than the cost increases we have seen in the private commercial sector," said economist David Blitzer, who oversees Standard & Poor's index of health care costs. "But both Medicare and the commercial sector face rising cost pressures no matter what, and they seem to come from virtually all directions." Because Medicare is a government program, it sets prices on take-it-or-leave-it terms for hospitals and doctors, who complain it doesn't pay enough and that causes them to charge more to privately insured patients. Many experts say the longer Congress waits to address the two programs, the more difficult it could become to impose adequate changes. If Congress acts soon, it can phase in changes over time, perhaps sparing current retirees while giving those closing in on retirement time to prepare. But Washington has struggled to make tough political choices that could involve raising taxes, cutting benefits or some combination of both. Advocates for seniors oppose benefit cuts in either program. They say Social Security's finances are secure for decades to come. "No one is saying you don't have to maintain it," said eric kingson, co-chair of the Strengthen Social Security Campaign and a professor of social work at Syracuse University. "What I worry about is reducing he benefit structure or radically changing the system." kingson and other advocates say Social Security could be shored up by simply increasing the amount of wages subject to Social Security taxes - an idea that most Republicans in Congress flatly oppose.

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Social Security is financed by a 6.2 percent tax on the first $110,100 in wages. It is paid by both employers and workers. Congress temporarily reduced the tax on workers to 4.2 percent for 2011 and 2012, though the program's finances are being made whole through increased government borrowing. The Medicare tax rate is 1.45 percent on all wages, paid by both employees and workers.


__________________________________________________________Legal Street News Monday, April 30, 2012

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R o m N E y o N S P E N D i N G : G u N S T R u m P b u T T E R WASHINgTON (AP) -- Reducing government deficits Mitt Romney's way would mean less money for health care for the poor and disabled and big cuts to nuts-and-bolts functions such as food inspection, border security and education. Romney also promises budget increases for the Pentagon, above those sought by some gOP defense hawks, meaning that the rest of the government would have to shrink even more. Nonmilitary programs would incur still larger cuts than those called for in the tightfisted gOP budget that the House passed last month. Differences over the government's budget and spiraling deficits are among the starkest that separate Republican Romney and Democratic President Barack Obama. Obama's budget generally avoids risk, with minimal cuts to rapidly growing health care programs such as Medicare and Medicaid while socking wealthier people with tax increases. It's all part of an effort to close trillion-dollar-plus deficits. Romney, by contrast, proposes broad cuts in government spending, possibly overpromising on reductions that even a Congress stuffed with conservatives might find hard to deliver. His campaign materials give relatively few specifics, other than a pledge to bring total government spending down to 20 percent of the U.S. economy by the end of a first term in 2016. That is roughly in line with where it was during Republican george W. Bush's presidency. estimates by the nonpartisan Congressional Budget Office put current government spending at $3.6 trillion, or about 23.5 percent of the gross domestic product this year, slipping to 21.8 percent by 2016. The math can get fuzzy. But the Romney campaign says it needs to come up with $500 billion in cuts in 2016, the target year. Overall, Romney promises to shrink the government by about one-seventh when compared against the size of the economy. The gOP front-runner suggests raising the Social Security retirement age and reducing cost-of-living increases for better-off retirees. He generally endorses a plan by House Budget Committee Chairman Paul Ryan, RWis., to gradually transform Medicare from a program that directly pays hospital and doctor bills into vouchers for subsidizing future beneficiaries in buying health insurance. Because Romney promises to protect current Social Security and Medicare recipients from cuts, he cannot get much savings from those programs by 2016. Combined, they are projected to make up about 44 percent of the budget that year. Interest costs, which cannot be touched, would make up an additional 9 percent of the budget, while Romney promises to add almost $100 billion to the Pentagon budget that year, based on his pledge that military spending reach 4 percent of gDP. So what's left to cut?

