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JROTC MUST GO!
The San Francisco Board of Education has re-installed the Junior Reserve Officer's Training Corps in San Francisco schools -- including allowing it to count for Physical Education credits.
This is a complete reversal of the 2006 decision to end JROTC altogether in San Francisco public schools. Our children need a good physical education program, not a death education program!
With the economy in crisis; jobs and higher education for youth more unattainable; the lure, lies and false promises of military recruiters is driving more and more of our children into the military trap.
This is an economic draft and the San Francisco Board of Education is helping to snare our children to provide cannon fodder for the wars in Iraq, Afghanistan, Pakistan and for over 700 U.S. military bases around the world!
We can't depend upon "friendly politicians" who, while they are campaigning for office claim they are against the wars but when they get elected vote in favor of military recruitment--the economic draft--in our schools. We can't depend upon them. That has been proven beyond doubt!
It is up to all of us to come together to stop this NOW!
GET JROTC AND ALL MILITARY RECRUITERS OUT OF OUR SCHOOLS NOW!
Write, call, pester and ORGANIZE against the re-institution of JROTC in our San Francisco public schools NOW!
This issue should be taken up by the October 17 Coalition at it's next meeting; to organize an intervention at the next Board of Education meeting Tuesday, October 27, 6:00 P.M. (For how to get on the speakers list at the Board of Education meeting see below.) [PLEASE NOTE, THIS IS A SUGGESTION. I AM OPEN TO OTHERS.]
Final October 17 Coalition Meeting before the demonstration:
October 11, 2009, 2:00 P.M.
Unitarian Church (Fireside Room)
1187 Franklin at Geary, SF (wheelchair accessible).
www.oct17awc.wordpress.com
In solidarity,
Bonnie Weinstein
Bay Area United Against War Newsletter
The next Board of Education meeting is:
Tuesday, October 27, 2009, 6:00 P.M.
San Francisco Board of Education
555 Franklin Street, 1st Floor
San Francisco, CA 94102
415/241-6427
cascoe@sfusd.edu
415/241-6427 or (415) 241-6493
(To get on the speaker's list call the Monday before the meeting from 8:30 AM - 4:00 PM or Tuesday, the day of the meeting from 8:30 AM - 3:30 PM. You will get at most, two minutes and most probably only one minute to speak.)
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U.S. Out Now! From Iraq, Afghanistan, Pakistan and all U.S. bases around the world; End all U.S. Aid to Israel; Get the military out of our schools and our communities; Demand Equal Rights and Justice for ALL!
TAX THE RICH NOT THE POOR! MONEY FOR HUMAN NEEDS NOT WAR!
Final October 17 Coalition Meeting before the demonstration:
October 11, 2009, 2:00 P.M.
Unitarian Church (Fireside Room)
1187 Franklin at Geary, SF (wheelchair accessible).
www.oct17awc.wordpress.com
SATURDAY, OCTOBER 17 SAN FRANCISCO MARCH AND RALLY AGAINST THE WARS
U.S. Troops Out Now! Iraq, Afghanistan and Pakistan!
Assemble 11:00 A.M. U.N. Plaza, SF (Market between 7th and 8th Streets)
March begins at 12:00 Noon
Rally begins at 1:00 P.M. back at U.N. Plaza
Commemorating the eighth anniversary of the war on Afghanistan and the 40th anniversary of the massive October 17, 1969 Vietnam Moratorium.
Sponsor: October 17 Antiwar Coalition
510-268-9429 or 415-794-7354
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Bay Area United Against War Newsletter
Table of Contents:
A. EVENTS AND ACTIONS
B. SPECIAL APPEALS, VIDEOS AND ONGOING CAMPAIGNS
C. ARTICLES IN FULL
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Sick For Profit
http://sickforprofit.com/videos/
Fault Lines: Despair & Revival in Detroit - 14 May 09 - Part 1
http://www.youtube.com/watch?v=QJ7VL907Qb0&feature=related
Michael Moore on Good Morning America
http://www.youtube.com/watch?v=JY1pcoBWp3Q
Michael Moore on Countdown With Keith Olbermann
http://www.youtube.com/watch?v=0URCqniVTOY
VIDEO INTERVIEW: Dan Berger on Political Prisoners in the United States
By Angola 3 News
Angola 3 News
37 years ago in Louisiana, 3 young black men were silenced for trying to expose continued segregation, systematic corruption, and horrific abuse in the biggest prison in the US, an 18,000-acre former slave plantation called Angola. In 1972 and 1973 prison officials charged Herman Wallace, Albert Woodfox, and Robert King with murders they did not commit and threw them into 6x9 ft. cells in solitary confinement, for over 36 years. Robert was freed in 2001, but Herman and Albert remain behind bars.
http://angola3news.blogspot.com/2009/09/video-dan-berger-on-political-prisoners.html
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Taking Aim Radio Program with
Ralph Schoenman and Mya Shone
The Chimera of Capitalist Recovery, Parts 1 and 2
http://www.takingaimradio.com/shows/audio.html
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A. EVENTS AND ACTIONS
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EMERGENCY: "BLUE ANGELS" DIE-IN, SATURDAY!
COME TO A WEDDING PARTY . . . AND DIE-IN
To Say NO to Obama's War On Afghanistan
Saturday, October 10, 3:00 PM
Union Square, San Francisco
Appropriate attire requested
To RSVP, call 415 864 5153
Blue Angels ready to roar, soar for Fleet Week
"For the city, raising the $500,000 to put on the first Fleet Week since the great recession hit with full force proved more difficult than usual. The CVS drugstore chain is sponsoring the event, and Hornblower Cruises and Events and other groups held a fundraiser but brought in only about a third of the $100,000 they were hoping to raise. Other funds came from private donations, the Port of San Francisco and a city grant."
Henry K. Lee, Heather Knight, Chronicle Staff Writers
Wednesday, October 7, 2009
http://www.sfgate.com/cgi-bin/article.cgi?f=/c/a/2009/10/07/MNV31A1PTT.DTL
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NATIONAL MARCH FOR EQUALITY
WASHINGTON, D.C. OCTOBER 10-11, 2009
Sign up here and spread the word:
http://www.nationalequalitymarch.com/
On October 10-11, 2009, we will gather in Washington DC from all across
America to let our elected leaders know that *now is the time for full equal
rights for LGBT people.* We will gather. We will march. And we will leave
energized and empowered to do the work that needs to be done in every
community across the nation.
This site will be updated as more information is available. We will organize
grassroots, from the bottom-up, and details will be shared on this website.
Our single demand:
Equal protection in all matters governed by civil law in all 50 states.
Our philosophy:
As members of every race, class, faith, and community, we see the struggle
for LGBT equality as part of a larger movement for peace and social justice.
Our strategy:
Decentralized organizing for this march in every one of the 435
Congressional districts will build a network to continue organizing beyond
October.
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ARE WE GOING TO PROTEST????????????????!!!!!!!!!
YES WE ARE!!!
Demonstrate Your Support for Single Payer Healthcare at President Obama's
San Francisco Fundraising Dinner on
Thursday, October 15, from 4:30 to 6:30.
Gather at Union Square across from the St Francis Hotel - 355 Powell St.
( 3 blocks form Powell St BART/MUNI )
[SEE THE $1000.00-A-PLATE ($500.00 FOR STANDING ROOM) DINNER INVITATION BELOW...bw]
Dear Single Payer Activist,
Join us in letting President Obama know that Californians want single payer healthcare. We support HR 676, the U.S. National Healthcare Act.
We do not have to go to Washington, DC to let our President know what Californians want. He is coming to SF.
And want the Kucinich Amendment passed so states can enact their single payer legislation.
We also need your help building this demonstration. We need dozens of phone tree callers. I will send you a list of names and a suggested script. We also need dozens of people to hold large banners on September 15. Please let us know how you can help.
___ I plan to attend the demonstration.
___ I can help call our phone tree.
___ I can help hold a banner.
___ I have forwarded this alert.
1. The California Democratic Party wants single payer healthcare.
2. The Democratic controlled state legislature has twice passed single payer healthcare legislation, only to have it vetoed by a Republican Governor.
3. The City of San Francisco supports single payer both nationally (HR 676) and in California (SB 810).
Thank you.
Don Bechler
Chair - Single Payer Now
415-695-7891
www.singlepayernow.net
DINNER INVITATION:
Please join us for a very exciting evening with
President Barack Obama
President Obama will be visiting
San Francisco for the first time since his historic election,
this very special event is in support of Organizing for America and the Democratic National Committee.
THURSDAY, OCTOBER 15, 2009
Reception
5:00 PM
Westin St. Francis Hotel, San Francisco
Please forward to anyone you know who would appreciate this opportunity, space is limited.
Reception:
$1000 VIP Ticket (seated)
$500 General Ticket (standing)
Please click to rsvp.
http://www.democrats.org/SanFrancisco?custom1=Annemarie+Stephens http://www.democrats.org/SanFrancisco?custom1=Annemarie+Stephens
I hope you will be able to join us for this exciting evening as we welcome President Obama back to San Francisco!
Annemarie Stephens
510-759-2491
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SATURDAY, OCTOBER 17 SAN FRANCISCO MARCH AND RALLY AGAINST THE WARS
U.S. Troops Out Now! Iraq, Afghanistan and Pakistan!
Assemble 11:00 A.M. U.N. Plaza, SF (Market between 7th and 8th Streets)
March begins at 12:00 Noon
Rally begins at 1:00 P.M. back at U.N. Plaza
Commemorating the eighth anniversary of the war on Afghanistan and the 40th anniversary of the massive October 17, 1969 Vietnam Moratorium.
Sponsor: October 17 Antiwar Coalition
510-268-9429 or 415-794-7354
Money for Human Needs Not War!
Immediate and unconditional withdrawal of all U.S. troops, military personnel, bases, contractors, and mercenaries from Iraq, Afghanistan, Pakistan and Colombia.
End U.S. support for the Israeli occupation of Palestine! End the Seige of Gaza!
U.S. Hands Off Iran and North Korea!
Self-determination for All Oppressed Nations and Peoples!
End War Crimes Including Torture and Prosecute the War Criminals!
See historical images of the Vietnam Moratorium at:
http://images.google.com/images?q=vietnam+moratorium&oe=utf-8&rls=org.mozilla:en-US:official&client=firefox-a&um=1&ie=UTF-8&ei=lGaISs7pMIP-sQOr2OznAg&sa=X&oi=image_result_group&ct=title&resnum=4
Image of San Francisco Vietnam Moratorium, Golden Gate Park, October 17, 1969 (I was there...bw):
http://images.google.com/imgres?imgurl=http://www.rchrd.com/photo/images/pb2-12-15.jpg&imgrefurl=http://rchrd.com/photo/archives/1969/&usg=__FeHN5CAwDXv-ewwCt2Hfni6ZUn8=&h=567&w=850&sz=143&hl=en&start=3&um=1&tbnid=EJH6Kzj6YI6zzM:&tbnh=97&tbnw=145&prev=/images%3Fq%3Dvietnam%2Bmoratorium%26hl%3Den%26client%3Dfirefox-a%26rls%3Dorg.mozilla:en-US:official%26sa%3DX%26um%3D1
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Protest Ehud Olmert, former Prime Minister of Israel on Thursday October 22 @ 6pm. We want Olmert arrested and tried for his role in the brutal attack on Gaza in December/January, as well as the attack on Lebanon in 2006. Olmert will be appearing as a speaker for the World Affairs Council, at meeting held at the St. Francis Hotel, 335 Powell Street, San Francisco, California, 94102 USA . The protest will be outside this building in Union Square.
As Olmert speaks in the St Francis Hotel, we will be gathered outside on Union Square in San Francisco. We want Israel and its leaders held accountable for their crimes against the people of Palestine and Lebanon.
We support the findings of the Goldstone Report, that detail the crimes committed by Israel during its war against the whole people of Gaza of last December/January, in "Operation Cast Lead". President Obama and most politicians have simply refused to take this report seriously, some by vocally rejecting it, and many more by ignoring it completely.
It is therefore up to us, civil society, to again do what politicians are unwilling to do. Call for universal application of human rights and international law. This will be the message of our protest. We demand that Olmert, who initiated "Operation Cast Lead" and is directly responsible for the crimes that took place and therefore must be held accountable. Olmert is also responsible for the insane attack against Lebanon in the Summer of 2006. Olmert shares criminal responsibility for the siege on Gaza that leaves children hungry and 1.5 million people in desperate circumstances.
Please plan on being there. Please spread the word. We need to stand together to create a new reality. We will not accept that Israel may act with impunity and total disregard for human life. This protest is our opportunity to stand up and be counted.
Spread the word to your friends and all organizations that support the rule of law, human rights, and oppose militarism and occupation. Organizations are urged to send in their endorsements.
More info:
http://stopaipac.org/olmertprotest.htm
Jim Harris
people@stopaipac.org
www.StopAIPAC.org
Stop AIPAC
PO Box 11311
Berkeley, CA 94712
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Please forward widely. Contact us if you or your organization would like to endorse this call.
CALL FOR OCTOBER 22 DEMONSTRATION IN OAKLAND, CA:
NATIONAL DAY OF PROTEST TO STOP POLICE BRUTALITY, REPRESSION AND THE CRIMINALIZATION OF A GENERATION
Oscar Grant. Brownie Polk. Parnell Smith. And dozens more Oakland alone. Sean Bell and Amadou Diallo in New York City. Adolph Grimes in New Orleans. Robbie Tolan in Houston. Julian Alexander in Anaheim. Jonathan Pinkerton in Chicago. And thousands more nationwide.
All shot down, murdered by law enforcement, their lives stolen, victims of a nationwide epidemic of police brutality and murder.
The racist arrest of Harvard Professor Henry Louis Gates this summer in Cambridge, Massachusetts - right in his own home - showed that any Black man or woman, no matter their stature, no matter their education, no matter their accomplishments can be targeted for brutality - even murder - at any moment.
Meanwhile, a whole generation of youth is treated as guilty until proved innocent, and hundreds of thousands are criminalized, and locked away in U.S. prisons with no hope for the future. And immigrants are subject to brutal raids, with families cruelly split up in an instant.
We refuse to suffer these outrages in silence. We need to put a stop to this and drag the truth about the nationwide epidemic of police violence and repression into the light of day for all so see. We say no more! Enough is Enough!
Oct 22nd 2009 is the 14th annual national day of protest to Stop Police Brutality, Repression and the Criminalization of Generation---bringing together those under the gun and those not under the gun as a powerful voice to expose the epidemic of police brutality. On that day in cities across the country many different people will take to the streets against police brutality and murder, against the criminalization of youth, and against the targeting of immigrants.
We call for a powerful demonstration in Oakland on October 22 demanding:
* Stop Police Brutality, Repression and the Criminalization of a Generation!
* October 22....No To Police Brutality
* No to ICE raids and round-ups of immigrants!
* Enough Is Enough! No More Stolen Lives!
* Justice for Oscar Grant and all victims of police murder!
