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Tuesday, August 12, 2008

Free Internet Press Newsletter - Tuesday August 12 2008 - (813)

Tuesday August 12 2008 edition
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Sovereign Funds Become Big Oil Speculators
2008-08-12 03:22:26

Sovereign wealth funds, the massive investment pools run by foreign governments, are now among the biggest speculators in the trading of oil and other vital goods like corn and cotton in the United States, according to interviews with brokers who handle their investments at leading Wall Street banks, veteran traders and congressional investigators.

Some lawmakers say the unregulated activity of sovereign wealth funds and other speculators such as hedge funds has contributed to the dramatic swing in oil prices in recent months.

The agency regulating the market said it had not picked up on this activity by sovereign wealth funds. In a June letter, the Commodity Futures Trading Commission (CFTC) told lawmakers that its monitoring showed that these funds were not a significant factor in commodity trading.

The CFTC is not detecting the growing influence of foreign funds because they invest through Wall Street brokers known as "swap dealers" who often operate on unregulated markets, said sources familiar with the transactions.

Several Democrats said the Republican-led CFTC won't use its authority to clamp down on such unregulated activity because it doesn't want to hurt the influential Wall Street firms it favors.

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Global Trail Of An On-Line Crime Ring
2008-08-12 03:22:04

As an international ring of thieves plundered the credit card numbers of millions of Americans, investigators struggled to figure out who was orchestrating the crimes in the United States.

When prosecutors unveiled indictments last week, they made a stunning admission: the culprit was, they said, their very own informant.

Albert Gonzalez, 27, appeared to be a reformed hacker. To avoid prison time after being arrested in 2003, he had been helping federal agents identify his former cohorts in the online underworld where credit and debit card numbers are stolen, bought and sold.

But on the sly, federal officials now say, Gonzalez was connecting with those same cohorts and continuing to ply his trade, using online pseudonyms - including “soupnazi” - that would be his undoing. As they tell it, Gonzalez had a central role in a loosely organized online crime syndicate that obtained tens of millions of credit and debit card numbers from nine of the biggest retailers in the United States.

The indictments last week of 11 people involved in the group give a remarkably comprehensive picture of how the Internet is enabling new kinds of financial crimes on a vast international scale.

In interviews over the last few days, investigators detailed how they had tracked Gonzalez and other members of a ring that extended from Ukraine, where a key figure bought and sold stolen numbers over the Internet, to Estonia, where a hacker infiltrated the servers of a Dallas, Texas-based restaurant chain.

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Russian Army Marches Into Georgia, Georgian Troops Pulled Back To Defend Capital
2008-08-12 03:21:05

Russia's punitive campaign in the Caucasus threatened to intensify into all-out war against Georgia Monday night, with Russian troops seizing control of strategic towns a couple of hours from the capital, and aircraft pounding Georgian infrastructure.

Vastly outnumbered by the Kremlin's ground and air forces, the Georgian government announced it was pulling back its troops to defend the capital, Tbilisi, against a feared Russian onslaught. Washington accused the Kremlin of long preparing an invasion of Georgia in "aggression that must not go unanswered".

"Russia has invaded a sovereign neighbouring state and threatens a democratic government elected by its people. Such an action is unacceptable in the 21st century," President George Bush said. "The Russian government must reverse the course that it appears to be on." He urged Russia to agree to a ceasefire offer by Georgia.

The Georgian authorities said the town of Gori, 40 miles north of Tbilisi, had, in effect, fallen to the Russians, who were also advancing from the breakaway province of Abkhazia in the west into territory previously under Georgian control.

"The Georgian army is retreating to defend the capital. The government is urgently seeking international intervention to prevent the fall of Georgia and further loss of life," said the Georgian government. Its president, Mikhail Saakashvili, said the Russian campaign was aimed at overthrowing his government.

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Commentary: Of Helpless Hotheads And Half-Baked Warriors
2008-08-12 03:20:38
Intellpuke: This commentary was written by Christian Neef and appeared in Spiegel Online's edition for Monday, August 11, 2008.

The escalating war in the Caucasus region is an example of the political stubbornness of both sides. Diplomacy is ineffectual and, aside from warm words, can deliver nothing. The West, where speaking plainly to Russia went out of vogue a long time ago, is also partly to blame.

