Free Internet Press Newsletter - Thursday February 12 2009 - (813)

Thursday February 12 2009 edition
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Congress Reaches Stimulus Accord, $790 Billion Bill Expected To Pass 2009-02-12 03:47:44 Congressional leaders agreed Wednesday on the details of a nearly $790 billion stimulus package, an unprecedented attempt by the federal government to jolt the economy, create millions of jobs and ease the financial woes facing individuals, businesses and states. The House is expected to vote on the plan today or tomorrow, and with Senate action quickly following, the legislation is set to arrive on President Obama's desk no later than Monday - the target Democratic leaders set last month for enacting it into law. The final product is similar to the ideas Obama outlined when he took office on Jan. 20, but it claims many co-authors, including House liberals who saw a rare opportunity to secure new social spending, as well as the three moderate Republican senators who demanded $100 billion in cuts as the price of their support. Three months ago, the stimulus plan was envisioned as a $300 billion rescue package that the incoming Obama team had hoped would be enacted well before Inauguration Day, which would have cleared the way for the new White House to start from scratch on an ambitious domestic agenda. Instead, it became a politically charged first test for the Obama administration and the newly expanded Democratic Congress, as well as a rallying point for congressional Republicans. The bill is made up of four broad categories: tax breaks for individuals and businesses; investments in health care and alternative energy; funding for "shovel-ready" infrastructure projects; and aid to state and local governments, including expanded benefits for individuals who are unemployed and lack health insurance. Read The Full Story NASA Alert As Russia, U.S. Satellites Crash In Space At 25,000 MPH 2009-02-12 03:46:58 NASA scientists are closely monitoring the skies after two satellites crashed into each other over Siberia, in what experts have said is the first collision of its kind. The accident, which took place more than 400 miles above the Earth's surface on Tuesday, has left a large cloud of debris drifting in space. NASA officials are keeping watch to see if the wreckage could endanger other spacecraft, although they said it was unlikely that the International Space Station could be damaged. "It will be weeks at least before the true magnitude of these clouds are known," NASA said in an alert message. "The risk to the space station is considered to be very small and within acceptable limits." The agency said that it was more concerned about the threat to an array of monitoring satellites, which it said were of "highest interest for immediate consideration". Air Force Lieutenant Colonel Les Kodlick, of the U.S. Strategic Command, said: "We believe it's the first time that two satellites have collided in orbit." The command's joint space operations center was tracking 500 to 600 new bits of debris, some as small as 10 centimeters (3.9 inches) across, in addition to the 18,000 or so other man-made objects it has catalogued, he said. Read The Full Story Lloyds, Barclays Face British Parliament On Tax Evasion Allegations 2009-02-12 03:46:32 Members of Britain's Parliament Wednesday confronted banking chiefs from Lloyds and Barclays with Guardian newspaper disclosures that they are alleged to practice massive tax avoidance schemes. At the Treasury Select Committee hearing, Lloyds chief executive Eric Daniels was challenged by the Liberal Democrat Parliament Member Colin Breed, who demanded of him: "Now that you are in receipt of taxpayers' money, will you stop implementing tax avoidance schemes?" Daniels did not reply directly. He said: "I would tell you that we do not do anything other than adhere to the spirit and letter of the law." Breed asked: "So you don't undertake tax avoidance schemes?" Daniels replied: "The law is very clear about the amount of tax that we have to pay and we adhere to that strictly." The Barclays chief, John Varley, said: "I don't recognize this statement that we have undertaken tax avoidance schemes. What we are required to do as a publicly owned company is to manage our tax affairs efficiently." Pressure may grow on the British government Thursday to say whether it intends to order a stop to tax avoidance by taxpayer-backed banks. The chancellor is due to be asked by Parliament members what he knows of a further string of huge loans by Lloyds Bank totaling £4 billion ($7.4 billion), which have been identified by the Guardian. Read The Full