* Wear Black, Fight Back
Contact the National Office of October 22nd at:
Info@october22.org or 1-888-NOBRUTALITY
October 22nd Coalition
P.O. Box 2627
New York, N.Y. 10009
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[please excuse duplicate postings]
INVITATION
October 24 Mobilizing Conference to Save Public Education
We have the power to stop the catastrophic budget cuts, fee hikes, and layoffs -- but to save public education in California requires coordinating our actions on a statewide level.
We invite all UC, CSU, CC, and K-12 students, workers, teachers, and their organizations across the state to participate in and collectively build the October 24 Mobilizing Conference to Save Public Education. The all-day conference will take place at UC Berkeley (contact us for more logistics).
The purpose of this conference is both simple and extremely urgent: to democratically decide on a statewide action plan capable of winning this struggle, which will define the future of public education in this state, particularly for the working class and communities of color.
Why UC Berkeley? On September 24, over 5,000 people massively protested and effectively paralyzed the UCB campus, as part of the UC-wide walkout. A mass General Assembly of over 400 individuals and dozens of organizations met that night and collectively decided to issue this call.
We ask all organizations and individuals in the state who want to save public education to endorse this open conference and help us collectively build it.
Save public education!
No budget cuts, fee hikes, or layoffs!
For statewide student, worker, and faculty solidarity!
Please contact oct24conference@gmail.com to endorse this conference and to receive more details.
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Dear participants, authors, organizational endorsers and allies,
Attached are promotional materials for our upcoming events in support of GI
resistance on Oct. 18 and Oct. 25 featuring Col. Ann Wright (ret.), Dahr
Jamail, David Solnit, Marjorie Cohn, Rebecca Solnit, and Aimme Allison.
Web graphics and text are attached. Some list both events, and others for
each event separately. Please use as needed for your purposes. For example,
if you have an online calendar, you may want to post the date-specific
graphic and/or text for each date. Descriptions below.
Courage to Resist very much appreciates your participation and support.
Please let me know if you have any questions.
Jeff Paterson, Courage to Resist
Web graphic for both events - ctr-oak09-events.jpg
Web graphic for Oct 18 only - ctr-18oct09-wright-event.jpg
Web graphic for Oct 25 only - ctr-25oct09-cohn-event.jpg
PDF leaflet for both events - ctr-oak-oct09events.pdf
Text announcement (brief) for both events - oct18-25-events-brief.txt
Text for Oct 18 only - oct18-wright-jamail-solnit.txt
Text for Oct 25 only - oct25-cohn-solnit-allison.txt
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U.S. OUT OF IRAQ AND AFGHANISTAN NOW!
FREE PALESTINE!
San Francisco March and Rally
on Saturday, March 20, 2010
11am, Civic Center Plaza
National March on Washington
on Saturday, March 20, 2010
Fri., March 19 Day of Action & Outreach in D.C.
People from all over the country are organizing to converge on Washington, D.C., to demand the immediate and unconditional withdrawal of all U.S. and NATO forces from Afghanistan and Iraq.
On Saturday, March 20, 2010, there will be a massive National March & Rally in D.C. A day of action and outreach in Washington, D.C., will take place on Friday, March 19, preceding the Saturday march.
There will be coinciding mass marches on March 20 in San Francisco and Los Angeles.
The national actions are initiated by a large number of organizations and prominent individuals. (see below)
Click here to become an endorser:
http://answer.pephost.org/site/Survey?SURVEY_ID=5940&ACTION_REQUIRED=URI_ACTION_USER_REQUESTS&autologin=true&link=endorse-body-1
Click here to make a donation:
https://secure2.convio.net/pep/site/Donation?ACTION=SHOW_DONATION_OPTIONS&CAMPAIGN_ID=2302&autologin=true&donate=body-1&JServSessionIdr002=2yzk5fh8x2.app13b
We will march together to say "No Colonial-type Wars and Occupations in Afghanistan, Iraq, Palestine!" We will march together to say "No War Against Iran!" We will march together to say "No War for Empire Anywhere!"
Instead of war, we will demand funds so that every person can have a job, free and universal health care, decent schools, and affordable housing.
March 20 is the seventh anniversary of the criminal war of aggression launched by Bush and Cheney against Iraq. One million or more Iraqis have died. Tens of thousands of U.S. troops have lost their lives or been maimed, and continue to suffer a whole host of enduring problems from this terrible war.
This is the time for united action. The slogans on banners may differ, but all those who carry them should be marching shoulder to shoulder.
Killing and dying to avoid the perception of defeat
Bush is gone, but the war and occupation in Iraq still go on. The Pentagon is demanding a widening of the war in Afghanistan. They project an endless war with shifting battlefields. And a "single-payer" war budget that only grows larger and larger each year. We must act.
Both the Iraq and Afghanistan wars were predicated on the imperial fantasy that the U.S. could create stable, proxy colonial-type governments in both countries. They were to serve as an extension of "American" power in these strategic and resource-rich regions.
That fantasy has been destroyed. Now U.S. troops are being sent to kill or be killed so that the politicians in uniform ("the generals and admirals") and those in three-piece suits ("our elected officials") can avoid taking responsibility for a military setback in wars that should have never been started. Their military ambitions are now reduced to avoiding the appearance of defeat.
That is exactly what happened in Vietnam! Avoiding defeat, or the perception of defeat, was the goal Nixon and Kissinger set for themselves when they took office in 1969. For this noble cause, another 30,000 young GIs perished before the inevitable troop pullout from Vietnam in 1973. The number of Vietnamese killed between 1969 and 1973 was greater by many hundreds of thousands.
All of us can make the difference - progress and change comes from the streets and from the grassroots.
The people went to the polls in 2008, and the enthusiasm and desire for change after eight years of the Bush regime was the dominant cause that led to election of a big Democratic Party majority in both Houses of Congress and the election of Barack Obama to the White House.
But it should now be obvious to all that waiting for politicians to bring real change - on any front - is simply a prescription for passivity by progressives and an invitation to the array of corporate interests from military contractors to the banks, to big oil, to the health insurance giants that dominate the political life of the country. These corporate interests work around the clock to frustrate efforts for real change, and they are the guiding hand behind the recent street mobilizations of the ultra-right.
It is up to us to act. If people had waited for politicians to do the right thing, there would have never been a Civil Rights Act, or unions, women's rights, an end to the Vietnam war or any of the profound social achievements and basic rights that people cherish.
It is time to be back in the streets. Organizing centers are being set up in cities and towns throughout the country.
We must raise $50,000 immediately just to get started. Please make your contribution today. We need to reserve buses, which are expensive ($1,800 from NYC, $5,000 from Chicago, etc.). We have to print 100,000 leaflets, posters and stickers. There will be other substantial expenses as March 20 draws closer.
Please become an endorser and active supporter of the March 20 National March on Washington.
Please make an urgently needed tax-deductible donation today. We can't do this without your active support.
The initiators of the March 20 National March on Washington (preceded by the March 19 Day of Action and Outreach in D.C.) include: the ANSWER Coalition; Muslim American Society Freedom; National Council of Arab Americans; Cynthia McKinney; Malik Rahim, co-founder of Common Ground Collective; Ramsey Clark; Cindy Sheehan; Medea Benjamin, co-founder of CODEPINK; Deborah Sweet, Director, World Can't Wait; Mike Ferner, President, Veterans for Peace; Al-Awda, the Palestine Right to Return Coalition; Heidi Boghosian, Executive Director, National Lawyers Guild; Ron Kovic, author of "Born on the 4th of July"; Juan Jose Gutierrez, Director, Latino Movement USA; Col. Ann Wright (ret.); March Forward!; Partnership for Civil Justice; Palestinian American Women Association; Alliance for a Just and Lasting Peace in the Philippines; Alliance for Global Justice; Claudia de la Cruz, Pastor, Iglesia San Romero de Las Americas-UCC; Phil Portluck, Social Justice Ministry, Covenant Baptist Church, D.C.; Blase & Theresa Bonpane, Office of the Americas; Coalition for Peace and Democracy in Honduras; Comite Pro-Democracia en Mexico; Frente Unido de los Pueblos Americanos; Comites de Base FMLN, Los Angeles; Free Palestine Alliance; GABRIELA Network; Justice for Filipino American Veterans; KmB Pro-People Youth; Students Fight Back; Jim Lafferty, Executive Director, National Lawyers Guild - LA Chapter; LEF Foundation; National Coalition to Free the Angola 3; Community Futures Collective; Advocates for Indigenous California Language Survival; Companeros del Barrio; Barrio Unido for Full and Unconditional Amnesty.
A.N.S.W.E.R. Coalition
http://www.answercoalition.org/
info@internationalanswer.org
National Office in Washington DC: 202-265-1948
New York City: 212-694-8720
Los Angeles: 213-251-1025
San Francisco: 415-821-6545
Chicago: 773-463-0311
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B. SPECIAL APPEALS, VIDEOS AND ONGOING CAMPAIGNS
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HELP VFP PUT THIS BOOK IN YOUR HIGH SCHOOL OR PUBLIC LIBRARY
For a donation of only $18.95, we can put a copy of the book "10 Excellent Reasons Not to Join the Military" into a public or high school library of your choice. [Reason number 1: You may be killed]
A letter and bookplate will let readers know that your donation helped make this possible.
Putting a book in either a public or school library ensures that students, parents, and members of the community will have this valuable information when they need it.
Don't have a library you would like us to put it in? We'll find one for you!
https://salsa.democracyinaction.org/o/826/t/9311/shop/custom.jsp?donate_page_KEY=4906
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Take Action: Stop Rite Aid's abuses: Pass the Employee Free Choice Act!
For years Rite Aid workers have faced unfair firings, campaigns of misinformation, and intimidation for trying to form a union. But Rite Aid would never have been able to get away with any of this if Congress had passed the Employee Free Choice Act.
You can help us fight mounting anti-union opposition to the bill that would have protected Rite Aid's workers. Tell Congress to pass the Employee Free Choice Act today!
http://action.americanrightsatwork.org/campaign/riteaidefca2/8gg63dd407ejd5wi?
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This is a must-see video about the life of Oscar Grant, a young man who loved his family and was loved by his family. It's important to watch to understand the tremendous loss felt by his whole family as a result of his cold-blooded murder by BART police officers--Johannes Mehserle being the shooter while the others held Oscar down and handcuffed him to aid Mehserle in the murder of Oscar Grant January 1, 2009.
The family wants to share this video here with you who support justice for Oscar Grant.
http://www.indybay.org/newsitems/2009/07/21/18611878.php
WE DEMAND JUSTICE FOR OSCAR GRANT!
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Urgent: Ahmad Sa'adat transferred to isolation in Ramon prison!
http://www.freeahmadsaadat.org/
Imprisoned Palestinian national leader Ahmad Sa'adat, the General Secretary of the Popular Front for the Liberation of Palestine, was transferred on August 11, 2009 to Ramon prison in the Naqab desert from Asqelan prison, where he had been held for a number of months. He remains in isolation; prior to his transfer from Asqelan, he had been held since August 1 in a tiny isolation cell of 140 cm x 240 cm after being penalized for communicating with another prisoner in the isolation unit.
Attorney Buthaina Duqmaq, president of the Mandela Association for prisoners' and detainees' rights, reported that this transfer is yet another continuation of the policy of repression and isolation directed at Sa'adat by the Israeli prison administration, aimed at undermining his steadfastness and weakening his health and his leadership in the prisoners' movement. Sa'adat has been moved repeatedly from prison to prison and subject to fines, harsh conditions, isolation and solitary confinement, and medical neglect. Further reports have indicated that he is being denied attorney visits upon his transfer to Ramon.
Ahmad Sa'adat undertook a nine-day hunger strike in June in order to protest the increasing use of isolation against Palestinian prisoners and the denial of prisoners' rights, won through long and hard struggle. The isolation unit at Ramon prison is reported to be one of the worst isolation units in terms of conditions and repeated violations of prisoners' rights in the Israeli prison system.
Sa'adat is serving a 30 year sentence in Israeli military prisons. He was sentenced on December 25, 2008 after a long and illegitimate military trial on political charges, which he boycotted. He was kidnapped by force in a military siege on the Palestinian Authority prison in Jericho, where he had been held since 2002 under U.S., British and PA guard.
Sa'adat is suffering from back injuries that require medical assistance and treatment. Instead of receiving the medical care he needs, the Israeli prison officials are refusing him access to specialists and engaging in medical neglect and maltreatment.
The Campaign to Free Ahmad Sa'adat demands an end to this isolation and calls upon all to protest at local Israeli embassies and consulates (the list is available at: http://www.mfa.gov.il/MFA/ About+the+Ministry/Diplomatic+mission/Web+Sites+of+Israeli+ Missions+Abroad.htm) and to write to the International Committee of the Red Cross and other human rights organizations to exercise their responsibilities and act swiftly to demand that the Israelis ensure that Ahmad Sa'adat and all Palestinian prisoners receive needed medical care and that this punitive isolation be ended. Email the ICRC, whose humanitarian mission includes monitoring the conditions of prisoners, at jerusalem..jer@icrc.org, and inform them about the urgent situation of Ahmad Sa'adat!
Ahmad Sa'adat has been repeatedly moved in an attempt to punish him for his steadfastness and leadership and to undermine his leadership in the prisoners' movement. Of course, these tactics have done nothing of the sort. The Palestinian prisoners are daily on the front lines, confronting Israeli oppression and crimes. Today, it is urgent that we stand with Ahmad Sa'adat and all Palestinian prisoners against these abuses, and for freedom for all Palestinian prisoners and for all of Palestine!
The Campaign to Free Ahmad Sa'adat
http://www.freeahmadsaadat.org
info@freeahmadsaadat.org
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Troy Anthony Davis is an African American man who has spent the last 18 years on death row for a murder he did not commit. There is no physical evidence tying him to the crime and seven out of nine witnesses have recanted. New evidence and new testimony have been presented to the Georgia courts, but the justice system refuses to consider this evidence, which would prove Troy Davis' innocence once and for all.
Sign the petition and join the NAACP, Amnesty International USA, and other partners in demanding justice for Troy Davis!
http://www.iamtroy.com/
For Now, High Court Punts on Troy Davis, on Death Row for 18 Years
By Ashby Jones
Wall Street Journal Law Blog
June 30, 2009
http://blogs.wsj.com/law/2009/06/30/for-now-high-court-punts-on-troy-davis-on-death-row-for-18-years/
Take action now:
http://takeaction.amnestyusa.org/siteapps/advocacy/ActionItem.aspx?c=jhKPIXPCIoE&b=2590179&aid=12361&ICID=A0906A01&tr=y&auid=5030305
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Committee To Save Mumia Abu-Jamal
P.O. Box 2012
New York, NY 10159-2012
New videos from April 24 Oakland Mumia event
http://abu-jamal-news.com/article?name=jlboak
Donations for Mumia's Legal Defense in the U.S. Our legal effort is the front line of the battle for Mumia's freedom and life. His legal defense needs help. The costs are substantial for our litigation in the U.S. Supreme Court and at the state level. To help, please make your checks payable to the National Lawyers Guild Foundation (indicate "Mumia" on the bottom left). All donations are tax deductible under the Internal Revenue Code, section 501(c)(3), and should be mailed to:
It is outrageous and a violation of human rights that Mumia remains in prison and on death row. His life hangs in the balance. My career has been marked by successfully representing people facing death in murder cases. I will not rest until we win Mumia's case. Justice requires no less.
