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Tuesday, February 10, 2009

Free Internet Press Newsletter - Tuesday February 10 2009 - (813)

Tuesday February 10 2009 edition
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Obama: Economic Crisis Comes First
2009-02-10 03:35:09

President Obama declared Monday night in his first prime-time news conference that the task of saving and creating jobs is more important than cultivating the bipartisan cooperation he promised to bring to Washington, and he pressed his case for the massive economic stimulus plan working its way through Congress.

Warning that inaction could "turn a crisis into a catastrophe," Obama rejected criticism from Republicans about the legislation's effect on the federal deficit, noting that government debt had ballooned on his predecessor's watch. Although he called for lawmakers to break out of their "ideological rigidity," he was unapologetic as he pushed a package with a cost of more than $800 billion that has so far drawn only nominal Republican support.

"I can't afford to see Congress play the usual political games. What we have to do right now is deliver for the American people," Obama said just hours after the legislation narrowly cleared a key procedural hurdle in the Senate, where it is likely to gain final passage Tuesday. The bill will then become the subject of potentially contentious negotiations between House and Senate leaders. It is unclear whether it will reach the president's desk before a scheduled congressional recess next week.

Obama repeatedly stressed the need for swift and aggressive action on the economy, pitting his plan against those who he said would "do nothing" to assist a desperate public.

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Newsblog: 12 Questions That Bank Bosses Must Answer Today
2009-02-10 03:34:45

The next 36 hours could prove a watershed in the history of the financial crisis. Over three political hearings on both sides of the Atlantic, the heads of 16 of the world's largest banks will be called to account. Some, such as Sir Fred Goodwin of the Royal Bank of Scotland (RBS), will be speaking in public on the subject for the first time.

The U.S. House of Representatives has summoned Goldman Sachs, Morgan Stanley and Citigroup Tuesday to discuss how they are using federal bail-out money. Britain's Treasury select committee has a broader remit: quizzing the government-owned RBS and HBOS about the wider banking crisis Tuesday, then Lloyds, Barclays and HSBC on Wednesday.

Until now, the British Parliament's financial watchdog has been accused of giving our banks a softer ride than the notoriously robust congressional hearings.

Since the committee of backbench Parliament members first started tackling the private equity industry two years ago, critics have questioned its ability to home in on the key financial issues.

Today, there are at least a dozen questions that need to be answered:

Why did your risk models not show up the dangers?

Banks pride themselves on being able to measure risk. But the mystery is that their models all failed to anticipate what would happen if banks no longer had access to wholesale funding sources such as the securitization market, even though these were a relatively recent invention.

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Livni Closes In On Netanyahu In Israeli Polls
2009-02-10 03:34:11

Israelis go to the polls Tuesday in one of the tightest elections in years, with the right-wing opposition leader Benjamin Netanyahu only narrowly ahead of his rival, Tzipi Livni, the centrist foreign minister.

Up to a fifth of voters were thought to be undecided hours before voting began, an unusually high number that reflects disillusionment with all candidates.

Netanyahu, leader of Likud, has led the opinion polls for months. Most analysts believe he has the best chance of leading a new coalition government, even though his lead has shrunk in recent days. The bloc of right-wing parties that will support him looks set to be enough for a majority in the Israeli parliament, the Knesset.

Even if Kadima emerges slightly ahead, with the most seats, most analysts think that Livni would struggle to put together a like-minded majority coalition.

"Netanyahu has the biggest bloc," said Yossi Verter, a political commentator for the left-leaning Ha'aretz newspaper. "It will be very, very difficult for Livni to form a government, even if Kadima turns out to be the bigger party, because every government would depend on a right-wing party and the right-wing always will quit the coalition whenever there is some progress with the Palestinians or the Syrians."

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U.S. F.D.A. Finds 'Natural' Diet Pills Spiked With Drugs
2009-02-09 18:58:17

Grady Jackson, a defensive tackle with the Atlanta Falcons, said he used the weight-loss capsules. Kathie Lee Gifford  was enthusiastic about them on the “Today” show. Retailers like GNC and the Vitamin Shoppe sold them, no prescription required.