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-MeDICAID: The program now provides health care for about 50 million mostly poor and disabled people, including nursing home care for 7 of 10 patients nationwide. Obama's health care law sharply would sharply boost Medicaid enrollment to cover more people above the poverty line, a move that Romney promises to repeal. Like House Republicans, Romney promises to transform Medicaid into block grants for states and shed federal supervision of it. He would cap the program's annual growth to inflation plus a percentage point. His campaign says the approach would unshackle states to innovate and, by the end of a decade, cut costs by more than $200 billion a year. Advocates for the poor say the inevitable result will be that millions of people will be bounced from the program. An Urban Institute study last year estimated that Ryan's cuts would force between 14 million and 27 million people off of Medicaid by 2021. Romney's budget would make deeper cuts. -DOMeSTIC AgeNCy BUDgeTS: If Social Security is mostly off the table and current Medicare beneficiaries are protected, domestic Cabinet agency budgets would take a major hit in ways that could fundamentally alter government. The future growth of those discretionary programs funded through annual appropriations bills was already cut greatly in last year's deal to raise the government's borrowing limit. At issue are these programs, just to name a few: health research; NASA; transportation; homeland security; education; food inspection; housing and heating subsidies for the poor; food aid for pregnant women; the FBI; grants to local governments; national parks; and veterans' health care. Romney promises to immediately cut them by 5 percent. But they would have to be cut more than 20 percent to meet his overall budget goals, assuming veterans' health care is exempted. It's almost unthinkable that lawmakers would go along with cuts of such magnitude for air traffic control and food inspection or to agencies like NASA, the FBI, Border Patrol and the Centers for Disease Control. "It's just not sustainable," said gOP lobbyist Jim Dyer, a former staff director for the House Appropriations Committee. "What do you want to do with the national parks? Which ones do you want to close? ...The only way it adds up is if you go after the big, popular stuff, and nobody talks about that now."

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Among the few specific cuts listed in Romney's campaign literature are proposals to cut the federal workforce by 10 percent through attrition, eliminate federal family planning money, privatize the money-losing Amtrak system and trim foreign aid. -OTHeR BeNeFIT PROgRAMS: Like Ryan's budget, the Romney plan would also cut benefit programs other than Social Security and Medicare. They include food stamps, school lunches, crop subsidies, Supplemental Security Income for very poor seniors and disabled people, unemployment insurance, veterans' pensions and refundable tax credits to the working poor. Based on the Romney materials, it's impossible to project the size of the cuts to such programs. Suffice it to say, they would be controversial. "There's good reason why Ryan's budget and the Romney budget don't have details," said Jim Horney, a budget analyst with the liberalleaning Center on Budget and Policy priorities think tank. "If people knew what it would actually have to be done to accomplish what they're saying should be done, it's hard to imagine there would be widespread support for it."

Justices Debating Tr i b a l C a s i n o Lawsuit WASHINgTON (AP) -- The Supreme Court seems troubled at letting a lawsuit move forward that attempts to shut down a new tribal casino in southwestern Michigan. The justices heard arguments Tuesday from the Match-e-Be-Nash-She-Wish Band of Pottawatomi Indians, also known as the gun Lake Tribe, and the Justice Department. They want a lawsuit by casino foe David Patchak thrown out by the high court. The tribe opened a casino in Wayland Township, 20 miles south of grand Rapids. But Patchak sued to close the casino down, challenging how the government placed the land in trust for the tribe. A federal judge threw out his lawsuit, but the U.S. Appeals Court for the Federal Circuit said it could move forward. Several justices questioned whether Patchak waited too long to file his lawsuit.


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Monday April 30, 2012_____________________________________________________________

Wa l - m a r t m i c ro s o f t S e l l s A o L P a t e n t s o n To F a c e b o o k Stores Stock Slides on bribery Probe NeW yORk (AP) -- Microsoft, which just bought patents from AOL for $1 billion, is now turning around and selling most of them to Facebook for $550 million.

Patents have become a valuable commodity for technology companies in recent years, and companies frequently use them in lawsuits against one another.

Facebook is buying about 650 of the 925 AOL patents and patent applications that Microsoft bought, Microsoft and Facebook said Monday.

Facebook, which is expected to go public in May, is embroiled in a patent suit with struggling Internet company yahoo Inc. yahoo had sued Facebook saying the company violates 10 of its patents covering advertising, privacy controls and social networking. Facebook responded with its own lawsuit this month accusing yahoo of violating 10 of its patents.