With best wishes,
Robert R. Bryan
Lead counsel for Mumia Abu-Jamal
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Short Video About Al-Awda's Work
The following link is to a short video which provides an overview of Al-Awda's work since the founding of our organization in 2000. This video was first shown on Saturday May 23, 2009 at the fundraising banquet of the 7th Annual Int'l Al-Awda Convention in Anaheim California. It was produced from footage collected over the past nine years.
Video: http://www.youtube.com/watch?v=kTiAkbB5uC0&eurl
Support Al-Awda, a Great Organization and Cause!
Al-Awda, The Palestine Right to Return Coalition, depends on your financial support to carry out its work.
To submit your tax-deductible donation to support our work, go to
http://www.al-awda.org/donate.html and follow the simple instructions.
Thank you for your generosity!
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KEVIN COOPER IS INNOCENT!
FLASHPOINTS Interview with Innocent San Quentin Death Row Inmate
Kevin Cooper -- Aired Monday, May 18,2009
http://www.flashpoints.net/#GOOGLE_SEARCH_ENGINE
To learn more about Kevin Cooper go to:
savekevincooper.org
LINKS
San Francisco Chronicle article on the recent ruling:
http://sfgate.com/cgi-bin/article.cgi?f=/c/a/2009/05/13/BAM517J8T3.DTL
Ninth Circuit Court of Appeals ruling and dissent:
http://www.ca9.uscourts.gov/datastore/opinions/2009/05/11/05-99004o.pdf
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COURAGE TO RESIST!
Support the troops who refuse to fight!
http://www.couragetoresist.org/x/
Donate:
http://www.couragetoresist.org/x/content/view/21/57/
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C. ARTICLES IN FULL
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1) International Jewish Anti-Zionist Network-Labor
Statement of Solidarity with the Palestinian General Strike
October 1, 2009
http://www.indybay.org/newsitems/2009/10/01/18624038.php
2) For Those of You on Your Way to Church This Morning
...a note from Michael Moore
October 4, 2009
http://www.michaelmoore.com/words/mikes-letter/those-you-your-way-church-morning-note-michael-moore
3) E. Coli Path Shows Flaws in Ground Beef Inspection
By MICHAEL MOSS
October 4, 2009
http://www.nytimes.com/2009/10/04/health/04meat.html?ref=us
4) Profits for Buyout Firms as Company Debt Soared
By JULIE CRESWELL
October 5, 2009
http://www.nytimes.com/2009/10/05/business/economy/05simmons.html?hp
5) Puerto Ayora Journal
To Protect Galápagos, Ecuador Limits a Two-Legged Species
By SIMON ROMERO
October 5, 2009
http://www.nytimes.com/2009/10/05/world/americas/05galapagos.html?ref=world
6) Wanted: Pot Critic With Shrewd Taste and Medical Need
By RICHARD PÉREZ-PEÑA
October 5, 2009
http://www.nytimes.com/2009/10/05/business/media/05marijuana.html?ref=us
7) Few Results for Reports of Police Misconduct
By CHRISTINE HAUSER
October 5, 2009
http://www.nytimes.com/2009/10/05/nyregion/05ccrb.html?ref=nyregion
8) Arrest Puts Focus on Protesters' Texting
By COLIN MOYNIHAN
October 5, 2009
http://www.nytimes.com/2009/10/05/nyregion/05txt.html?ref=nyregion
9) Report on Bailouts Says Treasury Misled Public
By LOUISE STORY
October 5, 2009
http://www.nytimes.com/2009/10/05/business/economy/05bank.html?ref=business
10) Greenspan Foresees a Rise in Unemployment
By JOSEPH BERGER
October 5, 2009
http://www.nytimes.com/2009/10/05/business/economy/05greenspan.html?ref=business
11) Study Says Reporting on Economy Was Narrow
By RICHARD PÉREZ-PEÑA
October 5, 2009
http://www.nytimes.com/2009/10/05/business/media/05pew.html?ref=business
12) Three-fourths of the VFP Executive Committee arrested along with others in DC today
Kenneth Mayers
Veterans for Peace - Santa Fe
Wage Peace!
October 5, 2009
13) Does Obama Get It?
By BOB HERBERT
Op-Ed Columnist
October 6, 2009
http://www.nytimes.com/2009/10/06/opinion/06herbert.html?hp
14) The Card Game
Prepaid, but Not Prepared for Debit Card Fees
By ANDREW MARTIN
October 6, 2009
http://www.nytimes.com/2009/10/06/your-money/06prepay.html?hp
15) Blue Angels ready to roar, soar for Fleet Week
Henry K. Lee,Heather Knight, Chronicle Staff Writers
Wednesday, October 7, 2009
http://www.sfgate.com/cgi-bin/article.cgi?f=/c/a/2009/10/07/MNV31A1PTT.DTL
16) Police Brutally Attack Funk the War
by Rochester IMC
http://rochester.indymedia.org/feature/display/19958/index.php
17) Companies Strike Deal on Testing for E. Coli
By MICHAEL MOSS
October 8, 2009
http://www.nytimes.com/2009/10/08/health/08meat.html?ref=us
18) Thousands of Homeowners Cite Drywall for Ills
By LESLIE WAYNE
October 8, 2009
http://www.nytimes.com/2009/10/08/business/08drywall.html?ref=business
19) New Orleans Police Face Swarm of Inquiries
By CAMPBELL ROBERTSON
October 9, 2009
http://www.nytimes.com/2009/10/09/us/09orleans.html?ref=us
20) Study Finds High Rate of Imprisonment Among Dropouts
By SAM DILLON
October 9, 2009
http://www.nytimes.com/2009/10/09/education/09dropout.html?ref=us
21) U.S. Mortgage Backer May Need Bailout
By DAVID STREITFELD and LOUISE STORY
October 9, 2009
http://www.nytimes.com/2009/10/09/business/09fha.html?ref=us
22) Fannie and Freddie Continue to Struggle, Lawmakers Told
By JACK HEALY
October 9, 2009
http://www.nytimes.com/2009/10/09/business/economy/09loan.html?ref=us
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1) International Jewish Anti-Zionist Network-Labor
Statement of Solidarity with the Palestinian General Strike
October 1, 2009
http://www.indybay.org/newsitems/2009/10/01/18624038.php
In the long tradition of Jewish working class involvement in and support for liberation struggles, IJAN-Labor stands in solidarity with the High Follow-up Committee for the Arab Citizens of Israel, the National Committee of Local Authorities, and all parties, movements and institutions of Palestinian civil society in Israel, who have called a general strike for today, October 1, 2009.
This strike marks the ninth anniversary of the Jerusalem and Al Aqsa Day in October 2000 when Israeli authorities massacred 13 Palestinian protesters. The killers have never been brought to justice.
IJAN-Labor also welcomes the Trades Union Congress (U.K.) resolution of 17 September, which endorses the growing movement for Boycott, Divestment and Sanctions (BDS) against Israeli apartheid, and calls for reconsideration of the TUC's relationship with the Histadrut, the Zionist labor federation whose latest crime was to support Israel's attacks on Gaza.
The BDS campaign has been endorsed by a growing number of labor bodies, including the Congress of South African Trade Unions (COSATU), Solidaires Industrie (France), UNISON (UK), Transport and General Workers' Union (UK), Western Australia Branch of the Maritime Union of Australia, Canadian Union of Postal Workers, Canadian Union of Public Employees-Ontario, six Norwegian trade unions, Irish Congress of Trade Unions, Scottish Trades Union Congress, and Intersindical Alternativa de Catalunya.
In the United States, despite growing support from labor organizations and populations across the globe, the AFL-CIO and Change to Win fail to recognize what their British counterpart has now acknowledged: that Israel is a state built on defeating the aspirations and solidarity of working families not only in Israel but internationally.
Often without the knowledge or consent of union members, US Labor officialdom remains a leading accomplice of Israeli apartheid and the Zionist colonialism of which it is part. For more than sixty years, it has closely collaborated with the Histadrut, which has spearheaded - and whitewashed - apartheid, dispossession, ethnic cleansing and exploitation of the Palestinians since the 1920s.
Indeed, the Histadrut (as both employer and union) provided lethal weapons which the South African apartheid government used against Black workers, while at home it either excluded or segregated Arab workers.
Today, in solidarity with the general strike of Palestinian workers in Israel and growing international labor support for BDS, we call on US labor organizations to divest their estimated $5 billion investment in State of Israel Bonds, and to end all relations with the Histadrut.
For more information IJAN Labor, please see our website: http://www.ijsn.net/C91
If you are interested in participating in IJAN Labor, please email us at: Labor-IJAN@ijsn.net
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2) For Those of You on Your Way to Church This Morning
...a note from Michael Moore
October 4, 2009
http://www.michaelmoore.com/words/mikes-letter/those-you-your-way-church-morning-note-michael-moore
Friends,
I'd like to have a word with those of you who call yourselves Christians (Muslims, Jews, Buddhists, Bill Maherists, etc. can read along, too, as much of what I have to say, I'm sure, can be applied to your own spiritual/ethical values).
In my new film I speak for the first time in one of my movies about my own spiritual beliefs. I have always believed that one's religious leanings are deeply personal and should be kept private. After all, we've heard enough yammerin' in the past three decades about how one should "behave," and I have to say I'm pretty burned out on pieties and platitudes considering we are a violent nation who invades other countries and punishes our own for having the audacity to fall on hard times.
I'm also against any proselytizing; I certainly don't want you to join anything I belong to. Also, as a Catholic, I have much to say about the Church as an institution, but I'll leave that for another day (or movie).
Amidst all the Wall Street bad guys and corrupt members of Congress exposed in "Capitalism: A Love Story," I pose a simple question in the movie: "Is capitalism a sin?" I go on to ask, "Would Jesus be a capitalist?" Would he belong to a hedge fund? Would he sell short? Would he approve of a system that has allowed the richest 1% to have more financial wealth than the 95% under them combined?
I have come to believe that there is no getting around the fact that capitalism is opposite everything that Jesus (and Moses and Mohammed and Buddha) taught. All the great religions are clear about one thing: It is evil to take the majority of the pie and leave what's left for everyone to fight over. Jesus said that the rich man would have a very hard time getting into heaven. He told us that we had to be our brother's and sister's keepers and that the riches that did exist were to be divided fairly. He said that if you failed to house the homeless and feed the hungry, you'd have a hard time finding the pin code to the pearly gates.
I guess that's bad news for us Americans. Here's how we define "Blessed Are the Poor": We now have the highest unemployment rate since 1983. There's a foreclosure filing once every 7.5 seconds. 14,000 people every day lose their health insurance.
At the same time, Wall Street bankers ("Blessed Are the Wealthy"?) are amassing more and more loot -- and they do their best to pay little or no income tax (last year Goldman Sachs' tax rate was a mere 1%!). Would Jesus approve of this? If not, why do we let such an evil system continue? It doesn't seem you can call yourself a Capitalist AND a Christian -- because you cannot love your money AND love your neighbor when you are denying your neighbor the ability to see a doctor just so you can have a better bottom line. That's called "immoral" -- and you are committing a sin when you benefit at the expense of others.
When you are in church this morning, please think about this. I am asking you to allow your "better angels" to come forward. And if you are among the millions of Americans who are struggling to make it from week to week, please know that I promise to do what I can to stop this evil -- and I hope you'll join me in not giving up until everyone has a seat at the table.
Thanks for listening. I'm off to Mass in a few hours. I'll be sure to ask the priest if he thinks J.C. deals in derivatives or credit default swaps. I mean, after all, he must've been good at math. How else did he divide up two loaves of bread and five pieces of fish equally amongst 5,000 people? Either he was the first socialist or his disciples were really bad at packing lunch. Or both.
Yours,
Michael Moore
MMFlint@aol.com
MichaelMoore.com
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3) E. Coli Path Shows Flaws in Ground Beef Inspection
By MICHAEL MOSS
October 4, 2009
http://www.nytimes.com/2009/10/04/health/04meat.html?ref=us
Stephanie Smith, a children's dance instructor, thought she had a stomach virus. The aches and cramping were tolerable that first day, and she finished her classes.
Then her diarrhea turned bloody. Her kidneys shut down. Seizures knocked her unconscious. The convulsions grew so relentless that doctors had to put her in a coma for nine weeks. When she emerged, she could no longer walk. The affliction had ravaged her nervous system and left her paralyzed.
Ms. Smith, 22, was found to have a severe form of food-borne illness caused by E. coli, which Minnesota officials traced to the hamburger that her mother had grilled for their Sunday dinner in early fall 2007.
"I ask myself every day, 'Why me?' and 'Why from a hamburger?' "Ms. Smith said. In the simplest terms, she ran out of luck in a food-safety game of chance whose rules and risks are not widely known.
Meat companies and grocers have been barred from selling ground beef tainted by the virulent strain of E. coli known as O157:H7 since 1994, after an outbreak at Jack in the Box restaurants left four children dead. Yet tens of thousands of people are still sickened annually by this pathogen, federal health officials estimate, with hamburger being the biggest culprit. Ground beef has been blamed for 16 outbreaks in the last three years alone, including the one that left Ms. Smith paralyzed from the waist down. This summer, contamination led to the recall of beef from nearly 3,000 grocers in 41 states.
Ms. Smith's reaction to the virulent strain of E. coli was extreme, but tracing the story of her burger, through interviews and government and corporate records obtained by The New York Times, shows why eating ground beef is still a gamble. Neither the system meant to make the meat safe, nor the meat itself, is what consumers have been led to believe.
Ground beef is usually not simply a chunk of meat run through a grinder. Instead, records and interviews show, a single portion of hamburger meat is often an amalgam of various grades of meat from different parts of cows and even from different slaughterhouses. These cuts of meat are particularly vulnerable to E. coli contamination, food experts and officials say. Despite this, there is no federal requirement for grinders to test their ingredients for the pathogen.
The frozen hamburgers that the Smiths ate, which were made by the food giant Cargill, were labeled "American Chef's Selection Angus Beef Patties." Yet confidential grinding logs and other Cargill records show that the hamburgers were made from a mix of slaughterhouse trimmings and a mash-like product derived from scraps that were ground together at a plant in Wisconsin. The ingredients came from slaughterhouses in Nebraska, Texas and Uruguay, and from a South Dakota company that processes fatty trimmings and treats them with ammonia to kill bacteria.
Using a combination of sources - a practice followed by most large producers of fresh and packaged hamburger - allowed Cargill to spend about 25 percent less than it would have for cuts of whole meat.
Those low-grade ingredients are cut from areas of the cow that are more likely to have had contact with feces, which carries E. coli, industry research shows. Yet Cargill, like most meat companies, relies on its suppliers to check for the bacteria and does its own testing only after the ingredients are ground together. The United States Department of Agriculture, which allows grinders to devise their own safety plans, has encouraged them to test ingredients first as a way of increasing the chance of finding contamination.
Unwritten agreements between some companies appear to stand in the way of ingredient testing. Many big slaughterhouses will sell only to grinders who agree not to test their shipments for E. coli, according to officials at two large grinding companies. Slaughterhouses fear that one grinder's discovery of E. coli will set off a recall of ingredients they sold to others.
