Cuomo’s Proposal for an Executive-Branch Prosecutor Is Called a ‘Scheme’

Abstract: ALBANY — As negotiations continue over the possibility of a special legislative session, concern has spread here over the prospect of last-minute gifts that Gov. Andrew M. Cuomo and state lawmakers might exchange. For its part, the Cuomo administration recently floated proposals to create a new inspector general with oversight of state issues at the Port Authority of New York and New Jersey, and a new special prosecutor with broad investigative powers over the state procurement process. For their part, legislative leaders continue to have their hopes set on a raise for their members. While the administration appears to have backed off part of the Port Authority proposal — saying bill language that would have enhanced the governor’s powers over appointees reflected earlier thinking on the subject — the idea of an inspector general for the authority is still alive. The new procurement prosecutor, controlled by the governor, would be empowered to investigate complaints, policies and procedures in vast array of agencies, employees and contracts. The prosecutor proposal has set off another skirmish between Mr. Cuomo and the state attorney general, Eric T. Schneiderman, a fellow Democrat. Mr. Schneiderman expressed his displeasure over the proposal in a letter to Mr. Cuomo and legislative leaders on Wednesday, calling the idea of an executive branch prosecutor “likely unconstitutional” and “a scheme.” “It does not establish the independence required of a procurement watchdog,” Mr. Schneiderman wrote, “and therefore will not achieve the real accountability and reform our state desperately needs.” The governor first floated the concept of such executive oversight in a statement last month , just before Joseph Percoco, one of his closest aides and a former confidant, was indicted in a corruption scandal involving hundreds of millions of dollars in state contracts. Also indicted was Alain Kaloyeros, who resigned as president of the State University of New York Polytechnic Institute, which has been central to the governor’s upstate economic policies and would also be subject to the powers of the proposed procurement prosecutor. But the attorney general’s office, which has squabbled with Mr. Cuomo before, said “the governor’s proposal would allow executive agencies to simply police themselves.” “Self-policing does not work,” said Eric Soufer, Mr. Schneiderman’s communications director and senior counsel for policy. “It’s like the fox guarding the henhouse.” The attorney general was not alone in reacting negatively to the governor’s idea. On Thursday, a collection of government watchdog groups condemned the proposal, saying in a letter it would “effectively weaken the independent oversight authority of the state comptroller and the attorney general.” Last week, Thomas P. DiNapoli, the comptroller, asked the governor to restore his powers to monitor the state and city university systems’ spending and state contracts. He said his authority in those areas had been substantially reduced by executive and legislative actions during Mr. Cuomo’s time in office. The possibility of a special session has been percolating since last month, when a commission formed to evaluate a raise for lawmakers and members of the executive branch disbanded after Mr. Cuomo’s appointees helped block approval of a raise proposal . Mr. Cuomo, who has a reputation for wielding a heavy hand in all things Albany, then offered up the basics of a possible deal: supporting a salary increase in exchange for action on ethics and other policy proposals. The governor’s overt quid pro quo irked legislative leaders and members, but did not stop negotiations: Talks were continuing on Thursday, with lawmakers being contacted about their holiday-season availability. A special session could be convened as early as Tuesday. Any deal still faces hurdles, including the raise itself. The idea is popular among downstate members, for whom living on the $79,500 base salary is a challenge, but less so for those from more conservative, and less expensive, areas in upstate and western New York. Lawmakers have not gotten a raise since 1999, after Gov. George E. Pataki, a Republican, brokered an agreement with a similar year-end deadline. (Current lawmakers cannot vote themselves a raise; only the next Legislature, which convenes in January, can approve such a raise.) The impact of the agreement shepherded by Mr. Pataki was profound: It allowed charter schools into the state, a development that is still contentious nearly two decades later. While Mr. Cuomo clearly sees a raise as a point of leverage, he agreed that it was a “difficult issue” for lawmakers politically. He added that he believed that the legislation being discussed included “fairly straightforward issues.” “These are not complicated bills,” he said on Wednesday. “You could read it, you know, in a matter of a half an hour.” Still, some of the ideas alarmed longtime observers of state politics like Blair Horner, executive director of the New York Public Interest Research Group, in part because few outside the Capitol are paying close attention. “No one knows what’s going on, certainly not the 19 million New Yorkers paying the tab for this,” Mr. Horner said. He added that while he believed lawmakers deserved a raise, “legislative extortion shouldn’t be part of the policy process.” A spokesman for the governor, Richard Azzopardi, said that the special prosecutor proposed by Mr. Cuomo would simply be “in addition to all other efforts and can only be a positive,” before noting a bribery scandal that enveloped Mr. DiNapoli’s office this week. “We saw just yesterday another example of the failure of the current system with corruption in the comptroller’s office, which was missed by both the comptroller and the attorney general’s office,” Mr. Azzopardi said, adding that “the attorney general should have known there were issues.” The sniping came as many in Albany began to head home for the Christmas holiday, though return trips could be in the offing, a prospect that John Kaehny, executive director of Reinvent Albany, a watchdog group, bemoaned. “Governor Cuomo is turning this Christmas special session into a weapon of governmental mass dysfunction,” said Mr. Kaehny. But even he appeared to acknowledge that such outrage might not keep a deal from getting done. “It’s shameless, Albany at its worst,” he said. “And the governor may get away with it.”

Inspector General
Port Authority
New York
Special prosecutor
State legislature
Andrew Cuomo
Eric T Schneiderman
Government Contracting and Procurement


Hand-Holding for a Nervous Passenger

Abstract: I’VE been traveling my entire life. My dad was an importer who traveled quite a bit to Asia back in the 1960s. So I think my family was actually bred to travel. I am a serial entrepreneur, and at one point in my career when I was opening our supply offices for my semiconductor business, I had to travel to about 30 different countries. For the last seven years, as the founder of Make Meaning , I’ve been traveling to meet with investors and to source ideas and inspiration for new craft experiences to offer in our stores. It’s good that I don’t mind the travel and that I am a good flier. I like the commercial flight experience. I’m not the private jet kind of guy. I like to connect with people, and if someone wants to talk that’s fine with me. I don’t work on flights. I’d much prefer to sleep, read or talk to someone. When you have your own business, you are working all the time, so taking a few hours during a flight to relax helps recharge a person. It’s wonderful. Business travel can have some unintended consequences. At one point I was spending a lot of time in Asia and I met this woman from Australia who was going to manage a bed-and-breakfast in Italy. We started visiting each other a lot and she eventually decided to come to the United States and move in with me. She didn’t know anyone here, and she was getting a little lonely when I went to work. She was a huge animal lover so I decided to buy her a cat, a beautiful Tonkinese that cost me about $900. Image Dan Nissanoff in Amsterdam. He is founder and chief of Make Meaning, which offers artistic activities for children and adults. Eventually the relationship ended, and she decided to move back to Australia. She couldn’t take the cat with her right away, so I kept it. The cat, named Jade, decided she hated me. It was not pleasant. I am a good traveler. I know how to make dollars stretch. I know the right paperwork I need to get into countries to do business. I did not know what it would take me to fly an animal to Australia. I have never been so confused in my life. The amount of red tape was insane, and I even had to get the cat what amounted pretty much to a kitty passport. The cat’s trip cost me about $3,000. I couldn’t even use any of my own frequent-flier miles for her. The cat did arrive safely and is healthy and happy. I, however, was a little broke for a bit. When you take the time to get to know someone sitting next to you on a flight, you might be able to make a connection that is meaningful. I was on a trip to Mexico City and the woman sitting next to me was extremely nervous. She told me that she might be crawling all over me because she was so afraid, but she was embarrassed about her fear because her daughter was sitting a few rows behind her. She did not want her daughter to be worried about her. She asked if she could hold my hand during takeoff. I said sure. The woman had a grip like you wouldn’t believe, and it was clear she was terrified. She held on to my hand for about 10 minutes, and then she was O.K. We laughed a little about it and she was so grateful. It might not seem like much, but it was very important to her and it was a great experience for me to connect on that level with a fellow flier, even if my hand did hurt a little bit for the rest of the flight.

Make Meaning
Business travel
Dan Nissanoff
Airlines,airplanes
Travel,Tourism


E.U. Lays Out Plan to Improve the Lives of the Roma

Abstract: BRUSSELS — Calling for better integration of its 10 million to 12 million Roma citizens, the European Union conceded on Tuesday that its 27 member states were doing too little to tackle discrimination, prejudice and intolerance against the minority group. “There is no evidence that strong and proportionate measures are in place to tackle the social and economic problems of a large part of the E.U.’s population,” Viviane Reding, vice president of the European Commission , said as she outlined a strategy to improve the plight of the Roma. Ms. Reding, also the European Union’s justice commissioner, was at the center of a furious dispute last year when she criticized France’s expulsion of Roma and likened French tactics to those used in World War II. On Tuesday at the European Parliament in Strasbourg, she described that episode as a “very necessary wake-up call.” Laszlo Andor, European Union’s commissioner for social affairs, condemned attacks on Roma in his own country, Hungary, where the far-right party Jobbik has been accused of harassing minorities. Xenophobic and racist tendencies must be confronted, Mr. Andor said. The plans outlined on Tuesday focus on improving access to education, jobs, health care and housing. The 27 member states would set individual goals to integrate Roma, in proportion to the population on their territory and tailored to their circumstances. These would then be monitored in Brussels. But the European Roma Policy Coalition, a collection of nongovernmental organizations, said that, while the announcement was welcome, it did not go far enough. “E.R.P.C. is deeply disappointed that while the framework recognizes the need to fight discrimination against Roma and ensure their equal access to all fundamental rights, it fails to specify measures to combat discrimination, intimidation, anti-Gypsyism, hate speech or violence against Roma,” it said in a statement. The coalition lamented the lack of clear guidance, noting “the general failure of existing Roma inclusion policies” and the lack of experience of many European states with such programs. One problem highlighted on Tuesday was that about 70 percent of the money allocated by the European for Roma integration is not spent. Under the bloc’s rules, national governments need to find matching funds to be able to spend the E.U. cash. During the financial crisis, some had struggled to do so, Mr. Andor said, adding that in some cases the impediments were political as well as technical. According to the European Commission, the Roma form about 10 percent of the population in Bulgaria, 9 percent in Slovakia, 8 percent in Romania, 7 percent in Hungary, and 1.5 percent to 2.5 percent in Greece, the Czech Republic and Spain. Of those countries, only Spain enjoys a reputation of having some success in integrating Roma.

