Whistle-Blowing Insiders: ‘Game Changer’ for the S.E.C.

Abstract: Although there have been many complaints about the Dodd-Frank Act, one area generally hailed as a success is the whistle-blowing program at the Securities and Exchange Commission. Since the program’s creation in 2011, the S.E.C. has received more than 14,000 tips, including almost 4,000 last year. That number falls well short of the original estimate of 30,000 submissions each year, but quality is far more important than quantity. Not surprisingly, agency officials heap praise on the program. Mary Jo White, the S.E.C. chairwoman, called it “a game changer for the agency,” while the director of the enforcement division, Andrew J. Ceresney, said that whistle-blowers “had a transformative impact.” Figuring out how well a program is doing is always difficult because the sponsor has every reason to claim success. As the scandal caused by Bernard L. Madoff’s Ponzi scheme shows, it is as much a matter of taking whistle-blowers seriously as it is getting them in the door. Five years into the program, it is clear that some of the best information comes from corporate insiders. They can give the S.E.C. a map to how a firm operates and where to look for wrongdoing. A $22 million award to an internal whistle-blower at Monsanto announced last week is a good example of the impact an internal whistle-blower can have in showing the S.E.C. where there may be problems inside a company. Monsanto in February settled charges of violating accounting rules related to the recording of the costs of a rebate program for Roundup, one of its leading consumer products. The company offered rebates to its distributors to increase sales but shifted those costs into the next fiscal year. By not recognizing the expenses right away, it was able to push up its revenue while delaying the reduction caused by recognizing the costs, something that investors would certainly want to know in evaluating how a company is doing. Accounting shenanigans are notoriously difficult to uncover, especially for a company like Monsanto, which has annual sales of more than $10 billion and multiple product lines. The amount of the rebates was comparatively small, less than $100 million over two years, so it is unlikely it would have been noticed by the S.E.C. without a whistle-blower saying where to look. The agency knows well that accounting problems at a company usually start small and then can grow to take on a life of their own, so catching a violation early on is the best way to keep a business from veering into bigger problems. In announcing the $22 million award , which is one of the largest given by the commission, the head of the whistle-blower office, Jane A. Norberg, said that “without this whistle-blower’s courage, information and assistance, it would have been extremely difficult for law enforcement to discover this securities fraud on its own.” When the rules for the whistle-blower program were first announced, companies objected that there was no requirement for an employee to report wrongdoing internally before providing information to the agency. Internal whistle-blowers account for nearly half of those receiving awards, and the S.E.C.’s most recent annual report to Congress on the program notes that 80 percent of them either reported their concerns to management or said that the corporate compliance office was aware of the issue. The internal whistle-blower presents a real threat to a company, not only from the S.E.C., but also from the Justice Department, because any violation of the securities law can result in a criminal prosecution. The winding-down of Visium Asset Management, a multibillion-dollar hedge fund, shows how a disgruntled former employee who goes to the government can wreak havoc on a firm. Stefan Lumiere, a former portfolio manager at Visium, was charged in June with a scheme to mismark securities held in a credit fund that he helped manage, which invested in the debt securities of health care companies. He is accused of inflating the value of the investments and not identifying how some were highly illiquid. His boss, Christopher Plaford, has already pleaded guilty to securities fraud and insider trading charges, and is cooperating in the case. A major feature of the government’s case against Mr. Lumiere are recordings made by a junior trader at the firm of more than 125 conversations with colleagues, totaling almost 200 hours, after agreeing to cooperate in the investigation. Visium itself has not been charged with any wrongdoing. The indictment calls the trader “CC-1,” the typical nomenclature for a cooperating co-conspirator, who Bloomberg News reported is Jason Thorell. According to an affidavit filed by a F.B.I. agent, Mr. Thorell received immunity from prosecution and the case “could indirectly result in a financial benefit” to him. The S.E.C. filed a parallel lawsuit against Mr. Lumiere and Mr. Plaford, so the financial benefit is likely to come from a whistle-blower claim Mr. Thorell might have for providing information that led to the cases. The prerequisite to receiving a whistle-blower award is that the S.E.C. will recover more than $1 million from enforcement actions based on the information provided, so any payment will have to await the resolution of the cases. At the Justice Department’s request, the S.E.C. lawsuit against Mr. Lumiere has been delayed until the criminal charges are resolved. One factor that could increase an award, which can range from 10 to 30 percent of any monetary sanctions recovered, is whether the case involves an area that is an agency priority, such as misconduct involving a regulated entity or an industrywide practice. That certainly applies to this case, because the S.E.C. has been focusing its attention recently on how hedge funds value illiquid investments, and Visium was an investment adviser that owed a fiduciary duty to its clients. Any claim Mr. Thorell makes as a whistle-blower raises the interesting question about whether someone who participates in wrongdoing can receive an award. Mr. Thorell, according to Bloomberg, helped obtain sham quotes used to inflate the price of the securities in the Visium credit fund that were an important part of the mismarking, so he was in the middle of any violations. The answer is that even a violator can receive an award, but it may be reduced or denied based on the person’s level of involvement in the violations. Under the S.E.C. rules , a whistle-blower’s “role in the securities violations” and whether the person financially benefited from the conduct can be taken into consideration in the final decision. As is often the case, the best information comes from someone involved in the misconduct who left the company and may hope to cash in by turning over information to the government. The S.E.C. may be willing to overlook the acts of a lower-level trader in deciding how much it might give if the recovery exceeds $1 million. The S.E.C. no doubt hopes that large awards will draw the attention of corporate employees who can provide information; for some, the awards are almost like winning the lottery. The $22 million payment to the Monsanto employee is the second-largest in the history of the program, after a $30 million award in September 2014. But much like buying a Powerball ticket, the chances of scoring a big whistle-blower award appear to be quite low, at least when one considers the number of tips the agency receives and the likelihood that it will lead the S.E.C. to obtain a significant recovery from a company. Just as important, not every internal whistle-blower is in it for the money. Eric Ben-Artzi, a former risk manager at Deutsche Bank, turned down an $8.25 million award for information he provided about how the bank inflated the value of its credit derivatives portfolio during the financial crisis that resulted in the payment of a $55 million penalty in May 2015. In an op-ed article in The Financial Times on Aug. 19, he said that the bank and its shareholders were the victims of the misconduct by having to pay the fine while “top executives retired with multimillion-dollar bonuses based on the misrepresentation of the bank’s balance sheet.” Mr. Ben-Artzi’s refusal signals that whistle-blowing has truly come of age when someone shows that it is more than just the potential reward that motivates the revelation of misconduct. That sends a signal to companies that wrongdoing in the ranks will not go unnoticed for long, with the S.E.C.’s awards an additional motivation.

Monsanto
Eric Ben-Artzi
Whistleblower
SEC


Justice Department to Counter Sex Crimes on Indian Reservations

Abstract: The Justice Department announced a pilot program on Wednesday to curb high rates of sexual assault on Indian reservations by setting up specialized response teams for rapes and other abuse. The joint federal and tribal teams will be established on six Montana reservations over the next six months. Federal statistics indicate that Indian women are raped at a higher rate than any other race. The teams will be made up of federal and tribal prosecutors, victims’ advocates, health care providers, law enforcement officials and others.

Justice Department
Sex Crimes
Native Americans


Iraq: Funding Shortfall Deprives Uprooted Iraqis of Health Services

Abstract: Faced with a shortage of funds, international aid agencies have been forced to suspend 84 percent of their health programs in 10 Iraqi provinces, depriving almost three million people of basic medical care, World Health Organization officials said Tuesday. The aid agencies, including the W.H.O., need $60.9 million to operate their health care centers in Iraq but have received only $5.1 million from donors. More than 184 centers serving refugees and other people displaced by violence in Iraq have suspended their operations, the W.H.O. said . The centers were the only health care providers in many parts of Iraq. “This is a country ravaged by conflict,” said Dr. Syed Jaffar Hussain, the W.H.O. representative in Iraq. “Not only do we have innocent civilians being caught in the violence, with so many people fleeing the fighting and living in temporary housing, people are at much higher risk from communicable diseases. Unless additional funding is received, millions more will be deprived of health services they urgently need.” The W.H.O. said it was appealing to international donors and seeking alternative sources of funding.