"Ground beef is not a completely safe product," said Dr. Jeffrey Bender, a food safety expert at the University of Minnesota who helped develop systems for tracing E. coli contamination. He said that while outbreaks had been on the decline, "unfortunately it looks like we are going a bit in the opposite direction."
Food scientists have registered increasing concern about the virulence of this pathogen since only a few stray cells can make someone sick, and they warn that federal guidance to cook meat thoroughly and to wash up afterward is not sufficient. A test by The Times found that the safe handling instructions are not enough to prevent the bacteria from spreading in the kitchen.
Cargill, whose $116.6 billion in revenues last year made it the country's largest private company, declined requests to interview company officials or visit its facilities. "Cargill is not in a position to answer your specific questions, other than to state that we are committed to continuous improvement in the area of food safety," the company said, citing continuing litigation.
The meat industry treats much of its practices and the ingredients in ground beef as trade secrets. While the Department of Agriculture has inspectors posted in plants and has access to production records, it also guards those secrets. Federal records released by the department through the Freedom of Information Act blacked out details of Cargill's grinding operation that could be learned only through copies of the documents obtained from other sources. Those documents illustrate the restrained approach to enforcement by a department whose missions include ensuring meat safety and promoting agriculture markets.
Within weeks of the Cargill outbreak in 2007, U.S.D.A. officials swept across the country, conducting spot checks at 224 meat plants to assess their efforts to combat E. coli. Although inspectors had been monitoring these plants all along, officials found serious problems at 55 that were failing to follow their own safety plans.
"Every time we look, we find out that things are not what we hoped they would be," said Loren D. Lange, an executive associate in the Agriculture Department's food safety division.
In the weeks before Ms. Smith's patty was made, federal inspectors had repeatedly found that Cargill was violating its own safety procedures in handling ground beef, but they imposed no fines or sanctions, records show. After the outbreak, the department threatened to withhold the seal of approval that declares "U.S. Inspected and Passed by the Department of Agriculture."
In the end, though, the agency accepted Cargill's proposal to increase its scrutiny of suppliers. That agreement came early last year after contentious negotiations, records show. When Cargill defended its safety system and initially resisted making some changes, an agency official wrote back: "How is food safety not the ultimate issue?"
The Risk
On Aug. 16, 2007, the day Ms. Smith's hamburger was made, the No.3 grinder at the Cargill plant in Butler, Wis., started up at 6:50 a.m. The largest ingredient was beef trimmings known as "50/50" - half fat, half meat - that cost about 60 cents a pound, making them the cheapest component.
Cargill bought these trimmings - fatty edges sliced from better cuts of meat - from Greater Omaha Packing, where some 2,600 cattle are slaughtered daily and processed in a plant the size of four football fields.
As with other slaughterhouses, the potential for contamination is present every step of the way, according to workers and federal inspectors. The cattle often arrive with smears of feedlot feces that harbor the E. coli pathogen, and the hide must be removed carefully to keep it off the meat. This is especially critical for trimmings sliced from the outer surface of the carcass.
Federal inspectors based at the plant are supposed to monitor the hide removal, but much can go wrong. Workers slicing away the hide can inadvertently spread feces to the meat, and large clamps that hold the hide during processing sometimes slip and smear the meat with feces, the workers and inspectors say.
Greater Omaha vacuums and washes carcasses with hot water and lactic acid before sending them to the cutting floor. But these safeguards are not foolproof.
"As the trimmings are going down the processing line into combos or boxes, no one is inspecting every single piece," said one federal inspector who monitored Greater Omaha and requested anonymity because he was not authorized to speak publicly.
The E. coli risk is also present at the gutting station, where intestines are removed, the inspector said
Every five seconds or so, half of a carcass moves into the meat-cutting side of the slaughterhouse, where trimmers said they could keep up with the flow unless they spot any remaining feces.
"We would step in and stop the line, and do whatever you do to take it off," said Esley Adams, a former supervisor who said he was fired this summer after 16 years following a dispute over sick leave. "But that doesn't mean everything was caught."
Two current employees said the flow of carcasses keeps up its torrid pace even when trimmers get reassigned, which increases pressure on workers. To protest one such episode, the employees said, dozens of workers walked off the job for a few hours earlier this year. Last year, workers sued Greater Omaha, alleging that they were not paid for the time they need to clean contaminants off their knives and other gear before and after their shifts. The company is contesting the lawsuit.
Greater Omaha did not respond to repeated requests to interview company officials. In a statement, a company official said Greater Omaha had a "reputation for embracing new food safety technology and utilizing science to make the safest product possible."
The Trimmings
In making hamburger meat, grinders aim for a specific fat content - 26.6 percent in the lot that Ms. Smith's patty came from, company records show. To offset Greater Omaha's 50/50 trimmings, Cargill added leaner material from three other suppliers.
Records show that some came from a Texas slaughterhouse, Lone Star Beef Processors, which specializes in dairy cows and bulls too old to be fattened in feedlots. In a form letter dated two days before Ms. Smith's patty was made, Lone Star recounted for Cargill its various safety measures but warned "to this date there is no guarantee for pathogen-free raw material and we would like to stress the importance of proper handling of all raw products."
Ms. Smith's burger also contained trimmings from a slaughterhouse in Uruguay, where government officials insist that they have never found E. coli O157:H7 in meat. Yet audits of Uruguay's meat operations conducted by the U.S.D.A. have found sanitation problems, including improper testing for the pathogen. Dr. Hector J. Lazaneo, a meat safety official in Uruguay, said the problems were corrected immediately. "Everything is fine, finally," he said. "That is the reason we are exporting."
Cargill's final source was a supplier that turns fatty trimmings into what it calls "fine lean textured beef." The company, Beef Products Inc., said it bought meat that averages between 50 percent and 70 percent fat, including "any small pieces of fat derived from the normal breakdown of the beef carcass." It warms the trimmings, removes the fat in a centrifuge and treats the remaining product with ammonia to kill E. coli.
With seven million pounds produced each week, the company's product is widely used in hamburger meat sold by grocers and fast-food restaurants and served in the federal school lunch program. Ten percent of Ms. Smith's burger came from Beef Products, which charged Cargill about $1.20 per pound, or 20 cents less than the lean trimmings in the burger, billing records show.
An Iowa State University study financed by Beef Products found that ammonia reduces E. coli to levels that cannot be detected. The Department of Agriculture accepted the research as proof that the treatment was effective and safe. And Cargill told the agency after the outbreak that it had ruled out Beef Products as the possible source of contamination.
But federal school lunch officials found E. coli in Beef Products material in 2006 and 2008 and again in August, and stopped it from going to schools, according to Agriculture Department records and interviews. A Beef Products official, Richard Jochum, said that last year's contamination stemmed from a "minor change in our process," which the company adjusted. The company did not respond to questions about the latest finding.
In combining the ingredients, Cargill was following a common industry practice of mixing trim from various suppliers to hit the desired fat content for the least money, industry officials said.
In all, the ingredients for Ms. Smith's burger cost Cargill about $1 a pound, company records show, or about 30 cents less than industry experts say it would cost for ground beef made from whole cuts of meat.
Ground beef sold by most grocers is made from a blend of ingredients, industry officials said. Agriculture Department regulations also allow hamburger meat labeled ground chuck or sirloin to contain trimmings from those parts of the cow. At a chain like Publix Super Markets, customers who want hamburger made from whole cuts of meat have to buy a steak and have it specially ground, said a Publix spokeswoman, Maria Brous, or buy a product like Bubba Burgers, which boasts on its labeling, "100% whole muscle means no trimmings."
To finish off the Smiths' ground beef, Cargill added bread crumbs and spices, fashioned it into patties, froze them and packed them 18 to a carton.
The listed ingredients revealed little of how the meat was made. There was just one meat product listed: "Beef."
Tension Over Testing
As it fed ingredients into its grinders, Cargill watched for some unwanted elements. Using metal detectors, workers snagged stray nails and metal hooks that could damage the grinders, then warned suppliers to make sure it did not happen again.
But when it came to E. coli O157:H7, Cargill did not screen the ingredients and only tested once the grinding was done. The potential pitfall of this practice surfaced just weeks before Ms. Smith's patty was made. A company spot check in May 2007 found E. coli in finished hamburger, which Cargill disclosed to investigators in the wake of the October outbreak. But Cargill told them it could not determine which supplier had shipped the tainted meat since the ingredients had already been mixed together.
"Our finished ground products typically contain raw materials from numerous suppliers," Dr. Angela Siemens, the technical services vice president for Cargill's meat division, wrote to the U.S.D.A. "Consequently, it is not possible to implicate a specific supplier without first observing a pattern of potential contamination."
Testing has been a point of contention since the 1994 ban on selling ground beef contaminated with E. coli O157:H7 was imposed. The department moved to require some bacterial testing of ground beef, but the industry argued that the cost would unfairly burden small producers, industry officials said. The Agriculture Department opted to carry out its own tests for E. coli, but it acknowledges that its 15,000 spot checks a year at thousands of meat plants and groceries nationwide is not meant to be comprehensive. Many slaughterhouses and processors have voluntarily adopted testing regimes, yet they vary greatly in scope from plant to plant.
The retail giant Costco is one of the few big producers that tests trimmings for E. coli before grinding, a practice it adopted after a New York woman was sickened in 1998 by its hamburger meat, prompting a recall.
Craig Wilson, Costco's food safety director, said the company decided it could not rely on its suppliers alone. "It's incumbent upon us," he said. "If you say, 'Craig, this is what we've done,' I should be able to go, 'Cool, I believe you.' But I'm going to check."
Costco said it had found E. coli in foreign and domestic beef trimmings and pressured suppliers to fix the problem. But even Costco, with its huge buying power, said it had met resistance from some big slaughterhouses. "Tyson will not supply us," Mr. Wilson said. "They don't want us to test."
A Tyson spokesman, Gary Mickelson, would not respond to Costco's accusation, but said, "We do not and cannot" prohibit grinders from testing ingredients. He added that since Tyson tests samples of its trimmings, "we don't believe secondary testing by grinders is a necessity."
The food safety officer at American Foodservice, which grinds 365 million pounds of hamburger a year, said it stopped testing trimmings a decade ago because of resistance from slaughterhouses. "They would not sell to us," said Timothy P. Biela, the officer. "If I test and it's positive, I put them in a regulatory situation. One, I have to tell the government, and two, the government will trace it back to them. So we don't do that."
The surge in outbreaks since 2007 has led to finger-pointing within the industry.
Dennis R. Johnson, a lobbyist for the largest meat processors, has said that not all slaughterhouses are looking hard enough for contamination. He told U.S.D.A. officials last fall that those with aggressive testing programs typically find E. coli in as much as 1 percent to 2 percent of their trimmings, yet some slaughterhouses implicated in outbreaks had failed to find any.
At the same time, the meat processing industry has resisted taking the onus on itself. An Agriculture Department survey of more than 2,000 plants taken after the Cargill outbreak showed that half of the grinders did not test their finished ground beef for E. coli; only 6 percent said they tested incoming ingredients at least four times a year.
In October 2007, the agency issued a notice recommending that processors conduct at least a few tests a year to verify the testing done by slaughterhouses. But after resistance from the industry, the department allowed suppliers to run the verification checks on their own operations.
In August 2008, the U.S.D.A. issued a draft guideline again urging, but not ordering, processors to test ingredients before grinding. "Optimally, every production lot should be sampled and tested before leaving the supplier and again before use at the receiver," the draft guideline said.
But the department received critical comments on the guideline, which has not been made official. Industry officials said that the cost of testing could unfairly burden small processors and that slaughterhouses already test. In an October 2008 letter to the department, the American Association of Meat Processors said the proposed guideline departed from U.S.D.A.'s strategy of allowing companies to devise their own safety programs, "thus returning to more of the agency's 'command and control' mind-set."
Dr. Kenneth Petersen, an assistant administrator with the department's Food Safety and Inspection Service, said that the department could mandate testing, but that it needed to consider the impact on companies as well as consumers. "I have to look at the entire industry, not just what is best for public health," Dr. Petersen said.
Tracing the Illness
The Smiths were slow to suspect the hamburger. Ms. Smith ate a mostly vegetarian diet, and when she grew increasingly ill, her mother, Sharon, thought the cause might be spinach, which had been tied to a recent E. coli outbreak.
Five days after the family's Sunday dinner, Ms. Smith was admitted to St. Cloud Hospital in excruciating pain. "I've had women tell me that E. coli is more painful than childbirth," said Dr. Phillip I. Tarr, a pathogen expert at Washington University in St. Louis.
The vast majority of E. coli illnesses resolve themselves without complications, according to the Centers for Disease Control and Prevention. Five percent to 10 percent develop into a condition called hemolytic uremic syndrome, which can affect kidney function. While most patients recover, in the worst cases, like Ms. Smith's, the toxin in E. coli O157:H7 penetrates the colon wall, damaging blood vessels and causing clots that can lead to seizures.
To control Ms. Smith's seizures, doctors put her in a coma and flew her to the Mayo Clinic, where doctors worked to save her.
"They didn't even think her brain would work because of the seizuring," her mother said. "Thanksgiving Day, I was sitting there holding her hand when a group of doctors came in, and one looked at me and just walked away, with nothing good to say. And I said, 'Oh my God, maybe this is my last Thanksgiving with her,' and I stayed and prayed."
Ms. Smith's illness was linked to the hamburger only by chance. Her aunt still had some of the frozen patties, and state health officials found that they were contaminated with a powerful strain of E. coli that was genetically identical to the pathogen that had sickened other Minnesotans.
Dr. Kirk Smith, who runs the state's food-borne illness outbreak group and is not related to Ms. Smith, was quick to finger the source. A 4-year-old had fallen ill three weeks earlier, followed by her year-old brother and two more children, state records show. Like Ms. Smith, the others had eaten Cargill patties bought at Sam's Club, a division of Wal-Mart.
Moreover, the state officials discovered that the hamburgers were made on the same day, Aug. 16, 2007, shortly before noon. The time stamp on the Smiths' box of patties was 11:58.
On Friday, Oct. 5, 2007, a Minnesota Health Department warning led local news broadcasts. "We didn't want people grilling these things over the weekend," Dr. Smith said. "I'm positive we prevented illnesses. People sent us dozens of cartons with patties left. It was pretty contaminated stuff."
Eventually, health officials tied 11 cases of illness in Minnesota to the Cargill outbreak, and altogether, federal health officials estimate that the outbreak sickened 940 people. Four of the 11 Minnesota victims developed hemolytic uremic syndrome - an usually high rate of serious complications.
In the wake of the outbreak, the U.S.D.A. reminded consumers on its Web site that hamburgers had to be cooked to 160 degrees to be sure any E. coli is killed and urged them to use a thermometer to check the temperature. This reinforced Sharon Smith's concern that she had sickened her daughter by not cooking the hamburger thoroughly.
But the pathogen is so powerful that her illness could have started with just a few cells left on a counter. "In a warm kitchen, E. coli cells will double every 45 minutes," said Dr. Mansour Samadpour, a microbiologist who runs IEH Laboratories in Seattle, one of the meat industry's largest testing firms.