"War in South Ossetia," "General Mobilization in Georgia," "Russia Invades." These are the headlines of a weekend in which newspaper publishers had expected the Olympics in Beijing to dominate the front page. The surprise, or rather, irritation over this conflict that has suddenly pushed its way into the limelight is so great that even the International Olympic Committee - which, as we well know, is a master of political sensitivity - criticized the escalation of fighting. "Conflict is not what we want to see," said IOC spokeswoman Giselle Davies.

For once, the IOC is right. South Ossetia - excuse me, where? Tskhinvali? Never heard of it! A tiny mountainous realm one-and-a-half times the size of Luxembourg, and all of this happening less than 3,000 kilometers (1,875 miles) from Berlin? And in that not-so-faraway place, Russian and Georgian tanks on the move, while Russian fighter jets launch strikes into the Georgian hinterland? It sounds crazy, but what is now coming back to haunt us is the consequence of everyone - for a full 20 years - having disavowed this small, simmering trouble spot in the oh-so-inscrutable Caucasus, the home of breakaway regions like Nagorno-Karabakh, Abkhazia and South Ossetia.

Mikhail Saakashvili, the young hothead sitting in the president's chair in the Georgian capital Tbilisi, wants to rein in two breakaway provinces lost in the bloody wars of secession in the early 1990s, a period when hundreds of thousands of his countrymen were forced to leave their homes overnight. One of Saakashvili's key campaign promises was to enable them to return to their ancestral home, an understandable wish that no Georgian president could ignore. It is as if the Lusatian Sorbs, a tiny Slavic ethnic group that settled in the border region between modern-day Germany and Poland in the 6th century A.D., had suddenly taken control of a slice of the German state of Brandenburg and driven everyone else out, or as if the Bavarians ... But let's leave it at that.

A Futile Effort To Join NATO

Saakashvili's logic is supported by the fact that the (Western) international community has been making it clear to him for years that Georgia would not be welcomed into NATO or the European Union as long as its conflicts in Abkhazia and South Ossetia remained unresolved. But membership in these two alliances is near and dear to Saakashvili's heart, since it would enable the Georgian leader and his country to finally escape from the gravitational field of their domineering neighbor, Russia.
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Al-Qaeda Video Calls For War On Pakistan And Musharraf
2008-08-12 03:19:48

Pakistan's beleaguered president, Pervez Musharraf, faced a direct challenge from al-Qaeda Monday, after the terrorist group lambasted his record in a video.

Ayman al-Zawahiri, al-Qaeda's deputy leader, whose voice apparently appeared on the tape, spoke in English and called for an uprising against Musharraf and the Pakistan state, which he said was "virtually ruled from the American embassy".

The video came as Pakistan's parliament convened Monday for the start of a special session on impeachment proceedings against Musharraf. The government has not yet released its "charge sheet" against the president, but al-Qaeda spelled out its anger in the video.

"Pervez has insulted and compromised Pakistan's sovereignty by allowing the CIA and FBI to operate freely in Pakistan and arrest, interrogate, torture, deport and detain any person, whether Pakistani or not, for as long as they like, thus turning the Pakistani army and security agencies into hunting dogs in the contemporary crusade," said Zawahiri.

The al-Qaeda leader denounced Musharraf for the crackdown he ordered on Islamabad's radical Red Mosque - an army raid last year resulted in about 100 deaths - and his treatment of the renegade Pakistani nuclear scientist, Dr. A.Q..Khan, who has been under house arrest for four years.

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Russian Soldiers Open Second Front In Georgia
2008-08-11 16:17:35
Russian soldiers plunged into Georgia Monday to open a second front in the two countries' 4-day-old war, storming out of the Russia-backed breakaway republic of Abkhazia to seize control of a western army base.

The Russian occupation of the base near the town of Senaki, close to the Black Sea, came as Georgia's military struggled to regain ground lost to Russia in South Ossetia, another Moscow-backed region seeking independence from Georgia. Reservists in flip-flops and drawn, dirty soldiers mingled on the outskirts of South Osstia Monday, taking cover under trees and overpasses while Russian warplanes hammered the roads.

The emergence of a second front is another sign that Russia intends to continue its punishing campaign against Georgia, bringing the force of its military might to bear on the smaller, poorer neighboring country.

The long-simmering conflict erupted in earnest last week when Georgia launched a surprise operation to seize control of South Ossetia, killing Russian peacekeepers and Russian citizens of the breakaway republic. An enraged Russia stormed into the breakaway republics with the full wrath of its military power, and opened a bombing campaign in Georgia proper.