Not to Be, Um, Trifled With, Texas Guards Its Slogans

Abstract: HOUSTON — Don’t mess with Texas. In fact, don’t even mess with “Don’t Mess With Texas.” The trademarked slogan started out nearly 30 years ago as the clarion call of a campaign to reduce highway littering. But over the years it has become something far bigger: an identity statement, a declaration of Texas swagger — from barrooms to sports arenas to political conventions. And Texas is touchy about who uses it and how. In July, a Montana company that makes Western-themed accessories stopped selling a “Don’t Mess With Texas” belt buckle after the Texas Department of Transportation, which owns the federally registered trademark on the phrase, threatened legal action and told the firm to ship the offending merchandise to Austin. The author of a romance novel titled “Don’t Mess With Texas,” “a thrill ride of hunky heroes, hilarious high jinks and heartwarming romance,” found herself in a legal battle with the state after it filed a lawsuit in a federal court in Austin alleging trademark infringement. Days before the book was to be released, the state’s lawyers asked a judge to prohibit it from being sold while the case was under way. The judge denied the state’s request, but Texas ultimately won a dispute that dragged for nearly nine months. The suit was settled last year, and the author, Christie Craig, agreed to pay Texas $2,500 and change the book’s title. “Don’t Mess With Texas” became “Only in Texas.” Image The slogan “Don’t Mess With Texas” began as part of a campaign to curb highway littering. Credit Michael Stravato for The New York Times In a state whose governor likes to point out that Houston was the first word spoken on the moon, it should come as no surprise that Texas not only invented its most famous catchphrase, but that it also fights to ensure that catchphrase is used to the state’s satisfaction. Texas officials say they want to prevent “Don’t Mess With Texas” from losing its original antilittering message and protect the authorized use of its trademark. But others say that the state has been overzealous and that it is seeking to control a phrase so popular and well worn that people now associate it more with tough Texans than with litterbugs. It is used wherever and whenever Texans want to claim superiority or victory or simply boast of a Texan’s Texasness. Federal prosecutors say it at news conferences after announcing a big indictment. The Navy made it the motto of the U.S.S. Texas submarine at Pearl Harbor. Since 2000, Texas transportation officials have contacted more than 100 companies, organizations and individuals about the unauthorized use of the phrase, often in the form of strongly worded cease-and-desist letters that warn violators to either stop using the slogan or obtain licensing for it for a fee. (New York, of course, with its often-imitated “I ♥ NY” logo, has threatened hundreds more, sending out roughly 350 cease-and-desist letters since 2008.) But Texas has been just as protective of another popular phrase: “Remember the Alamo.” The state and its General Land Office , which oversees the historic site in San Antonio, registered “the Alamo” as a trademark, and it has claimed common-law rights, a more limited type of trademark protection that does not require federal registration, on “Remember the Alamo.” Last year, a San Antonio bar owner tried to register the phrase “I Can’t Remember the Alamo,” hoping to plaster it on T-shirts, mugs and even underwear. Image The state’s Transportation Department is protective of its trademark. Credit TxDOT Texas opposed the bar owner’s trademark application, arguing that it would lead consumers to believe it was sponsored by the General Land Office and that it tarnished the state “by communicating that the heroism and sacrifice undertaken by its forebears is not worthy of memory or esteem,” the agency wrote to the trademark appeals board. Texas won that fight, too: “I Can’t Remember the Alamo” underwear was never sold because the bar owner, Christopher Erck, abandoned the trademark application. “It got fairly heated, I will say that,” Mark Dallas Loeffler, the communications director for the General Land Office, said of the dispute. “In the end, I think he realized it was probably more trouble than it was worth just to sell a shirt. In our opinion, it was a victory for the State of Texas. The people of Texas should have the right to protect the phrases that are iconic to Texas.” To protect “Don’t Mess With Texas,” state transportation officials and lawyers monitor what they call “the usage of the brand.” The slogan was coined in 1985 by Tim McClure, a native Texan and a founder of GSD&M , an advertising agency based in Austin and hired by the state to help its antilittering campaign reach the worst highway offenders — men under 25. The phrase gave rise to a state-sponsored Web site, a book (“Don’t Mess With Texas: The Story Behind the Legend”), a Twitter account , television advertisements, bumper stickers and trash cans, all of which, if you look carefully enough, are emblazoned with the tiny encircled “R” that signifies a registered trademark. “The phrase is known around the world, and it is important for everyone to recognize that ‘Don’t Mess With Texas®’ means ‘Don’t litter,’ ” Veronica Beyer, a Transportation Department spokeswoman, said in a statement. “When an alleged infringement is discovered, the department quickly seeks the appropriate legal remedy, which is usually a cease-and-desist demand of the unauthorized use and all future uses thereof. In the majority of such cases, our request for the violator to cease and desist has been all the action required.” One group should not worry about using the phrase, however. The state’s politicians never tire of dropping it into speeches. As governor, George W. Bush used it in his speech accepting the Republican presidential nomination in 2000, and the state’s attorney general, Greg Abbott, recently used it when campaigning for governor. State and federal law allow for trademarked phrases to be used in political speech, said Megan M. Carpenter, the director of the Center for Law and Intellectual Property at the Texas A&M University School of Law in Fort Worth. Gov. Rick Perry traveled to New York in June to try to lure businesses to Texas. A television ad tied to his trip that criticized New York as a high-tax, high-regulation state — paid for by the marketing group TexasOne , which also paid for the governor’s trip — tweaked the trademarked “I ♥ NY” logo to read “NY ♥ regulations.” New York, so far, has let it slide.

Texas
Trademarks
Rick Perry
Slogans and Mottoes


In Syria, Protesters and Government Mobilize for Friday

Abstract: BEIRUT, Lebanon — Syria deployed police officers, soldiers and military vehicles in two of the country’s three largest cities on Thursday ahead of a call for nationwide protests that will test the popular reception of reforms decreed by President Bashar al-Assad as well as the momentum that organizers have sought to bring to a five-week uprising. Residents described a mobilization in the capital, Damascus, and, in more pronounced fashion, in the restive city of Homs, where a government crackdown this week dispersed one of the largest gatherings since demonstrations began last month. For days, organizers have looked to Friday as a potential show of strength for a movement that has yet to build the critical mass reached in Egypt and Tunisia . “Together toward freedom,” read a Facebook page that has served as a pulpit of the uprising, the words posed over symbols of Christianity and Islam. “One heart, one hand, one goal.” The aim of both sides is the same: to prove they have the upper hand in the biggest challenge yet to the 40-year rule of the Assad family. While organizers were reluctant to call Friday a decisive moment, they acknowledged that it would signal their degree of support in a country that remained divided, with the government still claiming bastions of support among minorities, loyalists of the Baath Party and wealthier segments of the population. “People are still hesitant,” said Wissam Tarif, the executive director of Insan, a human rights group. But he added, “If it’s not this Friday, it will be the coming Friday.” Residents of Damascus said police officers were seen heading from a headquarters on the outskirts in Zabadani toward the capital, where military security officers had reportedly turned out in greater numbers. The security presence was more pronounced in Homs, residents said, as scores of military vehicles loaded with soldiers and equipment were seen on the highway from Damascus. Police officers in plain clothes had gathered at the New Clock Square, where thousands of protesters had tried to stage an Egyptian-style sit-in on Monday night. Cellphones were hard to reach, and some land lines had been cut. In Homs, an organizer, Abu Kamel al-Dimashki, said the city was “like a ghost town and we are still mourning our martyrs, so everything is closed.” He said, “Things are a little scary.” In a sign of the anxiety, some protesters were already predicting violence. “We know if we’re asking for freedom, we will lose people,” said Salem Abu al-Saud, a protester who fled Homs this week but has remained in contact with people there. “At least in Homs, people are more determined than ever to participate, without fear.” The government has maintained that the uprising is led by militant Islamists, and organizers acknowledge that organized religious forces like the banned Muslim Brotherhood have forcefully taken part. The government has also accused foreign countries of supporting the protests. And, indeed, some of the largest have occurred in cities near Syria’s borders: Dara’a, a poor town in southwestern Syria near Jordan , and Homs, the country’s third largest city and an industrial center near conservative northern Lebanon . But so far, the government has sought to hew to a policy of crackdown and compromise. On Thursday, Mr. Assad signed decrees that repealed harsh emergency rule, in place since 1963, abolished draconian security courts and granted citizens the right to protest peacefully, though they still need government permission to gather. The orders had already been handed down to his government on Tuesday, making his endorsement a formality; its timing seemed aimed in part at blunting Friday’s protests. He also appointed a new governor in Homs. Two weeks ago, the previous governor, Mohammed Iyad Ghazzal, was dismissed. He had been in power since 2004 and was widely despised. “Homs wasn’t happy with the old governor, but a new one isn’t the urgent issue,” said a government employee who gave his name as Khalid. “We want to change the mentality of how the country is run, not change a governor or his administration.” Sporadic protests erupted again Thursday, though their numbers were not as large as in past demonstrations, and they seemed confined to Kurdish areas. Organizers said about 300 people protested at a university in Hasakah, a city near the Turkish and Iraqi borders, and a larger demonstration occurred in Ayn al-Arab, east of Aleppo. Between 5,000 and 8,000 people marched there, though Mr. Tarif said it seemed more spontaneous than organized. He said the Kurdish leadership in the region had yet to endorse bigger turnouts, debating whether they could instead extract more concessions from a government that has already granted citizenship to as many as 300,000 stateless Kurds. The debate is a microcosm of a larger one taking place in Syria, where many fear the prospect of chaos or score-settling in the event of the government’s collapse. Many activists said the reforms so far were too little and too late; in the words of Haitham Maleh, an oft-imprisoned activist and former judge, “the mentality of the regime has to change.” But some worry about the combustibility of a society that is shadowed by sectarian resentments fostered by the government. And many identify that government almost entirely with the Alawite minority, a heterodox Muslim sect that accounts for 10 percent of Syria’s population. “Let’s be realistic, let’s not destroy the country,” said Camille Otrakji, a Damascus-born political blogger in Montreal . “Why do you think there aren’t millions in the street demonstrating against Bashar? It’s not because they’re afraid of the security forces. It’s because they’re afraid of what would replace Assad.”