With help from his laboratories, The Times prepared three pounds of ground beef dosed with a strain of E. coli that is nonharmful but acts in many ways like O157:H7. Although the safety instructions on the package were followed, E. coli remained on the cutting board even after it was washed with soap. A towel picked up large amounts of bacteria from the meat.
Dr. James Marsden, a meat safety expert at Kansas State University and senior science adviser for the North American Meat Processors Association, said the Department of Agriculture needed to issue better guidance on avoiding cross-contamination, like urging people to use bleach to sterilize cutting boards. "Even if you are a scientist, much less a housewife with a child, it's very difficult," Dr. Marsden said.
Told of The Times's test, Jerold R. Mande, the deputy under secretary for food safety at the U.S.D.A., said he planned to "look very carefully at the labels that we oversee."
"They need to provide the right information to people," Mr. Mande said, "in a way that is readable and actionable."
Dead Ends
With Ms. Smith lying comatose in the hospital and others ill around the country, Cargill announced on Oct. 6, 2007, that it was recalling 844,812 pounds of patties. The mix of ingredients in the burgers made it almost impossible for either federal officials or Cargill to trace the contamination to a specific slaughterhouse. Yet after the outbreak, Cargill had new incentives to find out which supplier had sent the tainted meat.
Cargill got hit by multimillion-dollar claims from people who got sick.
Shawn K. Stevens, a lawyer in Milwaukee working for Cargill, began investigating. Sifting through state health department records from around the nation, Mr. Stevens found the case of a young girl in Hawaii stricken with the same E. coli found in the Cargill patties. But instead of a Cargill burger, she had eaten raw minced beef at a Japanese restaurant that Mr. Stevens said he traced through a distributor to Greater Omaha.
"Potentially, it could let Cargill shift all the responsibility," Mr. Stevens said. In March, he sent his findings to William Marler, a lawyer in Seattle who specializes in food-borne disease cases and is handling the claims against Cargill.
"Most of the time, in these outbreaks, it's not unusual when I point the finger at somebody, they try to point the finger at somebody else," Mr. Marler said. But he said Mr. Stevens's finding "doesn't rise to the level of proof that I need" to sue Greater Omaha.
It is unclear whether Cargill presented the Hawaii findings to Greater Omaha, since neither company would comment on the matter. In December 2007, in a move that Greater Omaha said was unrelated to the outbreak, the slaughterhouse informed Cargill that it had taken 16 "corrective actions" to better protect consumers from E. coli "as we strive to live up to the performance standards required in the continuation of supplier relationship with Cargill."
Those changes included better monitoring of the production line, more robust testing for E. coli, intensified plant sanitation and added employee training.
The U.S.D.A. efforts to find the ultimate source of the contamination went nowhere. Officials examined production records of Cargill's three domestic suppliers, but they yielded no clues. The Agriculture Department contacted Uruguayan officials, who said they found nothing amiss in the slaughterhouse there.
In examining Cargill, investigators discovered that their own inspectors had lodged complaints about unsanitary conditions at the plant in the weeks before the outbreak, but that they had failed to set off any alarms within the department. Inspectors had found "large amounts of patties on the floor," grinders that were gnarly with old bits of meat, and a worker who routinely dumped inedible meat on the floor close to a production line, records show.
Although none were likely to have caused the contamination, federal officials said the conditions could have exacerbated the spread of bacteria. Cargill vowed to correct the problems. Dr. Petersen, the federal food safety official, said the department was working to make sure violations are tracked so they can be used "in real time to take action."
The U.S.D.A. found that Cargill had not followed its own safety program for controlling E. coli. For example, Cargill was supposed to obtain a certificate from each supplier showing that their tests had found no E. coli. But Cargill did not have a certificate for the Uruguayan trimmings used on the day it made the burgers that sickened Ms. Smith and others.
After four months of negotiations, Cargill agreed to increase its scrutiny of suppliers and their testing, including audits and periodic checks to determine the accuracy of their laboratories.
A recent industry test in which spiked samples of meat were sent to independent laboratories used by food companies found that some missed the E. coli in as many as 80 percent of the samples.
Cargill also said it would notify suppliers whenever it found E. coli in finished ground beef, so they could check their facilities. It also agreed to increase testing of finished ground beef, according to a U.S.D.A. official familiar with the company's operations, but would not test incoming ingredients.
Looking to the Future
The spate of outbreaks in the last three years has increased pressure on the Agriculture Department and the industry.
James H. Hodges, executive vice president of the American Meat Institute, a trade association, said that while the outbreaks were disconcerting, they followed several years during which there were fewer incidents. "Are we perfect?" he said. "No. But what we have done is to show some continual improvement."
Dr. Petersen, the U.S.D.A. official, said the department had adopted additional procedures, including enhanced testing at slaughterhouses implicated in outbreaks and better training for investigators.
"We are not standing still when it comes to E. coli," Dr. Petersen said.
The department has held a series of meetings since the recent outbreaks, soliciting ideas from all quarters. Dr. Samadpour, the laboratory owner, has said that "we can make hamburger safe," but that in addition to enhanced testing, it will take an aggressive use of measures like meat rinses and safety audits by qualified experts.
At these sessions, Felicia Nestor, a senior policy analyst with the consumer group Food and Water Watch, has urged the government to redouble its effort to track outbreaks back to slaughterhouses. "They are the source of the problem," Ms. Nestor said.
For Ms. Smith, the road ahead is challenging. She is living at her mother's home in Cold Spring, Minn. She spends a lot of her time in physical therapy, which is being paid for by Cargill in anticipation of a legal claim, according to Mr. Marler. Her kidneys are at high risk of failure. She is struggling to regain some basic life skills and deal with the anger that sometimes envelops her. Despite her determination, doctors say, she will most likely never walk again.
Gabe Johnson contributed reporting.
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4) Profits for Buyout Firms as Company Debt Soared
By JULIE CRESWELL
October 5, 2009
http://www.nytimes.com/2009/10/05/business/economy/05simmons.html?hp
For most of the 133 years since its founding in a small city in Wisconsin, the Simmons Bedding Company enjoyed an illustrious history.
Presidents have slumbered on its mattresses aboard Air Force One. Dignitaries have slept on them in the Lincoln Bedroom. Its advertisements have featured Henry Ford and H. G. Wells. Eleanor Roosevelt extolled the virtues of the Simmons Beautyrest mattress, and the brand was immortalized on Broadway in Cole Porter's song "Anything Goes."
Its recent history has been notable, too, but for a different reason.
Simmons says it will soon file for bankruptcy protection, as part of an agreement by its current owners to sell the company - the seventh time it has been sold in a little more than two decades - all after being owned for short periods by a parade of different investment groups, known as private equity firms, which try to buy undervalued companies, mostly with borrowed money.
For many of the company's investors, the sale will be a disaster. Its bondholders alone stand to lose more than $575 million. The company's downfall has also devastated employees like Noble Rogers, who worked for 22 years at Simmons, most of that time at a factory outside Atlanta. He is one of 1,000 employees - more than one-quarter of the work force - laid off last year.
But Thomas H. Lee Partners of Boston has not only escaped unscathed, it has made a profit. The investment firm, which bought Simmons in 2003, has pocketed around $77 million in profit, even as the company's fortunes have declined. THL collected hundreds of millions of dollars from the company in the form of special dividends. It also paid itself millions more in fees, first for buying the company, then for helping run it. Last year, the firm even gave itself a small raise.
Wall Street investment banks also cashed in. They collected millions for helping to arrange the takeovers and for selling the bonds that made those deals possible. All told, the various private equity owners have made around $750 million in profits from Simmons over the years.
How so many people could make so much money on a company that has been driven into bankruptcy is a tale of these financial times and an example of a growing phenomenon in corporate America.
Every step along the way, the buyers put Simmons deeper into debt. The financiers borrowed more and more money to pay ever higher prices for the company, enabling each previous owner to cash out profitably.
But the load weighed down an otherwise healthy company. Today, Simmons owes $1.3 billion, compared with just $164 million in 1991, when it began to become a Wall Street version of "Flip This House."
In many ways, what private equity firms did at Simmons, and scores of other companies like it, mimicked the subprime mortgage boom. Fueled by easy money, not only from banks but also endowments and pension funds, buyout kings like THL upended the old order on Wall Street. It was, they said, the Golden Age of private equity - nothing less than a new era of capitalism.
These private investors were able to buy companies like Simmons with borrowed money and put down relatively little of their own cash. Then, not long after, they often borrowed even more money, using the company's assets as collateral - just like home buyers who took out home equity loans on top of their first mortgages. For the financiers, the rewards were enormous.
Twice after buying Simmons, THL borrowed more. It used $375 million of that money to pay itself a dividend, thus recouping all of the cash it put down, and then some.
A result: THL was guaranteed a profit regardless of how Simmons performed. It did not matter that the company was left owing far more than it was worth, just as many people profited from the mortgage business while many homeowners found themselves underwater.
Investors who bought that debt are getting virtually nothing in the new deal.
"From my experience, none of the private equity firms were building a brand for the future," said Robert Hellyer, Simmons's former president, who worked for several of the private equity buyers before being asked to leave the company in 2005. "Plus, the mind-set was, since the money was practically free, why not leverage the company to the maximum?"
Just as with the housing market, the good times ended when the economy fell into recession and the credit markets froze. Simmons is now groaning under a huge amount of debt at a time when its sales are slowing. And this time there is no escaping by finding yet another buyer willing to shoulder its entire burden.
Simmons is one of hundreds of companies swept up by private equity firms in the early part of this decade, during the greatest burst of corporate takeovers the world has ever seen. Many of these deals, cut in good times, left little or no margin for error - let alone for the Great Recession.
A disproportionate number of the companies that were acquired during that frenzy are now struggling with the enormous debts. More than half the roughly 220 companies that have defaulted on their debt in some form this year were either owned at one time or are still controlled by private equity firms, according to analysts at Standard & Poor's. Among them are household names like Harrah's Entertainment and Six Flags, the theme park operator.
Executives at THL counter that Simmons was the victim of hard economic times, not mismanagement or too much debt. As proof, executives point to Simmons's 40 percent growth in sales and its 26 percent climb in operating income from 2003 through 2007 as well as its 13 consecutive quarters of market share gains against competitors through March 2009.
Simmons's woes, said Scott A. Schoen, a co-president of the firm who sat on Simmons's board, are entirely caused by the "unprecedented and unforeseeable" downturn that has shaken the entire bedding industry.
"We think the work we had done had positioned the company for us to reap the financial rewards that this economic cycle has taken away," said Mr. Schoen, gazing across a conference table at THL's headquarters overlooking Boston Harbor.
Still, he acknowledged, "We are clearly disappointed in the outcome of this investment. Make no bones about it."
Built Over Generations
Like other emerging industrialists of the 19th century, Zalmon G. Simmons, of Kenosha, Wis., had his hand in numerous businesses - the local bank, a telegraph company, a railroad and a cheese-box factory. He was even, for a time, the mayor of Kenosha.
Around 1876, Mr. Simmons came across a new machine that could mass-produce woven wire mattresses. The Simmons bedding company was born.
From its humble beginnings on the banks of Lake Michigan, Simmons grew to become one of the country's largest manufacturers of mattresses. Along the way, it even sprinkled a little Hollywood pixie dust on the ho-hum mattress business, hiring Dorothy Lamour and Maureen O'Hara to plug its products.
Until the 1970s, Simmons largely prospered. Then the troubles started, and the company was soon buried deep inside two enormous conglomerates, Gulf & Western and the Wickes Corporation, for a number of years.
But in the mid-1980s, Simmons caught the attention of a new type of investor. The businesses that stormed corporate America in recent years under the banner of private equity were not always called private equity firms. In the 1980s, they were known as leveraged buyout shops. Their strategy is essentially unchanged, however: they try to buy undervalued companies, using mostly borrowed money, fix them up and sell them for a fast profit.
Because they pile debt onto the companies they buy, the firms free up their own cash, allowing them to make additional investments and increase their potential profits.
Simmons's first trip through the revolving door of private equity came in 1986. Like the latest trip, it was not a pleasant one for employees, but the buyers did just fine.
William E. Simon, a private equity pioneer and a Treasury secretary under President Richard M. Nixon, was the man with the golden touch. In 1986, his investment firm, Wesray Capital, and a handful of Simmons's top managers acquired the company for $120 million, the bulk of which was borrowed. After selling several businesses to pay back some of the money it had borrowed, Wesray cashed out in 1989. It sold Simmons to the company's employee stock ownership plan for $241 million - twice what it paid just three years earlier.
The deal was a fiasco for the employees. As part of the buyout, Simmons stopped contributing to its pension plan, since the stock ownership plan shares were meant to pay for the employees' retirements. But then the bottom fell out of the housing market and Simmons, with its large debt, stumbled. Its pensions crumbled as the value of the stock plan shares plunged.
A succession of private equity buyers came and went. Merrill Lynch Capital Partners bought Simmons in 1991 for $32 million for a 60 percent stake in the company and the assumption of its debt. Merrill sold it to Investcorp, an investment group based in Bahrain, for $265 million in 1996. Two years later, Investcorp sold the company to Fenway Partners for $513 million.
During Fenway's tenure, Simmons released one of the industry's biggest innovations: the no-flip mattress. Profits soared. But after five years, Fenway executives decided to cash out. By the fall of 2003, Simmons was back on the block.
Teddy Bear at the Gate
A longtime figure in investment circles, Thomas H. Lee vaulted into the big leagues of private equity with what is regarded as one of the legendary deals of all time. After founding Thomas H. Lee Partners in 1974, he grabbed headlines in 1994 when he sold Snapple, the iced tea maker, for $1.7 billion to Quaker Oats. He bought the company two years earlier for around $130 million.
But while other captains of the buyout craze - like Henry Kravis of Kohlberg Kravis & Roberts - chased giant companies in hostile deals, Mr. Lee focused largely on midsize companies and steered clear of deals where he was not welcome. The research firm Hoover's describes Thomas H. Lee Partners as "the teddy bear at the gate."
Mr. Lee, scion of the family that founded the Shoe Corporation of America, left his namesake firm in 2006 to start another investment company. During his 30-year tenure at THL, his firm invested in a series of big names: Ghirardelli Chocolate, Petco Animal Supplies and General Nutrition Companies, among others. And by 2003, as the buyout boom began to build, his firm had Simmons in its cross hairs.
The Deal
The fall of 2003 was little more than a blur of meetings and presentations for Robert Hellyer, the former Simmons president who is among the fourth generation of his family involved in the mattress industry. In eight weeks, the company was shown to 20 private equity suitors in the corporate version of speed dating.
The list of potential buyers was quickly whittled to three and finally to THL, whose $1.1 billion bid for the company consisted of $327 million in new equity from the firm and more than $745 million in bonds and bank loans that had to be raised from investors.
"They were good guys; very smart guys," Mr. Hellyer said. "Their thesis was to buy a good business with good management and let them get better."
What THL wanted from the deal was a return of two to three times its initial investment.
From the get-go, the lofty price the firm paid for Simmons and the amount of debt raised red flags on Wall Street.
The "higher debt burden will limit the company's ability to respond to unexpected negative business developments, including economic or competitive threats or internal missteps," analysts at Moody's Investors Service warned at the time.