The U.S. Food and Drug Administration (F.D.A.) now says those weight-loss capsules, called StarCaps and promoted as natural dietary supplements using papaya, could be hazardous to your health. In violation of the law, the agency has found, the capsules also contained a potent pharmaceutical drug called bumetanide which can have serious side effects.

StarCaps are not the only culprits. In a continuing investigation that has prompted consumer warnings and recalls by some distributors, the F.D.A. has determined that dozens of weight-loss supplements, most of them imported from China, contain hidden and potentially harmful drugs. In the coming weeks, the agency plans to issue a longer list of brands to avoid that are spiked with drugs, said an F.D.A. spokeswoman.

Besides StarCaps, which were made in Peru and which Balanced Health Products, the American distributor, has voluntarily withdrawn, the agency’s warning list includes more obscure pills sold under the names Sliminate, Superslim and Slim Up, among many others. So far, the F.D.A. has cited 69 tainted weight-loss supplements.

“A large percentage of these products either contain dangerous undeclared ingredients or they might be outright fraudulent on the ingredients and have no effect at all,” said Michael Levy, the director of the F.D.A.’s division of New Drugs and Labeling Compliance. “We don’t think consumers should be using these products.”

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U.S. Army Suspends Germ Research At Maryland Lab
2009-02-09 18:57:44
U.S. Army officials have suspended most research involving dangerous germs at the biodefense laboratory at Fort Detrick, Maryland, which the F.B.I. has linked to the anthrax attacks of 2001, after discovering that some pathogens stored there were not listed in a laboratory database.

The suspension, which began Friday and could last three months, is intended to allow a complete inventory of hazardous bacteria, viruses and toxins stored in refrigerators, freezers and cabinets in the facility, the Army Research Institute of Infectious Diseases.

The inventory was ordered by the institute’s commander, Col. John P. Skvorak, after officials found that the database of specimens was incomplete. In a memorandum to employees last week, Colonel Skvorak said there was a high probability that some germs and toxins in storage were not in the database.

Rules for keeping track of pathogens were tightened after the 2001 anthrax letters, which killed five people. Pressure to improve record keeping and security at the Army institute intensified six months ago after the suicide of Bruce E. Ivins, a veteran anthrax researcher, and the Federal Bureau of Investigation’s announcement that prosecutors had been preparing to charge Dr. Ivins with making the deadly anthrax powder in his laboratory there.

A spokesman for the institute, Caree Vander Linden, said an earlier review had located all the germ samples listed in the database. She said some “historical samples” in institute freezers were not in the database, and the new inventory was intended to identify them so they could be recorded and preserved, or destroyed if they no longer had scientific value.

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Sri Lanka Looks To Uncertain Future
2009-02-09 18:56:34

The Tamil Tigers appear to be finished as Sri Lankan government troops close in on rebel fighters trapped in a small area on the northeastern coast. But it is Sri Lanka's civilian population that has suffered most during the decades-long civil war.

A group of soldiers at the Palali air base on the northern tip of Sri Lanka is waiting for an Antonov aircraft to arrive from Colombo. All transportation links to the capital were cut off for years. Now the first journalists are being allowed to visit the region, which has been liberated by government forces.

After more than a quarter century of civil war, the separatist movement that has controlled the region for so long, the Liberation Tigers of Tamil Eelam (LTTE), has been expelled, at least from its strongholds.

Now the government wants eyewitnesses to visit the region and report on its victories. But there is also another reason that the soldiers are looking forward to the arrival of the Antonov: It is carrying relief supplies and medical personnel.
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RNC Chairman Steele Defends $37,000 Payment To Sister's Company
2009-02-09 14:52:34

Michael S. Steele, the new chairman of the Republican National Committee, said Sunday that there was nothing improper in a payment of more than $37,000 to his sister's company for work on his 2006 Senate campaign and that he would work with the FBI "to clear up my good name."

In his first public comments on the inquiry, Steele said on ABC's "This Week" that the FBI is "winding this thing down," although he did not explain how he knew that.

In recent days, federal agents have contacted his sister, Monica Turner, according to a spokesman for Steele. Steele said those contacts were for "purposes of closing out" the matter. He said he will be "proactive" in gathering information to give to the FBI.

"I'm not going to wait for them to come to me," said Steele. "I'm going to take it to them. I'm going to give them everything that they think they need, and if that's not enough, we'll give them more, because I want to clear up my good name. This is not the way I intend to run the RNC, with this over my head. We're going to dispense with it immediately."

