California Says Uber Driver Is Employee, Not a Contractor

Abstract: In a ruling that fuels a long-simmering debate over some of Silicon Valley’s fastest-growing technology companies and the work they are creating, the California Labor Commissioner’s Office said that a driver for the ride-hailing service Uber should be classified as an employee, not an independent contractor. The ruling ordered Uber to reimburse Barbara Ann Berwick $4,152.20 in expenses and other costs for the roughly eight weeks she worked as an Uber driver last year. While Uber has long positioned itself as merely an app that connects drivers and passengers — with no control over the hours its drivers work — the labor office cited many instances in which it said Uber acted more like an employer. Uber is appealing the decision. The ruling does not apply beyond Ms. Berwick and could be altered if Uber’s appeal succeeds. Uber has also prevailed in at least five other states in keeping its definition of drivers as independent contractors. Yet the California ruling stands out because officials formally laid out their arguments for why Uber drivers are employees. That could bolster class-action lawsuits against the company in the state. California law expressly requires employers to reimburse employees for business expenses and several suits proceeding against Uber are based on that state law. Companies like Uber and its rival Lyft, and Instacart, a grocery delivery service, have long faced questions about whether they are creating the right kind of employment opportunities for both the economy and for workers. The technology companies have contended that their virtual marketplaces, in which people act as contractors and use their own possessions to provide services to the public at the touch of a smartphone button, afford workers flexibility and freedom. Yet labor activists and others have said such roles — with people working as freelancers and having little certainty over their wages and job status — are simply a way for companies like Uber to minimize costs, even as they maintain considerable control over drivers’ workplace behavior. They say that such control is typically the hallmark of an employee relationship, which should bring with it benefits, more stable pay and greater job security. The classification of freelancers is in dispute across a number of industries, including at other transportation companies. And the debate is set to escalate as the number of online companies and apps like Uber and others rises. Venture capitalists have poured more than $9.4 billion into such start-ups — known as on-demand companies — since 2010, according to data from CB Insights, a venture capital analysis firm, spawning things like on-demand laundry services and hair stylists. “For anybody who has to pay the bills and has a family, having no labor protections and no job security is at best a mixed blessing,” said Robert Reich, former secretary of labor and a professor of public policy at the University of California, Berkeley. “At worst, it is a nightmare. Obviously some workers prefer to be independent contractors — but mostly they take these jobs because they cannot find better ones.” The California ruling, which was made June 3 and came to light after Uber filed an appeal Tuesday evening, noted that the company provided drivers with phones and had a policy of deactivating its app if drivers were inactive for 180 days. “Defendants hold themselves out as nothing more than a neutral technological platform, designed simply to enable drivers and passengers to transact the business of transportation,” the Labor Commissioner’s Office wrote about Uber. “The reality, however, is that defendants are involved in every aspect of the operation.” In a statement, Uber said the decision was “nonbinding and applies to a single driver.” The company said individual cases about worker classification in at least five other states, including Georgia, Pennsylvania and Texas, have resulted in rulings that categorize drivers as contractors. In May, authorities in Florida also said a former Uber driver should be classified as an employee to claim unemployment benefits, a decision Uber is appealing. Yet politicians, lawyers and others quickly seized upon the California ruling as one that could have more repercussions for Uber and other similar companies. “Today’s ruling from the California labor regulators demonstrates why federal policy makers need to re-examine the 20th-century definitions and employment classification we’re attempting to apply to a 21st-century work force,” said Senator Mark R. Warner, a Democrat from Virginia. In California, Uber faces class-action lawsuits from drivers saying they were misclassified as independent contractors. Shannon Liss-Riordan, a Boston-based employee and labor rights lawyer who is involved in the lawsuits on behalf of drivers against Uber, said the commissioner’s office ruling would be “helpful” to the suits, which argue drivers should be reimbursed for expenses. “This is a very big deal,” she said. “Uber has been fighting very hard against any decisions like this coming out, and when a fact-finder sat down and looked at the situation, they determined that Uber is an employer.” Other Uber drivers may also be inspired to follow Ms. Berwick’s example, given that filing a claim with the California labor office is a relatively simple process. “We’ll see if this starts a trend,” said Wilma B. Liebman, the former chairwoman of the National Labor Relations Board. “I wouldn’t be surprised if there’s a flood of similar kinds of claims.” Uber, co-founded five years ago by Travis Kalanick, who is its chief executive, has come to symbolize the worker debate by virtue of its scale. The company, based in San Francisco, has rapidly upended entrenched taxi and transportation industries with its model of letting people hail rides via their smartphones. Uber, which has collected billions of dollars in venture capital and is in talks to raise more money at a $50 billion valuation , is now operating in more than 300 cities across six continents. To meet consumer demand, Uber’s driver ranks have swelled. At a presentation this month celebrating Uber’s fifth anniversary, Mr. Kalanick said the company had 26,000 drivers in New York City alone; 15,000 in London; 22,000 in San Francisco; 10,000 in Paris; and 20,000 in Chengdu, China. “Every single month, Uber is adding hundreds of thousands of drivers around the world,” Mr. Kalanick said. Uber has run into regulatory hurdles worldwide. In China, local authorities have raided Uber offices in two cities over questions about whether its service is legal because drivers are not licensed. In the United States, cities including Portland, Ore., have claimed that Uber operated an “ illegal, unregulated transportation service. ” It has also faced protests from cabdrivers. Ms. Berwick, who lives in San Francisco, may seem like an unlikely David to the Uber Goliath. In the 1980s, she said, she founded Berwick Enterprises, a phone sex-entertainment company that is now an independent money manager, for which she said she did online trading as a volunteer. ( The website of the company she started offers to trade on behalf of clients; neither Ms. Berwick nor the firm is registered as an investment adviser with the Securities and Exchange Commission or the Financial Industry Regulatory Authority.) In a phone interview, Ms. Berwick said she started driving for Uber last summer because she had grown bored working by herself at her computer. But she quickly took issue with Uber’s policy of classifying drivers as independent contractors. “People who drive people are employees,” Ms. Berwick said. “Bus drivers are employees. Paratransit drivers are employees.” In the course of driving for Uber from July to September 2014, working 60 to 80 hours a week, she said, she earned about $11,000 before expenses and taxes. “If you work it out, if I didn’t get compensated for expenses, I’d be working for less than minimum wage,” Ms. Berwick said. So she said she decided to file a claim against Uber last September with the California labor office, setting in motion the events that led to the ruling. Ms. Berwick has a history of being litigious. Since 1991, she and her company have filed at least 20 lawsuits in California. In one case, she sued an employee of a pizza parlor for $500 in damages for leaving restaurant menus on her gate. She was not awarded any damages.

California
Uber
Barbara Ann Berwick
Freelancer
Jobs
Car Service
Mobile Apps


Putin Pulls Off His Latest Feat: Flying With Migratory Birds

Abstract: MOSCOW — Vladimir V. Putin is the unquestioned supreme leader of Russia , known for his icy stare and steely ways. But now Mr. Putin has taken on a new, perhaps more tender, leadership role. He has guided a flock of birds — through the air. Russia’s president piloted a motorized hang glider over an Arctic wilderness while leading six endangered Siberian cranes toward their winter habitat, as part of an operation called “The Flight of Hope,” his press office confirmed Wednesday. While Mr. Putin recently has found some resistance to his stewardship at home, he found a more receptive crowd among his feathered followers. Experts say that when raised in captivity, these cranes quickly form bonds with figures they perceive as parents. That is a role, apparently, that Mr. Putin has been training for. “For cranes, the parent is a man in a white robe,” Yuri Markin, the director of the game preserve that reared the chicks, told Russian News Service, a radio network. “They don’t remember a particular person. They remember the white robe and hood, or on the ultralight, a white helmet — and a special beak that is worn on the head.” Mr. Putin wore the billowy, white costume forhis flights. Late Wednesday, the Interfax news agency reported that the president had flown three times in an ultralight aircraft at the Kushavet ornithological research station on the Yamal Peninsula, in the Arctic. On two flights, cranes followed him, the news agency reported. A political cartoon started making the rounds early in the morning, showing resentful-looking cranes and Mr. Putin wearing cardboard wings, telling them: “Let’s assign roles right now. I’ll be the alpha crane!” Another, darker one went this way: Mr. Putin looked at the crane and said, “I will save you!” The crane looked at the president and thought, “Maybe I’d better die out.” Though Mr. Putin’s flight was most likely the first ever for a Russian head of state, it was not the first time he had tried to burnish his public image as a caring outdoorsman, or macho man of adventure. Mr. Putin on past expeditions has tranquilized a tiger , used a crossbow to extract tissue from a whale and put a tracking collar on a polar bear. News of his latest plan rippled over the Internet all day Wednesday, to great merriment. Some wondered just how far he would go. Would he try to imitate the gasping-shrieking cry of the cranes, to instill more faith in his leadership? He has also appeared shirtless riding a horse in Siberia and flown on a fighter jet, a bomber and an amphibious firefighting airplane. Last summer, he dived into the Kerch Strait in the Black Sea and, remarkably, quickly discovered fragments of two ancient Greek urns. Mr. Putin’s spokesman, Dmitri S. Peskov, however, was later compelled to admit that the discovery was staged . Indeed, it seemed last year that Mr. Putin’s stunts had begun to fall flat. To the young sophisticates who dominate Russia’s Internet, they looked stiff and fake, a throwback to the days when the vast apparatus of Soviet propaganda worked to glorify one man. Mr. Putin steered clear of them for the tense months around his election, but this project suggests a return of confidence. Mr. Peskov confirmed to Russian newspapers that the president had been training to pilot the motorized hang glider for the purpose of guiding the cranes. The president began guiding the birds to their winter retreat just before a summit meeting of the Asia-Pacific Economic Cooperation organization opens Friday . For his critics, the image of Mr. Putin dressed in a bird suit and flying was, perhaps, too good an opportunity to pass up. Aleksei Navalny, an opposition leader and blogger, wrote on Twitter on Wednesday: “About Stalin they said, ‘In the night a light will burn in the window.’ And of Putin they will say, ‘He flew over our homes with a flock of cranes.’ ” One post circulating on Twitter said, “For the flock to recognize him as a leader he stuffed three feathers in his rear.” The stunt rippled in Russian politics in other ways, too. Masha Gessen, the editor of the magazine Vokrug Sveta, or Around the World, and the author of a critical biography of Mr. Putin, was fired this week for what she said was a refusal to send a photographer to cover Mr. Putin with the cranes. The publisher said broader long-term disagreements led to her dismissal. While Mr. Putin’s interest seems more recent, Russian ornithologists have experimented with using slow-flying airplanes to guide captive-bred cranes to the south since 2002, the newspaper Vedomosti reported. They modeled the effort on experiments by North American conservationists, most famously shown in “ Fly Away Home ,” a 1996 film about Canada geese led to the south by a girl in an ultralight aircraft. After Mr. Putin’s flights, he handed the baton of leadership — only over his feathered followers — to a professional pilot who will take over for the rest of the journey to the birds’ winter habitat in Central Asia.