As casualties mount, Georgia has called for a cease-fire. Despite pressure from the international community, Russia has so far rebuked talks of a truce, insisting that its campaign in Georgia is a peacekeeping mission that must press forward.
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Russian Tanks Roll Deep Into Georgia
2008-08-11 16:17:14
Russian armored vehicles rolled deep into western Georgia on Monday, quickly seizing several towns and a military base and slicing open a damaging second front in Russia's battle with Georgia. Other Russian forces captured the key central city of Gori.

Fighting also raged Monday around Tskhinvali, the capital of the separatist province of South Ossetia. Swarms of Russian planes launched new raids across Georgia, sending screaming civilians running for cover.

The invasions of Gori and the towns of Senaki, Zugdidi and Kurga came despite a top Russian general's claim earlier Monday that Russia had no plans to enter Georgian territory. By taking Gori, which sits on Georgia's only east-west highway, Russia has the potential to effectively cut the country in half.

Security Council head Alexander Lomaia said Monday that it was not immediately clear if Russian forces would try to advance on Tbilisi.

The two-front battlefield was a major escalation in the conflict that blew up late Thursday after a Georgian offensive to regain control of South Ossetia. Even as Georgian President Mikhail Saakashvili signed a ceasefire pledge with E.U.  mediators on Monday, Russia appeared determined to subdue the small country that has been pressing for NATO membership.

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Brown Tree Snake's Impact On Guam May Extend To Plant Life
2008-08-11 16:16:35

One of the most infamous examples of what can happen when a nonnative species is introduced into a new environment involves the brown tree snake - a voracious, semi-venomous species that in less than 50 years all but destroyed bird life on the northern Pacific island of Guam. Introduced inadvertently from the South Pacific just after World War II, apparently on a cargo ship, the snake has killed off 10 bird species on the island and is in the process of wiping out the remaining two.

The virtual extermination of Guam's birds has been bemoaned for decades, but new research suggests that the damage to the ecology of the narrow, 30-mile-long island did not stop there.

The hundreds of thousands of snakes, researchers say, are now changing the way Guam's forest grows and will most likely cause substantial thinning and clumping of trees in the years ahead. In addition, the snakes appear to be indirectly responsible for an explosion in the spider population.

Guam, which is 3,800 miles west of Hawaii, did not have predatory snakes before the brown tree snakes arrived, and as a result the birds were not afraid of such creatures and not prepared for the onslaught. The snakes have few natural predators on the island and have at times climbed electric poles in their search for young birds, causing power outages.

"The brown tree snake has often been used as a textbook example for the negative impacts of invasive species, but after the loss of birds no one has looked at the snake's indirect effects," said Haldre Rogers, a University of Washington doctoral student in biology who presented her findings last week at the Ecological Society of America's annual meeting.

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White House Wants To Eliminate Scientific Reviews On Endangered Species
2008-08-12 03:22:14

The Bush administration Monday proposed a regulatory overhaul of the Endangered Species Act to allow federal agencies to decide whether protected species would be imperiled by agency projects, eliminating the independent scientific reviews that have been required for more than three decades.

The new rules, which will be subject to a 30-day public comment period, would use administrative powers to make broad changes in the law that Congress has resisted for years. Under current law, agencies must subject any plans that potentially affect endangered animals and plants to an independent review by the Fish and Wildlife Service or the National Marine Fisheries Service. Under the proposed new rules, dam and highway construction and other federal projects could proceed without delay if the agency in charge decides they would not harm vulnerable species.

In a telephone call with reporters Monday, Interior Secretary Dirk Kempthorne described the new rules as a "narrow regulatory change" that "will provide clarity and certainty to the consultation process under the Endangered Species Act."

Environmentalists and congressional Democrats blasted the proposal as a last-minute attempt by the administration to bring about dramatic changes in the law. For more than a decade, congressional Republicans have been trying unsuccessfully to rewrite the act, which property owners and developers say imposes unreasonable economic costs.

"I am deeply troubled by this proposed rule, which gives federal agencies an unacceptable degree of discretion to decide whether or not to comply with the Endangered Species Act," said Rep. Nick J. Rahall (D-West Virginia), chairman of the House Natural Resources Committee, who asked for a staff briefing before the proposal was announced but did not receive one. "Eleventh-hour rule makings rarely, if ever, lead to good government - this is not the type of legacy this Interior Department should be leaving for future generations."