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Bishop Who Denied Holocaust Ousted As Head Of Seminary
2009-02-09 14:52:08
The rehabilitated bishop at the heart of a Vatican uproar for denying the Holocaust has been dismissed as the head of an Argentine seminary.

The seminary announced the dismissal on Sunday in a statement that said the bishop, Richard Williamson was no longer the director of the La Reja seminary on the outskirts of the Argentina capital.

He has said the “historical evidence” argues against Nazi gas chambers and said that only 200,000 to 300,000 people died in concentration camps in the Holocaust.

Bishop Williamson’s views “in no way reflect the position of our congregation,” the Rev. Christian Bouchacourt, the director of the Latin America branch of the Catholic Society of St. Pius X, said in the statement. He expressed “sadness” that the Bishop Williamson’s statements had prompted accusations that “discredited” the congregation.

Pope Benedict XVI provoked widespread anger last month when he rescinded the excommunications of Bishop Williamson and three fellow bishops, all members of the Society of St. Pius X, as part of an effort to heal a 20-year schism.

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U.S. Bank Bailout Counting On Private Money
2009-02-09 05:22:53

Wall Street helped produce the global financial and economic crisis. Now, as the Obama administration prepares to unveil a revised bailout plan for the banking system, policy makers hope Wall Street can be part of the solution.

Administration officials said the plan, to be announced Tuesday, was likely to depend in part on the willingness of private investors other than banks - like hedge funds, private equity funds and perhaps even insurance companies - to buy the contaminating assets that wiped out the capital of many banks.

The officials say they are counting on the profit motive to create a market for those assets. The government would guarantee a floor value, officials say, as a way to overcome investors’ reluctance to buy them.

Details of the new plan, which were still being worked out during the weekend, are sketchy and they are likely to remain so even after Treasury Secretary Timothy F. Geithner announces the plan on Tuesday. The aim is to reduce the need for immediate federal financing and relieve fears that taxpayers will pay excessive prices if the government takes over risky securities. The banks created those securities when credit and home prices were booming a few years ago.

Besides devising a way to bring private investors into the bank bailout, the Treasury plan is expected to inject more capital into some banks and to give many homeowners relief from immediate foreclosures.

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Nissan Expects $2.9 Billion Annual Loss, Cuts 20,000 Jobs
2009-02-09 05:22:24
Nissan Motor on Monday joined Toyota, Mazda and Mitsubishi in forecasting a loss for the current financial year, and announced it was cutting 20,000 workers in one of the most aggressive cutbacks so far by a Japanese company since the start of the global downturn.

The announcement reflected a growing urgency among Japanese manufacturers as it becomes clear that the downturn and the strength of the yen is hitting Japan more severely than thought.

“In every planning scenario we built, our worst assumptions on the state of the global economy have been met or exceeded, with the continuing grip on credit and declining consumer confidence being the most damaging factors,” Nissan’s chief executive, Carlos Ghosn, said in a statement. “Looking forward, our priority remains on protecting our free cash flow and taking swift, adequate and impactful actions to improve our business performance.”

The past two weeks have seen sharp earnings revisions and job cuts by nearly all of Japan’s best-known companies, including Toyota, Sony, Hitachi, NEC, Hitachi and Panasonic. Toyota Motor, the world’s largest car manufacturer, on Friday forecast a net loss of 350 billion yen, or $3.8 billion, for the year, its first since 1950.

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Mexican General Seized, Slain In Cancun
2009-02-09 05:21:27
The general didn't get much time. After a long, controversial career, Brig. Gen. Mauro Enrique Tello Quinones retired from active duty last month and moved to this Caribbean playground to work for the Cancun mayor and fight the drug cartels that have penetrated much of Mexican society. He lasted a week.

Tello, 63, along with his bodyguard and a driver, were kidnapped in downtown Cancun last Monday evening, taken to a hidden location, methodically tortured, then driven out to the jungle and shot in the head. Their bodies were found Tuesday in the cab of a pickup truck on the side of a highway leading out of town. An autopsy revealed that both the general's arms and legs had been broken.