Birds
Russia
Putin Vladimir V
Animal Migration
Gliders Hang Gliding and Paragliding


Sidney Frank, 86, Dies; Took a German Drink and a Vodka Brand to Stylish Heights

Abstract: Correction Appended Sidney E. Frank, who was forced to leave Brown University as a freshman when his money ran out, went on to concoct spectacularly successful marketing campaigns for Jägermeister liqueur and Grey Goose vodka, then became so rich he gave Brown its biggest gift ever, died Tuesday in San Diego. He was 86. His death was announced by the Sidney Frank Importing Company. After Mr. Frank sold Grey Goose to Bacardi for an estimated $2.3 billion in 2004, he liked to call himself "the $2 billion man" and told BusinessWeek that he planned to become "the $10 billion man." He died well short of his goal, but this deprivation hardly sabotaged his lifestyle. He owned six palatial homes, traveled with four chefs and, when he could no longer play golf, hired a team of professionals to play just for him; he instructed them on which clubs to use. His generosity was similarly outsize: a $23.8 million bonus for his secretary, $100 million in scholarships and $20 million for a building for Brown, among other gifts. After he saw "Escape From Sobibor," a film from 1987 based on the revolt in 1943 of Jewish prisoners at a Polish death camp, he tracked down nine survivors and sent them checks of $11,000 each. The ebullient Mr. Frank was known for audacious sales techniques, including employing a squadron of pretty young women, called Jägerettes, to patrol bars and promote Jägermeister. Sales increased from 600 cases a month in 1974, when Mr. Frank started selling it, to more than two million cases last year. Grey Goose's success was also stellar, but involved a different technique from Jägermeister's, which rarely advertised. Mr. Frank plowed his entire first year's profit from Grey Goose, $3 million, into ads. The idea was to build an elegant image, beginning with a price about $10 a bottle more than the market leader, Absolut. He gave Grey Goose away at charity events and deposited bottles in limousines used for the Academy Awards ceremony. It became the best-selling premium vodka in the country. Sidney Edward Frank was born on Oct. 2, 1919, in Montville, Conn., where his father and mother raised chickens and grew vegetables. He graduated from the Norwich Free Academy, which was not free; his tuition was paid by the town, which had no high school. Two years ago, Mr. Frank gave the school $12 million. At 12, he started as an entrepreneur by making a ladder to climb Mohegan Rock, a tourist attraction. He charged a dime to climbers. He earned mostly A's in high school and planned on paying for college with earnings from Mohegan Rock and odd jobs. When he applied to Brown, he was told his chances were borderline. His firm handshake finally persuaded the dean of admissions to accept him, he was told. Once there, he was assigned a room next to that of another freshman, Edward Sarnoff, a son of David Sarnoff, the founder of the National Broadcasting Company. Mr. Sarnoff introduced him to Louise Rosenstiel, daughter of Lewis Rosenstiel, founder of Schenley Industries, one of the nation's largest distillers. They later married. "The easiest way to make a million dollars is to marry it rather than earn it," Mr. Frank said in an interview with The Daily Mail, a London newspaper, in 2005. When he ran out of tuition money, he applied for a job at Pratt & Whitney. There were many applicants, and he was told to come back in a couple of hours to demonstrate that he knew how to use a slide rule, which he did not. He bought one, pored over the directions and got the job, which involved keeping Allied planes flying in World War II. Not yet married to Miss Rosenstiel, he met her father, who asked him to use his engineering skills to help develop an alcohol-based motor fuel. That flopped, so Mr. Frank switched to liquor. After his sixth marriage proposal to Miss Rosenstiel, which she accepted, he went to work for the family's company and soon vastly increased the production of a Scotch distillery that Schenley had bought in Glasgow. He discovered that the distillery was still following a law limiting distillation to twice a week, a law that had been repealed. With daily production, the still, for which Schenley had paid $13 million, rang up $10 million in profit the first year, nearly recouping the cost. Mr. Frank soon discovered that marrying a fortune was not a foolproof tactic, as he became enmeshed in repeated familial disputes. He was fired, rehired, made president, and fired again. His father-in-law then blackballed him from the industry. Mr. Frank sold art for a few years, then clawed his way back, first by supplying sake to sushi restaurants. He discovered Jägermeister -- a German liqueur variously described as tasting like licorice, root beer or cough syrup -- on a stroll through Yorkville, a historically German neighborhood in Manhattan. Germans viewed the syrupy drink, which contained many herbs, as medicinal, but Mr. Frank saw another niche: the hard-partying college market. He said he got a big break when a newspaper in Baton Rouge, La., likened Jägermeister to Valium, even if it had no drugs. The party scene Mr. Frank fostered -- rife with free shots at the bar, promotions by young women and, later, male Jägerdudes -- developed a reputation for wild behavior. In 1997, a group of Jägerettes persuaded the Equal Employment Opportunity Commission to sue Mr. Frank's company, charging sexual harassment. Some said they had been harassed by Mr. Frank himself. The company and Mr. Frank denied the charges, but paid $2.9 million as part of a settlement. Mr. Frank's first wife died in 1972. He is survived by his wife, Marian; his daughter, Catherine Halstead, of Seattle; his son, Matthew, of Marin County in California; his sister, Edna Nowitz, of Bridgeport, Conn.; five grandchildren; and two great-grandchildren. In recent years, Mr. Frank was working on a travel magazine, a new Irish whiskey and an energy drink called Crunk. Correction: January 27, 2006, Friday An obituary on Jan. 12 about Sidney Frank, a liquor importer and marketing executive, referred incorrectly to a World War II death camp featured in "Escape from Sobibor," a film that led Mr. Frank to give money to some of the camp's survivors. Sobibor was set up and run by the German occupiers of Poland; it was not a "Polish death camp."

BROWN UNIVERSITY
SIDNEY FRANK IMPORTING
DEATHS (OBITUARIES)


Official Syrian Web Sites Hosted in U.S.

Abstract: Even as Syrians lost access to the Internet on Thursday, people outside the country could still browse the Syrian government’s many Web sites for much of the day because they are hosted in foreign countries, including the United States. By nightfall, after being contacted by The New York Times, several host companies said they were taking down those sites. They and similar companies had been identified in reports published by Citizen Lab, a research laboratory that monitors North American Web service providers that host Syrian Web sites. For example, the Web site of SANA, the Syrian state news agency, is hosted by a Dallas company, SoftLayer Technologies. It is one of a handful of Internet providers based in the United States that sell their services, often unknowingly, to Web sites operated by the government of President Bashar al-Assad . HostDime.com in Orlando, Fla., hosts the Web site of Syria ’s Ministry of Religious Affairs. Jumpline.com hosts the site of the country’s General Authority for Development. The government of Hama, a city that has seen heavy clashes between rebels and government troops, operated its Web site through WeHostWebSites.com in Denver. An executive order by President Obama prohibits American companies from providing Web hosting and other services to Syria without obtaining a license from the Treasury Department. On Thursday, State Department officials confirmed that providing the services was a violation of the United States sanctions. “Our policies are designed to assist ordinary citizens who are exercising their fundamental freedoms of expression, assembly and association,” a spokesman, Mark C. Toner, said. A SoftLayer spokesman, Andre Fuochi, would not comment about the SANA Web site, but in a statement he said the company “rigorously” enforces “prevailing laws and regulations and acts swiftly and vigorously if we find our users to be in violation.” Dennis Henry, the vice president of operations at HostDime.com , said he had been unaware of the Syrian government Web site, but that it was hosted by a customer’s server housed in HostDime.com ’s data center. “We have contacted our direct client whose server is housing the Web site to express our concerns,” Mr. Henry said. On Friday, Mr. Henry said the company had removed the Web site. Mike Griffin, an owner of Handy Networks, a wholesale Web service and the owner of WeHostWebSites.com , said he too had been unaware of the Syrian government Web site but had asked that it be removed. “We comply with all U.S. sanctions, including those prohibiting the exportation of Web hosting services to Syria,” he said. Upon being told of the Syrian Web site, Jumpline’s chief operating officer, Andy Mentges, said in an e-mail that it would be “shut down within the hour.” The Internet shutdown across Syria on Thursday underscored how the 20-month conflict, which has left more than 40,000 people dead, has increasingly moved to the Web. Both sides use cyberattacks to advance their causes. The hosting of government Web sites overseas represents a growing technological sophistication by the Assad government. “Look what they did with chemical weapons. They can do the same with communications,” said Robert B. Baer, a former C.I.A. operative based in the Middle East. “When the Syrians want to do something, they can do it.” It is also likely that Syrian rebel and jihadi groups host Web sites inside the United States. The Syrian government appears to be aware that its Web sites are safer and easier to control when operated on servers inside the country. In July, the Assad government ordered that all official Web sites be hosted inside Syria. But in case of an emergency or an Internet shutdown like the one on Thursday, the government also maintains Web sites based in the United States, Canada and Britain, said Helmi Noman, a senior researcher at Citizen Lab. “This most recent Internet disruption in Syria highlights the issue of Web hosting and how the regime is able to make use of servers outside Syria to promote its message while locally hosted sites are down,” Mr. Noman said.