European Union
Discrimination
European Commission
Romani People


2 Days With No Text Messages for Riverdale Students

Abstract: Julia Sokoloff, 14, woke up around 8 on Sunday morning and reached for her phone the way hard-core smokers reach for their cigarettes, before they’re even fully conscious. She sent a text, something about a play rehearsal, and then it hit her. “Noooo!” she screamed, then ran into her little brother Gabriel’s room and threw the phone at him: “Take it!” It was the first hour of the first day of a two-day experiment in text-free living at Riverdale Country School , where Julia is an eighth grader, and already she had fallen off the wagon, simply by forgetting. If only every supposedly responsible grown-up who was tempted to text and drive had an 11-year-old Gabriel in the back seat, someone with an iron grip and a long-unsatisfied desire to play the enforcer. (A few hours later, when Julia asked for the phone back, he told her: No can do.) Last week, researchers at the University of Maryland reported that college students who swore off social media showed signs of withdrawal similar to those of drug addicts going cold turkey. So how would scores of middle-schoolers fare under the same circumstances, what with their underdeveloped frontal lobes and raging need for affirmation? By midday Monday, three-quarters of the way through the experiment at Riverdale, an elite private school in the Bronx, a handful of students gathered to discuss how it felt. None looked pale and ashen; none were twitching, at least visibly. The school counselor, K C Cohen, had distributed worksheets to the group beforehand that asked, among other things: When you find yourself wanting to text/I.M./chat, is it because you need to communicate with someone right away? Or just for the sake of a casual connection? “WANT TO!” Zachary Riopelle, a 13-year-old seventh grader answered. He underlined it, too. The experiment, which asked students to voluntarily forsake instant messaging, chat, texts, and Facebook through Monday night, was Ms. Cohen’s idea. “Are they finding easy ways to avoid negotiating some of the normal social challenges of adolescence?” she wrote in an explanatory e-mail message that the head of school sent to parents. The immediacy of parent-child texting does wonders for communication, Ms. Cohen said in an interview, but some aspects of the constant electronic dialogue make her uneasy. “Kids will do poorly on a test, and more often than not, right away they’ll go into the bathroom and text their mom and dad,” she said. “There’s no sense that the kid just has to feel his feelings. It’s an instant Band-Aid.” The experiment left Kayla Waterman, a 12-year-old sixth grader, with a new appreciation for the convenience of texting over calling. On Monday morning, instead of texting, she called her mom to let her know there were “a gazillion fire trucks at school.” Then she called right back: false alarm — fire drill. “I could tell she was getting annoyed because I kept calling,” Kayla said. How many times during the school day does she usually text her mom? About 10, Kayla said; a friend nodded in agreement. Boundaries between work and home have long since fallen, so maybe it should not be surprising that the same is true for school and home. But what middle school student 20 years ago would have voluntarily reached out to her mother 10 times between 9 a.m. and 3 p.m.? If school had any universally agreed upon upside, it was that it gave a 12-year-old some much-needed space to revel in independence or struggle with rejection — space in which, presumably, that 12-year-old could start to figure out who she was, or how he wanted to navigate the world. This text-free Sunday, the Riverdale students said, was unusually relaxing. They were shocked at how quickly they finished their homework, undistracted by an always-open video chat, or checking in on Facebook or responding to the hundred messages they typically get in a day. Kayla and her mother went for a stroll in SoHo, a rare outing, with them both off the computer. “I had to look for things to do,” said Zachary, who ended up watching a movie with his mother. Fewer than half of the 250 middle school students at Riverdale participated in the experiment, but Julia, for one, found it valuable. Among the revelations was the envious reaction of her father, who pointed at his own BlackBerry and told her, “I’d give anything to put this down.” Unlike him, she realized, she had a choice, the best youth has to offer: freedom.

Text Messaging
Riverdale Country School
Social Networking (Internet)
Teenagers and Adolescence
Education and Schools
Computers and the Internet
Riverdale (NYC)


Cleveland Realizes a Championship After All, Thanks to the Monsters

Abstract: CLEVELAND — Late Saturday morning, about 10 hours after the Cleveland Cavaliers lost to the Golden State Warriors in Game 4 of the N.B.A. finals, dozens of workers in wine-colored shirts were stuffing trash bags and sweeping out the aisles inside Quicken Loans Arena. They were getting the arena ready for a record crowd of 19,665 that, hours later, packed the place — but not to watch LeBron James. Instead, they were there to cheer on Cleveland’s minor-league hockey team, the Lake Erie Monsters, as they tried to nail down a title for a famously championship-starved city. “We’re aware of what’s gone on here,” Ryan Craig, the Monsters’ 34-year-old captain, said during the team’s morning skate on Saturday. As he spoke, the basketball nets and court, as well as a few thousand seats, had been stashed away, and the Monsters, in their first year as an affiliate of the N.H.L.’s Columbus Blue Jackets, has come out onto the freshly Zambonied sheet of ice for a laugh-filled and rambunctious morning skate. The Monsters’ basketball counterparts, the Cavaliers, trail the Warriors by three games to one in the finals and few give them a chance of prevailing. But the Monsters were an entirely different story, especially for Cleveland. As they skated Saturday morning, they knew they needed just one more victory to complete a four-game sweep of the Hershey Bears, the Washington Capitals’ top farm team, and capture the American Hockey League’s Calder Cup finals. And with a goal by Oliver Bjorkstrand with just two seconds remaining in the first overtime on Saturday night, the Monsters did just that, the 1-0 victory giving Cleveland its first hockey title since the Barons won the same Calder Cup in 1964. As everyone in Cleveland — and maybe the whole country — seems to know, 1964 was also the last year a team from the city won a big-league sports championship, with the Cleveland Browns beating the Baltimore Colts, 27-0, for the N.F.L. title on Dec. 27 at Cleveland Municipal Stadium, which was razed 20 years ago. (The Cleveland Crunch, it should be noted, won three National Professional Soccer League titles indoors in the 1990s.) “I mean, if you’re a sports fan at all, and you come to Cleveland, you’re made aware of that stuff right away,” Golden State Coach Steve Kerr, a former Cavaliers guard, saidFriday. The Monsters were not pretending that a Calder Cup equals a Stanley Cup — or, for that matter, the Larry O’Brien N.B.A. Championship Trophy, an oversized replica of which was placed smack-dab in the middle of the Fan Fest area at the Cavaliers’ gameFriday night. But they said a trophy for Cleveland would be a significant accomplishment. The Monsters, who had been an affiliate of the Colorado Avalanche for eight seasons, were third in the 30-team A.H.L. in attendance during 2015-16 regular season, averaging 8,596 per game. “It helps them get prepared for the next step — it’s not just a couple thousand people in an empty building,” said Jock Callander, a former forward for the International Hockey League’s Cleveland Lumberjacks who is now the color commentator on Monsters’ radio and TV broadcasts. Game 3 of the Calder Cup finals had been played at Quicken Loans Arena and drew 12,935. Tony Brown, the Monsters’ play-by-play announcer, said: “The support has been great. This market is so hungry for a championship.” Youth hockey here is big, and hockey is not new. The Cleveland Indians played in the I.H.L. from 1929 to 1933, when they were renamed the Falcons. The Falcons became the Barons in 1936 and won the Calder Cup nine times before moving to Jacksonville, Fla., in 1973. The Cleveland Crusaders of the World Hockey Association opened in 1972, moving from Cleveland Arena to the suburban Richfield Coliseum in 1974. For two seasons in the mid-’70s, Cleveland had an N.H.L. team, also called the Barons, which drew poorly. The Lumberjacks popped up in 1992 and lasted until the I.H.L. folded in 2001, and yet another iteration of the Barons, this time a San Jose Sharks’ farm team, played in the A.H.L. from 2002-6 until moving to Worcester, Mass. A banner with Callander’s number with the Lumberjacks, 15, hangs in the rafters at Quicken Loans Arena, next to the No. 1 worn by Barons’ goaltender Johnny Bower, the No. 9 worn by Barons center Fred Glover and another banner commemorating the Barons’ Calder Cups. With the Blue Jackets established 140 miles away and the Pittsburgh Penguins 150 miles away, it is unlikely that an N.H.L. team will return to Cleveland any time soon. But the Blue Jackets and the Monsters have benefited from their relationship. “You’re not so far away that someone gets there every once in a while, so you can assess these guys as they grow,” said Bill Zito, the Monsters’ general manager and the Blue Jackets’ assistant general manager. “Our market gets to come up there and see the young guys play.” Josh Anderson, a 22-year-old Monsters’ forward who played 12 games for the Blue Jackets this season, said of the parent club, “They didn’t have the year they wanted up there, and now they’re rooting for us to win for the whole organization.” The arena, of course, is still the Cavaliers’ domain. The Monsters take up little space: Their dressing room is down a corridor, carpeted with the Cavs’ “C” logo, from the Cavaliers’ ornate locker room. Still videos pitching Monsters’ tickets are splashed on the big screen during Cavaliers’ games. Work crews allowed giant N.B.A. playoff banners to hang from the rafters Saturdaynight, because the Cavaliers could avoid elimination by winning Game 5 of the N.B.A. finals on Monday in Oakland, Calif. Game 6, if necessary, would be here on Thursday. The Monsters, meanwhile, are now champions, whatever fate awaits the Cavaliers They had even grown playoff beards. The veterans on the team had lush facial hair, with the promising young players trying to catch up. “Some guys can grow them, some guys can’t,” said Craig, who has played most of his 13-year professional career in the minor leagues. “The good thing is that we’ve had two months to grow them.” And now a whole summer to celebrate a championship, which is always remarkable in Cleveland.