But nobody, it seems, was listening. Six months after acquiring Simmons, THL set in motion plans to take the company public. And by December 2004, THL found a way to get part of its initial investment back. Simmons issued debt that required the company to pay a hefty 10 percent annual interest rate. The proceeds were used to pay THL a dividend of $137 million. With the company's debt climbing, Simmons executives had to aim high with new products - and pray they were right.
In late 2004, Simmons unveiled the HealthSmart mattress in a blitz of marketing.
It gave away 250 beds to the audience of "The Ellen DeGeneres Show." It began a $15 million advertising campaign. It put coupons for free HealthSmart beds in celebrity souvenir bags during New York's Fashion Week.
A mattress line aimed at combating dust mites, mold and germs, the HealthSmart featured a zip-off top that could be washed or dry cleaned. But in the rush to get the product to market, Simmons did not go through its normal research and testings, Mr. Hellyer says.
HealthSmart was a flop. Consumers did not like the mattress - they thought the zip-on cover was troublesome. Sales at the company slid nearly 8 percent in the first quarter from the previous year.
"Panic ensued. Thomas H. Lee came in and pulled the national advertising right away," said a former Simmons employee involved with HealthSmart who declined to be named because he is still involved with the mattress industry.
THL shelved its plans to take Simmons public, and the company shook up its sales division. By the third quarter of 2005, Simmons had "one of the best quarters in the company's entire history up to that point," a spokesman for THL said in an e-mail message. The numbers tell a slightly different story: Net sales declined 4.8 percent in that quarter from a year earlier, and operating income fell to $25.1 million, from $25.5 million in the third quarter of 2004. Later, spokesmen for THL and Simmons clarified the statement by saying that after excluding a one-time reorganization expense, an adjusted earnings figure for the quarter was the 10th best in the company's history.
Executives at THL say they moved quickly to put Simmons back on track.
"More than a dozen THL professionals have devoted literally thousands of man-hours to Simmons, including making over 115 visits to company headquarters and site facilities around the country," the firm said in a statement.
The results, it argued, speak for themselves. In the following years, Simmons's sales and profits climbed, and the company introduced several new products, including the successful premium-price Beautyrest Black line of mattresses.
By early 2007, at the very top of the credit market bubble, THL took a bit more out of Simmons. It created a holding company that it used to issue $300 million more in debt, which paid an additional $238 million dividend to the private equity firm. With that, THL had recouped its entire $327 million equity investment in Simmons and booked a profit of around $48 million. (It made an additional $28.5 million in various fees over the years.)
THL was hardly alone in undertaking this sort of financial engineering, known as a dividend recapitalization. From 2003 to 2007, 188 companies controlled by private equity firms issued more than $75 billion in debt that was used to pay dividends to the buyout firms.
Asked whether the 2007 dividend was too much for Simmons, Mr. Schoen of THL defended the deal.
"That debt financing, which clearly spelled out to the market the use of the proceeds, was extremely well received. The securities were heavily oversubscribed," Mr. Schoen said. "Not only did we think it was appropriate, but the market did as well," he added.
As the economy soured in late 2007, so did Simmons's sales. The company slashed costs and cut jobs throughout 2008. But last fall, unable to meet the terms of its bank loans and debt dating back to the 2003 acquisition itself, Simmons stopped making interest payments to its bondholders. THL began talking to the banks and bondholders about how to lighten Simmons's debt load, and put the company up for sale.
The Impact on Employees
From the start, Noble Rogers loved working at Simmons.
"There were picnics, March of Dimes walks, Christmas parties, and we always had Halloween parties. It was a really family-oriented company," Mr. Rogers, 50, recalled. "I told my wife that this was a great place for me to work. A great place for me to retire, to make a living at."
For a long time, it was. For 22 years, Mr. Rogers worked at Simmons, the bulk of those years at a factory in Mableton, outside Atlanta. After operating the coiler machine for the company's Beautyrest mattress, he moved into maintenance and kept all of the plant's machinery humming.
Over the years, as Simmons passed from one private equity firm to another, and as Mr. Rogers became president of the local union at the plant, he saw little difference on the plant floor. Then, in the spring of 2008, when the slowing economy had begun to hurt sales, Simmons laid off the night shift at the Mableton plant. And on Sept. 18 that year, it gathered employees in the cafeteria to say that the plant was closing.
"So many people were hurt because they thought this was a great company to work for and they planned on spending the rest of their lives here. Their families were here. They bought houses and cars here," Mr. Rogers recalled. "After this happened, people were really struggling."
Between the closings and other cuts, Simmons let go of more than a quarter of its work force last year, said its chief financial officer, William S. Creekmuir.
Mr. Rogers, who received his union-negotiated severance package of two months' pay, said he and other union representatives had tried to get a little more for workers, particularly those who would have been eligible for retirement. Simmons had a long history of giving retiring employees a bonus of $20 for each year worked and a free mattress set, Mr. Rogers said.
"They wouldn't give us anything," he said.
In the months after he lost his job, Mr. Rogers nearly lost his home to foreclosure and struggled to pay his family's bills. Mr. Rogers, who eventually landed a job at an air filter company and picked up part-time work doing maintenance at an apartment complex, said Simmons bore little resemblance to the company he once loved.
"They stopped the picnics. They stopped the Christmas parties. They stopped the retirement parties," he recalled. "That showed you the type of people I was working for. I just didn't realize it until the hard times came like they did."
For now, the Golden Age of private equity is over, the financiers say. In a speech to an industry gathering last spring. Mr. Schoen said that bankers and bondholders were reluctant to lend more money to the buyout kings.
"We're in a brave new world," he said. "We can't go back to where we were, at least not in this investment cycle, and probably not in my career."
But some private equity investors are searching for profits in the detritus of the buyout bust. Simmons hopes to emerge from bankruptcy in the hands of two new private equity firms. One is Ares Management, which owns the mattress giant Serta. Under the plan, Simmons's debt would be more than halved, to $450 million, in part reflecting the losses suffered by its existing bondholders.
Simmons and its remaining employees face an uncertain future. Some in the industry predict Ares will eventually merge at least part of Simmons with Serta, jeopardizing more jobs.
"Simmons has been a cash cow. It's made a lot of people a lot of money," said David Perry, executive editor of Furniture/Today. "But there's a growing question in the industry of how many more times can this be repeated. How much more juice can be squeezed out of the orange?"
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5) Puerto Ayora Journal
To Protect Galápagos, Ecuador Limits a Two-Legged Species
By SIMON ROMERO
October 5, 2009
http://www.nytimes.com/2009/10/05/world/americas/05galapagos.html?ref=world
PUERTO AYORA, Galápagos Islands - The mounds of reeking garbage on the edge of this settlement 600 miles off Ecuador's Pacific coast are proof that one species is thriving on the fragile archipelago whose unique wildlife inspired Darwin's theory of evolution: man.
Tiny gray finches, descendants of birds that were crucial to his thesis, flutter around the dump, which serves a growing town of Ecuadoreans who have moved here to work in the islands' thriving tourism industry.
The burgeoning human population of the Galápagos, which doubled to about 30,000 in the last decade, has unnerved environmentalists. They point to evidence that the growth is already harming the ecosystem that allowed the islands' more famous inhabitants - among them giant tortoises and boobies with brightly colored webbed feet - to evolve in isolation before mainlanders started colonizing the islands more than a century ago.
The growth has become enough of a threat to the environment that even the government, which still welcomes growth in the tourism industry, has expelled more than 1,000 poor Ecuadoreans in the past year from a province that they feel is rightfully theirs, and it is in the process of expelling many more.
By limiting the population, officials hope to preserve the natural wonders that bolster one of Ecuador's most profitable sectors: tourism. But the measures are feeding a backlash among unskilled migrants who say they are being punished while the country continues to enjoy the many millions of dollars tourists bring to Ecuador, one of South America's poorest nations.
"We are being told that a tortoise for a rich foreigner to photograph is worth more than an Ecuadorean citizen," said María Mariana de Reina Bustos, 54, a migrant from Ambato in Ecuador's central Andean valley, whose 22-year-old daughter, Olga, was recently rounded up by the police near the slum of La Cascada and put on a plane to the mainland.
The first settlers came to the islands to live off the land, working as fishermen, ranchers and farmers. Now, most of those who make the short flight from Quito, the capital, or sneak on the islands in boats are lured by different sorts of riches: the relatively high wages they can earn as taxi drivers and hotel maids or workers in the islands' growing bureaucracy.
For decades, the country's leaders did little to prevent people from coming here, partly to build the tourism industry and then to ensure the government had a presence among the pioneers. There seemed to be something of a natural limit on growth: the country had put aside 97 percent of the archipelago as a park.
But as tourism and migration grew over the last decade, pressure began building within the archipelago's scientific and environmental community and abroad for Ecuador to act on curbing the islands' population. The United Nations put the Galápagos on its list of endangered heritage sites in 2007.
Scientists here said people had already done significant damage, pointing to fuel spills, the poaching of giant tortoises and sharks and the introduction of invasive species - including rats, cattle and fire ants - that threaten animals endemic to the Galápagos.
Even seemingly benign human activities like owning a pet can have outsize consequences here.
"With people come cats, and with cats come threats to other animals found nowhere else in the world," said Fernando Ortiz, coordinator of the Galápagos program for Conservation International.
Conflict is built into the rules that allowed the Galápagos to be colonized in the first place, despite a lack of fresh water in the archipelago. Technically, residency is granted to a limited number of people, including those born here and their spouses, people who arrived before 1998 and those with temporary work permits. The police, known in local slang as the "migra" for their role in tracking down illegal migrants, set up impromptu checkpoints throughout the islands. But the same government that oversees the expulsions also offers subsidies to people living on the islands.
One subsidy allows gasoline to cost about the same here as on the mainland. Another allows residents to fly between the islands or to Quito for a fraction of what foreigners pay. Loopholes also flourish. For instance, a black market in residency thrives in which migrants marry established residents to obtain coveted identity cards.
The result: Puerto Ayora's streets beckon with discos, food stands and souvenir shops. On the outskirts, a billboard with the image of Leopoldo Bucheli, the pro-development mayor, celebrates a project called El Mirador that is clearing an area on the edge of town to build 1,000 new homes.
"All we want, like people anywhere on this planet, is a dignified existence," said Yonny Mantuano, 36, who bought a lot to build a home at El Mirador. He heads the teachers union here, whose 600 members have chafed at one of the government's new attempts to limit subsidies: a measure this year cutting their cost-of-living bonus.
The government's somewhat schizophrenic view of life here is echoed by the sentiments of the people. Margarita Masaquiza, 45, an Indian from Ecuador's highlands who arrived here at the age of 14, abhors the government's expulsions.
"We built this province with our own hands, so, yes, it pains us to see our countrymen deported like animals," Ms. Masaquiza said. "After all, we are indigenous Ecuadoreans, how can we be illegal in our own country?"
But when asked how she felt about the impact of new migrants on her four children and four grandchildren, Ms. Masaquiza adopted a different tone.
"We must preserve opportunities for our families," she said.
Most people in the Galápagos live on San Cristóbal, an island where a penal colony functioned decades ago, and Santa Cruz, where Puerto Ayora is located. Development is spreading to other parts of the archipelago, as well.
Isabela, the largest of the islands, offers a glimpse into the Galápagos frontier.
Despite its streets of sand, Puerto Villamil, Isabela's main town, looks not unlike a Phoenix subdivision around 2007. Laborers work feverishly on 200 new cinderblock homes on the town's edge. Only about 2,000 people live in the town, but it has one of the Galápagos's highest rates of population growth, about 9 percent a year.
"I earn $1,200 a month here, while I could only earn $500 a month on the continent," said Bolívar Buri, 26, a construction worker born in Puerto Villamil who made a small fortune this year when he sold an empty lot for $8,000 that he bought six years ago for $600.
But even in the archipelago's less spoiled areas, there is little doubt that man's intrusion has altered life on the islands that enraptured Darwin.
On the road from Puerto Villamil to the drizzle-shrouded crater of the Sierra Negra volcano, subsistence hunters on horseback scan the forest for wild pigs, a species introduced by mariners over a century ago. White cattle egrets, another introduced species, fly overhead.
One recent day, Manuel López, a cowboy and migrant from the mainland who tends a herd under the volcano's mist, emerged from a forest thick with guava trees.
He paused under the equatorial sun; his gaze narrowed.
"If it is God's will, I'm on this island to stay," said Mr. López, 36.
"We must be in Galápagos for a reason," he said, prodding a visitor to reply. "Yes or no?"
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6) Wanted: Pot Critic With Shrewd Taste and Medical Need
By RICHARD PÉREZ-PEÑA
October 5, 2009
http://www.nytimes.com/2009/10/05/business/media/05marijuana.html?ref=us
Don't look for phrases like "insouciant yet skunky." At least, not yet.
Westword, an alternative weekly newspaper in Denver, has the standard lineup of film, food and music critics. But in what may be a first for American journalism, the paper is shopping around for a medical marijuana critic.
The idea is not to assess the green stuff itself, but to review the dispensaries that have sprouted like, um, weeds in Denver this year.
"We want to see what kind of place it is, how well they care for you and also how sketchy the place is," said Patricia Calhoun, editor of Westword. "Do they actually look at your medical marijuana card? Do they let you slip some cash under the counter and bypass the rules?"
Last week, the paper published a call for a regular freelance reviewer with a real, doctor-certified medical need - asking each candidate to send a résumé and an essay on "What Marijuana Means to Me" - and received several dozen applications within a few days.
"Every time an application comes in, it's like opening a little birthday present, because most of them are quite hilarious," Ms. Calhoun said.
Coloradans voted in 2000 to legalize medical marijuana, but the dispensaries boomed this year, after the state decided against taking a restrictive view of the law and the Obama administration decided to end federal raids on state-sanctioned businesses.
"It is the wild west of medical marijuana out here," Ms. Calhoun said. "There were a couple of dozen dispensaries this spring, and now it's over 100. We just heard there's going to be a drive-through dispensary."
Dispensaries promote different strains with distinctive flavors - there are, after all, marijuana snobs just as there are wine snobs - and some mix their wares into foods like hummus, pesto and chocolate. So why not critique the cannabis, too?
"It could well be that we will be reviewing the product itself, eventually," she said.
The job posting has drawn national attention, to which she said dryly, "This is our dream, to be known as the pothead paper." In the alt-weekly world, competition for that title would be fierce.
RICHARD PÉREZ-PEÑA
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7) Few Results for Reports of Police Misconduct
By CHRISTINE HAUSER
October 5, 2009
http://www.nytimes.com/2009/10/05/nyregion/05ccrb.html?ref=nyregion
Joseph A. Diaz's problems with the police began in 2007. He was sitting on the stoop of his apartment building in the Bronx, smoking a cigarette, when a police officer approached him and, according to Mr. Diaz, asked him for identification.
"Why are you asking me this?" Mr. Diaz, 58, said he told the officer. "For 40 years, I live in this building. Did you see me do something? Did you get a call on me? You can't profile me," he said in an interview.
One week later, Mr. Diaz said, he was confronted by the same officer and a few others. Words were exchanged, and this time, Mr. Diaz said, he was handcuffed and frisked before being released without arrest.