Middle East and North Africa Unrest (2010- )


China: Database on Each Citizen Is Urged

Abstract: China ’s top internal security official called for building a database containing information on each of China’s 1.34 billion residents to improve “social management,” a term that encompasses the state’s efforts to manage public dissent and head off protests in the name of maintaining stability. The official, Zhou Yongkang, said the system should be based on the resident identity cards issued to every Chinese citizen, and should include such details as each person’s tax record and history of education and employment, as well as what property and vehicles he or she owns. Writing in Qiushi, a Communist Party magazine, Mr. Zhou said that a comprehensive database would help neighborhood watchmen enforce stability.

Human Rights and Human Rights Violations


A Clash of Ideals and Investments at Swarthmore

Abstract: Kate Aronoff didn’t arrive at Swarthmore College in fall 2010 expecting to be an environmental activist. Nor did she know much about the stock market. She knew even less about asset management and college endowments. That all changed her freshman year, when she and about a dozen Swarthmore students made a field trip to West Virginia to meet Larry Gibson, widely known and celebrated by environmentalists as the “Keeper of the Mountains.” A short walk from his two-room cabin on land his family has owned for generations, the students could see thousands of acres laid bare by mountaintop removal coal mining operations. “The difference between the majesty of the Appalachian Mountains that hadn’t been ruined and the mountain peaks that were flattened was so stark,” Ms. Aronoff told me this week, as she was studying for finals. “We saw and heard about how toxic the coal mining industry is and how much of the economy is structured around coal mining. It was a moment when the connection between economic injustice and environmental injustice was just so clear.” That moment, and others like it, have touched off a nationwide movement that is beginning to affect how colleges, universities, other institutions and pension funds are investing their vast financial resources. A week ago, Stanford University rocked the endowment world when it said its $18.7 billion endowment would not make direct investments in publicly traded companies whose primary business is mining coal for energy generation. Stanford joins 11 other colleges that, to varying degrees, have pledged not to invest their endowment resources in fossil fuels. But Stanford’s prestige and the size of its endowment have suddenly thrust the divisive issue of fossil fuel divestment, and what is more generally considered socially responsible investment, onto the agendas of investment committees everywhere. But at Swarthmore, one of the country’s most selective and prestigious colleges, where the student-led divestment movement had its origins, the college’s board members and administrators have listened repeatedly to the student activists — yet have firmly rebuffed their proposals on the grounds that they could hurt endowment income and are unlikely to have any impact on energy companies. “It’s surprising that Swarthmore, which prides itself on social justice, would be so hesitant when you try to involve the institution itself,” Ms. Aronoff said. “It’s astounding to us to see the ways they continue to resist and won’t put their money where their mouth is.” College officials seem sensitive to the point. “The students are terrific,” Giles Kemp, the chairman of Swarthmore’s board of managers, told me this week. “There’s no lack of admiration for their idealism. They want to make a positive difference in the world, which is Swarthmore’s mission. The frustrating thing, the ironic aspect is, the board is as much a believer in the threat to us and our children from climate change as the students are. Where we disagree are the tactics. After much deliberation, the board came to a different point of view.” Swarthmore’s endowment is $1.635 billion, and has generated a one-year return of 11.9 percent, a three-year average annual return of 12.5 percent, and a five-year average annual return of 6.4 percent. All three are better than the average rates of return for all colleges and universities. Much of the income is earmarked for scholarships. While the activist students vow to keep the pressure on Swarthmore, they held a retreat this week to strategize and savor the Stanford decision, “We’re elated,” said Sara Blazevic, a Swarthmore junior who worked closely with students at Stanford. “I’m amazed at how this has taken off. It’s unprecedented how quickly it’s grown. When we started our campaign, it was kind of lonely. By the fall of 2012, there were 20 to 30 campaigns and then last year it really blew up.” Students say the Swarthmore movement, which goes by the name Mountain Justice, was in part inspired by George Lakey, a visiting professor in peace and conflict studies, who led the trip to West Virginia and whose class examined various case studies in nonviolent activism, including the impact of divestiture on ending apartheid in South Africa. Ms. Blazevic also went to West Virginia. “I was shocked to see the degree of devastation,” she said. “And I was troubled and disturbed that my tuition money and alumni donations were being invested in that kind of destruction. It was politicizing.” Professor Lakey agreed. “The more these Swarthmore students learned,” he said by email from Iceland, “the more the students connected the dots and understood that the choice of extreme extraction over switching to sustainable energy is a choice that is simply wrong,” He added, “They felt gravely disappointed to find that their school, a Swarthmore that insists on its devotion to the future of the students, was in fact committed to a policy that makes the students’ future problematic.” Ms. Aronoff, who was in Professor Lakey’s class, said she and other students were intrigued by the possibility of divestment, “but we weren’t even sure what an endowment is or how it works. We had to take a crash course on investing.” That led them to the Responsible Endowments Coalition and its executive director, Dan Apfel, who worked closely with the group. “He really helped us get the campaign off the ground after we had the idea,” she said. The group got a lift when 350.org, led by the writer and environmental activist Bill McKibben, took up the cause, and started a cross-country bus tour to promote divestment. As interest spread to other campuses, the Swarthmore students were the hosts of a conference on the campus in spring 2013. “We thought we’d get maybe six other schools to attend,” Ms. Aronoff said. “We ended up with over 200 students from 75 schools.” A national student divestment network was forged soon after. But Swarthmore itself didn’t budge, although officials always seemed open to discussion of the issue, and the board agreed to an open meeting with students to discuss it. “By last spring we’d met with them more than 25 times,” Ms. Aronoff said. “There was some value to going through institutional channels and having face time with administrators, but there was remarkably little progress.” At the open meeting, hundreds of students filed in, but many raised other contentious issues, like sexual harassment. The meeting became chaotic. Opponents of divestment were drowned out, and one vented her frustration in an opinion article in The Wall Street Journal (“ My Top Notch Illiberal Arts Education ”). At the next board meeting, divestment activists gathered in the hallway and used an open microphone to try to get the board’s attention, but board members ignored them. “As a college that honors its Quaker roots, we encourage students to engage one another and us in matters related to the college and to the world beyond, and we listen to their points of view as we consider important decisions,” Rebecca Chopp, Swarthmore’s president, said. “Sometimes this is difficult, sometimes people do not agree, and sometimes it does not work the first time. But we will always be proud that Swarthmore is a college that supports debate and disagreement.” Last fall, the board issued a formal letter rejecting the group’s demands. “The managers’ decision not to divest is broad and deep,” Mr. Kemp wrote. “It is our collective judgment that the cost of divestment would far outweigh any potential benefit.” He wrote that divestment would be costly to the endowment, with a decline in income of an estimated $10 million to $15 million a year, and that it would be a “symbolic” act with little if any impact on energy companies or public officials. Mr. Kemp pointed out that Stanford’s endowment charter explicitly permitted the university to consider social causes in making investment decisions, while Swarthmore’s takes the opposite position. “There are a lot of worthy causes,” Mr. Kemp said, “but the question is, Should an endowment be used to advance them? Last year, there was a lot of agitation for companies to support Palestine and stop investing in companies having to do with Israel. Those students were as fervent in their cause as these students are in theirs.” He added: “The board concluded the way our endowment is set up, we weren’t meant to use for social purposes no matter how noble.” The student activists wrote a rebuttal that ran in the campus newspaper, contending that Swarthmore’s “chief concern can no longer be the rapid and uninhibited growth of the institutional endowment. Endless growth is a false methodology that inherently prioritizes money over human, moral and environmental concern. It is the same logic on which the fossil fuel industry has operated since its inception, and what has driven us to our current economic and environmental crises.” And some faculty members have taken issue with elements of the board’s position. “I don’t really support divestment,” said Mark Kuperberg, an economics professor. “I don’t think it will affect company behavior. But I don’t think it will hurt the endowment much, either.” Stanford’s decision doesn’t appear to have affected the Swarthmore board’s thinking. “Ultimately, after considering many diverse viewpoints, the board made its decision,” Ms. Chopp said. “The board is simply not willing to accept the significant cuts in scholarships, faculty and curriculum offerings that a significantly lower endowment return would necessitate. We believe that to do so would have no measurable effect on halting climate change and, at the same time, would pose an unacceptable risk to the college’s finances.” Despite their differences, Mr. Kemp acknowledged some pride in the students and what they’ve accomplished. “I may not agree with these students, but I think we can learn from them and admire their dedication and if we disagree, it’s not for lack of respect for their commitment and drive.”

Swarthmore College Endowments Coal Stanford Environment


Twitter Reaction to the FIFA Indictments

Abstract: Soon after Swiss authorities arrested several top soccer officials early Wednesday, journalists and soccer figures took to Twitter to share their reactions and opinions. That cackling sound you hear is Michael Garcia, who investigated 2018/22 votes only to have FIFA disregard pretty much everything he found — Nancy Armour (@nrarmour) May 27, 2015 So perfect: #FIFA arrests were done by plain clothed Swedes in Switzerland, the land of neutrality, in an electric car (Leaf). Really. — Julie Foudy (@JulieFoudy) May 27, 2015 Irony of location of Swiss police raid is Baur au Lac hotel is where FIFA executive stayed before casting controversial 18/22 World Cup vote — tariq panja (@tariqpanja) May 27, 2015 Perhaps not surprising, many of the comments focused on FIFA’s longtime president, Sepp Blatter, who has not been charged. Also, to the election ahead...