Financial Crisis Dims Hopes for Giant Cross-Border Banks in Europe

Abstract: FRANKFURT — Only a few years ago, the future of European banking was said to belong to European champions, big border-straddling banks that would compete with the American giants. Instead, European integration has been replaced by Balkanization. Because of the financial crisis, banks are retrenching and refocusing on their home markets, all but abandoning ambitions of banking on a Continental scale — or bigger. Strings-attached government rescue plans and basic business logic are driving the change. So instead of strategies for global conquest, Martin Blessing, the chief executive of Commerzbank, is concentrating on ways to keep credit flowing to the small and medium-size businesses that form the backbone of the German economy. “We will see a domestic refocusing of banking but not because everyone is turning nationalist or because one or the other governments take stakes,” he said during a recent interview at his office in the bank’s stunning Norman Foster-designed office tower here. “Banks are going to look at where their franchise is strongest.” These new realities could end up hurting Eastern Europe most. After communism, privatization led to an extended gold rush for Western bankers. Now those investors are having to decide whether to continue lending at home — in France or Austria — or in Poland, the Czech Republic or Hungary. In the global financial crisis, with the health of many banks dependent on the good will of their home governments, the choice is not hard. The thinking at the heart of cross-border expansion in Europe was always straightforward: Europe needed banks that could achieve economies of scale and have the global reach, global clients and global influence to compete with American titans. Operating on that basis, a handful of European banks moved to grow and consolidate. In 2004, Banco Santander of Spain bought Abbey National of Britain. A year later, Italy’s UniCredit swallowed the bank HVB Group of Germany. In early 2007, Royal Bank of Scotland led a consortium that snapped up ABN Amro of the Netherlands for 70 billion euros, or $92 billion at current exchange rates. That deal is already coming undone, with the implosion last year of Fortis, one of Royal Bank’s partners. More broadly, nationalist impulses are on the move across the Continent, with many politicians arguing — as some Democrats are in the United States — that if the government is going to bail out banks, then taxpayers should get some ownership and some say in how they operate. For example, Gordon Brown, the British prime minister, has said he wants to stay out of the operating side of the banks Britain has bailed out. But his government is under heavy pressure to help small businesses at home, and the documents that created the new British vehicle for investing in banks, United Kingdom Financial Investments, cite domestic lending as its priority. French and German governments have also injected cash into their banks, both with the goal of keeping money flowing to businesses inside their borders. Daniel Gros, director of the Center for European Policy Studies in Brussels, called the developments the Balkanization of European finance. “Whenever governments get into the share capital of banks, even in a small way, of course they think nationally,” Mr. Gros said. For instance, few banks expanded more rapidly in Germany over the last decade than Royal Bank of Scotland. The British financier muscled onto Continental turf with attractive financing packages for German manufacturers. Today, Royal Bank is majority-owned by the British government after losses in 2008 from £7 billion to £8 billion, or $9.2 billion to $10.5 billion. According to two senior German executives, Royal Bank is now playing tough with German clients, calling in loans as the bank retrenches in favor of its British business. The executives, who asked not to be identified, because they were not authorized to publicly discuss confidential negotiations, said Royal Bank had demanded that its clients on the Continent sell assets, despite the catastrophic state of financial markets, so the bank could recover its cash quickly, perhaps to lend in Britain. Most recently, Royal Bank was a major creditor of Adolf Merckle, the German billionaire who killed himself when it became clear the banks — with Royal Bank in the lead, the executives said — would insist on the sale of his prized possession, the generic drug maker Ratiopharm. Christine Kortyka, a Royal Bank spokeswoman in Germany, denied the bank was retrenching. “We are an international bank with international clients and we will continue to serve them where they need us,” she said. Mr. Blessing, who took over at Commerzbank just in time to sell a 25 percent stake to the German government to stabilize its finances and complete a major acquisition, does not dispute that governments are angling for national advantage. Commerzbank styles itself the bank of Germany’s Mittelstand, as this country’s small and midsize companies are known. Mr. Blessing says he is comfortable with focusing on serving the Mittelstand, because that has always been the bank’s core mission. . As part of the deal for a cash infusion, the German government received the right to veto major decisions by the bank. That means it can ward off any acquisition from abroad — or any effort at a European expansion.

Europe
Subprime Mortgage Crisis
Banks and Banking


Montana Judicial Race Joins Big-Money Fray

Abstract: HELENA, Mont. — In a coffee shop on Last Chance Gulch, a woman approached Mike Wheat to say she was planning to knock on doors for him. “It’s getting pretty brutal out there,” she said. Mr. Wheat, a State Supreme Court justice running in the most expensive judicial race on record in Montana, nodded. In a parade of menacing television ads paid for by conservative groups, he has been attacked for “a history of supporting extreme partisan measures” (voting to raise fees on hunting licenses), and for allowing convicted criminals to use legal “loopholes” to go free. On the other side, unions and trial lawyers have accused his opponent, Lawrence VanDyke, of being “in the pocket” of out-of-state “special interests.” When Justice Wheat, 66, decided to run for another eight-year term on the court, he said, “I never really anticipated that I would end up with a race like this. I never thought it would turn into this gigantic money battle.” But judicial races have been evolving into another political battleground for big money. A last-minute surge of spending brought the total spent on television commercials to $12.1 million in 10 states, according to two groups that track judicial campaign spending. This election cycle, the spending race has been fueled by the Republican State Leadership Committee , which pledged to spend $5 million on a “judicial fairness initiative,” and contributed $400,000 in North Carolina last week. In the one election that has already taken place, in August, conservative efforts were unsuccessful. Despite spending more than $500,000 to unseat three justices, Tennessee voters retained them. Image Lawrence VanDyke, center, and his wife, Cheryl, on Saturday at the University of Montana in Missoula. Credit Lauren Grabelle for The New York Times In Montana, independent conservative groups have spent about $640,000 — $469,000 by a political action committee financed by the Republican State Leadership Committee and $170,000 by Americans for Prosperity, the conservative group backed by the brothers David H. and Charles G. Koch, according to figures provided by the Brennan Center for Justice in New York and Americans for Prosperity . In response, a political action committee financed largely by Montana trial lawyers and unions has spent $475,000. The money dwarfs what the candidates have raised under Montana’s strict individual contribution limit of $320: $132,000 for Mr. VanDyke and $143,000 for Justice Wheat, according to the most recent campaign filings. “It’s becoming one more log on the fire of the growth in big-money pressure politics,” said Bert Brandenburg, the executive director of Justice at Stake , which advocates judicial election reform. “What’s different is, of course, we want judges to be different. We pay legislators to make a promise and keep a promise; we pay judges to decide a case one at a time and ignore outside pressure. If money affects a legislator’s vote, it stinks. If money affects a judge’s decision, you’ve just violated the Constitution.” Justice Wheat, a trial lawyer, grew up in Montana, served in the Marine Corps in Vietnam and began practicing law in 1978. He was elected to the State Legislature as a Democrat and ran unsuccessfully for attorney general before being appointed to the Supreme Court, the state’s highest court, in 2010 by a Democratic governor. The next election he was subjected, as all appointed justices are, to a retention vote, and won. He has participated in hundreds of cases , voting to require a wealthy landowner to allow access to a public waterways and to allow same-sex couples to receive benefits, and dissenting from the court when it allowed new gas wells to be drilled — because, he said, the required environmental impact studies had not been conducted. In criminal cases, he has sided with both the accused and the prosecution. He is friendly to plaintiffs and trial lawyers, voting to allow a bat manufacturer to be held liable for the death of a teenager hit in the head by a baseball, and dissenting in a case in which the court denied a $1.2 million fee arrangement for lawyers. Nonetheless, he has been endorsed by former justices and Republican officeholders, who say they resent out-of-state interference and what they view as an injection of partisanship. “To take a little sliver of my record and bend it to a political message that they’re trying to get across, it’s wrong, it’s disingenuous and it’s misleading to the voters,” Justice Wheat said. His challenger, Mr. VanDyke, 41, grew up in Montana and worked for his father’s construction company, earning an engineering degree before winning a scholarship to Harvard Law School. As an editor on the Law Review, he defended a book that argued that it was constitutional to teach intelligent design in public school. After graduating, he worked in Washington and Dallas for Gibson, Dunn & Crutcher, the large corporate law firm that has given rise to prominent conservatives like Kenneth Starr. He came back to Montana when Tim Fox, a Republican, was elected attorney general in 2012 and appointed Mr. VanDyke to the post of solicitor general. There, Mr. VanDyke placed a special emphasis on writing amicus briefs supporting gun rights and anti-abortion laws. In one brief he wrote with Mr. Fox, they argued that Roe v. Wade, the Supreme Court decision preserving a woman’s right to an abortion, should be reconsidered in the light of “recent, compelling evidence of fetal pain.” But he quit in May after conflicts with colleagues. Asked about critics who say he has tried to hide the extent of his conservatism from voters, he said, “I am running on the platform that I am going to follow the law regardless of my personal preferences.” Image Mike Wheat, left, with Llevando Fisher on Friday in Lame Deer. Credit Kristina Barker for The New York Times Corporate interests, who say they are trying to preserve jobs and create growth, and trial lawyers, who say they represent the voiceless against the wealthy and powerful, have long gone head to head in judicial elections. As in any arms race, both sides say they are just trying to defend against the other. “Right-of-center interests have been long outspent by left-of-center interests on judicial races,” said Matt Walter, the executive director of the Republican State Leadership Committee. “So we feel like we’ve provided some measure of balance for voters to make an educated choice.” Alicia Bannon, a lawyer at the Brennan Center, said there have been some races where business groups have been vastly outspent. But “nationally,” she continued, “conservatives have been the bigger spenders.” According to her analysis: “Among the top 10 spenders on Supreme Court races from 2000 to 2009, 69 percent of spending came from business interests and conservative groups. In 2009 to 2010, the figure was 70 percent. In 2011-12, things were more evenly divided: Among the top 10 spenders in 2011-12, 52 percent of spending came from business interests and conservative groups.” Mr. VanDyke said courts in Montana had long been controlled by trial lawyers who funded election campaigns in a “pay-to-play” scheme, pointing to a 2004 race in which the Montana Trial Lawyers Association contributed $326,000 to retain a justice, James C. Nelson. “There is no way that I could have a chance against the trial lawyer money machine without independent expenditures coming in and helping me,” Mr. VanDyke said. Al Smith, the executive director of the trial lawyers group, said lawyers were trying to ensure that candidates were credible and had experience with Montana law. In 2004, he said, the challenger was inexperienced and the group anticipated a large amount of spending from the U.S. Chamber of Commerce that never materialized. “In 2006, 2008, ’10, ’12, we didn’t spend anything — nothing, zero,” he said. “The idea that we’ve been spending all this money for decades is absolutely false.”