Cleveland
Lake Erie Monsters
American Hockey League
Ice hockey


Maryland Wins in Romp

Abstract: Robert Carter Jr. had 20 points, and No. 2 Maryland routed visiting St. Francis (Pa.), 96-55. Maryland (7-1) was 31 of 46 from the field (67.4 percent). Ben Millaud-Meunier led St. Francis (3-4) with 13 points. ■ In a women’s game, the freshman Kalani Brown scored 16 points to lead five Baylor players in double figures, and the No. 4 Lady Bears beat visiting Northwestern State, 86-44.

College basketball
University of Maryland


Credit Crisis Is Leaving Charities Low on Cash

Abstract: SCO Family of Services, a nonprofit agency based on Long Island, started the year with a $25 million credit line at its bank, which it planned to use to pay its bills while awaiting government reimbursements and donations. Now, after its bank has cut its credit line twice and withdrawn a promise to support a critical bond offering, the organization is worried about whether it can pay its employees this month. “I spend a good part of my day every day just trying to manage cash flow,” said Johanna Richman, chief financial officer at SCO, which provides services to children with developmental disabilities. SCO is one of hundreds of charities caught in the credit crunch as skittish banks reduce their lines of credit or cut them off entirely at a time when the need for their services is climbing sharply, nonprofit leaders say. “While nonprofits are working feverishly to accommodate increased demand, they are facing severe financial constraints that are threatening their ability to go on, much less expand their services,” said Diana Aviv, president and chief executive of Independent Sector, a nonprofit trade association. Almost three-quarters of nonprofits in the United States receive some type of government financing, according to new research by the School of Social Service Administration at the University of Chicago, and about half of those count on that aid for at least half of their budgets. As a growing number of states delay payment, nonprofits must rely on lines of credit to help them get by. In Illinois, the state is running as much as 150 days late in making reimbursements, and California has told nonprofits to expect i.o.u.’s in lieu of payment starting next month. “You can just imagine a nonprofit walking into a bank with this tattered envelope from Sacramento saying that some day the state government will pay it,” said Thomas Peters, chief executive of the Marin Community Foundation in Marin County, Calif. “How’s a bank to make a loan against that promise?” The Marin foundation has been providing emergency and short-term grants to keep organizations like SCO alive, but Mr. Peters said it could not meet the demand for such money. Independent Sector has asked Congress to have the federal government make payments for social services directly to nonprofits, rather than funneling the money through state governments, as is the current practice. It is also seeking a $15 billion bridge loan program for nonprofits that can no longer tap banks for short-term loans. Nancy Biberman, president of the Women’s Housing and Economic Development Corporation, or Whedco, which provides services like child care and low-income housing in the Bronx, endorsed the idea of a bridge loan fund. “We don’t see any economic recovery money that’s clearly flowing into poor communities,” Ms. Biberman said. “Infrastructure projects are not really where it’s at when basic survival is at stake for so many people.” Whedco has just finished building what it calls the largest low-income “green” housing development in the country. The project was financed with a $39 million loan from a major bank. Last summer, New York City committed to provide $2 million more to the organization to underwrite additional amenities at the site, but the bank’s risk managers turned down its request to increase the loan by that amount because Whedco did not yet have the money in hand. “They were essentially challenging the full faith and credit of New York City,” Ms. Biberman said. Moreover, in December the bank froze a $500,000 reserve fund held to guarantee interest payments, even though the project was 95 percent complete. “That’s our money,” Ms. Biberman said, adding that, at most, Whedco would owe the bank 10 percent of that amount when it completed the project in the next few weeks. The inability to access the reserve fund has forced Whedco to ask some vendors to extend payment terms, a juggling act many nonprofit leaders are now performing. Despite such complaints, Ms. Biberman and other nonprofit leaders declined to identify their banks for fear of further souring relations with them. Keith Leggett, a senior economist at the American Bankers Association, said banks were applying the same tighter credit assessment standards to nonprofits as they were to businesses. “Donations and gifts are down, and that affects nonprofit creditworthiness,” he said, adding that “diminished or delayed payments” from state and local governments were also having an impact. Chicago Commons, a social services group with an annual budget of $17 million, was lucky to have a $700,000 line of credit at ShoreBank, which is known for its support of community-based nonprofits, when the state of Illinois fell $2.5 million behind in its reimbursements in December. “If we hadn’t had that credit line,” said Dan Valliere, the executive director, “we would have missed payrolls, which probably would have meant service cuts.” Nonetheless, the agency is postponing repairs to its facilities, including a new roof for a day care center. This month, the state borrowed $1.4 billion to pay for services provided last summer and in the early fall, which reduced the amount it owed Chicago Commons by about half. Mr. Valliere said the organization used the money to pay down its credit line and catch up with some bills, “but the comptroller’s office told us not to get used to this.” Moreover, Mr. Valliere said that use of the credit line was likely to increase the organization’s expenses by as much as $30,000, money that could be used to pay an employee or buy a new roof. “Try getting a donor to pay your interest expenses,” said Paul S. Castro, executive director of Jewish Family Service of Los Angeles, which racked up roughly $70,000 in interest costs while California legislators wrangled over the state budget. Now, the bank has told Mr. Castro that it will not allow any withdrawal from Jewish Family Service’s $3 million credit line without collateral — and it does not consider the promise of state payment sufficient collateral. “That’s a real burden for us,” Mr. Castro said. “All we really have as assets are contracts with the public sector.” At least that bank is willing to negotiate. SCO’s bank simply informed the organization one day that it would not provide a $12 million letter of credit needed for a bond offering for a new school for disabled children and renovations on other facilities. That forced the organization to borrow that money from its credit line, which the bank has cut to roughly $16 million, from $25 million. Kids Hope United, a nonprofit offering services in different states to support needy children and families, recently sought bids from 11 banks to handle virtually all of its banking needs. Seven declined to even make a proposal, “including two that have been taking me to lunch for years hoping for business,” said David McConnell, the organization’s chief financial officer. “There’s a triple-witching effect,” Mr. McConnell said. “You simply have less money to run operations and the government is paying more slowly than ever on top of that, which means you need the bank’s money more, and that makes banks more nervous about lending it to you.”

Credit
Finances
Nonprofit Organizations
Banks and Banking
Subprime Mortgage Crisis


Morning Agenda: Election Day, Paying for Crime, Whistle-Blowing in Korea

Abstract: It’s Election Day . Pleas have been made. Closing pitches have been delivered. For market watchers, that means one mystery will soon be solved (who won) and another one created (how will they lead). So far during the campaign, the pattern has been clear. Markets rallied on Monday after the F.B.I. announced that its review of newly discovered Hillary Clinton emails found no evidence that warranted charges. And analysts generally agree on the likely direction of markets after the votes are counted. A win for Donald J. Trump would lead to a drop in stocks, while a win for Mrs. Clinton would lead to a gain. What about the long term, though? That is more complicated . If Mr. Trump wins and the stock market sinks, the Federal Reserve might be less likely to raise interest rates at its next meeting. Low rates tend to strengthen asset prices. Some companies also stand to gain from Mr. Trump’s promises of a lower corporate income tax rate and lighter regulation, while some would suffer from the reduced availability of immigrant labor. So among the questions for the long term are: • Would a President Trump be more of an angry populist or a pragmatic dealmaker? • Would a President Clinton face steadfast resistance from Congress? Until we find out, you can follow our coverage here .* *We are offering unlimited access until 11:59 p.m. E.S.T. on Wednesday, so you can check out all our reporting, election-related or otherwise. Fitting Punishment How much punishment is enough, if a person poses no physical threat to the community and has an otherwise spotless record? Case in point: Andrew Caspersen, the disgraced scion of a wealthy Wall Street family, has been sentenced to four years in prison . He seemed to have it all before he bilked his family and friends out of more than $38 million. White collar offenders, who are usually more likely to be members of the middle class, have more resources to try to diminish their violations by painting them as aberrations from an exemplary life. They can argue that the loss of prestige and income should be a mitigating factor in a sentence. That rarely gains much traction, however, since judges are fearful of fostering the perception that offenders with greater wealth and social standing can expect better treatment. What judges really want is an expression of contrition, Peter J. Henning writes . This way, the defendants avoid the perception of trying to get away from something or planning the next crime. It’s an art, not a science, and it’s the system that the United States has. The Price of Whistle-Blowing in South Korea Economic growth is slowing and people are beginning to demand higher standards from their leaders and from big companies. This has made corruption a more pressing issue in South Korea, where a string of scandals have implicated prosecutors and judges. Opposition parties are calling for the establishment of an independent agency to investigate graft among senior public servants. A new law bans public servants, schoolteachers and journalists from receiving meals worth more than $27 as gifts. Prosecutors are increasingly examining the conduct of corporate executives. But the country is making slow progress in its efforts to empower whistle-blowers. That is partly because of political gridlock and partly because of entrenched attitudes toward whistle-blowers. Whistle-blowing is still regarded as an act of betrayal . Quotation of the Day “The world is closely watching how all actors involved will deal with the situation, including the banks that provide financial support to the project.” — A letter from environmental groups urging banks to halt further loan payments to the Dakota Access pipeline project. Environmentalists have increasingly focused on the financiers behind the fossil fuel industry, with some success .

Corruption
2016 Presidential Election
US Politics
Regulation and Deregulation
Debt


Young Children’s Deaths Said to Drop Again in 2011

Abstract: Fewer than seven million children around the world died before their fifth birthday from disease and birth complications in 2011 — a new low — the World Health Organization , the United Nations Children’s Fund and other agencies announced Wednesday. About 12 million children that age died in 1990, and the number fell below 10 million for the first time in 2007, so the pace of saving children’s lives is accelerating, experts said. Half of all the deaths occurred in five countries: India, Nigeria, the Democratic Republic of Congo, Pakistan and China. The leading causes, in descending order, were pneumonia, premature birth, diarrhea, birth complications and malaria. Most of those deaths were preventable with relatively cheap interventions, the United Nations agencies said.