Dolphins in a New Jersey River Could Perish Unless They Return to the Ocean

Abstract: RUMSON SUMMER has turned to fall and fall will soon give way to chilly days, but a pod of bottlenose dolphins that has called two New Jersey rivers home since June doesn’t seem to mind. The group splashes and frolics its way through its days and seems content to stay right where it is. That has been good news for a steady stream of curiosity-seekers who have delighted in getting a rare up-close look at one of nature’s most charming creatures. But it may be bad news for the dolphins themselves. With water temperatures dipping and food supplies about to dwindle, it may be imperative for the dolphins to leave, but whether to intervene to make that happen is a contentious issue. One side is arguing that the entire pod will be in imminent danger if not forced into warmer waters soon, but the other is not so sure. Two of the dolphins have died since late last month, but it is not clear if their deaths were related to their long stay in a river. A group of about 16 dolphins was originally spotted in the Shrewsbury River, a narrow waterway between Sea Bright and Rumson, in mid-June. Scientists believe the dolphins were most likely following a food source from the ocean that veered off into the Shrewsbury. Shortly after the July 4 weekend, the dolphins moved to the nearby Navesink River, where they have remained. Scientists were hoping that the dolphins’ stay in the Navesink would be a short one. Some have left, but seven or eight have remained in the same area, in the waters near the Oceanic Bridge, which connects Rumson and Middletown. Officials of the National Oceanic and Atmospheric Association, which is monitoring the dolphins’ movements, are prepared to try to force them back into the Atlantic Ocean. But they are concerned that an intervention could create problems for the dolphins, said Teri Frady, a spokeswoman for the agency. She said that NOAA may choose to do nothing at all. “We are looking at the condition of the animals and the river itself,” Ms. Frady said. “We are looking for prey and whether or not the animals are eating. If we are to do something to try to ease them out of the estuary, then we need to try before their conditions becomes such that it compromises their ability to make a normal migration. It’s still a judgment call, but since we’re getting to the point where we may have to do something we wanted to step up our planning.” Should NOAA act, it will likely try to use acoustic devices to make noises that would irritate the dolphins and cause them to flee from the din in the river and toward nearby Sandy Hook Bay. Should they make it to the bay, they would be free to swim toward warmer waters near North Carolina. Still able to feast on a supply of small fish living in the Navesink, the dolphins seem to be doing well. However, experts agree that the fish will leave the river once water temperatures dip into the 50s, which should happen soon. Without a food source, the dolphins may not survive. Like many people who have been following the dolphins’ travails, Bob Schoelkopf, the director of the Marine Mammal Stranding Center in Brigantine, is hoping they will leave the Navesink on their own accord, but he fears that won’t happen. He said four dolphins stayed in the Navesink in 1993 into December and eventually drowned when they were unable to come to the surface when the river froze over. Mr. Scholekopf said that he believes an immediate intervention is the best course of action. “I’d rather see them come up with an attempt to make a plan and let the public know they have an interest in recovering the animals and getting them out of there,” he said. “Rather, they’re saying they’ll be all right. If these animals die, what are they going to tell the public?” United States Representative Frank Pallone Jr., a Democrat from the Sixth District, and State Senator Joseph Kyrillos, a Republican from Monmouth, are also urging the agency to take action. In the meantime, NOAA sends observers every 10 days or so to check the dolphins’ health. Their reports will help the agency determine whether it or nature will ultimately resolve the situation. “Nature has a claw,” Ms. Frady said. “This is the kind of thing that happens in nature and this may be what we end up with.”

New Jersey
Rivers
Dolphins and Porpoises


CBS Considers Selling Its U.S. Radio Business

Abstract: The exit of CBS from the radio business looks in tune with the times. CBS, a $24 billion broadcaster, is considering a sale of its 117 stations in the United States, just as the Internet streaming service Pandora may be on the block. Both moves could make sense, given stiff competition from the likes of Spotify, waning advertising and other industry disruption. The trick will be to find buyers. The company’s chief executive, Leslie Moonves, said on Tuesday that CBS was exploring “strategic options” for its clutch of AM/FM stations. A sale or other separation could generate up to $1.9 billion in gross proceeds, according to Jefferies, the investment bank. The urge to deal is understandable. Industry revenue has declined as advertisers have embraced other media to reach customers. Last year, radio ad sales dropped 2 percent, while revenue in the struggling newspaper business actually rose 7 percent, according to Standard Media Index. Streaming services are capturing more listeners, too. Spotify and Apple allow people to pick songs and listen to them commercial-free. That’s a double whammy for terrestrial radio stations. Not everything is upbeat in the digital-streaming world, however. Pandora cannot grow overseas, because it lacks licenses to play music outside the United States. That seems to be driving its possible sale. Spotify is raising money and could be interested in Pandora’s more than 80 million listeners and powerful sales force. Long-shot buyers could include the likes of Google or Amazon. A sale is not the only option for CBS. It could split off the division, much as Time Warner did with AOL, Time Warner Cable and Time Inc. CBS itself put its outdoor business into a separately traded real estate investment trust in 2014. Possible buyers for the radio arm include iHeartMedia and Cumulus Media, although both are mired in debt. Alternatively, the division could, as a separate business, buy assets of those two troubled companies. Either way, the broadcaster seems to have a playlist to choose from.

CBS
Radio
Spotify
Leslie Moonves
Audio Recordings
Downloads and Streaming


Melissa Harris-Perry Says MSNBC Show Deserved ‘Proper Burial’

Abstract: Melissa Harris-Perry is still frustrated with MSNBC. Ms. Harris-Perry, the former weekend morning host, said in an interview that she remained baffled by the way the network treated her in recent weeks. She also expressed a concern that the removal of her show could leave the network lacking when it came to the coverage of social justice and race. For its part, MSNBC denies that her show was ever going to be canceled before she publicly complained about the network on Friday, and said that it remained committed to covering the issues that her program often highlighted. “We deserved a proper burial,” Ms. Harris-Perry said by phone. “We didn’t deserve to be disappeared. It was evil, and it was cruel. And it had racial implications.” Those implications, she explained, were not indicative of an endemic problem of racism at the network. Instead, she said, by removing her namesake show, MSNBC is unlikely to pay as much attention to matters of diversity that her program routinely explored in depth. Phil Griffin, the president of MSNBC, emphasized in a phone interview on Wednesday that the network had no interest in canceling the show, and that he remained “stunned” that Ms. Harris-Perry refused to return to the air after several weeks of her program being pre-empted for news about the presidential election. “The point is she’s wrong,” he said. “We were not trying to get rid of that show. We were focusing on the breaking news of the last couple of weeks.” Ms. Harris-Perry has received public support from many people in recent days, including Eric H. Holder Jr., the former attorney general, who praised the show for focusing on issues and stories “too often unheard/ignored.” The messy breakup between Ms. Harris-Perry and MSNBC, who officially parted ways on Sunday, comes at a time when the network has shifted its strategy during the day fairly drastically with an added emphasis on election coverage, not opinion-based programming. Yvette Miley, a senior vice president for MSNBC, said that the network would “continue to find distinct and diverse voices.” “If they’re judging us through the lens of the departure of Melissa Harris-Perry, we know we have the perception versus reality to manage,” she said. “But we’re going to meet the challenge to still provide meaningful programming that touches people.” But to Ms. Harris-Perry, the shift at the network had been jarring. She recalled the day in 2012 when President Obama spoke from the Rose Garden about the killing of Trayvon Martin and declared, “If I had a son, he’d look like Trayvon.” She said that an “all-points bulletin” went out to the black correspondents and analysts who happened to be present at MSNBC that day. “Obviously everybody hit the third-floor studios,” she said. She went on the air, as did other African-Americans who worked for the network. There was a special that night, she said, and it became a running joke “that when the bat signal went up,” she and every other “African-American put on their super capes.” She contrasted that with a scene from a few weeks ago shortly before the South Carolina primary. She said she was watching the network as Kate Snow, Steve Kornacki and Ari Melber had a lengthy discussion about black voters in South Carolina. She was sitting in the building, ready to go on the air if she was needed. She said that Ms. Miley emailed producers to remind them that both Joy Reid and Ms. Harris-Perry were ready to appear on the air. They never heard anything. “It was jaw-dropping, given that someone who wrote two books about the black vote was in the building,” said Ms. Harris-Perry, who is also a professor at Wake Forest University. “I don’t have the words,” she continued. “It didn’t make me feel proud to work there.” Ms. Miley confirmed that she sent email to producers that day, but said the fact that Ms. Harris-Perry did not go on the air was nothing more than the “ebbs and flows” of cable news, she said. “I don’t think it was a purposeful intention to silence or not include her in the conversation,” she said. But by that point, Ms. Harris-Perry explained, she said she already felt that the network had left her behind. Her show had already been pre-empted and her relationship with Mr. Griffin had deteriorated. They had not spoken in at least a year, she said, and she had never even met or spoken to the new chairman of NBC News, Andrew Lack, though she did remain in communication with other MSNBC executives. Mr. Griffin, who acknowledges that their relationship was strained, said he did everything he could to accommodate Ms. Harris-Perry, including giving her additional time off. “We believed in that show,” he said. Ms. Harris-Perry said that she had received inquiries about her options in television, but that she had not made any decisions about what to do. As for MSNBC, Ms. Miley said, “We will spend nights thinking about what we could have done differently. But pursuing politics in this matter, and at this time, was the right call.”