Facebook will also get a license to use the rest of the AOL Inc. patents that Microsoft bought. Similarly, Microsoft Corp. will get a license to use the patents Facebook is buying. This part of the arrangement amounts to an agreement between Facebook and Microsoft not to sue each other over any of the AOL patents. The companies are not saying what the patents cover. MATTHEW BROWN,Associated Press NeW yORk (AP) -- Shares of Wal-Mart Stores fell nearly 5 percent after a news report alleged executives at the company's Mexican subsidiary carried out a vast bribery scheme and tried to hush it up. Wal-Mart's stock price fell $2.70 to $59.75 in midday trading, wiping out its gains since the beginning of the year. The shares are still trading higher than their 52-week low of $48.31, reached on Aug. 10, 2011. On Saturday, The New york Times reported that Wal-Mart executives failed to notify law enforcement officials even after its own investigators found evidence of millions of dollars in bribes. The newspaper said the company shut down its internal probe despite a report by its lead investigator that Mexican and U.S. laws likely were violated. Wal-Mart says it is cooperating with authorities and looking into the matter. Analysts gave differing opinions on whether investors should hold on to Wal-Mart's stock. MkM Partners analyst Patrick Mckeever advised holders to reduce their exposure. He added that while he wasn't sure if there would be a management shakeup, if that does occur it could also hurt the stock. "Wal-Mart's current executive team has been starting to `gel' better over the past two to three quarters and is making progress with key initiatives after a period of leadership changes and inconsistency," he wrote "Accordingly, we would view any new changes in management as potentially disruptive to the improving fundamental trend we have seen recently."

Microsoft said the deal enables it to recoup half the cost of the AOL deal while reaching its goals for the purchase. Facebook's general counsel, Ted Ullyot, called the move a "significant step in our ongoing process of building an intellectual property portfolio to protect Facebook's interests over the long term."

The patents from AOL are adding to Facebook's quickly expanding patent portfolio. The company recently acquired 750 patents from IBM Corp. covering technologies that deal with software and networking. At the end of 2011, Facebook had just 56 U.S. patents, which was a relatively small number compared with other big tech companies. Facebook has said it expects to raise $5 billion in its initial public offering. The actual figure is expected to be higher, however, and could value the Menlo Park, Calif.-based company at as much as $100 billion.

m e t l i f e , S t a t e s R e a c h S e t t l e m e n t N e a r $ 5 0 0 m By GREG RISLING LOS ANgeLeS (AP) -- MetLife Inc. will pay nearly $500 million in a settlement involving more than 30 states that claimed it didn't provide life insurance benefits to some of its policyholders, the company said Monday. The largest life insurer in the United States said it expects to pay about $188 million of the $478 million this year, and the remainder over the next 17 years. State regulators investigated MetLife's use of the Social Security Administration's "Death Master" file, a database of people who have died. California Controller John Chiang said a joint investigative hearing held last year revealed MetLife had information about the deaths of some of its life insurance policyholders but failed to pay what was owned. "These settlements make it clear that if the industry isn't willing to make the payments

legally required, we will take action, including lawsuits, to compel them to do right by their customers," Chiang said. MetLife maintains it pays more than 99 percent of life insurance claims and it has been working with regulators to ensure everyone is paid. "The company has been working with regulators to develop industry best practices and is pleased to announce new processes that will provide an even stronger safety net for the limited number of beneficiaries who do not submit a claim to the company in the normal course of business," the company said in a statement. Californians' share from the agreement is expected to be about $40 million. It's not immediately known how much the other 33 states will receive. Among those included in the settlement are Florida, Illinois, North Dakota and Pennsylvania.

Citi Investment research analyst Deborah Weinswig took the opposite view. "We would use any weakness in the stock as an enhanced buying opportunity," she wrote. She said that after speaking with the company she believes Wal-Mart is dedicated to a "thorough and transparent review."

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__________________________________________________________Legal Street News Monday, April 30, 2012

obAmACARE CoLLAPSE WouLD PuT EmPLoyERS iN CHARGE House debate of Obama's law would have covered 3 million uninsured people, compared with more than 30 million under the president's plan. After the collapse of then-President Bill Clinton's health care plan in the 1990s, policymakers shied away from big health care legislation for years. Many expect a similar reluctance to set in if the Supreme Court invalidates Obama's Affordable Care Act.