World Health Organization
United Nations
Children and Childhood
Deaths (Fatalities)
United Nations Children's Fund


Drug Maker’s Donations to Co-Pay Charity Face Scrutiny

Abstract: As drug prices have soared in recent years and insurers have increased co-payments, a new type of charity has blossomed to fill a vital niche — helping patients pay the steep out-of-pocket costs for their medicines. But the largest of these co-payment assistance charities, the Chronic Disease Fund , is now in turmoil after questions have arisen about its relationship with a pharmaceutical company that is itself under investigation for its marketing practices. The practice is casting light on what has long been an open secret: The bulk of the contributions to these charities come from the pharmaceutical companies. The foundations not only help hundreds of thousands of patients a year, they also raise drug company sales and profits. After all, if a patient cannot afford out-of-pocket costs of $5,000 for a $100,000-a-year drug, the drug company gets nothing. But if the manufacturer or the charity pays the $5,000, the patient gets the drug and the company receives $95,000 from the patient’s insurance company or Medicare. The contributions — which also provide tax deductions to drug makers — are legal as long as a company does not require that the money it donates be used exclusively to pay for its own drugs. But articles circulating in the investment world have suggested that the Chronic Disease Fund might be showing improper favoritism toward Questcor Pharmaceuticals, which sells an expensive drug for immune diseases. Moreover, the articles noted that the charity was purchasing millions of dollars a year in services from for-profit companies owned by the charity’s founder and president, Michael Banigan. Questcor and the charity have said they are victims of a campaign by short-sellers — investors who benefit from the decline of a stock’s price. Nonetheless, fearing defections from donors, the charity hired a Washington law firm, Venable, to evaluate its practices and recommend changes to ensure it was in compliance with legal requirements. As a result, Mr. Banigan is leaving the charity and the entire board has been replaced. The charity is also revamping policies in a way that could eliminate co-pay assistance for certain drugs, according to Jeffrey S. Tenenbaum, the head of the nonprofit organizations practice at Venable. “When an organization comes under great scrutiny like C.D.F. has come under, you have to make sure they are squeaky clean,” Mr. Tenenbaum said in an interview. He said he thought the fund and Mr. Banigan had good intentions but “just didn’t know some of the things they should be doing.” Image Michael Banigan, founder of the Chronic Disease Fund, is leaving the charity. Mr. Tenenbaum said the charity was cooperating with a request for information in a federal investigation of Questcor’s marketing practices. He also said that the fund itself was “absolutely not a target of that or any other investigation.” Nonetheless, he said, he had advised the fund that an investigation might be coming. He said the controversy “definitely has gotten the drug companies’ attention.” While no company has ended its donations, some were still considering what to do, he said. The Chronic Disease Fund, which is based in Plano, Tex., received $200 million in contributions in 2012, triple its 2007 total and ranking it among the 50 largest charities in the United States. It says it helped nearly 86,000 patients last year and more than 500,000 since its inception in 2003. Critics say co-pay assistance helps keep drug prices high and circumvents efforts by insurers to control drug spending by making consumers bear part of the cost. “These subsidies are unfortunately used to promote the overutilization of expensive brand-name drugs,” said Wells Wilkinson, a lawyer at Community Catalyst, a consumer advocacy organization. The charities counter that any benefit to the drug companies is secondary to helping patients. “Look at the alternative,” said Dana Kuhn, founder and president of Patient Services, one of the charities. “If they didn’t donate their dollars, people would die.” Drug companies often directly subsidize the co-payments for privately insured patients. But they cannot do so for patients covered by federal programs like Medicare’s Part D drug benefit, because that would be considered a kickback, an illegal inducement to use a drug. So the drug companies donate to the co-pay assistance charities. A handful of charities specialize in providing such help. In addition, some patient advocacy groups like the Leukemia and Lymphoma Society have similar programs. Some executives of these charities now worry about increased scrutiny. “We could all get painted with the same brush,” said Patrick McKercher, president of the Patient Access Network Foundation . Its contributions more than doubled in 2012 to $179 million. It expects to help more than 100,000 patients this year, an increase from 59,000 in 2012. The charities are supposed to solicit donations from the public, not just drug companies. Still, 81 percent of the contributions to the Chronic Disease Fund in 2011 came from two pharmaceutical companies, according to its financial report for the year. The companies were not identified. Drug companies cannot contribute money specifically for their own drugs. Rather, they donate money to provide co-payment assistance for people with a specific disease, regardless of which drug is used. The Chronic Disease Fund, its website says, provides co-pay assistance for 78 drugs used to treat 46 diseases. Image Clorinda Walley, the executive director, will oversee the charity. For 15 of those diseases there is only one drug available, however, meaning the manufacturer of that drug can be certain its contribution will be spent on co-pays for its product. The articles raising questions about the fund were published in October in Barron’s and on the investor website Seeking Alpha . The latter was written by an anonymous short-seller of Questcor stock. Questcor sells a drug called H.P. Acthar Gel, which was approved more than 60 years ago to treat a variety of immune-related conditions. The company, which acquired the drug in 2001, has raised its price since then from $40 to more than $28,000 a vial . It has been gradually expanding the marketing of its drug to different diseases. And as it does so, it appears the Chronic Disease Fund has started co-pay assistance for those diseases. For instance, although the fund already offered support for multiple sclerosis, it started a new program for “acute exacerbations of M.S.,” which applies only to Acthar. The fund does not provide co-pay assistance for an approved drug for lupus, but it does for “exacerbations of lupus,” a use of Acthar. Questcor’s contributions for co-pay assistance are increasing even faster than sales of Acthar. Its contribution of $9 million in the first nine months of this year was 74 percent higher than the same period a year earlier. Its total 2012 contribution of $8 million was quadruple the level in 2011. Don M. Bailey, Questcor’s chief executive, said at an investor conference last week that the company was “doing exactly the same thing everybody else is doing” in contributing to the charity. Mr. Tenenbaum, the lawyer, said the fund would no longer provide co-pay assistance for diseases treatable by only a single drug, unless there was clearly a second drug in development. And he said the fund would sever all ties with companies owned by Mr. Banigan, its departing president. Mr. Banigan declined to comment. But in an email the fund forwarded to donors last week, he wrote: “There are many things I still want to accomplish in my lifetime and with C.D.F. well positioned for the future, I believe this is the right time for me to step aside and let others carry the organization forward.” Clorinda Walley, the executive director, will now run the organization. She issued a letter last week calling the earlier articles misleading but wrote that the charity was nonetheless making changes to its structure and practices aimed at “not just meeting, but exceeding best practices for nonprofit charities.”

Pharmaceuticals
Questcor Pharmaceuticals
Michael Banigan
Philanthropy


International Medical Corps’ C.E.O., on Self-Awareness

Abstract: This interview with Nancy Aossey , president and C.E.O. of the nonprofit International Medical Corps, which provides health care training, relief and development programs, was conducted and condensed by Adam Bryant . Q. Tell me about the first time you were somebody’s boss. A. When I was in junior high school, I detasseled corn in Iowa. We got picked up by a bus early in the morning and then taken out to a cornfield. We would go through the rows of corn and take the tassels off. We used to have checkers go through our rows to check that we didn’t miss any tassels, and then I became a checker. I was in seventh grade, and it was the first time I had to check other people’s work. Q. As you started your career, did you move quickly into management roles? A. I started with AT&T out of college. But I wanted to do something in the world of volunteering. I heard about International Medical Corps and got very interested. When I met the founder, it turned out that they were looking for a C.E.O. I loved their mission, and I never had any doubts that I could do the job. That was in my mid-20s. Q. That’s a big leap. A. At the time, I just thought, “Well, if they feel I can do this job, I feel I can do this job.” I was a hard worker, and I had had lots of experiences over the years of building my own skill set and having a sense of what I could do well and what I couldn’t do well. I later asked them why they hired me for the role, given that I had no experience, and they just said that they were looking for a deep commitment to the mission of the organization and that they were looking for qualities in a person, not the C.V. Q. Did they articulate them? A. They said that I was to some extent mature beyond my age, and that I was so committed. I was very truthful about what I thought I could and couldn’t do, what I thought I would bring to the position, and that I would be a hard worker. I told them I would not be afraid of taking risks and that I would do whatever it took to find ways to get things done. So those were some of the qualities they were looking for. Q. You’ve been C.E.O. for 27 years. A. As we’ve grown, my role has changed dramatically. In the beginning, I was very hands-on, but then I learned that hiring the right people was absolutely critical. If we’re going to reach the hardest-hit people in the world, we have to overcome obstacles. And so it took a certain personality, beyond commitment to the mission. I learned how to better identify those skills in a person, to see through the other things that they brought to the table and focus more on their personality and how they’re going to work with others in difficult situations, because that’s where you find out what people are really like. Q. So how do you hire? A. I try to look way beyond the C.V. In fact, I really try to put it aside and forget about it, and focus more on what motivates them, their aspirations, what environments they feel they thrive in. I want them to have a really good sense of our culture, and the kind of people who thrive in our culture. Is that what they’re interested in? Is that where they think they would thrive? What kind of an environment would they be happy and productive in? Image Nancy Aossey is president and C.E.O. of the nonprofit International MedicalCorps, which provides health care training, relief and development programs. Credit Librado Romero/The New York Times And if I can’t have an authentic conversation with someone, then they’re probably not right. I spend a lot of time trying to set the ground rules for the conversation and then I say, “Listen, we need to be honest with each other and tell the truth about ourselves and the organization, the challenges.” I’m asking them to trust me, and I’m trusting them to do the same thing. You’re really trying to get a sense of how the person handles certain situations. “If you had a conflict with a colleague and it had to be worked out, what did you do? How did you work it out?” I’ll ask them to reflect on how they navigated through it and what they learned from it. Were they able to think about it in a different way the next time? I’m always looking for the learning curve. I’ll also ask, “If I were to speak to colleagues or supervisors who weren’t on your reference list, someone who you didn’t always get along with, what would they say about you?” It forces people to think about themselves in a different way, through the lens of others and not their own. Everyone has strengths and weaknesses. The question is, how do we navigate through situations, and what do we draw on within ourselves to be effective? How do we draw out the best in other people? If you don’t have self-awareness, you’re always going to be outward-looking, and blame others for any difficulties. There are a million reasons why we might not be able to get something done. The question is, what am I going to do about it? I do believe it all goes back to self-awareness. Q. Are there things that you have a particularly low tolerance for? A. There is something I look for during the interview. If someone is getting up to leave and they have an empty cup, do they leave the cup without saying a word, or do they say, “Can I get rid of this?” It says something about the person, that they don’t expect someone else to pick it up. Another one is if somebody says, “That’s not what I was hired to do.” That’s a huge problem for me. You roll up your sleeves and do whatever it takes. You don’t want them so fixated on their job description, where they sit, and what their title is. It’s also a problem when somebody says, “I can’t work with this person.” There are always going to be difficult and challenging people to work with. I will ask why, but if it’s just that they’re difficult, I will say: “You have to find a way. Is there something I can do to help?” There are certain people we have to work with in life. That’s just the way it is. It goes back to, what’s your part in it? What’s your personal responsibility, and what are you going to do about it? Q. So many disagreements happen because of e-mail, too. A. Yes, they do. I have a lot of strong opinions around that. E-mail is an extraordinary communication tool and an extraordinary way to share information. No question about it. We know what it does, so let’s talk about what it doesn’t do. If there’s a conflict and you need to resolve it, you cannot really do it in an e-mail because people don’t know tone. They don’t know expression. Even if they like you and they know you, they might not know if you were irritated or joking in an e-mail. There are things we can say in conversation that you can’t say in e-mail because people don’t know tone and expression. People change when they talk in person about a problem, not because they chicken out, but because they have the benefit of seeing the person, seeing their reaction and getting a sense of the person. But arguing over e-mail is about having the last word. It plays into something very dangerous in human behavior. You want to have the last word, and nothing brings that out more than e-mail because you can sit there and hit send, and then it just kind of ratchets up, and you don’t have the benefit of knowing the tone. And the “copy all” function? That’s the most dangerous of all. If you copy five people on your team and five people on mine, suddenly we’re lining up against and around individuals. I think, from a leadership position, you have to set the tone and say this is not acceptable. We’re not going to conduct ourselves this way. We take a hard line that if you have an issue to resolve, you don’t do it over e-mail. Do I have people who follow it all the time? Of course not. But when I see it, I flag it.