Melissa Harris-Perry
Melissa Harris-Perry
MSNBC
TV
News media,journalism
Race and Ethnicity


At Australian Open, Injured Nadal Loses Bid for Rafa Slam

Abstract: MELBOURNE, Australia — It would have been tough enough to win a fourth consecutive Grand Slam title if Rafael Nadal had remained the picture of health. Across the net on Wednesday night in the quarterfinals was David Ferrer, Nadal’s inspired Spanish opponent and friend, who was bouncing on his toes as he waited for each serve. Waiting in the next round was Andy Murray, who has been in fine form. After that was a potential final against Novak Djokovic or Nadal’s archrival, Roger Federer. It would have been quite a challenge to join Rod Laver in the tennis history books, but Nadal, the world’s No. 1 player, did not stay healthy enough on the court named for Laver to mount even a serious challenge against Ferrer. “It was an opportunity I had,” Nadal said. “But I don’t live for this or for records.” Their match started out looking as if it might evolve into a marathon tussle — the first two games lasted 23 minutes — but Nadal injured his left hamstring in the second game, which extended to eight deuces before his serve was broken. Nadal then sought treatment off court during the next changeover. Though he soldiered on with his left thigh wrapped in tape, he was not the same player who won his first four matches here in straight sets, not the same player who won the French Open , Wimbledon and the United States Open all in a row last year. This Nadal was beaten, 6-4, 6-2, 6-3, in 2 hours 33 minutes, and, at one particularly demoralizing stage, he lost eight games in a row. In the third set, trailing by 0-3, Nadal sat forlornly on his chair during a changeover, his chin resting on his hands and his eyes welling with tears: quite a different image from that of the energetic optimist whose face rarely betrays the scoreline. “Look, I played my game; I’m happy with what I succeeded in doing, and I want to enjoy the moment,” Ferrer said. “But it’s obvious that Rafa had physical problems.” And so, Ferrer , the seventh seed, will now face Murray in Friday’s semifinal after Federer and Djokovic play the first semifinal on Thursday. “I hope he wins the tournament,” Nadal said of Ferrer, his longtime Davis Cup teammate. Tennis stars have been trying for more than 40 years to win the four Grand Slam tournaments in a row, but for now and perhaps quite a bit longer, Laver, the former Australian champion, will remain the last man to manage it. In the last five years, Federer has twice come up short, losing to Nadal in the 2006 and 2007 French Open finals. This time it was Nadal’s turn, and though this was unquestionably an upset, it was drained of most of an upset’s trademark suspense after Nadal’s injury, which he said was probably a small tear in his hamstring. Unwilling at first to discuss his injury after the match in the interest of not detracting from Ferrer’s victory, Nadal gradually became more forthcoming. “I don’t have to tell you about what I felt on the court because I tried my best all the time,” he said. “But it is obvious that I didn’t feel at my best. I had a problem in the match, in the very beginning. After that, the match was almost over. So that’s what I can say.” Nadal said he also did not want to give the impression that he was a player who sought excuses when he lost. In his first official event this year, in Doha, Qatar, after contracting a virus, he lost in the semifinals to Nikolay Davydenko and spoke openly about his health afterward. “Today I have another problem,” he said. “Seems like I always have problems when I lose, and I don’t want to have this image, no?” Nadal said he believed the virus might have made his body more susceptible to injury but dismissed any concern about the negative effect of the short off-season. (He took only a six-day break from tennis after last year’s ATP Tour World Finals in London.) “I think I did everything perfectly to start the year off well,” he said. “There are some factors in life you can’t control.” Nadal, 24, has an intense, punishing style of play, and his latest injury underscored the durability of Federer, who at 29 is playing in his 45th consecutive major tournament. But Nadal was far from helpless on Wednesday. He broke Ferrer’s serve three times after the injury. When the ball was in his strike zone, he still managed to hit winners and won 17 of 23 points at net as he attempted to shorten the rallies. But he was not his usual suffocating self on the baseline, finishing with 34 unforced errors and just 19 winners and struggling to track down balls that he would normally reach. On match point, he did not make an effort to run for Ferrer’s final winner. “I realized that either his level had to drop or I had no chance,” Nadal said. It was the second consecutive year that a physical problem contributed to Nadal’s losing in the quarterfinals of the Australian Open (on Australia Day, no less). Last year he retired during his match against Murray, but this year he said he never seriously considered that option. “I retire when I can’t run for the ball, that’s when I retire, but that was not the case,” said Nadal, who said he did not like retirements in general. “It’s much better to keep playing with the limitations you have,” Nadal said, “knowing that you have small chances but fighting until the end, and that’s it. And leaving with your head held high and with the feeling that you have done the right thing.” The situation was both an opportunity and a challenge for Ferrer, a relentless baseliner who, like all of Spain’s many leading players, has played in Nadal’s long shadow for years. But though he had lost his last seven matches against Nadal, this was his second victory over him in a Grand Slam tournament. Ferrer also won a grueling match against him in the fourth round of the 2007 United States Open. Even if Nadal had managed to win this tournament, it would not have completed a true Grand Slam, which, by tradition and consensus, requires a player to win all four major events in the same season. Only two men have done it: the American Don Budge in 1938, and Laver in 1962 and 1969, which was also the last year any man held all four titles. “Honestly, I didn’t come here for the Rafa Slam,” Nadal said. Ferrer said he still liked Nadal’s chances of doing it during his career. But for now Nadal must turn his attention to other possibilities, including a quick recovery. He said he still hoped to be healthy enough to play for Spain in the Davis Cup in early March in Belgium. “I’m not worried,” he said. “I know what I have is not really serious.”

Tennis
Nadal Rafael
Australian Open (Tennis)
Ferrer David


Australia, Nourishing China’s Economic Engine, Questions Ties

Abstract: SYDNEY , Australia — If outlanders tend to associate Australia with kangaroos, broad-brim leather hats and an opera house, many Australians are different. They think of iron ore and bauxite, copper and coal, nickel, gold and uranium, a trove of mineral riches that is their nation’s birthright and the bedrock of its prosperity. Which explains much of the breast-beating that has ensued since the Chinese announced plans this year to buy a big chunk of it. Since three state owned Chinese companies said they would buy stakes in Australia’s storied mining industry totaling $22 billion — as much as China ’s entire investment here in the last three years — some of this nation’s 21.3 million people have reacted with aggrieved nationalism. The government of Prime Minister Kevin Rudd , which generally favors the sales, has been savaged as naïvely cozy with China, a view some in his own military appear to share. Opposition politicians have flogged the specter of an Australian future more or less as a giant open-pit mine in which the locals toil, but Beijing takes the profits. “It’s the Communist People’s Republic of China, 100 percent Communist-owned, buying up sections of the country and minerals in the ground which they will then sell to the Communist People’s Republic of China,” said Barnaby Joyce, who is a leader of the National Party in Parliament. “And we’re going to live off the commission on the way through. They’ll try to make sure we get as little as possible.” But a few months after the first of the deals was announced, a sharp initial backlash has given way to a more subtle queasiness over whether Australia’s place in the region, anomalous but secure for so long, is about to be altered by the new Chinese giant looming over its horizon. Nor is Australia alone. From the Philippines to Vietnam , China’s neighbors are recalculating the benefits — and potential deficits — of life in the shadow of a newly dominant nation. Australia has always been the West’s outpost in the East, the British penal colony with American spunk and European joie de vivre. But seemingly overnight, China has become Australia’s biggest trading partner, one of its biggest tourism customers, the largest single buyer of its government debt, a major buyer of farmland and real estate. China’s hunger for steel gobbles up half of Australia’s iron ore exports, and its textile factories buy more than half of Australia’s wool. Over 120,000 Chinese students throng to Australian schools and universities. Although China’s purchases remain dwarfed by cumulative investments of the Americans and the British, they are growing much faster. And suddenly, Australians are stepping back, realizing that their new best friend is someone they really do not know very well, much less trust. “The momentum has shifted from being broadly receptive to these deals to having a hard think at this,” said Alan DuPont, who heads the Center for International Security Studies at the University of Sydney. “This