Montana
Mike Wheat
State supreme court
Lawrence VanDyke
Judicial Elections
2014 Midterm Elections
Campaign finance


Airbus Unveils Jet and Broadens Rivalry With Boeing

Abstract: TOULOUSE, France — The A350 XWB, the first all-new commercial jet from Airbus in more than six years, took wing into partly cloudy skies here on Friday. There was a lot more riding on it than the multinational crew of two test pilots and four engineers. The new aircraft carries the burden of dispelling Airbus’s reputation for cross-cultural and industrial dysfunction, which caused costly delays in the introduction of the company’s previous plane, the A380 superjumbo. And in the wake of last year’s failed merger of the plane maker’s parent, European Aeronautic Defense and Space, and the British military contractor BAE Systems, Airbus is betting its future more heavily on the success of commercial jets like the A350. It is no coincidence that Airbus showed off the A350 — a twin-engine wide-body jet meant to compete with Boeing’s 787 Dreamliner and 777 — as the global aviation industry assembled for the biennial Paris Air Show, scheduled to open Monday at Le Bourget Airport north of the French capital. As always at the show, which is the world’s largest aerospace bazaar, any announcements by other industry players will be undercard matches compared with the main event of Airbus vs. Boeing. While both aircraft makers are going into the show with order books for commercial airliners fat enough to keep their assembly lines humming for much of the next decade, military budgets are shrinking in the United States and Europe, the two biggest spenders on military planes. Few, if any, major announcements for military orders are expected at the show, and belt-tightening at the Pentagon means that the turnout of American military contractors will be among the lowest in recent memory. Northrop Grumman, for example, will be absent, and the delegations from Lockheed Martin, Raytheon and Boeing’s defense and security division, among others, will be much smaller than in years past. And this year’s show may be relatively subdued in terms of new commercial jet order announcements as well, given the uncertain near-term outlook for airline profits and economic growth, particularly in emerging markets. But on Friday the spotlight was on Toulouse-Blagnac Airport, about a 90-minute flight south of Paris, where, precisely at 10 a.m., the A350 lifted effortlessly from the sun-dappled runway. The purr of the plane’s two Rolls-Royce engines was momentarily drowned out by the cheers and whistles of a throng of Airbus employees, well-wishers and members of the news media who had gathered — camera phones at the ready — to capture the moment. Image Fabrice Brégier, chief executive of Airbus, with the test flight’s crew. The A350 is the company’s first new jetliner in more than six years. Credit Bob Edme/Associated Press The distinctive curled tips of the carbon-fiber wings glinted briefly before the jet slipped into the clouds. Judith Lindner, a 36-year-old quality control technician from an Airbus factory in Stade, Germany, whooped as the jet sailed past, jabbing her thumb in the air. “What a tremendous thrill — fantastic,” Ms. Lindner said, adding that she had helped inspect the vertical stabilizer on the plane’s tail. “I feel such a mix of pride and relief.” Analysts said the value of a well-timed and well-executed A350 debut could not be overestimated. Some said they still expected Airbus to try to maintain the public relations momentum by staging an A350 flyby sometime during the weeklong show in Paris. It would be hard for Airbus to find a bigger stage. Show organizers said they expected the chalets and exhibition halls of the air show to be filled with more than 2,200 companies from more than 40 countries. As many as 350,000 visitors from the aerospace industry, as well as the public, are expected over the course of the week. Even Boeing executives acknowledged that the timing of the A350 flight was likely to steal much of the American company’s thunder at the event. “I know they work hard to keep the home fans entertained,” Randy Tinseth, Boeing’s head of marketing, said at a briefing on Tuesday in Paris. Not so long ago, Airbus’s prospects did not look nearly as bright. It was struggling to roll out its last big-bet plane: the twin-deck A380. Miscommunication in the design, manufacturing and installation of electrical cables resulted in a series of missteps in the mid-2000s that delayed the A380’s first delivery by three years. The debacle prompted a management reshuffle in 2006 and more than $6 billion in losses. Airbus executives say they are determined not to repeat the experience. For the new A350, the company has changed its internal design systems and decision-making, even involving major suppliers in the process from the start. While in the past Airbus engineers in France and Germany operated independently, in some cases using incompatible tools and software, they now collaborate on shared digital blueprints. So far, analysts said, Airbus has managed to keep the A350’s development hiccups to a relative minimum. Friday’s flight took place about a year later than the company had envisioned when it began marketing the plane in 2007 — not all that significant a delay in aerospace terms. Image Airbus showed off its A350, a jet intended to compete with Boeing’s Dreamliner, just days before the opening of the Paris Air Show. Credit Eric Cabanis/Agence France-Presse — Getty Images Airbus, of course, is not the only jet maker that has had trouble with new products. Boeing rolled out its 787 Dreamliner three years late, and early this year was forced to ground the plane for three months after its lightweight but volatile lithium-ion batteries proved prone to overheating. “This is quickly coming down to a battle of credibility” between Airbus and Boeing, said Richard Aboulafia, an analyst at the Teal Group, an aerospace consulting firm in Fairfax, Va. “Signaling that you are a reliable provider sends a great message.” That is especially crucial because orders for commercial jets have slowed after several years of record purchases. This month, the International Air Transport Association, a trade group based in Geneva and Montreal, predicted that its 240 member airlines would report a combined profit of $12.7 billion in 2013, up from $7.6 billion last year. But those expected gains are largely the result of falling fuel prices and efforts to pack more customers onto fewer planes, rather than a jump in travel demand. While new jet sales may be slowing, there is still a big backlog of plane orders. Both Boeing and Airbus, as well as smaller jet makers like Bombardier of Canada and Embraer of Brazil, have been steadily increasing output. That has increased short-term demand for components, posing a quandary for parts suppliers. Many are reluctant to invest too heavily in new production capacity for fear that they will later be saddled with redundant plants and equipment — and debt. “I hear concerns everywhere in commercial markets about the reliability and resilience of the supply chain when they are increasing production everywhere,” said Damien Lasou, a managing director and aerospace analyst at Accenture in Paris. “It is a big distraction to management, particularly in terms of capital investment.” In recent years, the battle for commercial jet sales has focused on shorter-range, single-aisle models like the Airbus A320 and the Boeing 737, particularly after the two companies introduced new versions of those planes with more fuel-efficient engines. But airlines have also begun to show renewed interest in the latest wide-body jets, which can offer significantly greater range and more seats than previous models — promising bigger profit margins on long-distance routes. Several flag carriers, including Ethiopian Airlines, Japan Airlines, Lufthansa of Germany and Malaysia Airlines, say they are considering multibillion-dollar orders for the larger jets, including the A350 and the 787. Despite the battery hazards that were revealed on the 787 this year, airlines remain keenly interested in the plane, which is built extensively from lightweight composite materials. “The shelf life of new jetliner controversy is slightly less than fresh oysters,” Mr. Aboulafia of Teal Group said of the Boeing 787’s troubles. “It goes away incredibly fast.”

Airbus
Boeing
Paris Air Show
Airlines,airplanes
Air Shows,Air Racing


Ohio: More Charges in Abductions

Abstract: The man accused of holding three women captive in his Cleveland home for a decade was charged Friday with hundreds of added counts. The 977-count indictment against Ariel Castro, 53, includes charges of rape and kidnapping and two counts of aggravated murder on accusations that he starved and punched one of the women while she was pregnant until she miscarried. It covers the period from August 2002, when the first victim disappeared, to May, when the women were rescued. The first indictment covered August 2002 to February 2007.

Ohio
Cleveland
Ariel Castro
Rape
Kidnapping
Murders


New York City Police Study Use of Force; May Issue More Tasers

Abstract: Days after the death of a man who was subdued by police officers on Staten Island, the Police Department is undertaking a sweeping review of its training and tactics, Commissioner William J. Bratton said on Tuesday. A senior police official said one change under discussion was the expanded use of Taser stun guns , which are available to a small number of New York officers but have been controversial here and elsewhere because of the risk they can pose to people with heart problems and other medical issues. The official, who spoke on the condition of anonymity, said stun guns could be a way to provide officers with more options for subduing people who were resisting arrest and avoiding the close contact that can lead to serious, even fatal, injuries to officers and suspects. Speaking to reporters at Police Headquarters, Mr. Bratton said the goal of the review was “to develop state-of-the-art use-of-force policies.” The remarks came as he addressed investigations into the death of the man on Staten Island, Eric Garner, 43. Mr. Garner died on Thursday after officers who had been trying to arrest him for selling loose cigarettes forced him to the ground. In a widely viewed video of the encounter, one of the officers appeared to use a chokehold — banned by the Police Department — to subdue Mr. Garner, who was heard repeatedly saying, “I can’t breathe.” Other video taken later appears to show Mr. Garner unconscious and unresponsive to police officers and emergency medical workers. The medical examiner’s office is conducting an autopsy to determine what caused the death of Mr. Garner, who weighed 350 pounds and had health problems including asthma. Pathologists will seek to determine whether the chokehold contributed to his death. The Staten Island district attorney’s office is investigating Mr. Garner’s death, and the Police Department’s Internal Affairs Bureau is examining the conduct of the officers. The officer who appeared to use a chokehold has been stripped of his badge and gun, and an officer who helped hold down Mr. Garner has been placed on desk duty. Image William J. Bratton Credit Michael Appleton for The New York Times At the news conference on Tuesday, Mr. Bratton said he had met with F.B.I. officials in New York “to discuss their monitoring of this matter.” Mr. Bratton added that he expected the episode would ultimately be reviewed by federal prosecutors. Mr. Bratton said that next week he would visit the Police Academy to see the presentations that officers receive on how to “take people down” and “take them into custody.” During his remarks, Mr. Bratton did not mention Tasers, and it was not clear whether internal discussions about expanding the use of Tasers predated the episode on Staten Island or were in response to it. “There have been conversations, but nothing definitive,” said the official, who requested anonymity to discuss internal policy debates. The Police Department has been warier of Tasers than have many departments elsewhere. Stun guns have a scandal-tainted history in New York. In the 1980s, an early-model stun gun was used to force drug suspects to confess. Emergency Service Unit officers, who are highly trained and handle many of the department’s emergency calls regarding emotionally disturbed people, began carrying Tasers shortly after the 1984 death of Eleanor Bumpurs, a disturbed woman who was shot to death by the police after she threatened officers with a knife. As the use of stun guns grew around the country, the Police Department modestly expanded their use. In 2008, the department instructed some sergeants to wear Tasers on their gun belts instead of storing them in the trunks of police cruisers, as had been the practice. The move stemmed in part from a study the department commissioned in 2007 after an unarmed Queens man, Sean Bell, was shot dead by officers. Among the recommendations in the study, conducted by the RAND Corporation, was that the Police Department consider making Tasers more widely available to officers. But months after the police began to expand the use of Tasers, an emotionally disturbed man in Brooklyn fell to his death after the police shot him with a Taser. In that September 2008 episode, the man, Iman Morales, had engaged in a 30-minute standoff with the police, waving a fluorescent light bulb from a building ledge. A lieutenant on the scene ordered another officer with the Emergency Service Unit to fire a Taser at Mr. Morales, who fell headfirst to the sidewalk. Within days, the lieutenant, Michael W. Pigott, killed himself .