WASHINgTON (AP) -- If the Supreme Court strikes down President Barack Obama's health care overhaul, don't look to government for what comes next. employers and insurance companies will take charge. They'll borrow some ideas from Obamacare, ditch others, and push even harder to cut costs. Here's what experts say to expect: - Workers will bear more of their own medical costs as job coverage shifts to plans with higher deductibles, the amount you pay out of pocket each year before insurance kicks in. Traditional insurance will lose ground to highdeductible plans with tax-free accounts for routine expenses, to which employers can contribute. - Increasingly, smokers will face financial penalties if they don't at least seriously try to quit. employees with a weight problem and high cholesterol are next. They'll get tagged as health risks and nudged into diet programs. - Some companies will keep the health care law's most popular benefit so far, coverage for adult children until they turn 26. Others will cut it to save money. - Workers and family members will be steered to hospitals and doctors that can prove that they deliver quality care. These medical providers would earn part of their fees for keeping patients as healthy as possible, similar to the "accountable care organizations" in the health care law. - Some workers will pick their health plans from a private insurance exchange, another similarity to Obama's law. They'll get fixed payments from their employers to choose from four levels of coverage: platinum, gold, silver and bronze. Those who pick rich benefits would pay more. "employers had been the major force driving health care change in this country up until the passage of health reform," said Tom Billet, a senior benefits consultant with Towers Watson, which advises major companies. "If Obamacare disappears ... we go back to square one. We still have a major problem in this country with very expensive health care." Business can't and won't take care of America's 50 million uninsured. Republican proposals for replacing the health care law aren't likely to solve that problem either, because of the party's opposition to raising taxes. The gOP alternative during

Starting in 2014, the law requires most Americans to obtain health insurance, either through an employer or a government program or by buying their own policies. In return, insurance companies would be prohibited from turning away the sick. government would subsidize premiums for millions now uninsured. The law's opponents argue that Congress overstepped its constitutional authority by requiring citizens to obtain coverage. The administration says the mandate is permissible because it serves to regulate interstate commerce. A decision is expected in late June. The federal insurance mandate is modeled on one that Massachusetts enacted in 2006 under then-gov. Mitt Romney. That appears to have worked well, but it's unlikely states would forge ahead if the federal law is invalidated because health care has become so politically polarized. Romney, the likely Republican presidential nominee, says he'd repeal Obamacare if elected. That would leave it to employers, who provide coverage for about three out of five Americans under age 65. "With or without health care reform, employers are committed to offering health care benefits and want to manage costs," said Tracy Watts, a senior health care consultant with Mercer, which advises many large employers. "The health care reform law itself has driven employers, as well as the provider community, to advance some bolder strategies for cost containment." First, employers would push harder to control their own costs by shifting more financial responsibility to workers.

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Data from Mercer's employer survey suggests that a typical large employer can save nearly $1,800 per worker by replacing traditional preferred provider plans with a highdeductible policy combined with a health care account. "That is very compelling," said Watts. It won't stop there. Many employers are convinced they have to go beyond haggling over money, and also pay attention to the health of their workers. "As important as it is to manage the cost of medical services and products, and eliminate wasteful utilization, there has been a strong recognition that ultimately healthier populations cost less," said Dr. Ian Chuang, medical director at the Lockton Companies, advisers to many medium-size employers. His firm touts programs that encourage employees to shed pounds, get active or quit smoking. employer health plans were already allowed to use economic incentives to promote wellness, and the overhaul law loosened some limits. A Towers Watson survey found that 35 percent of large employers are currently using penalties or rewards to discourage smoking, for example, and another 17 percent plan to do so next year. The average penalty ranges from $10 to $80 a month, but one large retailer hits smokers who pick its most generous health plans with a surcharge of $178 a month, more than $2,100 a year. Overall, one of the most intriguing employer experiments involves setting up private health insurance exchanges, markets such as the health care law envisions in each state. Major consulting firms such as Mercer and Aon Hewitt are developing exchanges for employers. As under the health care law, the idea is that competition among insurers and cost-conscious decisions by employees will help keep spending in check. Aon Hewitt's exchange would open next January, with as many as 19 companies participating, and some 600,000 employees and dependents. "The concept of an exchange does not belong to Obamacare," said ken Sperling, managing the project for Aon Hewitt. "We're borrowing a concept that was central to the health care law and bringing it into the private sector. Whether the law survives or not, the concept is still valid."


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Legal Street News Monday, April 30, 2012 ___________________________________________________________

Continued from page 1

CHiNA oFFiCiAL SAyS P R o v i E W o W N S i PA D TRADEmARk

eats dinner in his hotel room instead of dining in public, which requires an entourage and more agents at work. Ordering in allows some agents to clock out. But the former Massachusetts governor suggested a lack of leadership led to the scandal and left no doubt what he'd do if it had happened on his watch. "I'd clean house," Romney told radio host Laura Ingraham. "The right thing to do is to remove people who have violated the public trust and have put their play time and their personal interests ahead of the interests of the nation." Among key Republicans on Capitol Hill, there was support for Sullivan and deference to his investigation — a recognition by some in Congress that the scandal needs no spinning and that any congressional action must have credibility with voters. It's about national security, Republicans say. But there's no question the hubbub also is about illicit sex, a topic not eagerly discussed by a long list of lawmakers who have transgressed in that department. Louisiana Republican Sen. David vitter, for example, admitted in 2007 to a "serious sin" after his telephone number had appeared in the records of a Washington-area escort service that authorities said was a front for prostitution. vitter, a member of the Armed Services Committee, won re-election in 2010.