The audacious kidnapping and killing of one of the highest-ranking military officers in Mexico drew immediate expressions of outrage from the top echelons of the Mexican government, which pledged to continue the fight against organized crime that took the lives of more than 5,300 people last year. Military leaders, who are increasingly at the front lines of the war against the cartels, vowed not to let Tello's death go unsolved or unpunished.

In the wake of the triple killing, the Mexican army swept into Cancun in a show of brute force. The military is now running high-visibility patrols and roadblocks around the Yucatan resort capital, complete with masked soldiers with automatic rifles rumbling in open trucks past the gleaming white rows of tourist hotels.

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Britain's Prime Minister Seeks Obama-Style Cap On Bankers' Bonuses
2009-02-10 03:34:56

Britain's bankers would face a £25,000 ($40,000) cap on cash bonuses under plans being examined by the Treasury Monday night in a bid to silence the public outcry over the City's culture of huge rewards and dangerous risk-taking.

The move to stifle growing anger over bonuses at the Royal Bank of Scotland was in danger of being overshadowed as Prime Minister Gordon Brown's righthand man in the cabinet, Ed Balls, said the world was facing the most serious recession in a hundred years.

Balls' remarks, the most alarming to be made by a senior government minister, interpret the crisis as worse than the great depression of the 1930s.

The Treasury wants RBS - now 68% owned by the government - to rein in large bonuses in a year when it is scheduled to post losses running to billions of pounds. Government ministers are trying to negotiate a £25,000 cap on cash bonuses, with the remainder being taken in share options.

The government's effort to show that it is responding to public anger over the bonus culture was undermined yesterday however when it emerged that the man appointed by the government to conduct a review of City pay was himself given multi-million pound bonuses while serving as European chairman of U.S. bank Morgan Stanley. (Note: The City is London's equivalent of Wall Street in the U.S.)

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Sound Familiar? Justice Dept. Uses 'State Secrets' Defense On Rendition
2009-02-10 03:34:28

The Obama administration invoked the same "state secrets" privilege as its predecessor in federal court in San Francisco yesterday in opposing the reinstatement of a lawsuit that alleges that a Boeing Co. unit flew people to countries where they were tortured as part of the CIA's "extraordinary rendition" program.

The Justice Department's stance on the case came despite a pledge by Attorney General Eric H. Holder,  Jr., first at his confirmation hearing and again Monday in a statement, to review all assertions of the state secrets privilege.

The American Civil Liberties Union (ACLU) brought the case on behalf of five foreigners who were allegedly transferred to countries where they were tortured under interrogation. One of the five, Binyam Mohammed, a British resident, claims in court papers in the United States and in Britain that he was flown to Morocco and held there for nearly two years after his capture in Pakistan. He is now in the U.S. military prison at Guantanamo Bay, Cuba.

Mohammed and the others are seeking unspecified damages.

Leon E. Panetta, Obama's nominee to head the CIA, told Congress that he would end the practice of transferring suspects to countries where they are at risk of being tortured.

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By Razor Thin Margin, Senate Clears Way For Stimulus Vote On Tuesday
2009-02-09 18:58:27
Senate Democrats on Monday advanced the $838 billion economic stimulus bill, clearing a major procedural hurdle by a razor thin margin with the help of just three Republicans. A vote on final passage of the bill is expected on Tuesday.

The Senate vote, by 61 to 36, to close debate on the stimulus, symbolized the partisanship that still grips Congress despite President Obama'scall for new cooperation. It also highlighted the rising power of the centrist Republicans who cast the critical votes. Under Senate rules, it takes 60 votes to invoke cloture and usher a bill to a vote.

Those votes, by Senators Susan Collins and Olympia J. Snowe, of Main, and Arlen Spector, of Pennsylvania, along with the 56 Democrats and two Independents who regularly vote with them, followed a succession of floor speeches by Republicans criticizing the stimulus as a bloated, wasteful spending bill.

With Obama in Indiana Monday afternoon to kick off a heightened effort to sell the stimulus plan to the public, Senate Democrats responded with their own speeches describing the bill as desperately needed to create millions of jobs and halt the recession.