Police Brutality,Police Misconduct,Police Shootings


Chinese, Spending Freely, Become Ever-Larger Tourism Force in New York

Abstract: New York City’s tourism officials have solved the riddle of how to attract the Chinese. The challenge now may lie in impressing them once they arrive. Chinese tourists, who have been flocking to New York in rising numbers for a decade, accounted for nearly one million of the record 60.3 million visitors to the city in 2016, city officials said. But some, like Li Chen, a retired bureaucrat from Beijing, are far from awed by the scale of America’s biggest city. Mr. Chen said he and the five friends he was sightseeing with on Friday expected New York to have taller buildings and wider streets. They were also disappointed that they could not get a look inside the New York Stock Exchange. “We don’t want to just see the door,” Mr. Chen said through an interpreter while sipping hot tea on a cruise of New York Harbor operated by Hornblower New York . “Closing the door is like closing the door to prosperity.” Hornblower bills the tour as international, but the narration piped through the speakers is only in English and Mandarin. Visitors from China are easily the largest group of foreign tourists on Hornblower’s tours, said Zichao Xie, the company’s international sightseeing manager. Ms. Xie said the company carried about 300,000 Chinese passengers this year, accounting for about one-quarter of its revenue. The Chinese surpassed Brazilians and Canadians in the ranks of tourists to the city this year and will overtake the British by 2022, said Fred Dixon, the chief executive of NYC & Company , the city’s tourism marketer. He said the city had more than 950,000 visitors from China this year, a sevenfold increase since 2007. Back then, more than 15 countries, including Switzerland and Israel, sent more tourists to New York than China did, according to NYC & Company’s statistics. In 2016, only visitors from Britain outnumbered the Chinese — and their total of about 1.2 million has not grown since 2007. The Chinese still travel mostly in groups, moving around on chartered buses and often staying in hotels outside the city , Ms. Xie said. But Mr. Dixon said his organization had begun to focus on attracting more Chinese tourists traveling on their own or in small groups like Mr. Chen’s. Those men flew from Shanghai with a larger group but broke off from it and were staying in a hotel in Lower Manhattan. They planned to go uptown to shop on Fifth Avenue, then head on Saturday to the Woodbury Common outlet mall , one of the most popular excursions for Chinese tourists, about 50 miles north of the city. Image Tourists on a cruise of New York Harbor on Friday. Their numbers in the city surpassed those of Brazilians and Canadians this year. Credit Christian Hansen for The New York Times “That individual travel market is the biggest opportunity,” Mr. Dixon said. “That’s the future of the Chinese market.” Emily Rafferty, chairwoman of NYC & Company, said she had recently attended a conference in Shenzhen, China, and met a group of local university students. “They were all wanting to come over to America,” Ms. Rafferty said. “The number of people under the age of 35 there is huge.” At the Museum of Chinese in America , on Centre Street in Manhattan, the boom in Chinese tourism has not really paid off yet. The president of the museum, Nancy Yao Maasbach, said the tourists tended to stick to the best-known destinations. “Our strategy has actually been that the more popular we become in the U.S., the more popular we will become to Chinese tourists,” Ms. Maasbach said. Mr. Dixon said the Chinese were still spending freely, while visitors from Europe were cutting back as the dollar strengthened and reduced the buying power of the euro and other currencies. He said NYC & Company had begun emphasizing value and bargains in some of its advertising to the British and other Europeans, including a campaign this winter called “ See It for Yourself ,” in partnership with British Airways. Those audiences might be easier to impress, judging by the reactions of Tony Neville and James Hopkinson, two first-time visitors from Yorkshire, England, who fit in some sightseeing on Friday after completing a work project. Mr. Neville, 36, said New York was bigger than he had imagined. “This just blows London out of the water, to me,” he said. Mr. Hopkinson said they had been surprised by how friendly, well mannered and courteous the local people they encountered had been. They even liked the American beers they had found, he said, sipping from a can of Brooklyn Lager. Alicia Glen, the deputy mayor responsible for economic development, said Mayor Bill de Blasio’s administration wanted to diversify the city’s tourist base so that it could weather economic downturns in Europe. Toward that end, the city increased its contribution to NYC & Company’s budget this year by $3.5 million, to about $21 million, she said. Promoting tourism is an investment aimed at attracting visitors to spend money and at creating jobs, especially for less-skilled workers, Ms. Glen said. She said she tried to help out last week when she was on a plane full of Chileans flying to New York from South America. Ms. Glen said that the Chileans had been excited to visit the new Whitney Museum of American Art and to walk on the High Line in Manhattan, but that she had tried to persuade them to try the Brooklyn Museum, too. “They used to go to Miami all the time,” she said of Chileans. “But Miami is so over.”

China
NYC
Museum of Chinese in America
Bill de Blasio
Travel,Tourism


Fox Sees Chemistry in New Baseball Booth

Abstract: A game with three announcers in a booth can be overly wordy. It can be filled with smart opinions from two analysts who come from sharply divergent backgrounds. Or it can sound out of balance if one analyst dominates the airspace. Fox Sports will learn this season which description fits its new lead baseball announcing team of Joe Buck, Harold Reynolds and Tom Verducci. Reynolds and Verducci are replacing Tim McCarver, who spent 18 seasons working with Buck and left after the 2013 season. “We didn’t take this decision lightly,” John Entz, the executive producer of Fox Sports, said Monday in a conference call with reporters. “When you have someone taking the mantle from Tim McCarver, we felt an extreme level of pressure.” Entz said he felt strongly enough about Reynolds and Verducci’s potential that he brought them to St. Louis last summer to rehearse a game with Buck, off the air, at Busch Stadium. “Within five minutes, I knew this would be the combination, if my opinion had anything to do with it,” Buck said. Verducci said, “I came away in the first minute and thought it was fun.” He also sensed a rhythm in which he, Reynolds and Buck gave one another room to speak, rather than stepping on one another’s words. The three subsequently got together once more to rehearse with a taped game on a television monitor. Reynolds and Verducci have worked together at the MLB Network for a few years and generated a personal chemistry that Entz said he believed would transfer to games. Verducci is a less traditional choice for a game analyst than Reynolds, a former second baseman for the Seattle Mariners. Verducci never played for a Major League Baseball team but has written about the sport for more than 30 years, most recently as a senior staff writer for Sports Illustrated. And he has called some games in recent years for MLB Network and Fox. The Buck-Reynolds-Verducci team will not be together every week of the season, which is the first under a new contract for Fox in which fewer games will be carried on the Fox broadcast network and many will be carried, for the first time, on Fox Sports 1. At the least, the new team will call eight prime-time games on the Fox broadcast network between May 24 and July 12, along with the All-Star Game and the postseason. Buck seemed to toll a small warning bell on the reception his new partners might receive, based on criticism that he and McCarver endured. “I don’t think there is any more criticized or picked-apart role in major television sports than doing a World Series on network television,” he said.

Baseball
Fox Sports
Joe Buck
Harold Reynolds
Tom Verducci
Tim McCarver
TV


6 Major Powers Move Closer to Considering More Iran Sanctions

Abstract: UNITED NATIONS — Six major powers agreed Saturday that the Iranian response to proposals to altering its nuclear development program had been inadequate and that it warranted consideration of further measures by the United Nations Security Council . China , however, which sent a low-level diplomat to the meeting, maintained its position that it opposed new sanctions now. The five permanent members of the Security Council — the United States, China, Russia, Britain and France — along with Germany have been pursuing a “dual track” policy under which they would seek a negotiated settlement, but if that effort stalled, further sanctions would be imposed. “We talked mostly about the second track, but it doesn’t mean we should abandon the first one,” said Sergei Ryabkov, Russia’s representative. “It is inconclusive in the sense that we didn’t make any decisions right away.” Western officials tried to cast a positive light on the meeting by suggesting that all six were at least moving in the same direction, even if it was unclear that China remained committed to the idea of a second track. “The credible threat of further pressure does create some leverage over the Iranian system,” said one Western diplomat engaged in the talks. The senior diplomats agreed to consult again by telephone before the end of the month on the next step. Most countries were represented on the level of senior diplomats, the “political directors” of their foreign ministries, but China virtually snubbed the gathering by dispatching a counselor from its United Nations mission. He Yafei, the former vice minister of foreign affairs, has now been appointed the Chinese ambassador to the United Nations in Geneva and it is unclear who will eventually replace him in the talks. The meeting Saturday was held in the New York offices of the European Union, whose representative said that there was at least “consensus” among the six nations to focus on the next step. “We will continue to seek a negotiated solution, but consideration of appropriate further measures has also begun,” said Robert Cooper, a senior European Union official. Both China and Russia voted in the Security Council for three previous rounds of sanctions, but only China has been outspoken in its recent opposition. Russia was upset that its offer to further enrich Iranian uranium at its facilities was rebuffed and that the Iranians did not seem serious about entering negotiations. The Obama administration has also been dismayed that Iran has been dismissive of a yearlong effort to engage it. Iran maintains that its desire to enrich uranium is only for peaceful civilian purposes, but Western powers accuse it of using that as a smokescreen to develop nuclear weapons . There is a sense of urgency about the matter, as there are concerns that Iran will develop the capacity to enrich uranium at the levels required for weapons, while negotiations drag on. In addition, the international Nuclear Nonproliferation Treaty is due for a review conference in May, and the Western powers want any new sanctions against Iran to be in place so as not to complicate any talks over the future of the treaty.