is not just about China and Australia. It’s about how the world sees China playing its role in the future as a great power.” Surviving Corporate Invasions This is not a new question. More than a century ago, Australians fretted about becoming vassals of the resource-hungry British Empire; then, in the mid-1900s, they feared becoming an American subsidiary. When Japan Inc. began snapping up companies in the 1970s, suspicion of Tokyo ran rampant. The British and Americans proved good corporate citizens, however, and Japan’s expansion faded amid economic problems. Now, Australians are asking whether China will be different. In one way, it assuredly is. Western companies, if at one time equally ravenous for Australia’s resources, are not direct appendages of their national governments. The dominant shareholder in major Chinese resources companies is the Chinese government. China has 115,000 state owned companies; the cream are more than 150 giants controlled by the central government. Those corporations — in mining, steel, finance, communications and other crucial areas — seek to make profits much as Western companies do. Government boards audit them, appoint their top executives and evaluate their performance, but in general, the companies insist, Communist Party leaders do not meddle in business strategy. Even if that is true, China has long insisted on maintaining state control over companies in crucial industries, blurring the line between national and corporate interests. Take steel. China makes more steel than any other nation, but it is highly dependent on iron ore imports to keep its mills humming. That raises suspicions that China may want big stakes in mining companies now to help ensure stable prices in the future. But if China works to keep iron ore prices stable, that might benefit steel producers more than it does Australian mining companies. That concern has only grown in recent months, as China’s largest steel producers have rejected as insufficient offers of lower prices from Australian mining companies. There is also the question of whether China’s stake in strategic industries — like its investment in United States Treasury bonds — could one day morph from a business deal to an instrument of diplomatic influence. The Chinese bids for parts of the three Australian mining companies — Fortescue Metals, Oz Minerals and Rio Tinto Ltd. — have been raptly watched for Australia’s answers. So far, they are mixed. The smallest deal, an $840 million bid for part of Fortescue, a struggling iron ore miner, won Australian regulators’ quick approval. But Australia’s foreign investments review board, the central gatekeeper for overseas purchases, vetoed part of a $1.8 billion bid for Oz, the world’s second largest zinc miner. The reason: Australia’s military raised the prospect of Chinese espionage at an Oz mine not far from an aerospace test site. A pared-down deal was approved after the suspect mine, the core of Oz Minerals’ assets, was excised from the deal. But it is the proposed purchase by the Aluminum Company of China, or Chinalco, of $19.5 billion in Rio Tinto stock, bonds and mining rights — China’s biggest investment in a foreign company — that has caused the most angst. Chinalco, which bought 9.3 percent of Rio Tinto in 2008, proposed taking a larger stake after the global economic collapse drove Rio into financial straits. If approved, the new investment would give China an 18.5 percent share of the world’s third largest mining company. Chinalco unequivocally asserts its independence. “Chinalco operates as a commercial entity, at arm’s length from Chinese political processes,” the company’s Australian spokesman said in a written response to questions. Many Australian experts agree. Modern Chinese corporations are state-run in name only, Ross Garnaut, an economist, former Australian ambassador to Beijing and himself the head of a gold-mining company, said in an interview. In practice, he said, they are just like their Western counterparts — fiercely competitive, and focused on profit. “You don’t know anything about the dynamics of relations between major corporations in China if you think a major aluminum company like Chinalco would sacrifice its profits to increase profits for one of its rivals in the steel industry,” he said. Even Australia’s antitrust regulators have concluded that the Chinese would be unable to influence the price of iron ore, a crucial Rio Tinto product, were the Rio deal to go through. Intentions Arouse Suspicions Yet other experts have a much different view of China’s intentions. Paul Glasson, a Shanghai -based Australian who brokers deals between Chinese and Australian businesses, notes that China’s domestic reserves can meet demand for fewer than half of 45 strategic minerals. By 2020, it will have sufficient supplies of only six. “In a nation of 1.3 billion people, with the complex issues they face, with such resource deprivation, would it be wise for the government to abdicate that responsibility to S.O.E.’s?” he asked, using the abbreviation for state owned enterprises. “Claiming the head doesn’t know what the body is doing just makes the situation difficult.” Mr. Glasson says state ownership actually brings advantages — among them, deep pockets and a focus beyond the next quarterly statement — that any merger partner might find attractive. But Beijing’s denial of a role in its state owned companies, he said, is creating a credibility problem. In fact, Chinalco would be very much a junior partner if the Rio deal were to go through, with just two seats on a 17-seat board of directors. Chinalco would have to recuse itself from any Rio issues that posed a conflict of interest. Chinalco would also not be able to guarantee a supply of ore to other Chinese companies, although the companies envision new efforts to market iron and aluminum ore inside China. Shareholders at Rio’s annual meeting in April were unimpressed. They denounced the proposed deal as a fire sale of assets to a government buyer whose interests were starkly at odds with their own. As if to underscore the point, Rio’s share price has risen sharply since the Chinalco agreement was announced, suggesting that Chinalco shrewdly struck a deal at the nadir of the financial crisis . With every gain in Rio’s stock price, the Chinalco deal looks less attractive. Some institutional investors have suggested that they will oppose the bid, which requires shareholder approval, even if regulators approve it this year. And that seems in some question. Allies of Prime Minister Rudd argue that increased Chinese investment pumps money into Australia’s economy and opens new trade opportunities. But Mr. Rudd’s opponents say he does Beijing’s bidding. Among a drip of well-timed news leaks were claims that Chinese spies sought to hack into Mr. Rudd’s laptop during last year’s Olympic Games, and that his defense minister had failed to disclose gifts from a Chinese friend with ties to Beijing’s military establishment. Those allegations have been flying even as the Australian military has become more focused on China as a potential rival. A newly issued defense strategy proposes the biggest Australian military buildup since World War II, driven in part by a forecast of rising Chinese economic and military power, and a slow American fade in the Pacific. And recently, a wealthy Australian businessman began a television advertising blitz opposing the Rio-Chinalco deal, featuring Mr. Joyce, an opposition leader. The theme — that Australia is selling its mineral wealth to a “foreign government” that may not have Australians’ interest foremost — is unlikely to affect regulators’ deliberations. But it stokes a larger disquiet of which Mr. Rudd’s government is acutely aware. Mr. Rudd, a Mandarin -speaking ex-diplomat in Beijing, has not helped his cause: after an unannounced meeting with China’s propaganda minister in Canberra , Australia’s capital, he lobbied for a greater Chinese role in global finance at the Group of 20 economic meeting in London , leading critics to dub him China’s “roving ambassador.” Mr. Rudd shrugged off the gibes, but seemed stung: in London, his staff quietly asked that he not be seated next to Beijing’s ambassador to Australia during a television broadcast (the request was refused). Australia’s foreign investments board has given itself an additional 60 days to consider the Chinalco-Rio deal. But hopes that some of Australians’ unease might ebb during that breather took a hit in May, when another state owned Chinese company, China Nonferrous Metal Mining Group , proposed a $184 million purchase of 51.6 percent of another miner, Lynas Corporation. Lynas, which mines rare-earth minerals, also has been left short of cash by the global economic crisis. Critics were quick to note that China Nonferrous operates huge nickel and iron ore mines in Myanmar , widely denounced as one of the world’s most repressive nations, and has extensive gold-mining operations in North Korea . “So Lynas would become part of a group which makes hay in Burma. Can the government live with that?” The Australian, one of the nation’s major newspapers, asked. “What are the rules about ethical investments?” The executives at Chinalco, which also has operations in Myanmar, might be expected to rue the bad timing of China Nonferrous. On the other hand, it could be promoted as evidence that the government does not stage-manage corporate strategy. But at least one Chinalco executive no longer has those worries. The company’s chairman, Xiao Yaqing, the architect of both the 2008 and 2009 purchases of Rio assets, left the company in March after being promoted — to deputy head of the State Council, the team of cabinet ministers that sets policy for all China.