That encounter began an effort, now nearly two years running, by Mr. Diaz to seek an official explanation. Like thousands of other New Yorkers each year, he filed a complaint with the Civilian Complaint Review Board, which investigates allegations of police misconduct. But about a year after the review board substantiated part of Mr. Diaz's case, the Police Department closed it without explanation.
"His is the typical case that we are concerned about," said Dick Dadey, the executive director of Citizens' Union, which has pressed for reforms at the review board. "It has been dismissed without him or the public knowing why."
Civil rights advocates, elected officials and community leaders say cases like Mr. Diaz's are reviving ideas for reforms of the review board, including recent legislative proposals by City Councilman Daniel R. Garodnick and Bill de Blasio, a candidate for public advocate. Most focus on the board's relevance; many civilian complaints, even those that the board's investigators substantiate, result in no disciplinary measures taken by the Police Department. And of the cases sent to the police, 40 percent are rejected.
"If you think you are going to see the cop fired or something serious happen, then maybe C.C.R.B. is not the right way to go," said Cory Walker, a former review board investigator, referring to the advice he gives his clients in his current job as a Legal Aid Society lawyer.
Police officials, in defending the way they handle discipline of officers, suggested that the department has improved its relationship with the review board. But they also insist that the department's own lawyers are best qualified to decide whether to pursue a case against an officer. "The department advocate is best positioned to assess the relative strength of the case and the probability of a finding of guilt," said the chief spokesman, Paul J. Browne.
The review board was established in December 1992, with a City Council vote intended to create an independent civilian agency to investigate misconduct complaints against the police. The allegations can range from obscenity to excessive force.
This year, the board is projecting that at least 8,200 citizens will file complaints, which would be the highest yearly total ever in the city. In 2008, more than half a million people - also a record number - were stopped and frisked, a practice that generates the most complaints to the board.
Despite the increasing volume of complaints, the review board has seen the Police Department decline to act upon a growing percentage of its cases.
In 2005, the Police Department declined to prosecute 2 percent of the cases that the review board referred to it. By 2008, that figure had risen to 33 percent; so far this year, the department has declined to prosecute 40 percent of the cases, records show.
"The only plausible explanation for the huge increase in dismissed cases is that the department has made a conscious decision not to pursue discipline against officers found by the C.C.R.B. to have engaged in misconduct," said Christopher Dunn, associate legal director for the New York Civil Liberties Union.
The board's records also show a trend of fewer officers being disciplined: it was 58 percent last year, down from 74 percent in 2004.
The Police Department has said that its standards of proof are different from those used by the review board's lawyers, and that only department lawyers have the expertise to decide which cases to prosecute.
Police Commissioner Raymond W. Kelly recently noted the department has made reforms to improve the way it works with the review board, like by replacing police personnel with civilian prosecutors in trials.
"There were police officers who were prosecuting other police officers," Mr. Kelly said in a recent news briefing. "Some were attorneys, some weren't."
If a case is substantiated by the review board, it is passed on to the Police Department, which has the sole discretion and power to drop the case or pursue it. Commissioner Kelly has the final say in any decisions about discipline, which can result in dismissal.
Mr. Browne, the police spokesman, said although they were prosecuting fewer cases referred by the review board, the conviction rate at departmental trials had risen to 60 percent from 30 percent in 2004. Mr. Browne credited an overhaul of the department's advocate office, whose prosecutors have been more selective about which cases they take on.
"It would be unfair and counterproductive, and a waste of scarce police resources, to move forward with a case which is incapable of being proven in the trial room," Mr. Browne said.
Over the years, some of the current ideas for reforms had been suggested before, like in 2001, when former Mayor Rudolph W. Giuliani, acting on the recommendations of the Commission to Combat Police Corruption, backed the idea of giving prosecutorial authority to the review board.
But now, at the start of the board's 16th year in operation, many say at no other time has the need to expand the agency's powers been more pressing.
In addition to the rising number of complaints, the board is facing internal challenges. Like other city agencies, its staffing and budget are coming under pressure, with $10.2 million budgeted for the 2010 fiscal year, down from $11.4 million in 2009.
The agency lost 10 investigators in the 2009 fiscal year and will shed another 16 in the following year, board officials said.
Joan Thompson, the board's executive director, testified at a City Council committee hearing in May that the agency was losing some staff, and she projected that slightly more than half of the cases would have to be dropped because investigators would not be able to meet the 18-month statute of limitations for each case.
One of them was the case Mr. Diaz initiated. On Feb. 8, 2007, a week after Mr. Diaz said he was initially approached by the officer on his stoop, that officer and three others passed him in front of his building. The officers spoke among themselves, and then one, identified in Mr. Diaz's case records as Officer Luis Ortiz, backtracked and asked Mr. Diaz for identification.
"You're harassing me," Mr. Diaz said he told Officer Ortiz. Mr. Diaz, in a telephone interview, said Officer Ortiz then used physical force, handcuffed him and frisked him before letting him go.
Mr. Diaz immediately filed a complaint with the review board. Ten months later, the board sent him a letter that said their investigators substantiated that Officer Ortiz had abused his authority by stopping and detaining Mr. Diaz. It referred the case to the police for action.
Mr. Browne, the department spokesman, said in an e-mail message that Mr. Diaz could not adequately identify the officers. Mr. Diaz denies this. Mr. Browne also said a command log shows that the accused officers were in a different location at the time Mr. Diaz said he was harassed by them.
But Mr. Diaz did not hear anything about his case until September 2008, nearly a year later, when he got a letter from the Police Department saying it investigated and decided no disciplinary action would be taken, and considered the matter closed. It did not tell him why.
"They waited like two years and nothing happened and it just disappeared," Mr. Diaz said. "It just disappeared like smoke."
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8) Arrest Puts Focus on Protesters' Texting
By COLIN MOYNIHAN
October 5, 2009
http://www.nytimes.com/2009/10/05/nyregion/05txt.html?ref=nyregion
As demonstrations have evolved with the help of text messages and online social networks, so too has the response of law enforcement.
On Thursday, F.B.I. agents descended on a house in Jackson Heights, Queens, and spent 16 hours searching it. The most likely reason for the raid: a man who lived there had helped coordinate communications among protesters at the Group of 20 summit in Pittsburgh.
The man, Elliot Madison, 41, a social worker who has described himself as an anarchist, had been arrested in Pittsburgh on Sept. 24 and charged with hindering apprehension or prosecution, criminal use of a communication facility and possession of instruments of crime. The Pennsylvania State Police said he was found in a hotel room with computers and police scanners while using the social-networking site Twitter to spread information about police movements. He has denied wrongdoing.
American protesters first made widespread use of mass text messages in New York, during the 2004 Republican National Convention, when hundreds of people used a system called TXTmob to share information. Messages, sent as events unfolded, allowed demonstrators and others to react quickly to word of arrests, police mobilizations and roving rallies. Mass texting has since become a valued tool among protesters, particularly at large-scale demonstrations.
And police and government officials appear to be increasingly aware of such methods of communication. In 2008, for instance, the New York City Law Department issued a subpoena seeking information from the graduate student who created the code for TXTmob. Still, Mr. Madison, who was released on bail shortly after his arrest, may be among the first to be charged criminally while sending information electronically to protesters about the police.
A criminal complaint in Pennsylvania accuses him of "directing others, specifically protesters of the G-20 summit, in order to avoid apprehension after a lawful order to disperse."
"He and a friend were part of a communications network among people protesting the G-20," Mr. Madison's lawyer, Martin Stolar, said on Saturday. "There's absolutely nothing that he's done that should subject him to any criminal liability."
A search warrant executed by the F.B.I. at Mr. Madison's house authorized agents and officers looking for violations of federal rioting laws to seize computers and phones, black masks and clothes and financial records and address books. Among the items seized, according to a list prepared by the agents, were electronic equipment, newspapers, books and gas masks. The items also included what was described as a picture of Lenin.
Since the raid, no other charges have been filed against Mr. Madison. On Friday, Mr. Stolar argued in Federal District Court in Brooklyn that the warrant was vague and overly broad. Judge Dora L. Irizarry ordered the authorities to stop examining the seized materials until Oct. 16, pending further orders.
Mr. Stolar said that the reason for the Jackson Heights raid would not be clear until an affidavit used to secure the search warrant was unsealed. But he said that commentary among agents indicated that it was related to Mr. Madison's arrest in Pittsburgh, where he participated in the Tin Can Comms Collective, a group of people who collected information and used Twitter to send mass text messages describing protest-related events that they observed on the streets.
There were many such events during the two days of the summit. Demonstrators marched through town on the opening day of the gathering, at times breaking windows and fleeing. And on both nights, police officers fired projectiles and hurled tear gas canisters at students milling near the University of Pittsburgh.
After Mr. Madison's arrest, other Tin Can participants continued to send messages, now archived on Twitter's Web site. Many of those messages tracked police movements. One read: "SWAT teams rolling down 5th Ave." Another read: "Report received that police are 'nabbing' anyone that looks like a protester / Black Bloc. Stay alert watch your friends!"
But even as protesters were watching the police, it appeared that the police were monitoring the protesters' communications.
Just after 1 p.m. on Sept. 24, a text message stated: "A comms facility was raided, but we are still fully operational please continue to submit reports." Nine hours later, a text read: "Scanner just said be advised we're being monitored by anarchists through scanner."
On Sunday night Mr. Madison said that the search of his home was an effort to "stifle dissent," and added that several groups in Pittsburgh, including the summit organizers, had used Twitter accounts to describe events related to the meetings.
"They arrested me for doing the same thing everybody else was doing, which was perfectly legal," he said. "It was crucial for people to have the information we were sending."
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9) Report on Bailouts Says Treasury Misled Public
By LOUISE STORY
October 5, 2009
http://www.nytimes.com/2009/10/05/business/economy/05bank.html?ref=business
WASHINGTON - The inspector general who oversees the government's bailout of the banking system is criticizing the Treasury Department for some misleading public statements last fall and raising the possibility that it had unfairly disbursed money to the biggest banks.
A Treasury official made incorrect statements about the health of the nation's biggest banks even as the government was doling out billions of dollars in aid, according to a report on the Troubled Asset Relief Program to be released on Monday by the special inspector general, Neil M. Barofsky.
The report also provides new insight into the way the Treasury allocated billions of dollars to nine of Wall Street's largest players. The report says that Bank of America appeared to qualify for more aid earlier, under the government plan. That assertion adds another element of intrigue to continuing investigations of the bank's merger with Merrill Lynch and the role that regulators played in the deal, even as Merrill's condition deteriorated.
The bailout formula called for banks to get an amount equal to as much as 3 percent of their risk-weighted assets, with aid capped at $25 billion for each institution, according to the report. By size, Citigroup, JPMorgan Chase and Bank of America could have qualified for more, and the first two received $25 billion.
But Bank of America was given only $15 billion in October, since Merrill Lynch was earmarked for $10 billion. The two companies agreed to a merger, though their deal had not yet been approved by regulators or shareholders.
Bank of America ultimately received Merrill's $10 billion in January - as well as $20 billion in additional bailout funds - but if the bank had not been involved in the Merrill deal, it would probably have received $25 billion at the outset, as did Citigroup and JPMorgan.
Another company in the process of a merger was not treated the same. Wells Fargo was acquiring Wachovia, and it received both companies' money at the start, according to the inspector general.
Mr. Barofsky's office also says that regulators were wrong to tell the public last year that the earliest bailout recipients were all healthy.
Former Treasury Secretary Henry M. Paulson Jr., for instance, said on Oct. 14 that the banks were "healthy," and that they accepted the money for "the good of the U.S. economy." The banks, he said, would be better able to increase their lending to consumers and businesses.
In truth, regulators were concerned about the health of several banks that received that first bailout, the inspector general writes.
The inspector general said government officials need to be more careful when describing their actions and rationale. In a letter included with the report, the Federal Reserve concurred with Mr. Barofsky's concern about the statements made last year, but the Treasury Department said that any review of announcements last year "must be considered in light of the unprecedented circumstances in which they were made."
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10) Greenspan Foresees a Rise in Unemployment
By JOSEPH BERGER
October 5, 2009
http://www.nytimes.com/2009/10/05/business/economy/05greenspan.html?ref=business
Alan Greenspan, the former chairman of the Federal Reserve board, said on Sunday that the latest job report showing the nation's unemployment at 9.8 percent was "pretty awful" and said he expected the figure to climb even higher.
"My own suspicion is that we're going to penetrate the 10 percent barrier and stay there for a while before we start down," he said in an appearance on "This Week With George Stephanopoulos" on ABC.
He said he was particularly concerned about data in the employment report, released Friday, indicating that an increasing number of Americans have been unemployed for more than six months. That number increased in September by 450,000, reaching 5.4 million, according to the report from the Labor Department.
Prolonged unemployment means "the economy loses skills," Mr. Greenspan said. "And people who are out of work for very protracted periods of time lose their skills eventually."
He went on: "And remember that what makes an economy great is a combination of the capital assets of the economy and the people who run it. And if you erode the human skills that are involved there, there is a real and in one sense an irretrievable loss."
The "silver lining" to the jobs report, he said, is that after the collapse of Lehman Brothers last year and a plunge in stock markets, businesses laid off too many people in anticipation of a drastic slowdown in the economy. Some of those jobs will have to be restored.
"At some point we're going to start to see an improvement in employment," he said.
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11) Study Says Reporting on Economy Was Narrow
By RICHARD PÉREZ-PEÑA
October 5, 2009
http://www.nytimes.com/2009/10/05/business/media/05pew.html?ref=business
A study to be released Monday of financial news coverage this year found that government, Wall Street and a small handful of story lines got the bulk of the attention while much less was paid to the economic troubles of ordinary people.
The study, by the Pew Research Center's Project for Excellence in Journalism, also found that when the stock market rebounded from its lows and pitched battles in Washington ended, the news media turned their attention away from economic coverage.
Reviewing almost 10,000 reports from Feb. 1 to Aug. 31 in newspapers, on news Web sites, on the radio and on network broadcast and cable television, Pew found that almost 40 percent of economic news reports dealt with the trials of the banking and auto industries, and the federal stimulus bill passed in February.
Unemployment and the housing crisis accounted for 12 percent. And, the study said, "stories that tried to explicitly examine the broader impact of the economic downturn on the lives of ordinary Americans filled 5 percent of the economic coverage."
Three-quarters of the reports originated from Washington or New York, and a similar number were based on the actions of government and business leaders.
In February and March, the economy was the subject of nearly half of all news coverage, driven mostly by the stimulus bill and the uses of bank bailout money. After those fights died down, financial news coverage fell by more than half.
Mark Jurkowitz, associate director of the Pew project, said it was easier for the national news media to cover Washington "than to fan out around the country and measure the impact on real lives."
"There's plenty of reason to understand why a lot of this is a Washington and New York story," he said. "But we're talking about something that affected almost every American in some way."
Newspapers did more financial reporting than other media, and covered a much broader range of economic topics about a wider range of people, and they were far more likely to dig up items on their own, the study said.