Story Key Witnesses To Be Interviewed In Bush U.S. Attorney Firings 2009-02-12 03:45:55 A federal prosecutor investigating the dismissal of nine U.S. attorneys during the Bush administration has issued a subpoena to former senator Pete V. Domenici (R-New Mexico) and is preparing to interview key witnesses, lawyers following the case say. Nora R. Dannehy, a public corruption prosecutor who helped convict Connecticut's Republican governor four years ago, was named last year to go to Capitol Hill and the Bush White House, where government officials declined to provide voluntary testimony to the Justice Department inspector general probing the firings. At the time, Inspector General Glenn A. Fine urged prosecutors to use their subpoena power to compel documents and testimony about the dismissal of New Mexico U.S. Attorney David C. Iglesias, whose pace on criminal investigations involving Democrats in the state drew complaints from Domenici and then-Rep. Heather A. Wilson (R-New Mexico). The Dannehy investigation appears to be intensifying with the disclosure that she will interview former White House political affairs deputy J. Scott Jennings as early as today, lawyers involved in the case said. Jennings worked alongside Karl Rove, a top aide to President George W. Bush. Jennings will "cooperate to the best of his ability" and is not a target in the case, lawyer Mark R. Paoletta said Wednesday. Read The Full Story New York Attorney General: Big Bonuses Went To Many At Merrill Lynch 2009-02-11 17:59:09 Merill Lynch paid out bonuses of more than $1 million each to 696 people last year, according to New York Attorney General Andrew M. Cuomo. Those payouts, made just as the firm’s merger closed with Bank of America, have caused a stir because they were made earlier than usual. Merrill typically pays out bonuses in January, but executives wanted to pay the bonuses out before the firm became part of Bank of America at the end of the year. Despite earlier rumors that Bank of America was surprised by the bonuses, the bank has recently publicly stated that they were fully aware of the amounts and timing. Merrill lost money all year long, largely because of its bad mortgage investments. Cuomo is investigating the bonus payments as well as other aspects of the merger. Shareholders and analysts have also expressed concerns about Merrill’s $15.3 billion fourth-quarter loss, which caused Bank of America to request a second round of government bailout money. Bank of America did not disclose early indications of those losses nor did it disclose talks it held with the government about reconsidering the deal in December. The bank’s shareholders voted to approve the deal on Dec. 5. Cuomo’s announcement came in a letter sent Tuesday evening to the House Financial Services Committee. Read The Full Story Tornado Kills 8 People In Oklahoma 2009-02-11 17:58:26 Emergency crews on Wednesday searched for more victims amid the wreckage of homes and businesses smashed by a cluster of tornadoes that killed at least eight people. One young woman was lifted into the air as a tornado pulled the roof off a house, but her mother and others held her down. Firefighters moved aside bricks and fallen walls as they sought to ensure there were no additional victims in Lone Grove, where all of the eight victims died Tuesday and 14 people were seriously injured, said Oklahoma Department of Emergency Management spokeswoman Michelann Ooten. Each building that had been searched was then marked with a large, spray-painted ''X.'' Rescuers found one woman injured but alive under an overturned mobile home. Ooten said the National Guard was sent to help. ''We will do everything we can to get Oklahomans the assistance they need,'' said Gov. Brad Henry. Read The Full Story Foreclosure Moratorium Called For By Regulator 2009-02-11 15:17:21 The U.S. Office of Thrift Supervision (OTS) Wednesday called for the mortgage lenders it regulates to halt foreclosures until the Obama administration unveils a program to help struggling homeowners. After presenting a plan to boost the financial sector Tuesday, Treasury Secretary Timothy F. Geithner said that a $50 billion initiative to help homeowners facing foreclosure is not expected for at least a week. The delay and the price tag - it was the low end of expectations - disappointed consumer advocates and lawmakers anticipating the announcement. OTS is joining consumer advocates and some in Congress, including Rep. Barney Frank (D-Massachusetts), chairman of the House Financial Services Committee, who have called for lenders to institute a moratorium on foreclosures in the meantime. Government officials have