Australia
China
Mining
Politics
Rio Tinto
Economy
International trade


Spinning the Web: P.R. in Silicon Valley

Abstract: Menlo Park, Calif. — Brooke Hammerling (publicist) and Erin McKean (entrepreneur) are in a Sand Hill Road conference room, hashing out plans to unveil Ms. McKean’s new Web site, Wordnik . Ms. Hammerling, while popping green apple Jolly Ranchers into her mouth, suggests a press tour that includes briefing bloggers at influential geek sites like TechCrunch, All Things Digital and GigaOM. But Roger McNamee, a prominent tech investor who is backing Wordnik, is also in the room, and a look of exasperation passes across his face at the mere mention of the sites. “Why shouldn’t we avoid them? They’re cynical,” he says, also noting his concern that Wordnik would probably appeal more to wordsmiths than followers of tech blogs. “That’s where I would be most uncomfortable. They don’t know the difference between ‘they’re’ and ‘there.’ ” Without missing a beat, Ms. Hammerling changes course, instantly agreeing with Mr. McNamee’s take. “I love you for that,” she intones. “I’ll leave the tech blogs out. Let them come to me.” Instead, she decides that she will “whisper in the ears” of Silicon Valley’s Who’s Who — the entrepreneurs behind tech’s hottest start-ups, including Jay Adelson, the chief executive of Digg; Biz Stone, co-founder of Twitter ; and Jason Calacanis, the founder of Mahalo. Notably, none are journalists. This is the new world of promoting start-ups in Silicon Valley, where the lines between journalists and everyone else are blurring and the number of followers a pundit has on Twitter is sometimes viewed as more important than old metrics like the circulation of a newspaper. Gone are the days when snaring attention for start-ups in the Valley meant mentions in print and on television, or even spotlights on technology Web sites and blogs. Now P.R. gurus court influential voices on the social Web to endorse new companies, Web sites or gadgets — a transformation that analysts and practitioners say is likely to permanently change the role of P.R. in the business world, and particularly in Silicon Valley. While public relations is just one arrow in the marketing quiver for most companies, it plays an especially crucial role in a region where dozens of start-ups are born each month. Without money for advertising, these unknown companies have to promote themselves to potential users, investors, employees and partners. “Few tech companies with absolutely no P.R. have built a user base successfully,” said Margit Wennmachers, a co-founder of OutCast Communications, a P.R. agency in San Francisco that opened in 1997. “They need P.R. to put the booster under that rocket ship.” In the new world of social media, P.R. people must know hundreds of writers, bloggers and Twitter users instead of having six top reporters on speed dial. Ms. Hammerling, the latest example of the omnipresent start-up pitchwoman, is the doyenne of who-you-know P.R. She arrived in Silicon Valley from the East Coast in 1997, just when the dot-com craze was reaching a crescendo and P.R.’s pivotal role in the start-up world was being cemented. And the evolution of her own tactics has run parallel to the ever-changing marketing forays that make this area a singular hotbed of promotional experimentation. Dena Cook, Ms. Hammerling’s business partner at Brew Media Relations, recalls the boom years when start-ups sent P.R. firms handsome checks that the firms had to return because they didn’t have room for new clients. For start-ups that did corral a P.R. adviser, it often didn’t matter if they had a solid business; Ms. Cook says a regional newspaper once ran a glowing article about one of her clients the same day the company went out of business. At the time, tools of the trade were largely limited to press releases and pitch letters, embargoes and exclusives and, of course, the legendary and often criticized parties. Those events included martinis and Champagne, lobster and shrimp, Tori Amos and Aerosmith, all to celebrate companies that had yet to make a cent. In those days, it took about six months to bring to market a new product or a start-up, Ms. Wennmachers recalls. First came East Coast tours with analysts and monthly publications, followed by visits to weeklies, then dailies. But the rise of blogs and social networks — and companies’ ability to post information on their own sites — transformed all this. Gradually, deadlines disappeared, as even monthly magazines offered Web sites that published stories by the minute. “Now the best ideas bubble up, which is great for start-ups,” Ms. Wennmachers says. “It’s no longer, ‘if you can’t get so-and-so to do a story, you can’t make it.’ ” For new companies’ trying to get the word out, there’s a healthy measure of liberation in all of this. For publicists, the era of e-mail, blogs and Twitter has the potential to turn the entire idea of P.R. professionals as gatekeepers on its head. Donna Sokolsky Burke, co-founder of Spark PR, another influential firm in San Francisco, acknowledges that the advent of social networks has upended all the traditional marketing and promotional practices that once helped make Silicon Valley, well, Silicon Valley. But she says that publicists will continue to play indispensable roles. “You absolutely have to be aware of power users who put things up on Facebook, Flickr, Yelp,” Ms. Burke says. “P.R. is important because it’s pretty intensive to figure out who they are.” Exactly, Ms. Hammerling says. “I think it’s key to have a personal face, to not be filtered. Does that mean we lose our value? Absolutely not,” she says. “As the world has exploded into so many ways of communication, we’re helping them navigate it.” MS. BURKE says that when her firm began representing Flickr, the photo sharing site, in 2004, she never issued a press release for it, even when it was acquired by Yahoo. Flickr would publish news on its company blog, a few more blogs would pick it up “and two days later, BusinessWeek would call,” she recalls. Some business people say that because journalists would rather hear stories directly from the entrepreneurs who are genuinely excited about their companies — rather than from publicists’ faking excitement — the role of publicists becomes less crucial. Glenn Kelman, chief executive of Redfin, a real estate Web site, says he has never hired a P.R. person. “Besides,” he says, “with the real-time Web, there’s no time to vet every message through three layers of spin.” Indeed, irritation has been rising among tech reporters forced to field as many as 50 canned pitches a day from publicists representing start-ups desperate to break through. Recent missives from the influential tech bloggers Michael Arrington and Robert Scoble have attacked the P.R. industry as being out of touch. Rafe Needleman, an editor at CNET, has started a blog called Pro PR Tips that gives publicists elementary guidance, such as “Before you press ‘send’ on your bulk e-mail press release, make sure the site you’re pitching is actually live.” In response to dissatisfied clients and huge shifts in the media landscape, a new breed of publicist is emerging, says Brian D. Solis, a P.R. guy who writes a blog called PR 2.0 . His firm, FutureWorks, has a broad definition of “writer,” a category that includes those in mainstream media as well as the tens of thousands of bloggers and Twitter users who have developed avid followings by writing about niche topics. “Mommy bloggers are the new TechCrunch; they’re such an influential crowd,” Mr. Solis says. Instead of calculating the impressions an article gets by estimating a publication’s circulation and pass-along rate, Mr. Solis counts the number of people who tweeted about a company and their combined following, the number of retweets or clicks on links, as well as traffic from Facebook and other social networks. Despite all these new channels, Ms. Burke says it’s still essential to know which mainstream publications to approach. If a start-up is seeking venture funding or new engineers, she says, Sparks PR still looks to The San Jose Mercury News, VentureWire or TechCrunch to get the word out. AS with so many professions in the digital era, public relations boils down to a juggling act, an effort to weigh and exploit the varied strengths of old media and new. Ms. Hammerling, at 35 years old one of the ubiquitous presences on the Silicon Valley publicity scene, has navigated these waters for years. In 1999, she got a job at MobShop, a group shopping Web site, where she got a taste of P.R. in boom-time Silicon Valley. She no longer had trouble getting reporters to call her back; instead she had trouble getting them to stop calling. “I didn’t have to pitch; I just had to pick up the phone and say no,” she recalls. “Everybody wanted you. How do you say no to that when your competition is absolutely saying, ‘Yes, we’ll be in Fortune and on the cover of Fast Company’?” Then, in 2001, after getting “more press than I’ve ever seen,” she says, MobShop died. “It shows that P.R. can’t be the end-all and be-all,” she says. “Everyone knew who they were, but at the end of the day, they couldn’t make any money.” Many other small P.R. shops that had sprouted up went out of business or were acquired. Ms. Hammerling moved back to New York, where she eventually joined the Zeno Group, an offshoot of Edelman. There, she focused on getting to know journalists and making sure that she was at every tech conference and party. One day in 2005, she went into her managers’ office to tell them she wanted to focus more on her relationships with the media and less on writing press releases and handling administrative tasks. “There are no stars in P.R.,” she says one boss told her — the job should be about behind-the-scenes teamwork, not individual personalities. “That literally hit me like a ton of bricks,” she says. She quit. (Citing firm policy, Zeno declined to comment on Ms. Hammerling’s tenure.) Ms. Hammerling then hired a financial manager, persuaded some of Zeno’s clients to come with her and started a new firm in New York that she named Brew (her childhood nickname). From the get-go, she focused on one-on-one communication and relationships with hundreds of writers and pundits. Over the years, her contact list swelled to the point that her stories now overflow with dropped names. There are the e-mail messages from Larry Ellison, the chief executive of Oracle, and the time she handled a client’s crisis from her BlackBerry while traveling to St. Barts to join the former Hollywood überagent Michael Ovitz and his family on his yacht. Or the time she was in her bikini at a Mexican resort, checking her e-mail at the hotel’s computer, when Ron Conway, a veteran tech investor, walked in. Or the purportedly secret poker party she threw in her suite at a recent tech conference: “All my friends were there — Arianna was there, the Twitter boys were there,” referring to Arianna Huffington of The Huffington Post and Evan Williams and Biz Stone, Twitter’s co-founders. “Arianna told me I was a great hostess, and I thought I was going to die,” she said, putting on a Greek accent to imitate Ms. Huffington: “I’m Greek, I know what it’s like to be a hostess.” (She would repeat this story several times in the weeks a reporter spent following her around.) Though Ms. Hammerling may be known in the Valley more for whom she knows than for the clients she represents, she shares something else with Ms. Huffington: an astute understanding of how valuable strategic name-dropping can be. It is the currency she uses to make sure people know she is someone worth knowing, and it has paid off. “I will listen to her pitch on some little fledgling start-up I have no interest in, in part because of the coterie of connections she brings with her,” says Dennis Kneale, the media and technology editor at CNBC. Ms. Hammerling’s connections have been crucial for Brew in finding and serving clients, says Ms. Cook, her business partner: “Without question, that allows us to play at a different level, because we’re not just doing P.R. and media relations; we’re connecting people at the highest level, helping deals get done.” Ms. Hammerling landed Brew’s most successful client, NetSuite, through her relationship with Mr. Ellison, who was a co-founder of the business software company. While dating an R.E.M. band member she met Bono, lead singer of U2, and then Roger McNamee, Bono’s investment partner. When Mr. McNamee personally invested in Wordnik, he called Ms. Hammerling. All of which gives rise to a series of Brooke-isms: how many executives and reporters are “dear friends,” how she “worships at the altar” of a NetSuite board member and likes a team of venture capitalists so much that “I just want to put them in my pocket.” Yet by most accounts, the relationships she builds are real and deep. “She drops names like a boat anchor, so shamelessly, but at the same time, it’s, ‘Larry, Larry,’ and I think she’s lying and then I get on the phone and it’s Larry Ellison. She got him on the cellphone; I didn’t,” says a journalist who did not want to be identified to avoid the professional risk of offending Ms. Hammerling. Her job is all-consuming. This last spring, she held bicoastal 35th birthday parties for herself in New York and San Francisco. The guest lists were filled with clients and reporters. “They’re my real friends,” she says. “My job has become my life and my life imitates my work, but I love that.” Her effervescent personality and proximity to the people she works with have sometimes set tongues wagging in Silicon Valley. “That prejudice is something we all suffer through,” she says. “When smart women interact with smart men, there is always a dynamic there.” She ponders the issue further. “I had to struggle when I was younger to be taken seriously and not just be considered to be a cute girl,” she adds. “If I gain 100 pounds and my skin broke out and I had glasses and frizzy hair, would I be as effective at my job? Yes, because of the relationships I built.” If there’s a madness in her lifestyle, there’s still a method behind what she does. And time spent perched on her shoulder offers some insights into how the publicity game is shifting. MS. HAMMERLING’S presentation on Erin McKean’s start-up, Wordnik, is a case study in how relationships still matter in the Valley (as they do elsewhere). But it also shows how the Web’s amplification of many voices, and not just those of professional writers, has transformed P.R. Ms. McKean — the former editor of the New Oxford American Dictionary and author of a blog about dresses and sewing — is an unlikely tech entrepreneur, and Ms. Hammerling is her guide through Silicon Valley. As they discuss whom to pitch Wordnik to, each name that came up elicits a knowing squeal from Ms. Hammerling. A tech blogger? “A dear friend,” she says. The writers of DailyCandy? “They are all my friends.” Barbara Wallraff, who writes Word Court, a syndicated column about language? “I love her, love her,” Ms. Hammerling says, her voice rising. Biz Stone, of Twitter? “I was just talking to Biz on the plane and he’s excited about Wordnik; I’ll ping him.” Executives from Amazon.com, a potential partner for Wordnik? “We could get in front of the top guys there,” Ms. Hammerling responds with a coy smile. “It didn’t matter what name we came up with, Brooke knew them, or knew somebody who knew them,” Ms. McKean says later. “If she is not the mayor of the town, then at least she runs the post office and knows where everybody gets their mail.” In the end, Ms. McKean and Wordnik’s advisers and investors decide to talk to a handful of bloggers who focus on language and to only one tech blogger, Caroline McCarthy at CNET, because, as Ms. Hammerling notes, “she could have fun with it, as opposed to writing a business story.” Ms. Hammerling plans to approach one journalist, Quentin Hardy at Forbes, not because she wants him to write about Wordnik in the magazine but because she hopes he’ll mention it on his personal Twitter and Facebook feeds. “I don’t know if this is a Forbes story at this point,” she says. “I see it more of Quentin as an influencer, Quentin the person.” Wordnik hasn’t announced how it will make money, and its backers are worried that some reporters and writers will pick apart that fact. So the group decides that Wordnik will be presented as a “project” instead of as a “company.” A few weeks later, Ms. Hammerling sets up a phone call with Ms. McKean and Mr. Adelson, the Digg C.E.O. He advises her on building mobile sites, offers to share Digg’s research on user-generated content and asks her to call back when she’s ready for partnerships. When Wordnik went live last month, Mr. Adelson tweeted about it. Digg’s founder, Kevin Rose, later tweeted to his then 759,310 followers that Wordnik was “truly amazing.” Most of the other tweets and blog posts described Wordnik as “an ongoing project,” adopting the language the P.R. team had decided on. BY 6:30 p.m. on the day Wordnik went live, Brew’s staff had calculated that 1.43 million people had seen tweets about it. CNET and a handful of blogs also wrote about the site. None of the coverage was in print, and most wasn’t by professional journalists. The publicity sent 40,000 people to Wordnik’s Web site to perform 170,000 searches the following week and caught the attention of reporters at USA Today and The Wall Street Journal who hoped to write articles. A couple of media companies have contacted Wordnik to talk about potential partnerships and mentioned that they read the tweets of Mr. Adelson or Mr. Rose. Ms. Hammerling says the approach she took with Wordnik accounts for about a third of Brew’s pitches and is becoming more common. Today, she says, people want to broadcast on Twitter. Tomorrow, the medium could change. But the core of her job won’t, she says: “It will morph, but it’s still about relationships.”