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Bishop Williamson: 'I Will Not Travel To Auschwitz'
2009-02-09 18:57:58
Intellpuke: Bishop Richard Williamson's denial of the Holocaust has done serious damage to the Catholic Church. In an e-mail and fax exchange with German news magazine Spiegel, the ultra-conservative bishop says that he is willing to "review the historical evidence." The interview, which took place before Monday's announcement by the Vatican that Bishop Williams was removed as head of a seminary, follows:

SPIEGEL: The Vatican is demanding that you retract your denial of the Holocaust, and it is threatening to not allow you to resume your activities as a bishop. How will you react?

Williamson: Throughout my life, I have always sought the truth. That is why I converted to Catholicism and became a priest. And now I can only say something, the truth of which I am convinced. Because I realize that there are many honest and intelligent people who think differently, I must now review the historical evidence once again. I said the same thing in my interview with Swedish television: Historical evidence is at issue, not emotions. And if I find this evidence, I will correct myself. But that will take time.

SPIEGEL: How can an educated Catholic deny the Holocaust?

Williamson: I addressed the subject in the 1980s. I had read various writings at the time. I cited the Leuchter report (eds. note: a debunked theory produced in the 1980s claiming erroneously that the Nazi gas chambers were technically impractical) in the interview, and it seemed plausible to me. Now I am told that it has been scientifically refuted. I plan now to look into it.

SPIEGEL: You could travel to Auschwitz yourself.

Williamson: No, I will not travel to Auschwitz. I've ordered the book by Jean-Claude Pressac. It's called "Auschwitz: Technique and Operation of the Gas Chambers." A printout is now being sent to me, and I will read it and study it.

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Commentary: Russia's Allies Should Not Help Vladimir Putin
2009-02-09 18:56:58
Intellpuke: This commentary was written by Gary Kasparov, chairman of the opposition group United Civil Front and co-leader of the pro-democracy coalition The Other Russia ( Mr. Kasparov's commentary appeared in the Spiegel Online edition for Monday, February 9, 2009.

Allowing Putin's regime to fall would help not only the Russian people but also the world's poisoned economic climate. The downfall of a regime that has trampled on moral values for a decade would signal change.

Last June, when Russian Prime Minister Vladimir V. Putin was invited to open this year's World Economic Forum confab of business and political leaders in Davos, he surely expected to be speaking from a position of strength. Seven months later oil prices have plunged, the Russian stock market has collapsed, and the ruble is in free fall. Instead of reasoned discourse, what the audience got on Jan. 28 was bluster, blame, and a cry for help.

But the world should not help Vladimir Putin. For too long, too many myths have surrounded him and his dictatorial regime. "At least Russians are better off than during the days of the Soviet Union" was the frequent refrain of Western leaders afraid to confront Putin over his domestic crackdown. When he discarded the last pretense of Russian democracy during the 2008 presidential transition, the chorus shifted to: "Even though Russians aren't free, even though elections are rigged and the media controlled by the state, at least the economy is doing well and investors are happy."

Now the myth of the strong economy has crumbled. Make no mistake: This is not just a sudden reversal of fortune. The fall in energy prices and the global financial crisis have only revealed what was going on behind the scenes all along. Putin and his government have hollowed out the economy by failing to invest in sectors other than the energy export business. More than half of state investment goes to oil and gas production, says think tank Carnegie Moscow Center. Meanwhile, in the last six months, industrial production has plunged 20 percent. Steel output is down more than 45 percent since early 2008. Skyrocketing oil prices gave Putin enough cash to keep the macroeconomic scenario rosy. The charade is over.

In 2000, Putin inherited an economy ready to boom after years of painful liberalization. That year, with oil at $20 a barrel, gross domestic product grew 10 percent. The federal budget was out of the red for the first time since the dissolution of the Soviet Union. Nine years later, despite a stretch of phenomenal luck and oil prices that peaked close to $150, Russia is again in crisis. Oil has now fallen to $40. Even if it rises to around $50, Finance Minister Alexei L. Kudrin forecasts a budget deficit of 5 percent of GDP, or $60 billion in 2009 - a number many experts call optimistic.

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More Than 200 Feared Dead In Australia Bushfires
2009-02-09 14:52:44
The smoldering ashes of southern Australia's massive wildfires delivered up dozens more dead Monday, and several blazes continued to rage out of control as the government promised a full-scale investigation into the worst bushfires in the country's history.