Iran
United Nations
China
Nuclear Weapons
Embargoes and Economic Sanctions
Security Council (UN)


Hartford: Bridge Inspections to Be Cut Back

Abstract: The State Transportation Department plans to scale back inspections of most Connecticut bridges in an effort to save money. Judd Everhart, a department spokesman, said that the department planned to inspect bridges in fair condition or better every four years instead of every two, The Hartford Courant reported. That means the inspections will occur half as often as the federal government recommends.

Transportation Department
Hartford (Conn)


Blagojevich to End Boycott of His Own Trial

Abstract: SPRINGFIELD, Ill. — After boycotting his impeachment trial for three days, Gov. Rod R. Blagojevich announced Wednesday that he wanted to address the State Senate on Thursday before legislators begin deliberations on whether to remove him from office. “He wants to make a closing argument,” said Lucio Guerrero, the governor’s spokesman. Mr. Guerrero said he was uncertain when or precisely why Mr. Blagojevich had chosen now to attend the trial, which he has repeatedly denounced as unfair and fixed. The governor will not give sworn testimony or be subject to cross-examination by prosecutors or legislators. Rather, he will address the Senate only to respond to the prosecution’s closing argument. Mr. Blagojevich’s announcement, which came about an hour before the prosecution rested its case, brought negative reactions from lawmakers. Many had previously lamented the governor’s absence from the proceedings and had repeatedly requested he testify. “It’s somewhat cowardly that he won’t take questions,” said Senator Dan Cronin, a Republican. “If he had something to say, he should have come down here like a man and faced the music.” Since he will not be giving testimony, senators said his appearance would not be included as evidence in their deliberations. “All the testimony was heard, so the things that we will consider, all that has taken place,” said Senator James F. Clayborne Jr., a Democrat. “I’m waiting to hear the closing argument tomorrow.” During a publicity tour this week, Mr. Blagojevich, a Democrat who was arrested Dec. 9 on federal corruption charges, repeatedly professed his innocence, complaining bitterly that many of the damning statements attributed to him had been taken out of context and saying the impeachment trial was unfair. Senators here have denounced the publicity campaign. Earlier in the day, the Senate president, John Cullerton, a Democrat, challenged Mr. Blagojevich to appear. “If he wants to come down here, instead of hiding out in New York and having Larry King asking questions instead of the senators — I think he’s making a mistake.” Still, Mr. Blagojevich’s charges seemed to rattle some senators, who worried the trial might appear politically motivated after the prosecution announced that it wanted to avoid redundant testimony and would call only 6 of its 13 scheduled witnesses. “If you eliminate half the witnesses and you speed up the process, does that send the wrong signal?” asked Senator Dave Syverson, a Republican. “Everything is being done very much above board, in fact, we’re going overboard to make sure everything is done fair. It’s just the perception.” Other senators said that even if the additional testimony was redundant, they would rather hear it out of an abundance of caution. “I don’t know who has a cruise or vacation to go to, but we ought to take our time,” Senator Kirk Dillard, a Republican, told a crush of reporters in an early morning break from the trial. “I’ll sit here on Super Bowl Sunday if I have to.” Amid the tumult of the proceedings on Wednesday, prosecutors painstakingly presented their final witness, William Holland, the state’s auditor general. He testified that starting in 2004 the Blagojevich administration endeavored to buy roughly 773,000 doses of a European flu vaccine that the Food and Drug Administration had prohibited. “The drugs were never going to come in to the U.S. because they’d been prohibited by the F.D.A.,” Mr. Holland said under questioning. “The vaccines were shipped to Pakistan, where the last we heard they were destroyed.” With the prosecution at rest, senators have only to hear closing arguments before casting votes on two issues. The first will be whether to remove the governor from office. The second will be to determine whether Mr. Blagojevich should be barred from holding office in the future. While many senators said they were still waiting to hear the closing arguments before making their final decision, it seemed unlikely that Mr. Blagojevich, who is scheduled to speak for 90 minutes after arriving here on Thursday morning by plane, would be able to sway many to his side. “This is typical of his style, the grand slam, the P.R. flourish,” said Senator Christine Radogno, the Republican minority leader. “It’s too bad he wasn’t here earlier in the week, I wish he had been.” She added, “I hope he has a ride home.”

Wiretapping and Other Eavesdropping Devices and Methods


A Small Empire Built on Cuddly and Fuzzy Branches Out From the Web

Abstract: CALENDARS and coffee table books filled with pictures of cute, cuddly kitties and sad-eyed puppies have been around for decades. So what explains the success of Cute Overload, a new page-a-day desk calendar that recently shot to the top of its category on Amazon.com and, more remarkably, to the upper ranks of the site’s overall best-sellers list? Stranger still, the birth of Cute Overload was almost purely accidental. Meg Frost, a 36-year-old design manager at Apple, started cuteoverload.com three years ago to test Web software. Within months, it became an online institution, drawing about 88,000 unique visitors a day — about the same as the political gossip blog Wonkette. BoingBoing linked to Cute Overload, saying that viewing the site “is like taking a happy pill.” And in that warm feeling lies the reason for its popularity. Given all the nastiness on the Internet — blog trolls, flame wars, vicious gossip, pornography, snark and spam — what better antidote is there than looking at pictures of tiny ducklings waddling in a line or kittens splayed on their backs, paw pads in the air? The most famous cute-animal Web sites are presented with a touch of self-mockery. The site I Can Has Cheezburger? ( icanhascheezburger.com ) features cat pictures with ungrammatical captions, Stuff on My Cat ( stuffonmycat.com ) displays photos of objects stacked on sleeping cats, and Kittenwars.com pits pairs of cat photos in a cuteness showdown. Like those sites, Cute Overload is “cute, but not cutesy,” says Ms. Frost. “There’s definitely an edge.” Ms. Frost has not given up her day job at Apple. “I actually love doing both, though it’s pretty crazy,” she said. Viewers send her about 100 submissions a day, and in doing so, grant her full republishing rights, she said. Ms. Frost is free to reuse the photos as she pleases. The calendar’s success may be just the beginning. She hints at other projects, possibly including a video channel. She is astounded at the calendar’s success. That it did so well on Amazon last week — and sold out in a day — “is totally ridiculous,” she said. Ms. Frost will not talk about how much money she has made from the site, although it is enough money that she recently hired two part-time assistants. Nor will she say how many calendars have been sold. But the calendar’s top ranking in its category — accessories — and its reaching as high as No. 21 last week on the overall category — books — are indications of its success. The site’s ads are placed by Blogads, which handles advertising for about 1,500 blogs, including the gossip site PerezHilton.com and the political site Daily Kos. On Blogads.com , advertisers can view traffic numbers for each site and the cost of various types of ads. According to Blogads, a “premium” ad on Cute Overload costs about $2,000 a week, with an estimated 808,000 page views. Hartz Mountain currently has a premium spot for its UltraGuard line of flea and tick repellents, as does American Apparel for its Essential X 3 line of underwear three-packs. The site also offers “standard” ads for $500 a week. Those are taken up mostly by small companies serving what might be called the “cute market.” Sublime Stitching, for example, sells “cute embroidery patterns,” like “Forest Friends,” while Shanalogic offers clothing and accessories emblazoned with cute imagery. According to Blogads, there are nine “standard” ads currently running on Cute Overload. That’s good money for a niche site. By comparison, Daily Kos is running one “second slot” ad for $7,500 a week and three standard ads for $4,650 each, according to Blogads, which says the site offers nearly 8 million ad impressions a week, about 10 times as many as Cute Overload. (Daily Kos’s “premium” slot, offered at $15,000, was unsold as of Tuesday.) It is all about niches and demographics, said Henry Copeland, founder of Blogads. The audience is overwhelmingly female and between 18 and 34. “For these women,” he said, “recently graduated from college and sitting in grim corporate America, Cute puts them in touch with their nonwork selves. It’s escapism.”

Cats
Pets
Computers and the Internet
Blogs and Blogging (Internet)
Online Advertising


Convicted Editor of Indonesian Playboy Surrenders

Abstract: DENPASAR, Indonesia — The editor of Indonesia ’s defunct version of Playboy magazine surrendered himself to authorities on Saturday to serve a two-year jail term for indecency. Erwin Arnada was taken into custody by dozens of police on arrival from Bali to Jakarta’s Soekarno-Hatta airport, the local news media reported, after nearly two months of avoiding summonses and hiding from Islamist vigilantes who had vowed to arrest him. A third and final summons for Mr. Arnada to hand himself in expired on Friday. “I’ve been treated like a criminal, put in a prison car,” Mr. Arnada said by BlackBerry message after being taken. “I don’t yet believe there’s democracy in Indonesia; at least my case makes me think that,” he said. “If there was democracy in Indonesia, then freedom of the press would be guaranteed and valued. The press and journalists shouldn’t be criminalized as I have.” Mr. Arnada edited the Indonesian edition of Playboy — which contained no nudity and was far less risqué than many other titles legally on sale in Indonesia — from its debut in 2006 until 2007, when it was closed after riots by Islamist groups, including the Islamic Defenders Front, or F.P.I., had forced the magazine to move to Bali. Political pressure from Islamists was also widely believed to be behind indecency charges brought against Mr. Arnada, which were successfully defeated in two lower courts. In 2009, in an unpublicized decision, the Supreme Court convicted Mr. Arnada, but neither he nor his conservative adversaries were aware of it until prosecutors received a copy of the verdict in August. The FPI said it would hunt Mr. Arnada to hand him in to serve his sentence. Mr. Arnada’s lawyers are seeking a case review in the Supreme Court. President Susilo Bambang Yudhoyono did not reply to a request from lawyers and Indonesia’s Press Council to intervene to stop Mr. Arnada’s detention while the review was pending. The apparently arbitrary nature of Mr. Arnada’s conviction has been widely seen as a victory for Islamic conservatives intent on imposing their vision on Indonesia, a Muslim-majority country long known for its religious tolerance. President Yudhoyono and authorities have come under criticism for repeatedly bowing to pressure from groups such as the FPI, which has been blamed for a string of violent protests and inciting attacks against religious minorities and secularists.