Bob Irvin, senior vice president of conservation programs at the advocacy group Defenders of Wildlife, questioned how some federal agencies could make the assessments, since most do not have wildlife biologists on staff.

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Some Web Firms, Including Google, Admit Tracking Users Without Consent
2008-08-12 03:21:48

Several Internet and broadband companies have acknowledged using targeted-advertising technology without explicitly informing customers, according to letters released Monday by the House Energy and Commerce Committee.

And Google, the leading online advertiser, stated that it has begun using Internet tracking technology that enables it to more precisely follow Web-surfing behavior across affiliated sites.

The revelations came in response to a bipartisan inquiry of how more than 30 Internet companies might have gathered data to target customers. Some privacy advocates and lawmakers said the disclosures help build a case for an overarching online-privacy law.

"Increasingly, there are no limits technologically as to what a company can do in terms of collecting information ... and then selling it as a commodity to other providers," said committee member Edward J. Markey (D-Massachusetts), who created the Privacy Caucus 12 years ago. "Our responsibility is to make sure that we create a law that, regardless of the technology, includes a set of legal guarantees that consumers have with respect to their information."

Markey said he and his colleagues plan to introduce legislation next year, a sort of online-privacy Bill of Rights, that would require that consumers must opt in to the tracking of their online behavior and the collection and sharing of their personal data.

Some committee leaders cautioned that such legislation could damage the economy by preventing small companies from reaching customers. Rep. Cliff Stearns (R-Florida) said self-regulation that focuses on transparency and choice might be the best approach.

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Analysis: A Hot Proxy War
2008-08-12 03:20:53
The rapid escalation of the conflict in South Ossetia shows just how much the crisis suits all parties involved. Georgia wants to ingratiate itself into the West, and Russia wants to prevent just that. The welfare of the South Ossetians plays no role whatsoever.

The South Ossetia conflict has been simmering since March, but it had taken the form of the controlled instability that had governed Russian-Georgian relations ever since the standstill agreement of June 24, 1992. The Georgian attack on the South Ossetia capital of Tskhinvali on August 8 turned this "frozen conflict," as diplomats call it, into a hot proxy war. At present its potential for escalation seems virtually unlimited and has direct consequences for Europe's security.

Protecting South Ossetia's national culture and identity isn't the issue here. This is more about the local business dealings of the self-declared president of South Ossetia's de facto regime - Eduard Kokoity, who isn't recognized by any government. His dealings play into the hands of Russian geopolitical interests and also serve Georgia, Europe and the United States.

South Ossetia has been part of Georgia since the 5th century. But the independence proclaimed in 1991 has proved a good earner for Kokoity. The Roki Tunnel, the only passable border crossing into North Ossetia, which belongs to Russia, is a much used smuggling route. This conduit is in the hands of Kokoity and the so-called Russian peacekeeers.

The Intervention Has Putin's Handwriting

Russia also supplies peacekeeping troops for Abkhazia, the other Georgian breakaway region. The dispatch of the Black Sea fleet to Abkhazia, the bombing of the Georgian towns of Poti and Gori and of an aircraft factory near the Georgian capital of Tbilisi show how determined Russia is to escalate this conflict. And how uninterested Russia is in living up to its role as a peacekeeping power.
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GAO: Many Corporations Didn't Pay Taxes From 1998 To 2005
2008-08-12 03:20:08

About two-thirds of corporations operating in the United States did not pay taxes annually from 1998 to 2005, according to a new report scheduled to be made public today from the U.S. Government Accountability Office (GAO).

In 2005, after collectively making $2.5 trillion in sales, corporations gave a variety of reasons on their tax returns to account for the absence of taxable revenue. The most frequently listed included the cost of producing their goods, salary expenses and interest payments on their debt, said the report.

The GAO did not analyze whether the firms had profits that should have been taxed.

Sen. Byron L. Dorgan (D-North Dakota) called the findings "a shocking indictment of the current tax system."

"It's shameful that so many corporations make big profits and pay nothing to support our country," he said. "The tax system that allows this wholesale tax avoidance is an embarrassment and unfair to hardworking Americans who pay their fair share of taxes. We need to plug these tax loopholes and put these corporations back on the tax rolls."