International Medical Corps
Nancy Aossey
Management
Job Recruiting and Hiring


Europe Reels From More Migrant Deaths on Land and Sea

Abstract: VIENNA — Europe reeled from fresh shocks in its escalating migration crisis Friday, with reports that 150 people drowned in the Mediterranean and news that far more bodies had been found crammed in an abandoned refrigeration truck in Austria than first thought. Damage to the vehicle’s side raised the possibility that victims had struggled to escape. The authorities in Austria and Hungary said at least four people had been arrested in connection with the truck. They also disclosed that the remains of 71 people had been found inside, including four children, and that at least some had come from Syria. On Thursday, officials estimated as many as 50 people had been packed in the vehicle, before they discovered additional bodies. The migrant crisis, the biggest wave to hit Europe since World War II , was further amplified on Friday by a report from the United Nations refugee agency estimating a 40 percent jump this year in the number of people fleeing to the Continent by boat compared with all of 2014. Most are escaping war and strife in the Middle East and Africa. Secretary General Ban Ki-moon of the United Nations, expressing shock over the latest deaths, announced an emergency summit Sept. 30 in New York while world leaders are visiting for the annual General Assembly. He called Europe’s migrant crisis a reflection of deeper travails elsewhere and cited the Syria war as an example, saying that conflict had “just been manifested on a roadside in the heart of Europe.” The deadly perils of crossing the Mediterranean, already well known, were reinforced by news from Libyan and international relief officials that 150 people had drowned off western Libya after their boats sank on Thursday. The exact toll was unclear, but potentially was among the highest this summer for the desperate families trying to reach European shores. Jamal Naji Zubia, director of the foreign media office for the Tripoli-based government of Libya, said the victims drowned near the western port city of Zuwarah, near the Tunisian border, a frequently used departure point for migrants and refugees often in packed fishing boats or rubber dinghies. In Sicily, Italian officials announced the arrests of 10 suspected smugglers implicated in the deaths of at least 52 people who had suffocated in the hold of an overcrowded boat found on Wednesday. Maurizio Scalia, a prosecutor in Palermo, was quoted by Agence France-Presse as saying the arrests were based on statements of survivors who said “the victims were all violently forced to stay below deck in an awful condition.” Video Three people held in Hungary are being questioned after the bodies of 71 people, believed to be Syrian migrants, were found in a truck near Vienna. Credit Credit Roland Schlager/European Pressphoto Agency Still, much of the focus in Europe on Friday was on the relatively new danger of death from smuggling overland, crystallized by the mystery of the people found in the abandoned truck in Austria. The authorities there reported that three boys ages 7 to 10 and a toddler girl were among the 71 people decomposing in the truck, which had no ventilation, abandoned east of Vienna on Wednesday and discovered 24 hours later. The other passengers included 59 men and eight women. Officials at Hyza, the Slovakian company that formerly owned the truck, said its cooling system was not functional when they sold it. Austrian authorities said they had determined the truck lacked ventilation. The United Nations refugee agency report said the number of refugees and migrants crossing the Mediterranean to reach Europe had reached 310,000 this year, up from 219,000 in 2014. Image Red Crescent workers on the beach in Libya where dozens of bodies washed ashore after a migrant boat sank. Credit Hani Amara/Reuters Close to 200,000 people have landed in Greece this year and about 110,000 more have reached Italy, Melissa Fleming, a spokeswoman for the refugee agency told reporters in Geneva. More than 2,500 people have died at sea this year, not including those believed to be victims in Thursday’s sinking off Libya. Last year, 3,500 died or were lost while trying to cross the Mediterranean to Europe. “The way people are being packed onto boats is causing their deaths,” Ms. Fleming said. At the root of many of the deaths are the practices of human traffickers who overload boats, cars, trucks and vans. The Austrian authorities believe that is what happened to the migrants whose corpses were discovered in the truck, parked in the emergency lane of a highway southeast of Vienna. Once investigators opened the rear hold of the vehicle, said Hans Peter Doskozil, director of police in the eastern Austrian state of Burgenland, they found more corpses than expected. They were trying to identify the victims and established a hotline for anyone seeking information about missing relatives. While the authorities said it was premature to give an exact cause of death, they noted the absence of ventilation, the broken refrigeration system and the dent in the vehicle’s side, raising the possibility it had been caused by occupants trying to escape or seek fresh air. “We cannot say whether air was able to circulate through the cooling system or the roof,” Mr. Doskozil said, “but I believe that it is highly likely that people in this truck asphyxiated.” The Global Refugee Crisis, Region by Region In the latest crisis, tens of thousands are racing to Hungary before a border fence is finished. The authorities said on Friday that three Bulgarians and an Afghan suspected of involvement in the truck operation had been detained in Hungary. In a separate case, 10 Syrian migrants were injured early Friday when a van overturned on a highway in Hungary, the police said in a statement. The Austrian Red Cross said it expected as many as 4,000 people to cross the country’s eastern border over the weekend, and the authorities said they would increase controls. They emphasized, however, that they would not be able to stop each of the thousands of trucks that enter from the east every day. The migrants found dead in Austria most likely followed a now-popular route from Greece, through the Balkans and Hungary, and toward the north. Hungary reported a daily average of 2,000 people cross its border with Serbia, but on Wednesday the number rose to 3,241 people, including 700 children — the highest number in a single day recorded this year, the United Nations refugee agency reported. In a bid to deter the flow of refugees, Hungary has accelerated construction of a fence along its border with Serbia , but humanitarian-agency officials in Geneva described it as “a roundabout subsidy to the smugglers,” who charge refugees and migrants more money to get them past it. Building walls “looks tough, it looks proactive, it looks as if you’re taking people’s complaints seriously that there are too many migrants,” said Joel Millman, a spokesman for the International Organization for Migration. “It doesn’t work.”