said the new loan modification program would be a "more aggressive version" of the one launched late last year by mortgage financiers Fannie Mae and Freddie Mac. That program has been criticized for not going far enough to help homeowners. OTS regulates more than 800 savings and loans across the country, including American Bank in Rockville, Maryland,  and First Market Bank in Virginia. "OTS-regulated institutions would be supporting the national imperative to combat the economic crisis by suspending foreclosures until the new plan takes hold," John Reich, the agency's director, said in a statement. Read The Full Story Peanut Corp. Ignored Lab Tests, Owner Refuses To Testify Before Congress 2009-02-11 15:17:02 The owner of a peanut company refused to testify to Congress on Wednesday amid the disclosure that he urged his workers to ship bacteria-tainted products, pleading with federal health officials that he should be able "turn the raw peanuts on the floor into money." Stewart Parnell, owner of Peanut Corp. of America, repeatedly invoked his right not to incriminate himself before the House subcommittee holding a hearing on a national salmonella outbreak blamed on his company. The outbreak has sickened some 600 people, may be linked to nine deaths - the latest reported in Ohio on Wednesday - and has resulted in one of the largest product recalls of more 1,800 items. Parnell sat stiffly, his hands folded in his lap at the witness table, as Rep. Greg Walden, R-Oregon, held up a clear jar of his company's products wrapped in crime scene tape and asked him if he would be willing to eat the food. "Mr. Chairman and members of the committee, on advice of my counsel, I respectively decline to answer your questions based on the protections afforded me under the U.S. Constitution," said Parnell. Read The Full Story	More U.S. Employers Fighting Unemployment Benefits 2009-02-12 03:47:20 As rolls swell in the recession, workers find firms are contesting claims by alleging wrongdoing or quitting in a bid to not pay benefits. It's hard enough to lose a job, but for a growing proportion of U.S. workers, the troubles really set in when they apply for unemployment benefits. More than a quarter of people applying for such claims have their rights to the benefit challenged as employers increasingly act to block payouts to former workers. The proportion of claims disputed by former employers and state agencies has reached record levels in recent years, according to the Labor Department numbers tallied by the Urban Institute. Read The Full Story Halliburton, KBR Agree To Pay $579 Million Fine For Bribery 2009-02-12 03:46:47 Halliburton and Kellogg Brown & Root have agreed to pay $579 million in fines related to allegations of foreign bribery, the biggest fines ever paid by U.S. companies in a foreign corruption case, federal authorities and the companies said Wednesday. The Securities and Exchange Commission and Department of Justice alleged that Houston-based Halliburton and KBR were part of a joint venture that spent $182 million to bribe Nigerian government officials over a 10-year period to win more than $6 billion in construction contracts. Halliburton, which owned KBR during the time of the alleged actions and spun it off in April 2007, will be responsible for paying all but $20 million of the penalty. KBR, one of the top U.S. government contractors, pleaded guilty to violating the federal law banning companies from paying bribes to get business in foreign countries. Halliburton did not admit or deny wrongdoing. Federal authorities alleged that the companies used agents in Tokyo, Japan, and Gibraltar to funnel money to Nigerian officials, who gave the companies contracts to build liquefied natural gas facilities on Bonny Island, on the Western African country's coast. The companies' efforts to obtain the contracts, alleged in court documents, sound like scenes from a James Bond movie. Read The Full Story Britain Slammed By More Bad Economic News 2009-02-12 03:46:15 Britain's Prime Minister Gordon Brown suffered his darkest day of the recession Wednesday when he was forced personally to sanction the removal of one of his closest banking allies as a City regulator, unemployment climbed to two million and the Bank of England warned that the economy will have shrunk by a chilling 4% by the summer. (Note: In London, the City is equivalent to Wall Street in the U.S.) Sir James Crosby was forced out of his job at the Financial Services Authority (FSA) after allegations by a whistleblower. To add to Brown's woes, it emerged that the FSA had taken on Crosby as its deputy chairman even though it had been concerned