Indonesia
Indecency Obscenity and Profanity
Playboy Enterprises Inc


Philadelphia Shows Its Love for an Owner Who Loved His Flyers

Abstract: PHILADELPHIA — Ed Snider once kicked Donald J. Trump out of a suite during a playoff game. No, not because Snider, a noted Ayn Rand disciple, may have had differing political views from Trump. The offense — Trump would not stop talking. Snider never wanted an interruption when he watched his beloved Philadelphia Flyers, the team he founded and owned until his death last week. He was remembered Thursday for his love of the Flyers, the fans and family at a public tribute at the Wells Fargo Center. Bobby Clarke, the Hall of Famer center and perhaps the greatest Flyer, had one wish for when he died. “I really hope I get one more chance to play a game in the orange and black for Mr. Snider’s Philadelphia Flyers,” he said. Snider would cringe when he was called Mr. Snider. He told everybody he knew — employees, the news media, players — to simply call him Ed. They rarely complied. He had earned immense respect as perhaps the most influential executive in Philadelphia sports history. Stanley Cup championship banners from 1974 and 1975 flanked the stage, the Flyers kept center ice cold and the logo shone bright on the floor inside the darkened arena. “EMS” — the initials for Edward Malcolm Snider — was painted on a banner and enveloped by a wreath. Snider died April 11 after a two-year battle with bladder cancer. He was 83. “It really hurt and it’s going to hurt us for a long time,” Clarke said at the memorial, which was open to the public. The current and former Philadelphia sports executives Billy King, Dave Montgomery, Scott O’Neil and Peter Luukko were among the mourners. Snider’s children remembered him as a father who warned them not to feed stray cats at the old Spectrum: “They’re here to catch the rats.” Michael Milken, the junk bond king of the 1980s, credited Snider for his “commitment and willingness to explore new medical treatments.” Commissioner Gary Bettman said Snider was a friend and confidant who helped shape the N.H.L. Bettman made a final visit in January to Snider’s California home for lunch. Bettman said Snider was in considerable pain, but he felt worse that a gloomy day had left them unable to see the mountains and the gorgeous view. Snider told Bettman that he loved him. “I love him, too,” Bettman said. “We all do. His impact on all of us is permanent. The fire in his eyes is now an eternal flame.” Bettman noted that Snider had many homes, “but Wells Fargo Center is the center of where Ed Snider lived.” Snider developed the arena, which opened as the new home of the Flyers and the 76ers in 1996. He was chairman of the 76ers, was once a part owner of the Eagles and had a hand in founding both Comcast’s local sports channel and the city’s largest sports-talk radio station. Snider, chairman of the Flyers’ parent company, Comcast-Spectacor, was elected to the Hockey Hall of Fame in 1988. He founded the Flyers in 1966, and in the 1970s, when they were known as the Broad Street Bullies, they became the first expansion team to win the Stanley Cup. But it was a 1972 postseason series defeat that would shape the Bullies, and Snider’s locker room pep talk still resonated with Clarke. “ ‘Boys, don’t worry about it,’ ” Clarke recalled him saying. “ ‘We’re going to be stronger because of it.’ Two years later, we won the Stanley Cup.” Snider always wanted to be remembered for more than hockey. He started the Ed Snider Youth Hockey Foundation in 2005. The foundation promotes life skills and hockey through after-school, recreational and other educational activities. Snider hockey programs are provided at no cost, and focus on underserved Philadelphia boys and girls who otherwise would not have the opportunity to play. Children wrote letters and drew pictures about Snider’s impact on them, and they were stationed around the arena’s concourse. “To me, Mr. Snider meant a new opportunity, a new opportunity to do something great,” one child wrote. “If I could say anything to him, it would be, thanks for letting me play a game I now love.” For all that Snider meant to the city, he was always full of gratitude for what Philadelphia and the Flyers gave to him. “The last full sentence he ever spoke to me, and this is what he said, not just for me or the family,” his son Jay Snider said, choking on his words. “He told me so I would tell you. And I quote, ‘I can’t thank the Flyers enough for everything they’ve given to me and my family. Thank you.’ ”


Egyptian Satirist Returns to TV With Careful Barbs

Abstract: CAIRO — As his popular television show returned to Egypt’s airwaves on Friday after a long hiatus, Bassem Youssef, an Egyptian satirist, took a swipe at the country’s new military leadership in perhaps the only manner such criticism remains possible: with great care. After playing a recently leaked video clip of Egypt’s defense minister, Gen. Abdul-Fattah el-Sisi, talking to colleagues about influencing the news media, Mr. Youssef responded with mock indignation. “Nobody can tell us what to say or not to say,” he said, as a disembodied arm appeared from beneath his desk, stole his script and replaced it with a new text. “We want freedom,” Mr. Youssef added, as the arm, a stand-in for Egypt’s powerful security agencies, slapped him in the face. It was Mr. Youssef’s first show since the military ousted President Mohamed Morsi in July, casting Egypt into a kind of fevered dream of violence and polarization. As the country’s Islamists were brutally swept from power by Egypt’s new leaders, television channels were also purged of dissent, cheering on the military-backed government and a mood of resurgent nationalism. That climate fed restless anticipation here for the return of Mr. Youssef’s show, called “The Program,” a weekly skewering of Egypt’s political class and the news media. Would he lampoon the new leadership as mercilessly as he had Mr. Morsi? While his fans hoped for the return of an independent voice to counter the conformity on the airwaves, the revived show was also a test of what the military-led government was prepared to allow. Mr. Youssef, a heart surgeon who modeled his program on Jon Stewart’s “Daily Show,” has attracted the ire of the authorities before. In March, prosecutors summoned him for questioning on charges that he had insulted Mr. Morsi. The administration denied that it was behind the questioning, but it was part of a pattern of similar charges leveled by Mr. Morsi’s sympathizers that chilled dissent against the Islamist government. Since Mr. Morsi’s ouster, the room for dissent has become far more restricted. The authorities have killed or imprisoned thousands of his Islamist supporters. Egyptian and foreign journalists have been harassed or arrested. In a deeply divided nation where it has become normal to be asked about one’s political loyalties, much of the stifling atmosphere seems self-imposed. As his program began Friday night, Mr. Youssef seemed more intent on advocating a third way in Egyptian politics, between loyalty to the military and loyalty to Islamist parties, than on provoking a confrontation with the new leaders. He did not speak in detail about the most incendiary news of the last few months — the mass killings of Morsi supporters by the authorities — but he said he stood against violence, whether by the state or against it. He explicitly poked fun at Egypt’s interim president, noting that many Egyptians seemed not even to know his name. (It’s Adly Mansour.) His jabs at General Sisi, widely seen as Egypt’s de facto leader, were more oblique. It seemed funnier, and perhaps safer, to make fun of the cult of personality the general had inspired. In a rapid-fire monologue, Mr. Youssef ran through the subjects that touch off Egypt’s daily arguments. It was an exhausting list that included the names of places where people had been killed and the justifications used to excuse such acts — a history of the latest tortured phase in Egypt’s transition since the fall of former President Hosni Mubarak in 2011. “Enough,” Mr. Youssef concluded. “Shh.” Despite his apparent attempts to calm the arguments, there was predictable outrage. On Twitter, Ahmed Sarhan, a former spokesman for Mr. Morsi’s rival in the presidential race, wrote, “The leader of the army shouldn’t be criticized or ridiculed as long as he’s wearing the uniform of the military.” On the opposite side, an Islamist supporter wrote that Mr. Youssef had provided “propaganda for the coup.” Dina Samak, a journalist, saw something hopeful even in the satirist’s cautious approach. “Bassem Youssef didn’t explicitly say that the king is naked,” she wrote, “but advised people to look at his clothes.”