Middle East and Africa Migrant Crisis,European Migrant Crisis


Turkey’s Push Into War Is Seen as Erdogan’s Political Strategy

Abstract: ISTANBUL — Confronted with widespread protests two summers ago, Prime Minister Recep Tayyip Erdogan ordered a harsh police crackdown and tarnished the demonstrators as traitors and spies. Faced with a corruption inquiry focused on his inner circle, he responded by purging the police and judiciary. So when Mr. Erdogan, now president, suffered a stinging electoral defeat in June that left his party without a majority in Parliament and seemingly dashed his hopes of establishing an executive presidency, Turks were left wondering how he would respond. Now, many say they have their answer: a new war. As Turkey resumes military operations against the separatist Kurdistan Workers’ Party, or P.K.K., analysts see a calculated strategy for Mr. Erdogan’s Islamist-rooted Justice and Development Party to regain its parliamentary majority in new elections. Having already delayed the formation of a coalition government , analysts say, Mr. Erdogan is now buttressing his party’s chances of winning new elections by appealing to Turkish nationalists opposed to self-determination for the Kurdish minority. Parallel to the military operations against the Kurds has been an effort to undermine the political side of the Kurdish movement by associating it with the violence of the P.K.K., which has also seemed eager to return to fighting. The state battled the group for three decades at a cost of about 40,000 lives before a fragile peace process began in 2013. “The overall assumption is that President Erdogan wants to create the conditions so the result of June 7 can be overturned, so that he can run the country from the presidency,” said Suat Kiniklioglu, a former lawmaker from Mr. Erdogan’s party and the executive director of the Center for Strategic Communication , a research organization in Ankara. Now a sharp critic of Mr. Erdogan, Mr. Kiniklioglu said, “I think there is little debate among normal and sane people in Turkey” that the war with the Kurds is being used as a tool to reverse the election defeat. The Justice and Development Party, known as the A.K.P., recently began conducting nationwide polls to see how it might fare in snap elections, which could be held as soon as November. “The outcome of these polls will be indicative of which direction they will go,” Mr. Kiniklioglu said. Many analysts say that after weeks of stalled coalition talks between the A.K.P. and three opposition parties, new elections are likely. And at a time of crisis, experts say, Turkish voters could very well turn again to Mr. Erdogan and the A.K.P. Indeed, a voter survey released Wednesday by a widely cited Turkish pollster found that Mr. Erdogan’s party could regain a parliamentary majority if elections were held today. “He is going for early elections,” said Henri J. Barkey, director of the Middle East program at the Woodrow Wilson International Center for Scholars and an expert on Turkey. “In any society, when there is a crisis, people rally under the flag, even if they don’t support the leader. In this instance, Mr. Erdogan is playing the nationalism card for his own benefit.” Image A moment of mourning after a police sweep of, among other groups, the P.K.K. Credit Cagdas Erdogan/Associated Press In addition to domestic political concerns, analysts said, Mr. Erdogan is worried about the growing military strength of the P.K.K., whose military affiliate has been working closely with the United States in northern Syria to resist and repel advances by the Islamic State. The bombing campaign against the P.K.K., they say, is intended to weaken it. However, the president’s domestic political opponents see his moves as directed mostly against them. Kemal Kilicdaroglu, the leader of the largest opposition party, the secular People’s Republic Party, has accused Mr. Erdogan of interfering in coalition talks by preventing Prime Minister Ahmet Davutoglu, the party leader who on paper is Turkey’s most powerful politician, from negotiating a deal, and also of using war for domestic political gain. “I say this with all sincerity: Prime Minister Davutoglu really is willing to sit down and form a coalition and save the country from its problems,” Mr. Kilicdaroglu said in a recent television interview. “But the person sitting in the post of the presidency is not allowing it.” He added, “If there is an aim to take the country to elections through blood politics, that would be extremely costly.” The resumption of war with the P.K.K. — with Turkish warplanes strafing targets in northern Iraq, where the group is based — came as Turkey, in a major shift, decided to join the American-led coalition against the Islamic State, the Sunni militant group that controls a large section of territory in Iraq and Syria. Turkey has struck Islamic State targets in Syria and granted the use of air bases to American warplanes, restoring its international standing as a reliable ally in the fight against the Islamic State, also known as ISIS or ISIL. On Wednesday, the Turkish foreign minister, Mevlut Cavusoglu, reaffirmed the government’s commitment to the coalition, saying Turkey was ready for a “comprehensive fight” against the Islamic State. Mr. Erdogan has said he is acting in Turkey’s national security interests in targeting terrorists of all stripes, both the Islamic State and the P.K.K., as well as a homegrown leftist group that has periodically carried out attacks here. But the bulk of the military operations so far have been directed at the P.K.K., which has carried out numerous attacks in Turkey over recent weeks that have killed nearly three dozen people, mostly soldiers and police officers. The latest came Tuesday, when a roadside bomb killed three soldiers in the southeastern province of Sirnak, an attack that was followed by more Turkish airstrikes on P.K.K. targets, according to Turkish news reports. In a column in The Daily Sabah on Wednesday, Ibrahim Kalin, Mr. Erdogan’s spokesman, characterized the war against the P.K.K. as self-defense and said that despite promises under the peace process, the group had failed to disarm. Others close to Mr. Erdogan said domestic politics had nothing to do with the decision to go to war. “Turkey’s military operations are being carried out in the interest of national security and has nothing to do with internal politics,” said one A.K.P. lawmaker, who spoke on the condition of anonymity because he had not been authorized by top party officials to speak publicly. Why Turkey Is Fighting the Kurds Who Are Fighting ISIS While the United States has long sought Turkey’s help in fighting ISIS, getting its help has revealed a tangle of diverging interests in the region. The lawmaker added: “Those who are trying to connect these operations to the president’s political goals are trying to cause provocation and influence the formation of the new government, which has entered a critical phase.” Turkey has also arrested many suspected militants and has seemed to go to extra lengths to publicize the arrests of suspected Islamic State members, perhaps to counter longstanding criticism from the West that it has been ambivalent about the threat posed by the group. However, according to news reports, many of the Islamic State suspects have been quietly released for lack of evidence. The electoral success of the Peoples’ Democratic Party, or H.D.P., a largely Kurdish group, is the main reason that the A.K.P. lost its majority. Mr. Erdogan had once embraced the Kurds , going further than any modern Turkish leader in the pursuit of peace, and counted on them for support in elections. But this year, by attracting many liberals who had grown disenchanted with Mr. Erdogan’s authoritarian governing style, the Peoples’ Democratic Party for the first time passed the 10 percent legal threshold to gain representation in Parliament. Now, though, rumors have circulated that officials are trying to close down the party and target its charismatic leader, Selahattin Demirtas. He is facing a judicial investigation over protests against Turkey’s approach last year to the battle for Kobani, the Syrian Kurdish border city that faced an Islamic State onslaught. Kurds accused Turkey of aiding the extremists, while the West was sharply critical of Turkey for not coming to the aid of the Kurds. “We believe Erdogan is dragging this nation into war to move forward with his own political agenda,” Mr. Demirtas said in an interview. “He believes that by targeting the H.D.P., he can push us below the electoral threshold and regain the majority his party lost in the June 7 elections. I don’t think he will be successful, because the Turkish public wants peace, and most people realize that the real motive behind all this is not peace but an A.K.P. victory.” Just two months ago, the elections were hailed as a victory for democracy, with many analysts predicting that the dominance of Mr. Erdogan, who has been the pre-eminent political figure in Turkey for more than a decade, had run its course. “People celebrated the election result prematurely,” said Ibrahim Tumen, 46, a banker in Istanbul. “It was obvious that the opposition wouldn’t be able to unite and that Erdogan would try to win back his majority at any cost.” Many are doubtful that such a strategy by Mr. Erdogan could work. “The more that time passes and people see through this, I’m not sure it will produce the outcome Erdogan wants,” said Mr. Kiniklioglu, the former A.K.P. politician. He added, “The way this is being digested in society is not clear yet.” Yet the country’s new war footing already seems to be influencing some voters. “I don’t support Erdogan or the prime minister, but Turkey can’t afford to have a weak coalition government,” said Oktay Cenk, a taxi driver in Istanbul. “The government tolerated the P.K.K. for long enough. It’s not possible to negotiate with terrorists, so we need to show strength against them, and we need a strong government to do that.”

Turkey
Recep Tayyip Erdogan
Kurdish
Ahmet Davutoglu
Selahattin Demirtas
ISIS,ISIL,Islamic State
Kurdistan Workers' Party,PKK


Marlins Re-Sign Suzuki for a Year

Abstract: Ichiro Suzuki signed a one-year contract Tuesday to remain with the Miami Marlins, giving him an opportunity to reach 3,000 hits in the majors. Suzuki, who will turn 42 on Oct. 22, is tied for 33rd on the career hits list with 2,935. He had 91 hits in 153 games for the Marlins this season but batted a career-low .229, dropping his career average to .314. His slugging percentage this year was .279, the lowest among all major-league players with more than 300 at-bats. Injuries to other outfielders — including the slugger Giancarlo Stanton — made Suzuki an everyday player.


WaMu’s Lesson for Private Equity

Abstract: WaMu’s Lesson For Private Equity The new era of private equity is proving treacherous for some old hands. The collapse of the nation’s largest savings and loan , Washington Mutual , highlights the point. The lender’s demise handed TPG, one of the buyout world’s kingpins, the kind of crushing body blow that has laid similar firms low in the past. The bursting of the credit bubble brought an end to the easy money that allowed TPG to take big public companies private, including Harrah’s Entertainment, MGM and Neiman Marcus. This drought led many buyout firms to pursue smaller stakes, not financed by debt, in public companies, where they hoped to negotiate terms and conditions that would give them an investment edge. Among the biggest of these deals was TPG’s injection of $2 billion into WaMu in April. TPG, led by David Bonderman, dove in with a flotilla of other top WaMu shareholders to collectively invest $7 billion in the struggling thrift. In return for precious capital, TPG received an array of advantages over WaMu’s other common shareholders that made it a sweetheart deal. This helped sustain the argument that private equity firms — despite the implosion of their leveraged buyout businesses — were still worth the huge fees their investors paid. After all, if private equity firms like TPG were just taking minority stakes in public companies, what would be the logic of paying them the industry standard 20 percent of any profits they make, as well as an annual retainer of up to 2 percent of the money they were given to manage? That logic, however, now looks specious. On Thursday, regulators declared WaMu insolvent and sold its carcass to JPMorgan Chase for $1.9 billion, vaporizing TPG’s investment. But TPG was not alone among private equity firms that, once the buyout boom turned, decided to take stakes in public companies. Nor was TPG alone among its peers in mistiming the financial turmoil. Warburg Pincus, for example, is still under water on its infusion of $800 million into the bond insurer MBIA. The buyout group reached twice into its $8 billion fund — first in December and then in February. This double-dip brought Warburg’s average price paid down to around $19.59 a share. MBIA stock closed Friday at $13.74. And Corsair Partners has taken a hit from its $985 million investment in the Cleveland banking company National City. The bank’s shares slid almost 26 percent on Friday alone, to $3.71, on concerns that it may follow WaMu into the arms of a deal, euthanized by worried regulators. But TPG’s loss is the biggest of this vintage of private equity into public company deals — and it is the first to crystallize a major loss for investors. So all eyes in the industry will be on Mr. Bonderman. They will want to see how he tries to convince his limited partners — the providers of TPG’s $50 billion of funds under management — that WaMu was a one-time event, perhaps a learning experience that will not be repeated. Judging by the history of the relatively young private-equity industry, this will not be a cinch to pull off. During the last financial market crisis, after the dot-com bust, two other pioneers of the buyout business — Forstmann Little and Hicks Muse — strayed from their usual discipline of taking full control of their quarry. Both lost large amounts of money for investors on stakes in publicly traded telecommunications firms, the end of their firms as major private equity players. Like TPG, Forstmann Little must have believed it was investing near the market’s bottom when it plowed $1.5 billion into XO Communications in 2001. The company went bankrupt a year later, prompting a public lawsuit by the Connecticut state employees’ pension fund, which claimed the firm had strayed from its mission. The WaMu debacle may be easier for TPG’s investors to forgive. The investment amounted to less than 5 percent of TPG’s assets under management. But for all those buyout barons trying to adjust to life without unfettered access to cheap capital, it will be a lesson they hope to learn vicariously. ROB COX and LAUREN SILVA