Infernos whipped up by dry, hot winds have killed at least 171 people in southeastern Victoria state, where Premier John Brumby announced a royal commission of inquiry into the still-unfolding catastrophe.

Scores of people are missing and feared dead, police said, warning the final toll could exceed 200.

Normally headed by judges with broad investigative powers, royal commissions can work for months to provide a detailed analysis of issues and events and recommend policy changes to government.

Brumby vowed that "everything will be on the table" for the inquiry, including the "stay and defend" policy that encourages residents to evacuate as early as possible or prepare to defend their homes from advancing wildfires.

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Fire Rages At Beijing Luxury Hotel
2009-02-09 14:52:23
The burning shell of an unfinished, 44-story luxury hotel lit the night sky over downtown Beijing on Monday after being showered with sparks from fireworks set off during China's biggest holiday.

Flames surged up one side of the hotel and sent off huge plumes of black smoke, showering the ground with embers as police held back crowds of onlookers.

There were no reports of deaths or injuries.

Beijing usually tightly restricts the use of fireworks downtown, but waives the rules each year during the Lunar New Year holiday. Monday was the final day for fireworks, marking the first full moon since the Lunar New Year, and massive barrages exploded in open spaces throughout the city.

The Rem Koolhaas-designed Mandarin Oriental hotel was part of a striking complex that helped transform the capital's skyline for last year's Olympics. It is next to China Central Television's landmark Z-shaped headquarters, a major prestige project for the government. The television headquarters was not burning.

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Four U.S. Soldiers, Interpreter Killed In Suicide Bomb In Mosul
2009-02-09 14:51:56
Four U.S. soldiers and an interpreter were killed Monday in a suicide bombing in the restive city of Mosul in northern Iraq, said the military.

The attack was the deadliest for U.S. troops in Iraq since May, according to, a Web site that tracks U.S. combat deaths.

The military said three service members were killed shortly after a person in a vehicle set off explosives. The fourth soldier and the interpreter working with the unit died later from wounds suffered in the blast, the military said.

Mosul, Iraq's third largest city, remains among the country's most dangerous. Although attacks in Nineveh province have decreased substantially, al-Qaeda in Iraq and other insurgent groups remain active in Mosul and some outlying areas.

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If Bailout Spending Is Swift, Oversight May Suffer
2009-02-09 05:22:38

The Obama administration's economic stimulus plan could end up wasting billions of dollars by attempting to spend money faster than an overburdened government acquisition system can manage and oversee it, according to documents and interviews with contracting specialists.

The $827 billion stimulus legislation under debate in Congress includes provisions aimed at ensuring oversight of the massive infusion of contracts, state grants and other measures. At the urging of the administration, those provisions call for transparency, bid competition, and new auditing resources and oversight boards.

Under the terms of the stimulus proposals, however, a depleted contracting workforce would be asked to spend more money more rapidly than ever before, while also improving competition and oversight. Auditors would be asked to track surges in spending on projects ranging from bridge construction and schools to research of "green" energy and the development of electronic health records - a challenge made more difficult because many contracts would be awarded by state agencies.

The stimulus plan presents a stark choice: The government can spend unprecedented amounts of money quickly in an effort to jump-start the economy or it can move more deliberately to thwart the cost overruns common to federal contracts in recent years.

"You can't have both," said Eileen Norcross, a senior research fellow at George Mason University's Mercatus Center who studied crisis spending in the aftermath of Hurricane Katrina. "There is no way to get around having to make a choice."

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Death Toll Reaches 131 In Australia Bushfires
2009-02-09 05:21:43
Fanned by the hottest temperatures on record, a series of wildfires tore through southern Australia over the weekend, killing at least 131 people in the country’s deadliest natural disaster on record, the police said Monday.

Forensic investigators descended on the fire zone Monday to begin identifying bodies found in the rubble. Police warned the death toll could rise.

Officials suspect that some of Saturday’s fires were set deliberately. Huge tracts of land were declared crime scenes and police announced a special task force to hunt suspected arsonists, who could face murder charges.

A man and a boy were charged with lighting fires on the outskirts of Sydney in two unrelated cases on Monday.

Again and again, survivors of the fires that ripped across the southern state of Victoria on Saturday told the same story - the fires came without warning and too fast for anyone to act.

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