about the risks being taken by the HBOS banking group he had been running since 2002. In a statement issued Wednes night, the FSA admitted it had long-standing issues with the way HBOS managed the risks it took but was not concerned enough to prevent Crosby becoming one of Britain's most influential regulators. In a further blow to the prime minister, the Guardian newspaper reported that senior bankers warned cabinet ministers this week that, although they support an overhaul of city bonuses, they will resist the freeze demanded by the public; they said traders would simply defect to competitor banks if they were not rewarded. Brown will come under renewed pressure Thursday to clarify his policy on bonuses - and his handling of the economy more generally - when he is quizzed by select committee chairmen for two hours. Read The Full Story Internet Broadband Oversight Given To ... Agriculture Department? 2009-02-12 03:44:35 Congress has targeted more than $6 billion to wire rural America with Internet service as part of the nearly $790 billion stimulus plan. Yet the bill would place much of those funds in a U.S. Agriculture Department (USDA) program that has been criticized for its past management of grants, raising concerns among some public interest groups. Under a deal House and Senate leaders negotiated Wednesrday, about $1.5 billion would fall under the oversight of the USDA's Rural Utilities Service, a program launched in 2002 to connect farming towns to high-speed, or broadband Internet, according to a Senate Commerce Committee aide. Some public advocacy groups are critical, citing a September 2005 report on an investigation by the USDA's inspector general that found that $236 million, or more than one-quarter, of the program's loans under review "was either not used as intended, not used at all, or did not provide the expected return of service." The Secretary of Agriculture and some congressional supporters say the program has been changed to address the problems. According to the report, $45.6 million went to wire several luxury subdivisions near Houston, Texas. About $30 million in loans defaulted, and the agency approved another $137 million in loans even when applications weren't completed. A separate report from the inspector general in June found that $430,000 went to a Lubbock, Texas, high-speed Internet service provider that used the money for pilot lessons for its president and treasurer. Read The Full Story At Least 20 People Killed, 57 Wounded As Taliban Attackers Storm Kabul Offices 2009-02-11 17:58:53 Taliban suicide bombers struck government buildings at three sites in Kabul on Wednesday, killing at least 20 people and wounding 57 in coordinated attacks that demonstrated the ease with which the insurgents can penetrate even Afghanistan’s heavily fortified capital. At the Justice Ministry, five Taliban guerrillas armed with explosives and Kalashnikov rifles killed two guards, stormed the building, and took control of several floors for about an hour. Frightened employees, including the justice minister, barricaded themselves in their offices while the armed men stalked the halls for victims. They shot to death 10 people before being killed. Coming on the eve of a scheduled visit by Richard C. Holbrooke, President Obama's special envoy to Pakistan and Afghanistan, the attacks underscored the deteriorating security in the Afghanistan and the growing sense of siege in the capital. The Taliban, who already control much of the countryside, have steadily encroached on the capital and its outlying provinces. Holbrooke’s visit is part of a ground-up review of the war effort, as the Obama administration prepares to send as many as 30,000 more American troops to Afghanistan this year in hopes of turning the war around. President Obama was scheduled to meet with Defense Secretary Robert Gates on Wednesday afternoon to discuss Afghan troop levels. The attacks, the most audacious and deadly here since last summer, highlighted how steep that challenge will be and the growing boldness of the Taliban. The multiple strikes cloaked this city of four million in chaos and panic for the entire day. Miles of Kabul’s principal thoroughfares were blocked off, as police and soldiers rushed to reinforce scores of checkpoints. Read The Full Story Banks Go On Image Offensive 2009-02-11 15:17:34 Intellpuke: There are two articles here on the testimony of bankers before the U.S. House Financial Services Committee. The first, following immediately, is the Washington Post's article on the hearing, that is followed by the New York Times' article on Wedensday's hearing. Here's the Post's article: Wall Street