Private Equity
Credit
Washington Mutual Inc
TPG Capital
Subprime Mortgage Crisis


Strong Storms Threaten Ozone Layer Over U.S., Study Says

Abstract: Strong summer thunderstorms that pump water high into the upper atmosphere pose a threat to the protective ozone layer over the United States , researchers said on Thursday, drawing one of the first links between climate change and ozone loss over populated areas. In a study published online by the journal Science , Harvard University scientists reported that some storms send water vapor miles into the stratosphere — which is normally drier than a desert — and showed how such events could rapidly set off ozone-destroying reactions with chemicals that remain in the atmosphere from CFCs, refrigerant gases that are now banned. The risk of ozone damage, scientists said, could increase if global warming leads to more such storms. “It’s the union between ozone loss and climate change that is really at the heart of this,” said James G. Anderson, an atmospheric scientist and the lead author of the study. For years, Dr. Anderson said, he and other atmospheric scientists were careful to keep the two concepts separate. “Now, they’re intimately connected,” he said. Ozone helps shield people, animals and crops from damaging ultraviolet rays from the sun. Much of the concern about the ozone layer has focused on Antarctica , where a seasonal hole, or thinning, has been seen for two decades, and the Arctic , where a hole was observed last year. But those regions have almost no population. A thinning of the ozone layer over the United States during summers could mean an increase in ultraviolet exposure for millions of people and a rise in the incidence of skin cancer , the researchers said. The findings were based on sound science, Dr. Anderson and other experts said, but much more research is needed, including direct measurements in the stratosphere in areas where water vapor was present after storms. “This problem now is of deep concern to me,” Dr. Anderson said. “I never would have suspected this.” While there is conclusive evidence that strong warm-weather storms have sent water vapor as high as 12 miles — through a process called convective injection — and while climate scientists say one effect of global warming is an increase in the intensity and frequency of storms, it is not yet clear whether the number of such injection events will rise. “Nobody understands why this convection can penetrate as deeply as it does,” said Dr. Anderson, who has studied the atmosphere for four decades. Mario J. Molina, a co-recipient of a Nobel Prize for research in the 1970s that uncovered the link between CFCs and damage to the ozone layer, said the study added “one more worry to the changes that society’s making to the chemical composition of the atmosphere.” Dr. Molina, who was not involved in the work, said the concern was “significant ozone depletion at latitudes where there is a lot of population, in contrast to over the poles.” The study, which was financed by the National Aeronautics and Space Administration , focused on the United States because that is where the data was collected. But the researchers pointed out that similar conditions could exist at other midlatitude regions. Ralph J. Cicerone, an atmospheric scientist and the president of the National Academy of Sciences , who reviewed the study for Science, also called for more research. “One of the really solid parts of this paper is that they’ve taken the chemistry that we know from other atmospheric experiments and lab experiments and put that in the picture,” he said. “The thing to do is do field work now — measure moisture amounts and whether there is any impact around it.” “The connection with future climate is the most important issue,” Dr. Cicerone said. Large thunderstorms of the type that occur from the Rockies to the East Coast and over the Atlantic Ocean produce updrafts, as warm moist air accelerates upward and condenses, releasing more heat. In most cases, the updrafts stop at a boundary layer between the lower atmosphere and the stratosphere called the tropopause, often producing flat-topped clouds that resemble anvils. But if there is enough energy in a storm, the updraft can continue on its own momentum, punching through the tropopause and entering the stratosphere, said Kerry Emanuel, an atmospheric scientist at the Massachusetts Institute of Technology . When Dr. Anderson produced data about five years ago clearly showing these strong injections of water vapor, “I didn’t believe it at first,” Dr. Emanuel said. “But we’ve come to see that the evidence is pretty strong that we do get them.” At the same time, he added, “we don’t really understand what determines the potential for convection in the atmosphere,” so it is difficult to say what the effect of climate change will be. “We’re much further along on understanding how hurricanes respond to climate change than normal storms,” Dr. Emanuel said. The use of CFCs, or chlorofluorocarbons, was phased out beginning in the late 1980s with the signing of an international treaty called the Montreal Protocol, but it will take decades for them to be cleansed fully from the atmosphere. It is chlorine from the CFCs that ultimately destroys ozone, upsetting what is normally a balanced system of ozone creation and decay. The chlorine has to undergo a chemical shift in the presence of sunlight that makes it more reactive, and this shift is sensitive to temperature. Dr. Anderson and his colleagues found that a significant concentration of water vapor raises the air temperature enough in the immediate vicinity to allow the chemical shift, and the ozone-destroying process, to proceed rapidly. “The rate of these reactions was shocking to us,” Dr. Anderson said. “It’s chemistry that was sitting there, waiting to be revealed.” Dr. Anderson said that if climate change related to emissions of greenhouse gases like carbon dioxide and methane led to more events in which water was injected well into the stratosphere, the effect on ozone could not be halted because the chemistry would continue. “It’s irreversible,” he said. If CFCs had not been banned, the ozone layer would be in far worse shape than it is. But by showing that CFC-related ozone destruction can occur in conditions other than the cold ones at the poles, the study suggests that the full recovery of the ozone layer may be further off than previously considered. “The world said, ‘Oh, we’ve controlled the source of CFCs; we can move on to something else,’ ” Dr. Anderson said. “But the destruction of ozone is far more sensitive to water vapor and temperature.”

Ozone
Weather
Climate Change Global Warming
Science Journal


In Pakistan, U.S. Courts Leader of Opposition

Abstract: WASHINGTON — As American confidence in the Pakistani government wanes, the Obama administration is reaching out more directly than before to Nawaz Sharif , the chief rival of Asif Ali Zardari , the Pakistani president, administration officials said Friday. American officials have long held Mr. Sharif at arm’s length because of his close ties to Islamists in Pakistan , but some Obama administration officials now say those ties could be useful in helping Mr. Zardari’s government to confront the stiffening challenge by Taliban insurgents. The move reflects the heightened concern in the Obama administration about the survivability of the Zardari government. Gen. David H. Petraeus, the head of the United States Central Command, has said in private meetings in Washington that Pakistan’s government is increasingly vulnerable, according to administration officials. General Petraeus is among those expected to attend an all-day meeting on Saturday with senior administration officials to discuss the next steps in Afghanistan and Pakistan, in advance of high-level sessions next week in Washington, when Mr. Zardari and President Hamid Karzai of Afghanistan will meet with President Obama at the White House. Washington has a bad history of trying to engineer domestic Pakistani politics, and no one in the administration is trying to broker an actual power-sharing agreement between Mr. Zardari and Mr. Sharif, administration officials say. But they say that Secretary of State Hillary Rodham Clinton and Richard C. Holbrooke, the special representative for Afghanistan and Pakistan, have both urged Mr. Zardari and Mr. Sharif to look for ways to work together, seeking to capitalize on Mr. Sharif’s appeal among the country’s Islamist groups. That could be a tall order, given the intense animosity between the men, not to mention the ambivalence that many American officials still have toward Mr. Sharif, a former prime minister who was overthrown in a military coup in 1999. Some Pakistani officials said that members of Mr. Zardari’s government already were reaching out to Mr. Sharif and that officials in Washington were exaggerating their influence over Pakistani politics. According to one Pakistani official, the government in Islamabad recently asked Mr. Sharif to rejoin the governing coalition. The two tried power-sharing last year, and that dissolved in acrimony only a week after Mr. Sharif and Mr. Zardari had banded together to force the resignation of President Pervez Musharraf. Obama administration officials have been up front in expressing dissatisfaction with the response shown by Mr. Zardari’s government to increasing attacks by Taliban fighters and insurgents with Al Qaeda in the country’s tribal areas, and along its western border with Afghanistan. During a news conference on Wednesday, Mr. Obama said he was “gravely concerned” about the stability of the Pakistani government; on Friday, a Defense Department official described Mr. Zardari as “very, very weak.” The official said the administration wanted to broker an agreement not so much to buoy Mr. Zardari personally, but to accomplish what the administration believes Pakistan must do. “The idea here is to tie Sharif’s popularity to things we think need to be done, like dealing with the militancy,” said the official, who insisted on anonymity to speak more candidly about American differences with Pakistan’s government. Mr. Sharif, 59, represents the Pakistan Muslim League-N, a coalition that includes a number of Islamist groups. He was prime minister twice during the 1990s, and received hero status in Pakistan for ordering nuclear weapons tests in 1998. Both Mr. Holbrooke and Mrs. Clinton have spoken with Mr. Sharif by telephone in the past month, and have urged Mr. Zardari’s increasingly unpopular government to work closely with Mr. Sharif, administration officials said. “We told them they’re facing a national challenge, and for that, you need bipartisanship,” a senior administration official said. “The president’s popularity is in the low double digits. Nawaz Sharif is at 83 percent. They need to band together against the militants.” Sir Mark Lyall Grant, director of political affairs at the British Foreign Office, was in Washington on Monday for talks with Mr. Holbrooke and Mrs. Clinton on Pakistan, according to American and European officials. The three discussed Mr. Sharif, but no conclusions were reached, a European official said. “There’s certainly no agreement that Nawaz should become Zardari’s prime minister,” the official said, speaking on grounds of anonymity. He said the enmity between the two would make such a situation impossible. But he added: “We need people who have influence over the militancy in Pakistan to calm it down. Who’s got influence? The army, yes. And Nawaz, yes.” The Obama administration’s contemplation of a closer alliance with Mr. Sharif was first reported in The Wall Street Journal last week. Husain Haqqani, Pakistan’s ambassador to the United States, said that Mr. Zardari was open to talking to Mr. Sharif. “The president and prime minister of Pakistan have been striving for national consensus and continue to be in close contact with the leadership of all political parties,” Mr. Haqqani said. The Bush administration struggled in 2007 to find a way to keep Mr. Musharraf in power amid a political crisis. The administration prodded him to share authority with his longtime rival, former Prime Minister Benazir Bhutto, but those efforts ended after Mrs. Bhutto — the wife of Mr. Zardari — was shot and killed . The situation in Pakistan has become so dire, with the fragile government battling Taliban insurgents who have gotten close to Islamabad, that both American and Pakistani officials are looking hard to bring stability to the nuclear-armed nation. “For the United States, there’s no ambiguity about where the danger lies; it’s in the people who are attacking the state,” said Teresita C. Schaffer, a Pakistan expert at the Center for Strategic and International Studies in Washington. She said Mr. Sharif could broaden the appeal of the Zardari government, and his ties to Islamist militants give him added heft right now. “So the U.S. would dearly love to see both of those parties on the same page.”