Start-ups
Twitter
Public Relations and Publicity
Computers and the Internet
Social Networking (Internet)
Executives and Management
Digg.com
Silicon Valley (Calif)


Protected by Washington, Companies Ballooned

Abstract: As the Bush administration scrambles to address the sudden decline of the country’s two largest mortgage finance companies, some of their longtime critics say the crisis has been building for years. Among them is Jim Leach, a Republican former representative from Iowa, who began arguing two decades ago in Congress that the government-chartered mortgage companies, Fannie Mae and Freddie Mac , were unfairly insulated from the real world. They were not subject to the same financial standards and tax burdens as their competitors, he warned, and if they ran into trouble, an implicit government guarantee to back them up meant taxpayers would be left with the losses. “There are times in public policy making that one can feel like Don Quixote,” Mr. Leach said of his repeated legislative battles to rein in the two companies’ growth. Congress established Fannie Mae during the New Deal to make homes more affordable for lower- and middle-income Americans, and Freddie Mac was established later with a similar purpose. Neither provides home loans. Instead, the companies buy mortgages from banks and take on the risks of possible defaults — allowing banks to make even more mortgages. Today they own or guarantee about half of the country’s $12 trillion in mortgage debt, so the free fall of their share prices last week amid concerns that they were undercapitalized has created chaos for Wall Street and Washington. The dominant role Fannie and Freddie play today is no accident. The companies, Wall Street firms, mortgage bankers, real estate agents and Washington lawmakers have built up an unusual and mutually beneficial co-dependency, helped along by robust lobbying efforts and campaign contributions. In Washington, Fannie and Freddie’s sprawling lobbying machine hired family and friends of politicians in their efforts to quickly sideline any regulations that might slow their growth or invite greater oversight of their business practices. Indeed, their rapid expansion was, at least in part, the result of such artful lobbying over the years. And as Fannie and Freddie grew, so did the fortunes of Wall Street, which reaped rich fees from issuing debt for the two companies, as well as the mortgage and housing industries, which banked billions of dollars as the housing market boomed. Even after accounting scandals arose at the two companies a few years ago, attempts to push through stronger oversight were stymied because few politicians, particularly Democrats, wanted to be perceived as hindering the American dream of homeownership for the masses. Lots of perks came with Fannie and Freddie’s charters and government backing: exemptions from state and local taxes, relatively meager capital requirements, and an ability to borrow money at rock-bottom rates. James A. Johnson, a longtime member of the Washington establishment who previously worked as a campaign adviser to former Vice President Walter F. Mondale, ran Fannie for most of the 1990s. “Jim Johnson was the architect of Fannie’s lobbying strategy. He was the muscle guy, if you will. The guy who would walk the halls of Congress,” said Bert Ely, a banking consultant in Arlington, Va., and longtime critic of the companies. Freddie, Mr. Ely said, soon copied Fannie’s playbook. Mr. Johnson could not be reached for comment. Fannie declined to comment; Freddie did not respond to an interview request. An early, and for some analysts, seminal attempt to overhaul regulation of Fannie and Freddie occurred in the early 1990s when the country was still licking its wounds from the savings and loan debacle. As legislators debated who would regulate Fannie and Freddie and what sort of capital cushions should be established for the entities, the companies enlisted a bipartisan mix of Washington insiders to represent them. Fannie and Freddie were careful to include powerful Democrats and Republicans as executives, board members and lobbyists to make sure they had access to top government officials and clout on Capitol Hill, no matter which party was in power. The strategy that started two decades ago continues. They have hired many officials who have worked for the last two administrations alone. Fannie hired Jamie Gorelick, a former deputy attorney general in the Clinton administration; Thomas E. Donilon, who was that administration’s chief of staff to the secretary of state; and Franklin D. Raines, who was President Clinton’s budget chief. Among Republicans, Fannie hired Robert B. Zoellick, now the head of the World Bank and a former official in both Bush administrations; Stephen Friedman, the onetime top economic adviser to the current President Bush; and Michele Davis, now an assistant secretary of the Treasury under Henry M. Paulson Jr. Fannie’s board once included Frederic V. Malek, a longtime friend of the Bush family and a former business partner of the current President Bush. The outcome of the regulatory tussle in the early 1990s did little to change things. Fannie and Freddie got a new but fairly weak regulator, the Office of Federal Housing Enterprise Oversight, while still having to meet less onerous capital requirements than some lawmakers wanted. The companies also stymied efforts to get the Securities and Exchange Commission more actively involved in regulating them. Later on, Mr. Johnson ramped up the influence of its charitable arm, the Fannie Mae Foundation, by doling out money to thousands of nonprofit groups and similar organizations. (Mr. Johnson was compelled to step down as the head of Senator Barack Obama’s vice-presidential search team last month after he was criticized for receiving mortgages on favorable terms from Countrywide Financial.) Fannie and Freddie also forged alliances with various interest groups, including affordable-housing advocates that previously criticized the companies for not doing enough for low- and middle-income homeowners. Mr. Leach, the Iowa representative, later accused Fannie and Freddie of effectively buying off activist groups by making charitable contributions to them. By providing much-needed grant money to the nonprofit groups, it made it hard for them to criticize the mortgage titans, said Jonathan GS Koppell, an associate professor at the Yale School of Management. “Likewise, there were another set of entities, essentially a huge industry, that profits from every additional loan that Fannie or Freddie can buy,” Mr. Koppell said. “The more loans they purchase, the more business there is for them and so they’re willing to work with the enterprises.” Fannie also opened up what it called Partnership Offices. They were billed as regional oversight offices for various housing projects financed by Fannie. In reality, critics, including the Department of Housing and Urban Development, said they were used primarily to influence Congress by providing local politicians and business leaders with ample ribbon-cutting ceremonies and photo opportunities. The offices were often run by and populated with former Congressional staff members. Several of those offices were staffed by family members of legislators, said Joshua Rosner, an analyst at Graham-Fisher in New York. Of course, foes of Fannie and Freddie began their own lobbying efforts, the most muscular of which had the backing of banks eager to get their own piece of the companies’ lucrative mortgage business. Some Wall Street firms joined these efforts, but they typically did not push too hard over fears that Fannie might retaliate by withholding business — and the rich fees associated with it. From 1990 to 2000, as each company’s stock grew more than 500 percent and top executives earned tens of millions of dollars, much criticism appeared on opinion pages of newspapers, in reports by free-market research groups and in Congressional testimony. Much of it was sponsored by a loose coalition of Washington lobbyists and consultants who were paid to portray Fannie and Freddie as too big and risky. Ultimately, what most hurt the companies was the failure of home buyers to pay off subprime and other risky mortgages that were packaged into bonds and sold to investors by Wall Street banks like Bear Stearns, Lehman Brothers and Citigroup, with Fannie and Freddie playing a lesser role. But they are suffering from the reverberations of the foreclosure wave, as the value of their mortgage assets declines along with home prices everywhere. Supporters of Fannie and Freddie say the companies’ lobbying machines have largely been taken apart in the wake of the accounting scandals, which resulted in billions of dollars of financial restatements and the ouster of major executives. Fannie’s Partnership Offices have been closed and its charitable foundation shut down. Critics say that current housing legislation before Congress could give even more power to Fannie and Freddie by allowing them to venture into new mortgage-related businesses. That, they say, is evidence enough that the companies have not been fully defanged. At the same time, the Senate version of that legislation, which was passed overwhelmingly on Friday, would also create an independent regulator to oversee Fannie and Freddie. “For sure, the political machine has not been dismantled,” said Thomas H. Stanton, a finance professor at Johns Hopkins University. “For every interest that might lose if Fannie and Freddie expands into what it does, you have someone else who wants to do business with them.”

Mortgages
Fannie Mae
Freddie Mac
Housing
Lobbying and Lobbyists
United States Politics and Government
United States Economy


7 Die in Sectarian Riots in Myanmar

Abstract: YANGON, Myanmar (AP) — Security forces in western Myanmar fired on rioters who burned hundreds of homes in an outbreak of sectarian violence that killed at least seven people, state-controlled news media reported Saturday, adding that calm had been restored. The rioting on Friday reflected longstanding tensions in the state of Rakhine between Buddhist residents and Muslims, many of whom are considered to be illegal settlers from neighboring Bangladesh. Although the root of the problem is localized — centering on the resentment of the settlers — there is fear that the trouble could spread elsewhere because of the religious divide. The state-run newspaper Myanma Ahlin said security forces had to open fire to restrain the rioters, and state television said soldiers had been deployed to help the police in Maungdaw and Buthidaung Townships. A dusk-to-dawn curfew was applied, and public gatherings of more than five people banned. According to the television report, seven people were killed and 17 wounded. It said 494 houses, 19 shops and a guesthouse were burned down. Myanma Ahlin said that about 1,000 “terrorists” were responsible for the rampage, and that some of them stormed Maungdaw General Hospital. State news media did not otherwise identify the rioters, but the area is 90 percent Muslim, and residents contacted by telephone said the people in the mob were Muslims. The dead were evidently all Buddhists, judging by the names of the victims mentioned in the newspaper, which added that those hurt had knife wounds. It was not clear whether the security forces were responsible for any of the casualties. The trigger for the latest round of violence was the rape and killing of a young Buddhist girl last month. Three Muslim youths have been put on trial, Myanma Ahlin reported on Saturday. Some anti-Muslim pamphlets were circulated about the crime, apparently inflaming local Buddhists. On June 3, 10 Muslims were killed by a mob that attacked a bus carrying them from a religious gathering in the town of Taungup in Rakhine State.

Myanmar
Curfews
Demonstrations Protests and Riots
Buddhism
Muslims and Islam