Chinese people wait outside an Apple store in Beijing arrange it and the court also expects to do so," By ELAINE KURTENBACH Ma said in a phone interview. AP Business Writer SHANgHAI (AP) -- Apple Inc. risks losing the right to use the iPad trademark in China, a senior official suggested Tuesday, as a Chinese court was seeking to mediate a settlement between the technology giant and a local company challenging its use of the iPad name. yan Xiaohong, deputy director of the National Copyright Administration, told reporters in Beijing that the government regards Shenzhen Proview Technology as the rightful owner of the trademark for the popular tablet computers. His remarks could add to pressure on Apple to find a solution to the standoff. yan's comments followed news that the guangdong High Court in southern China is seeking to arrange a settlement in the case. In late February, the court began hearing Apple's appeal of a lower court ruling that favored Proview in the trademark dispute. "The dispute between Apple and Shenzhen Proview concerning the iPad trademark is going through the judicial process," yan said in a news conference carried on the Internet. But he added that "according to our government's laws, Shenzhen Proview is still the lawful representative and user of the trademark." China has sought to showcase its determination to protect trademarks and other intellectual property, but with hundreds of thousands employed in the assembly of Apple's iPhones and iPads is unlikely to want to disrupt the company's production and marketing in China. Ma Dongxiao, a lawyer for Proview said the company had expected all along to settle with Apple, with the key sticking point being the amount of money involved. "It is likely that we will settle out of court. The guangdong High Court is helping to

Court officials contacted by phone said they were not authorized to comment on the issue to foreign media. "given the wide implications of this case we need to wait to see the final ruling of the court, which will decide the ownership rights for the trademark," yan said. "We will proceed with the case in a prudent manner." He said commercial authorities that had received complaints about Apple's use of the iPad trademark were collecting evidence. "Once the ruling emerges we will handle the case according to the evidence we have," he said. Chinese courts often try to mediate agreements out of court. But it is unclear whether Apple is open to that option. Proview, a financially troubled maker of computer displays and LeD lights, says it registered the iPad trademark more than a decade ago. Apple says Proview sold it worldwide rights to the iPad trademark in 2009, though the registration was never transferred for China. Proview's other worldwide trademarks for the iPad name were owned by another subsidiary of the Proview group, Taiwan-based Proview electronics. But the mainland China trademark was registered by Shenzhen Proview.

Asked how much responsibility Obama should be taking for the scandal, House Speaker John Boehner demurred, saying he's interested right now in finding out just what happened in Cartagena. A pair of aggressive House chairmen have deferred to the Secret Service probe, promised to monitor it and left open the prospect of launching their own highly public investigations. Across the Capitol, Iowa Republican Sen. Chuck grassley, one of his chamber's most dogged investigators, made public a letter to Sullivan that implied he believed more U.S. personnel in Cartagena that week were worth investigating. As examples, grassley named the White House Communications Agency and the president's advance staff. Was Sullivan investigating them? "If not, why not?" grassley wrote. A 12th member of the military, assigned to the WHCA, was implicated in the scandal and on Monday was relieved of his duties at the White House. Presidential spokesman Jay Carney, meanwhile, confirmed that the White House counsel had done his own investigation and ruled out any misconduct among White House employees who helped arrange Obama's trip.

An Apple spokeswoman, Carolyn Wu, said the company had no new comment on the possibility of a settlement with Proview.

Distancing the White House from the scandal, Carney said the internal investigation was conducted out of an abundance of caution and not as the result of evidence of misconduct. And he made clear, over and over again, that WHCA, despite its name, is a military unit and not a White House one.

In a statement, Apple reiterated its earlier insistence that it would never "knowingly abuse someone else's trademarks."

The gender politics that have infused every phase of the 2012 election make the issue especially sensitive.

The statement adds that Proview "still owe a lot of people a lot of money, they are now unfairly trying to get more from Apple for a trademark we already paid for."

"I can't help but wonder if there'd been more women as part of that detail if this ever would have happened," Sen. Susan Collins, R-Maine, said Sunday on ABC News' "This Week."

LSN_April_30  

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