Pakistan
Taliban
Sharif Nawaz
United States International Relations
Zardari Asif Ali
Obama Barack
Islam
Defense and Military Forces


Russell Libby, Organic Farming Advocate, Dies at 56

Abstract: Russell Libby, one of the nation’s leading advocates for organic farming, died on Sunday at his farm in Mount Vernon, Me. He was 56. The cause was cancer, his wife, Mary Anne, said. What began with his fourth-grade teacher handing out packets of vegetable seeds to her students in Sorrento, Me., nearly five decades ago, evolved into a lifelong passion for Mr. Libby and a deep concern about industrial farming and its use of chemical fertilizers and pesticides. “We have to challenge the idea that contamination is just the price of living in the modern world,” was a refrain in his many speeches. For 17 years, until he stepped down last month, Mr. Libby was executive director of the Maine Organic Farmers and Gardeners Association , which he had built into one of the largest of the organic movement’s state organizations. Since Mr. Libby was named director in 1995, membership doubled, to more than 7,000, and the number of organic farmers and producers in the state increased to 420, from 85. Under Mr. Libby, the organization moved from a single office in Augusta, Me., to a 400-acre complex of offices, exhibition halls, a library, a teaching kitchen and farmland in the town of Unity. The association distributes educational material throughout the country, places apprentices on farms in Maine and provides advice to local farmers on financing, marketing and food safety , as well as agricultural techniques. Mr. Libby also held sway with public officials, playing a central role in lobbying Congress to amend the Food Safety Modernization Act of 2011 to protect organic farmers. The act vastly broadened the power of the Food and Drug Administration to regulate food production. “The original legislation would have made it extremely difficult for small farmers to comply with the requirements,” said Fred Kirschenmann, a fellow at the Leopold Center for Sustainable Agriculture at Iowa State University, adding that some requirements “really had nothing to do with the safety of food.” In a statement, Kathleen A. Merrigan, the deputy secretary of the Department of Agriculture, called Mr. Libby “a powerful voice for and leader of small family farmers.” Russell Wayne Libby did not grow up on a farm; he planted those seeds from his teacher in the backyard. Born on Aug. 16, 1956, in Lincoln, Me. (the family later moved to Sorrento), he was the oldest of four children of Ronald and Sandra Libby. His father was a detective with the state police. After graduating from Bowdoin College in 1978, Mr. Libby went on to earn a master’s degree in agricultural economics from the University of Maine. He became a researcher for the National Center for Economic Alternatives, a small nonprofit organization, and later for the Maine Department of Agriculture. Besides his wife and parents, Mr. Libby is survived by three daughters, Anna, Margaret and Rosa; a brother, Chris; and two sisters, Pamela Fowley and Ronda Nichols. Beyond organic farming’s environmental and health benefits, Mr. Libby saw its value to local economies. In many speeches, he espoused a “Ten Dollars a Week” concept: the idea that communities could thrive if every household spent that amount on locally produced food, rather than buying from supermarket chains. On his 65-acre Three Sisters Farm in Mount Vernon, he and his daughters tended to the apple, pear and cherry trees, and to sheep, hens and a pony. They sold eggs to people around town.

Libby Russell W
Organic Foods and Products
Agriculture and Farming
Deaths (Obituaries)


Democrats Pick Up House Seat

Abstract: COLUMBUS, Ohio (AP) — The Republicans lost a House seat on Sunday after election officials here tallied provisional ballots in a tight race with no incumbent. Mary Jo Kilroy, a Democrat, won the 15th District, which encompasses Columbus, the state’s capital and largest city, by a little more than 2,000 votes over Steve Stivers, a Republican. Representative Deborah Pryce, a Republican, announced in August 2007 that she was vacating the seat. County officials released unofficial results Sunday that showed Ms. Kilroy with a margin of victory of 2,311 votes out of roughly 300,000 cast, enough to avoid an automatic recount. Ms. Kilroy had been down by 594 votes when officials began counting about 9,600 provisional ballots. Mr. Stivers conceded victory shortly after the results were released. With Ms. Kilroy’s victory, Democrats will hold 256 seats in the House and Republicans 177. Races in Louisiana and Virginia have yet to be decided. Ms. Kilroy narrowly missed being elected to Congress in 2006, when she came within about 2,000 votes of unseating Ms. Pryce.

Ohio
Elections
Kilroy Mary Jo
House of Representatives
Election Results
Columbus (Ohio)
Stivers Steve


UBS Given a Short Window to Release Documents

Abstract: Federal prosecutors have given UBS “several weeks” to hand over scores of United States client names or face possible indictment over its offshore banking services, a person briefed on the matter said Monday. While no indictment is imminent, this person said, any refusal to turn over the names would lead prosecutors to ask a federal judge to order UBS, the world’s largest private bank, to comply with a previous summons demanding the names of American clients using hidden offshore accounts. If UBS were to refuse, this person said, an indictment could follow, perhaps within months. Even if UBS turns over the names and averts indictment, it is almost certain to be forced into a deferred-prosecution agreement with a heavy fine, this person said. The bank could also face possible sanctions, from the Securities and Exchange Commission and banking regulators, that could limit its overall ability to conduct business in the United States, the person said. Karina Byrne, a spokeswoman for UBS, declined to comment on Monday on how the bank was dealing with the investigation. A Justice Department spokesman declined to comment. UBS, a giant in global financial services, is battling to maintain its centuries-old tradition of Swiss banking secrecy amid mounting legal pressure from the Justice Department to turn over up to 19,000 records of American clients who used hidden offshore accounts at the bank. While the bank has not provided any names, it has in recent months submitted — under a subpoena from the Manhattan district attorney, Robert M. Morgenthau — related records detailing wire transfers originating from the United States to same-name accounts in Zurich. The Justice Department’s criminal investigation is focused on UBS’s provision of cross-border private banking services to United States clients. Prosecutors suspect that from late 2002 through 2007, UBS helped these clients hide $20 billion in violation of United States tax laws, thereby evading $300 million a year in taxes. UBS shut down the business, which it had run out of three offices in Zurich, Lugano and Geneva, last year and has been closing the accounts. Prosecutors have so far identified about 300 names of wealthy American clients of UBS and are preparing to build criminal tax-evasion cases against them within a couple of months, according to the person. The collision course between the bank and prosecutors is forcing the Swiss government, which considers UBS a strategic part of the Swiss economy, to confront tough choices. In recent months, UBS executives told the Justice Department that they could not hand over client names because doing so would violate Swiss laws on banking secrecy. Americans can use offshore accounts, but have to disclose them and pay taxes on their holdings. Last November, Mark Branson, the chief financial officer of UBS’s global wealth management and business banking unit, which had overseen the private cross-border business, told investors that the Justice Department’s request for client names was “a matter between Swiss and U.S. government authorities.” But prosecutors recently rebuffed a suggestion by UBS that they deal directly with the Swiss government instead of the bank. The Swiss finance minister, Hans Rudolf Merz, is expected to press the case in Davos this week at the annual meeting of global business and political elite.


Arrests in Plan to Kill Obama and Black Schoolchildren

Abstract: WASHINGTON — Two young men who are believers in “white power” have been arrested and charged in Tennessee in what federal officials described as a plan to assassinate Senator Barack Obama and kill black children at a school. Federal officials said they regarded the scheme as “serious.” It does not appear to have moved to an advanced stage, according to court documents unsealed Monday, but officials said the two men did acquire several rifles and cased a home and a gun store to rob as part of the plan. Federal officials said that both of the men who were arrested — Paul Schlesselman, 18, of West Helena, Ark., and Daniel Cowart, 20, of Bells, Tenn. — told interrogators that they had talked of assassinating Mr. Obama. Lawyers for the men could not be reached. The two men “planned to drive their vehicle as fast as they could toward Obama shooting at him from the windows,” according to an affidavit filed in federal court in Jackson, Tenn., by an agent with the Bureau of Alcohol, Tobacco, Firearms and Explosives . Mr. Obama has no plans to be in Tennessee, and the affidavit does not make clear whether the men had picked a place for an attack. The assassination was to be the culmination of a “killing spree” that would also single out children at an unnamed, predominately black school, federal officials said. The men talked of “killing 88 people and beheading 14 African-Americans,” according to the affidavit. The two men each had “very strong views” about Aryan white power and “skinhead” ideology, the federal officials said, and the numbers 88 and 14 have special significance in the white power movement. The number 88 is shorthand for “Heil, Hitler” — H is the eighth letter in the alphabet —and 14 signifies a 14-word mantra among white supremacists: “We must secure the existence of our people and a future for white children.” Officials said the two men met via the Internet through a mutual friend. Concerns about possible plots against Mr. Obama have been acute because of his status as the first black presidential nominee from a major party. He has had Secret Service protection since May 2007, the earliest a candidate was ever assigned protection. Mr. Cowart and Mr. Schlesselman were each charged with illegal possession of a sawed-off shotgun, conspiracy to rob a firearms dealer and making threats against a presidential candidate. A detention hearing is scheduled for Thursday in Memphis. “We honestly don’t know if they had the capability or the wherewithal to carry out the kind of plan that they talked about,” Malcolm Wiley, a spokesman for the Secret Service in Washington, said in an interview. “But we take any threat seriously no matter how big or how small it is.”

Assassinations and Attempted Assassinations