Eric Toder, a senior fellow at the Urban Institute, said the vast majority of corporations are small businesses and start-ups that have adopted a corporate structure that allows them to lower their tax bills.

"I'm not trying to imply that there aren't tax-compliance issues among small corporations," he said. "But when you are talking about businesses that size, I would suspect the norm would be to not pay taxes, and there's nothing nefarious about that." Toder had not yet seen the GAO study.

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In U.S., Partisan Expert Witnesses Frustrate Many
2008-08-12 03:19:20

Judge Denver D. Dillard was trying to decide whether a slow-witted Iowa man accused of acting as a drug mule was competent to stand trial. But the conclusions of the two psychologists who gave expert testimony in the case, Judge Dillard said, were “polar opposites”.

One expert, who had been testifying for defendants for 20 years, said the accused, Timothy M. Wilkins, was mentally retarded, had a verbal I.Q. of 58 and did not understand the proceedings.

The prosecution expert, who had testified for the state more than 200 times, said that Wilkins’ verbal I.Q. was 88, far above the usual cutoffs for mental retardation, and that he was competent to stand trial.

Judge Dillard, of the Johnson County District Court in Iowa City, did what American judges and juries often do after hearing from dueling experts: he threw up his hands. The two experts were biased in favor of the parties who employed them, said the judge, and they had given predictable testimony.

“The two sides have canceled each other out,” the judge wrote in 2005, refusing either expert’s conclusion and complaining that “no funding mechanism” existed for him to appoint an expert.

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50 People Cannot Return To Homes Hit By Propane Blast
2008-08-11 16:17:27
Fifty people among the thousands who fled a massive propane explosion were told Monday that they cannot immediately return to the northwest Toronto, Canada, neighborhood because of “significant damage” to their homes, said police.

While an asbestos threat kept many residents waiting for their streets to reopen, the 50 people were sent back to an evacuation center at York University.

The fate of their houses remained unclear.

“It's 50 people whose houses appear to have sustained significant damage,” said Toronto police spokesman Mark Pugash.

“The buildings are standing but they've sustained significant damage - siding ripped off, obviously windows smashed. I don't believe there are houses that have been demolished.”

City officials will ultimately determine if the damaged homes are livable, added Pugash.

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Studying Great Salt Lake's High Mercury Levels
2008-08-11 16:16:45
The Great Salt Lake is so briny that swimmers bob in the water like corks. It is teeming with tiny shrimp that were sold for years in the back of comic books as magical “sea monkeys.” And, for reasons scientists cannot explain, it is laden with toxic mercury.

Exactly where the poison is coming from and how much danger it poses to the millions of migratory birds that feed on the Great Salt Lake are now under investigation.

“We’ve got a problem, but we don’t know how big it is,” said Chris Cline, a biologist for the federal Fish and Wildlife Service who has been collecting the eggs of cinnamon teal ducks from nests along the rim of the lake so that they can be cracked open and analyzed in the laboratory.

Three years ago, in an alarming finding, tests by the federal Geological Survey showed the lake had some of the highest mercury readings ever recorded in a body of water in the United States. The state warned people not to eat certain kinds of ducks because of the mercury.

This summer, scientists are fanning out across the lake and its marshy shoreline for the start of what is expected to be a multi-year study. The U.S. Environmental Protection Agency and the state are paying most of the $280,000 bill for the initial phase.

One major question is whether the mercury is accumulating naturally, from some as-yet-unknown source in the ground, or is the result of industrial pollution.

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Scientists: Invisibility Cloak One Step Closer
2008-08-11 16:16:23
Scientists have created two new types of materials that can bend light the wrong way, creating the first step toward an invisibility cloaking device.

One approach uses a type of fishnet of metal layers to reverse the direction of light, while another uses tiny silver wires, both at the nanoscale level.

Both are so-called metamaterials â€" artificially engineered structures that have properties not seen in nature, such as negative refractive index.

The two teams were working separately under the direction of Xiang Zhang of the Nanoscale Science and Engineering Center at the University of California, Berkeley, with U.S. government funding. One team reported its findings in the journal Science and the other in the journal Nature.

Each new material works to reverse light in limited wavelengths, so no one will be using them to hide buildings from satellites, said Jason Valentine, who worked on one of the projects.

“We are not actually cloaking anything,” Valentine said in an interview. “I don't think we have to worry about invisible people walking around any time soon. … We are just at the beginning of doing anything like that.”

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