Egypt
TV
Bassem Youssef
Military
Mohamed Morsi
Politics
Comedy


High-Tech, Lowered Profile

Abstract: TRENTON - FOR years, New Jersey has had this understanding: We are rich. We have great jobs. We are the medicine cabinet and the telecommunications nerve center of the world. We have hatched ideas and industries since Edison was recording sound onto tin-foil cylinders in Menlo Park. But just as a new governor steps up, with visions of a state growing its way out of fiscal distress, comes some disquieting news: We are not as rich as we used to be. The highest-paying industries are expanding in other states and countries, while in New Jersey some are actually shrinking. The state's fastest-growing sectors employ motel clerks and nursing home aides. The warnings come from many sources, but the loudest come from two academics at Rutgers, James W. Hughes and Joseph J. Seneca, who have regularly advised the governor and the Legislature on the state's economy. At the State House on Thursday, they drew a dismal picture of job trends. They had already sent out alarms in a report two months ago about a "startling erosion" in technology-based industries. That report, written for the New Jersey Commission on Science and Technology, documented a decline in the state's share of total national employment in every one of 10 technology-based industry groups. For example, New Jersey had 20 percent of the nation's jobs in the pharmaceutical industry in 1990, yet slipped to 14 percent in 2004. What's more, the state's share of jobs in Internet service and data processing was cut nearly in half. In all, in the five highest-paying sectors -- which include financial activities and federal government jobs, in addition to high-tech businesses -- New Jersey lost 44,000 jobs from 1990 to 2004. Given these numbers, it was perhaps not surprising that in census data released last month, New Jersey had lost its No. 1 rank in median household income, slipping behind Connecticut. Any erosion of New Jersey's brain-based economy is worrisome to a state that in the past had claimed "genius factories," in Mr. Hughes's phrase, like the Bell and the RCA laboratories. And while their shrinkage in a global tech upsurge is well known, many technology experts are taken aback by the bigger picture. "We've known that this is happening for a while, but now we have real numbers," said Sherrie Preische, the director of the science and technology commission, a state agency. "We certainly didn't know we were below 1990 levels." "Look at where a lot of technology is growing," Dr. Preische added. "A lot of it's in Massachusetts and California. These are not low-cost places." As if to drive home the point that other states are eating New Jersey's lunch, at a legislative hearing this month on the fledgling nanotechnology industry, Harch Gill, the general manager of Princeton Nanotech, arrived late with an explanation for his tardiness: he was just returning from Lehigh University in Bethlehem, Pa., where he had gone to confer informally with academic researchers. There, he said, he was met by a committee that offered grants, loans and other inducements to move to Pennsylvania. "These stories are repeated over and over," Dr. Preische said. New Jersey is not going the way of Alabama or Arkansas, as Mr. Hughes and Professor Seneca make clear; it is simply edging toward average. The state enjoys per-capita income that is 25 percent higher than the national average, down from 29 percent five years ago, for example. In the long term, economic forecasters say, all states are becoming more average. "New Jersey should perform just below the average over the long term," said Mark Zandi, who is the chief economist at Moody's Economy.com, based in West Chester, Pa. "The wealthier economies will get a little less wealthy, and the poorer economies will get a little wealthier." But 2006 is an especially bad time to become more average, since New Jersey's budget gap of about $6 billion is expected to be one of the worst of any state in the nation. It is no time, politically speaking, to be giving grants, tax breaks and seed money. So a question heard with increasing frequency is this: What is Jon S. Corzine, the governor-elect who spent a professional lifetime in the business of allocating capital, going to do? Mr. Corzine is well aware of the slippage, to judge from statements he issued during his campaign, although the governor-elect's transition team did not respond to several requests for an interview. Mr. Corzine has proposed a venture capital fund, called the Edison Innovation Fund, to be financed initially by bonds and used to aid high-tech enterprises. Mr. Corzine also has the larger job of shoring up the financial industry, salvaging manufacturing jobs and encouraging corporate investment. "Look, he's a business guy," said Anthony Shorris, the director of the Policy Research Institute for the Region at Princeton University. "He comes out of the environment of the people we're talking about, the world of information technology and financial services. He knows what they need and what it takes to get them to move and stay." Mr. Shorris, among others, noted that high-tech enterprises everywhere took a beating starting in 2000 and 2001, and were only recovering now. Adding Up the Pluses Yet the state treasurer, John E. McCormac, saw the state's economy far differently, saying that the overall recovery was filling the state's treasury faster than expected. "Our corporate tax is way over target," Mr. McCormac said in an interview, shrugging dramatically. "If there's really a problem, why do we keep beating our targets?" Mr. McCormac pointed out that the Novartis Pharmaceuticals Corporation was expanding its headquarters in East Hanover, Pfizer was building a new research center in Morris Plains and Sanofi-Aventis, the French pharmaceutical giant, was putting its United States headquarters in Bridgewater. And New Jersey -- going so far as to send Mr. McCormac and Gov. Richard J. Codey to Verizon Communications' headquarters in Manhattan about a year ago -- persuaded the company to take over the former AT&T campus in Basking Ridge rather than move to Virginia. In addition, Mr. McCormac said, a Wall Street surge has fed the state treasury with personal taxes paid on unearned income. "Those revenues for '04 were great, for '05 were better and for '06 look even better," he said. Mr. Hughes replies that Wall Street money is masking losses in the state's economic core. Moreover, jobs in the securities and brokerage firms in New Jersey declined from 2000 to 2004, after a decade in which many companies moved support services across the Hudson. The Hughes-Seneca report said: "With back-office functions now as easily carried out in low-cost Asia as in Jersey City, the state's recently gained role as a significant national financial center may very well be in jeopardy." And sooner rather than later, record-level corporate profits will recede, cutting income tax receipts from the state's wealthiest residents, said Mr. Hughes, who is the dean of the Edward J. Bloustein School of Planning and Public Policy at Rutgers. While people who bring home big paychecks from Manhattan pay income taxes to New York State, they pay taxes on their unearned income to New Jersey. Mr. Hughes, just like many Republican legislators, contends that the "millionaire's tax" adopted in 2004 -- raising taxes on income over $500,000 -- is a highly unreliable source of revenue. Mr. Hughes and Professor Seneca found an overall decline since 2000 in the highest-paying economic sectors, including the corporate management jobs and financial-industry jobs that were largely responsible for the state's high-end housing boom, which is an economic engine in itself. The average pay for what they label "Wall Street-type jobs" in 2004 was $131,422. Where the Growth Is At the same time, the highest job gains were in local government, education and health services, and leisure and hospitality --a sector that paid an average of $20,065 a year in 2004. A new state analysis of income tax returns, from its 2003 tax year, yielded a puzzling statistic: The average wage reported was $58,546, which was $13 below the average reported in 2000. There is little disagreement that the state needs to shore up its high-tech supports. "Other places have caught up," said Richard Goldberg, a member of the state's science and technology commission and a vice president of DRS Technologies in Parsippany, which produces electronics systems for the military. Most of the states viewed as competitors for high-tech business lost science and technology jobs in 2001 and 2002. But most lost fewer than New Jersey did, and several have done much better. In scientific research and development services, for example, New Jersey lost more than 4,000 of its 32,000 jobs from 1990 to 2004. The state was leapfrogged during that period by Massachusetts and Maryland, while Virginia and New York rapidly added jobs as well. New Jersey was the first state to commit funds to stem cell research, which helped spur California to adopt a $3 billion initiative. Now, New Jersey has started to spend the money -- which California has not -- announcing $5 million in grants last month. Still, New Jersey remains overshadowed by California and pursued by other states. Other States' Gains Mr. Zandi noted that New Jersey's technology sector had been dominated by very large corporations, especially the pharmaceutical companies and telecommunications giants like AT&T. "In the case of Maryland or California, a lot of the growth was in biotech, medical instrumentation, in small and midsize companies," he said. "Big companies generally are not experiencing the same kinds of growth rates and hiring in the same way." He then raised and answered his own question: "Why is it that New Jersey hasn't been able to attract small biotech companies? That may be because the state has underinvested in its university facilities. California, Maryland, Virginia are extraordinarily aggressive in bringing these companies to their states." To stem the tide, Mr. Goldberg advocates more technology incubators -- state-financed facilities that offer laboratory space -- for start-up companies. "Pennsylvania and New York have over 50 incubators each, and New Jersey has 8," he said. "We've done a poor job of growing that system because it costs money." Professor Seneca and Dean Hughes met with Mr. Corzine on Thursday, before their presentation at the State House, and found him, as Professor Seneca said, "very sharp in his understanding and penetrating with the questions." The science and technology commission, in preparing recommendations for Mr. Corzine, is urging a $300 million commitment for the Edison fund and $20 million to $50 million a year for more short-term programs. One model is New York State's new research center at the State University at Albany, which focuses on nanotechnology. The state has poured hundreds of millions of dollars into its development and has attracted billions in private investment from companies like IBM and International Sematech. New Jersey has given only scattered grants to nanotechnology companies, although it is one of the handful of fields that the science commission wants to emphasize. The Value of Education No high-tech company, of course, can do without a highly educated labor pool, even if it is in a high-cost state -- and it usually is. "The fundamental things don't turn around quickly, and New Jersey is coming at this from a very good position," Mr. Shorris said. "They're not putting Pfizer research labs in North Dakota or Mississippi." For recruiting purposes, he added, it would be nice to have Boston or Chicago in the middle of the state. But New Jersey is blessed, he said, by its nearness to two very attractive metro areas. And Mr. Hughes said it had never been hard to persuade people to live in Princeton or Short Hills or to commute from Manhattan. In fact, New Jersey probably has a harder time recruiting and keeping other types of businesses. In a survey of members of the New Jersey Business and Industry Association last fall, more than 90 percent said New Jersey had higher taxes and fees, health-care costs and government spending than other states. Another report released last month by the New Jersey Chamber of Commerce said relocation consultants who work around the nation reported that their clients rarely even considered the state. Some had lukewarm compliments for the state's Business Employment Incentive Program, which is intended to persuade employers to create new jobs in New Jersey by giving to them a portion of the state income taxes paid by each newly hired employee. The state's business-growth programs are now scattered in more than a dozen departments and agencies, and Mr. Corzine has said he wants to bring them all under the Economic Development Authority, the independent agency that handles the larger employment incentive program. To help achieve this, the governor-elect has appointed an advisory panel on economic development, which has been meeting throughout the transition period. One member, John Galandak, the president of the Commerce and Industry Association of New Jersey, said Mr. Corzine spent two and a half hours with the committee at its last meeting, although he said he could not give details of the discussions. "With the incoming administration facing a $6 billion budget gap, there's not going to be a lot of latitude or political will to give grants or more money," Mr. Galandak said. The incentives, he said, would have to come in the form of an easier tax and regulatory burden. The Chamber of Commerce report did cite New Jersey's competitive advantages, including the quality of its work force, as identified in interviews with corporate executives and consultants. Advantage No. 1: It is not New York City.

NEW JERSEY
LABOR
ECONOMIC CONDITIONS AND TRENDS