is trying to move out of its defensive crouch, with top bankers telling Congress Wednesday that they are making loans, managing their money prudently, and intending to pay back any public funds at a profit to the U.S. Treasury. Fighting a perception that money from a federal bailout plan has been used to underwrite lavish bonuses or squirreled away from businesses and households that need credit, chief executives of major institutions like Bank of America, JP Morgan and others acknowledged that the public has a right to be suspicious in the wake of a financial crisis that has helped drive the country into a deepening recession. "Taxpayers feel, and rightly so, that if a bank is having sufficient trouble to require public support, all its financial decisions should signal a conservative, sober and frugal approach to the financial health of the company," Bank of America chief executive Kenneth D. Lewis said in written testimony before the House Financial Services Committee. "There has been no shortage of examples of executives or companies spending money in ways that did not have a direct benefit to the business." Lewis and others also noted that their companies have made tens of billions of dollars in new loans to businesses and homeowners in recent weeks, and that as individuals many of them have foregone bonuses altogether. In some cases, bankers within days will make their first dividend payments to the U.S. Treasury under the terms of the capital investments received from the government under the Troubled Assets Relief Program. "We have every incentive to lend. And, despite recessionary headwinds, we are lending," said Lewis, while also noting that Bank of America will write a $400 million dividend check to the Treasury next week and is scheduled to make $2.8 billion in payments through the year. Read The Full Story Obama Administration To Revamp Plan For Oil, Gas Exploration 2009-02-11 15:17:13 The Obama administration will set aside an "oil and gas or nothing" approach to energy exploration on the outer continental shelf and consider proposals for offshore wind farms alongside plans for new drilling, Interior Secretary Ken Salazar said Tuesday. Salazar said he will revamp the process for writing a new five-year plan for oil and gas exploration in that zone, which generally extends three to 200 miles from the U.S. coast. The plan, which must be in place by 2012, is intended to guide a new push for offshore exploration, made possible after Congress and President George W. Bush lifted years-old bans last year. Salazar said the Interior Department will extend the public-comment period for the new plan, which had been scheduled to close March 23, by 180 days; but he also said the administration will look for ways to generate energy offshore by using renewable sources such as wind, waves or tides. He called the Bush administration's approach "a headlong rush of the worst kind" and "a process tilted toward the usual energy players." The changes, said Salazar, "will restore order to a broken process." Read The Full Story FBI Agent Claims Evidence On Stevens Was Sealed 2009-02-11 15:16:46 An F.B.I. agent who worked on the investigation of Senator Ted Stevens of Alaska, who was convicted on ethics charges, has said in a stunning formal complaint that a fellow agent and prosecutors contrived to improperly conceal evidence from the court and the defense. Among the startling accusations in the statement by the agent, Chad Joy, is that another agent maintained an inappropriate relationship with the prosecution’s star witness. Joy said his colleague, Mary Beth Kepner, almost always wore pants but on the day the witness, Bill Allen, took the stand, Kepner donned a skirt, which Joy said she described as “a present” to Allen. Both Joy and Kepner continue to work in the Anchorage office of the Federal Bureau of Investigation. Judge Emmet G. Sullivan, who presided over the Stevens trial in Federal District Court in Washington, D.C., has called a hearing Friday to consider a request by Stevens’ lawyers for a new trial based on Joy’s complaint, which was filed with the Justice Department as part of a procedure to obtain whistleblower status, which would protect him against job-related retaliation. Stevens, an Alaska Republican who lost his campaign for re-election in November, is awaiting sentencing after his conviction on charges involving failure to list on his Senate disclosure form goods and services he obtained from several supporters, but mostly from Allen, an influential oil-services tycoon in Alaska and a onetime close friend. Read The Full Story
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