Researchers at Cornell and Stanford, along with Pew and Facebook, also combed through 1.6 million Web sites to see what phrases about the economy were repeated most. Nine of the top 20 came from President Obama, like the statement Feb. 24 that "the weight of this crisis will not determine the destiny of this nation."
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12) Three-fourths of the VFP Executive Committee arrested along with others in DC today
Kenneth Mayers
Veterans for Peace - Santa Fe
Wage Peace!
October 5, 2009
Dear Colleagues,
VFP President Mike Ferner, Vice President Leah Bolger, and Treasurer
Ken Mayers were all arrested in front of the White House today while
standing vigil over three mock coffins draped with US, Afgan, and Iraq
flags. Other VFP members arrested included Mike Hearington, Jim
Goodnow, Tarak Kauf, Tom Palombo and Louis Wolf. VFP Executive
Director Michael McPhearson, along with Colonel Ann Wright and members
of the capital area VFP chapters also supported the protest. The VFP
members were among 65 arrestees who included Kathy Kelly, Liz
McAlister, and Cindy Sheehan among others. All those arrested were
taken to the National Park Police Headquarters, booked, and released.
They now have 14 days in which to reappear at the National Park Police
Headquarters either to pay their $100 fines or to obtain a court date.
Along with Veterans for Peace, a broad range of affinity groups, such
as the Atlantic Life Community, Witness Against Torture, Veterans for
Peace, World Can't Wait, and Activist Response Team had members
arrested. Other groups fully endorsing the action and participating
were Peace Action, Code Pink, the War Resisters' League, and Student
Peace Action Network.
The protest called for withdrawal of all U.S. troops from Afghanistan,
ending the illegal bombing with US drones, including neighboring
Pakistan, and the closing of the Bagram prison and ending indefinite
detention and torture. We called for an end to these wars and
occupations, including that of Iraq, so that our resources can be used
for life-sustaining actions including the funding and the rebuilding
of Afghanistan's and Iraq's infrastructure and medical assistance to
Afghans and Iraqis, in addition to poverty reduction programs in the
United States and world wide. We continue to call for accountability
for those who have committed war crimes.
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13) Does Obama Get It?
By BOB HERBERT
Op-Ed Columnist
October 6, 2009
http://www.nytimes.com/2009/10/06/opinion/06herbert.html?hp
The big question on the domestic front right now is whether President Obama understands the gravity of the employment crisis facing the country. Does he get it? The signals coming out of the White House have not been encouraging.
The Beltway crowd and the Einsteins of high finance who never saw this economic collapse coming are now telling us with their usual breezy arrogance that the Great Recession is probably over. Their focus, of course, is on data, abstractions like the gross domestic product, not the continued suffering of living, breathing human beings struggling with the nightmare of joblessness.
Even Mr. Obama, in an interview with The Times, gave short shrift to the idea of an additional economic stimulus package, telling John Harwood a few weeks ago that the economy had likely turned a corner. "As you know," the president said, "jobs tend to be a lagging indicator; they come last."
The view of most American families is somewhat less blasé. Faced with the relentless monthly costs of housing, transportation, food, clothing, education and so forth, they have precious little time to wait for this lagging indicator to come creeping across the finish line.
Americans need jobs now, and if the economy on its own is incapable of putting people back to work - which appears to be the case - then the government needs to step in with aggressive job-creation efforts.
Nearly one in four American families has suffered a job loss over the past year, according to a survey released by the Economic Policy Institute. Nearly 1 in 10 Americans is officially unemployed, and the real-world jobless rate is worse.
We're running on a treadmill that is carrying us backward. Something approaching 10 million new jobs would have to be created just to get back to where we were when the recession began in December 2007. There is nothing currently in the works to jump-start job creation on that scale.
A massive long-term campaign to rebuild the nation's infrastructure - which would put large numbers of people to work establishing the essential industrial platform for a truly 21st-century American economy - has not seriously been considered. Large-scale public-works programs that would reach deep into the inner cities and out to hard-pressed suburban and rural areas have been dismissed as the residue of an ancient, unsophisticated era.
We seem to be waiting for some mythical rebound to come rolling in, magically equipped with robust job creation, a long-term bull market and paradise regained for consumers.
It ain't happening.
While the data mavens were talking about green shoots in September, employers in the real world were letting another 263,000 of their workers go, bringing the jobless rate to 9.8 percent, the highest in more than a quarter of a century. It would have been higher still but 571,000 people dropped out of the labor market. They're jobless but not counted as unemployed. The number of people officially unemployed - 15.1 million - is, as The Wall Street Journal noted, greater than the population of 46 of the 50 states.
The Obama administration seems hamstrung by the unemployment crisis. No big ideas have emerged. No dramatically creative initiatives. While devoting enormous amounts of energy to health care, and trying now to decide what to do about Afghanistan, the president has not even conveyed the sense of urgency that the crisis in employment warrants.
If that does not change, these staggering levels of joblessness have the potential to cripple not just the well-being of millions of American families, but any real prospects for sustained economic recovery and the political prospects of the president as well. An unemployed electorate is an unhappy electorate.
The survey for the Economic Policy Institute was conducted in September by Hart Research Associates. Respondents said that they had more faith in President Obama's ability to handle the economy than Congressional Republicans. The tally was 43 percent to 32 percent. But when asked who had been helped most by government stimulus efforts, substantial majorities said "large banks" and "Wall Street investment companies."
When asked how "average working people" or "you and your family" had benefited, very small percentages, in a range of 10 percent to 13 percent, said they had fared well.
The word now, in the wake of last week's demoralizing jobless numbers, is that the administration is looking more closely at its job creation options. Whether anything dramatic emerges remains to be seen.
The master in this area, of course, was Franklin Roosevelt. His first Inaugural Address was famous for the phrase: "The only thing we have to fear. ..." But he also said in that speech: "Our greatest primary task is to put people to work." And he said the country should treat that task "as we would treat the emergency of a war."
Now that's the sense of urgency we need.
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14) The Card Game
Prepaid, but Not Prepared for Debit Card Fees
By ANDREW MARTIN
October 6, 2009
http://www.nytimes.com/2009/10/06/your-money/06prepay.html?hp
Buying a prepaid debit card these days is just about as easy as picking up a bottle of shampoo or a candy bar. Walk into a Wal-Mart or almost any major drugstore, and rows of plastic worth $25, $100 and even $500 beckon from kiosks alongside prepaid phone cards and gift cards for retailers.
"No Credit Check. Safer Than Cash. No Bank Account Needed," says the Green Dot Visa Prepaid Card: Just pay at the register and the card is ready for A.T.M. withdrawals, store purchases and online shopping.
For many people who do not have bank accounts, or cannot get a credit card, the appeal is irresistible, making the reloadable cards among the consumer banking industry's fastest-growing products. But their convenience comes with a catch: fees, often hidden in the fine print.
The MiCash Prepaid MasterCard docks cardholders a $9.95 activation fee. Like many competitors, it then charges numerous recurring fees, including $1.75 for each A.T.M. withdrawal, $1 for each A.T.M. balance inquiry, 50 cents for each purchase, $4 for monthly maintenance, $2 for inactivity after 60 days and $1 for a call to customer service.
The Millennium Advantage Prepaid MasterCard goes further, listing an application fee of up to $99. The Silver Prepaid MasterCard advertises that it does not charge for overdrafts as many debit cards do, but it gives itself the option of charging a $25 shortage fee if customers exceed their balance.
"It's a very expensive way to bank," said Jean Ann Fox, director of financial services at the Consumer Federation of America.
A cottage industry only 10 years ago, reloadable prepaid cards have tapped into the vast pool of about 80 million consumers who have little or no access to bank accounts. The market includes college students who do not want to carry around wads of cash and consumers who do not want to type their credit card number into the Internet.
More typically, it comprises low-income people and immigrants who have fewer financial options than other Americans. Often, they turn to these cards because they cannot open a bank account, or they become fed up with the costs of check-cashing stores or overdraft fees on checking accounts.
Industry officials say the cards are a good deal because users can avoid the fees charged on low-balance bank accounts and at check-cashing stores.
"If you look at these products today compared to even a checking account, many consumers have found that they can be far less expensive," said Gary Palmer, chairman of the Network Branded Prepaid Card Association.
But even as the industry expands, many prepaid cards continue to charge fees - including for purchases and paying bills - that can quickly accumulate.
Like many workers, Tyrell Blocker, 20, of Brooklyn, could ill afford the surprise when he took such a card last week to a Pay-O-Matic Financial Services store in Manhattan after a bank turned him down for an account because he lacked one of two required pieces of identification. As soon as the cash from his paycheck landed on his card, he noticed fees accumulating. Mr. Blocker returned to Pay-O-Matic to complain and only then was provided a detailed list of more than two dozen fees, he said.
"I need every last dime I got; I've got a newborn," Mr. Blocker said. A spokesman for Pay-O-Matic said the card was fairly new and the firm was working to make the fees more transparent.
Little Regulatory Scrutiny
Because it is a relatively new industry, prepaid cards have not undergone the Congressional and regulatory scrutiny of credit and debit cards. In the spring, lawmakers restricted interest rate increases and hidden fees on credit cards, and regulators are now examining stricter rules on overdraft fees on checking accounts. Even gift cards, which expire when the money runs out, will soon be subject to new rules limiting monthly fees and expiration dates.
Congress has asked regulators to determine if prepaid cards warrant the same protections extended to debit and credit cards. The industry's trade association says such measures are unnecessary and would make cards more expensive.
But consumer advocates say the lack of regulation means that prepaid card users can continue to be blindsided by hidden fees, and have few legal protections to recover their money if a card is lost or a charge disputed.
Mike Henry, who owns a small print shop in California, had not been able to recover $50 stuck on his Only 1 Visa prepaid card after it stopped working. He gave up after numerous calls to customer service - at 95 cents each - went unresolved. Only 1, meanwhile, continued to send daily updates of his balance as it was eaten away by monthly fees. His account was finally whittled to zero.
"For the last six months, I turn on my computer and check my e-mail and get slapped in the face," he said.
Only 1 officials said they regretted his inconvenience and were refunding Mr. Henry's money.
Among the beneficiaries of these cards are Visa, MasterCard and Discover, which receive about a nickel to 20 cents each time a credit or debit card emblazoned with their logo is swiped. While the companies do not disclose income from prepaid cards, their efforts to add tens of millions of users represents a potentially significant source of new revenue.
Financial firms that issue the cards are often little-known companies with names like Green Dot, NetSpend and AccountNow. Since they get money upfront from the consumer, there is relatively little risk with prepaid debit cards, compared with credit cards and other loan-making products.
Given the number of people who have little or no relationship with a bank, both in the United States and abroad, the financial industry is betting on a boom. In 2008, for instance, customers loaded about $8.7 billion onto prepaid cards, a 125 percent increase over the previous year, according to the Mercator Advisory Group. The industry is expected to balloon to $119 billion by 2012, Mercator predicts.
"Every year we've seen big growth," said Steve Streit, the founder of Green Dot, now one of the largest reloadable prepaid card companies. "There's a part of me that believes we are just at the entry ramp to growth right now."
The cards are part of a larger universe of plastic that includes prepaid phone cards and gift cards, payroll cards and government benefit cards. Industry officials are particularly excited about the explosive growth from government agencies and companies as they replace paper checks with prepaid cards to save money. Social Security payments are now offered on prepaid cards to retirees without bank accounts, and many states do the same with welfare payments. Wal-Mart recently said it would pay employees only on prepaid cards if they did not have a bank account for direct deposit.
These fees tend to be lower than those on commercial prepaid cards. But critics question why there are any fees at all, particularly when the recipients do not have a choice.
"To me, it's a terrible thing to give people their pay on a card that has fees on it," said Linda Sherry, director of national priorities for Consumer Action.
Reloadable prepaid cards hardly existed a decade ago. Then, as credit cards surged and the Internet bubble lifted the economy, a handful of companies noticed an untapped market in teenagers who wanted to shop on the Internet, but were not eligible for credit cards. But it soon became clear that the larger market for prepaid cards was people who do not use banks and the uncreditworthy.
In the years since, dozens of companies and banks have latched on, some offering celebrity branding to lure customers. Johnny Cash, Usher, Carmen Electra and the football player Vince Young have all had their name attached to a prepaid card, and the hip-hop impresario Russell Simmons continues to back the RushCard, mainly to African-Americans, as a "better alternative" than banks and credit cards.
But these efforts are not without controversy. Mr. Simmons, for example, has batted down repeated criticism that his card saps money from low-income users. His Pay-as-You-Go card has come under scrutiny for charging a $19.99 activation fee deducted from the cash first loaded onto the card; a $1 convenience fee for the first 10 purchases every month; and a fee of $1 for every bill paid with the card.
Fees Are Declining
Industry officials say fees have been declining, especially after Wal-Mart this year trimmed fees on the MoneyCard Prepaid card it sells, which prompted several other issuers to cut prices too. They add that consumer complaints are rare and that surveys indicate the vast majority of customers like the cards.
An industry-sponsored study by Bretton Woods, a bank advisory firm, said that cards like Green Dot, Wal-Mart and NetSpend are cheaper than a checking account, whose annual cost can be as high as $353, assuming six overdraft charges, compared with $207 for a direct-deposit prepaid card.
Yet in many instances, even the lowest-fee prepaid cards can cost more if consumers are able to avoid bank overdraft fees. That should get easier after several large banks announced recently they would let customers decline overdraft protection.
While most major banks charge $10 or less a month for a low-balance checking account, a survey of two dozen prepaid cards released in August by the Consumers Union, the publisher of Consumer Reports, found that the cheapest, the Wal-Mart Money Card, cost $16.59 in the first month and $21.54 in the second.
By contrast, the most expensive card, the Millennium Advantage card, cost $115.05 in the first month, because of a $99 application fee, and $27.95 the second month, the survey, compiled by Michelle Jun, a lawyer for Consumers Union, showed.
And the actual fees charged can be confusing. A spokesman for the Millennium Advantage card said that while it lists the $99 fee, the company charges only up to $30. A spokesman for the Silver card said that it does not actually charge the $25 shortage fee shown in its fine print, and is working to remove it from company documents.
"How are consumers supposed to keep the fees straight if the companies can't?" said Michael McCauley, a spokesman for Consumers Union.
In the meantime, bewildered by opaque terms and often dodgy customer service, many consumers are fending for themselves.
Damon Saxton, 34, said he had given up on prepaid cards and hoped to return to a bank, if they will have him. Mr. Saxton began using a prepaid card after being barred from getting a bank account for cashing a check from an eBay sale without realizing it was fake.
But Mr. Saxton, who lives in Florida, said that the two years he used his Vision Premier Prepaid Visa Card were marred by petty fees and horrible customer service.
Mr. Saxton said that when he punched the wrong code into an A.T.M., the bank charged him $2.95 for a declined A.T.M. transaction. When he called to complain, he said, they charged him an additional $1.95. When someone got hold of his card number and racked up several hundred dollars in shortage fees, Vision Premier covered the fees with Mr. Saxton's tax return, which was directly deposited onto the card, he said.
A spokesman for the Vision Premier said Mr. Saxton's experience was not the norm. The company eventually refunded the fees.
"I wasted countless hours dealing with this problem, not to mention the stress," Mr. Saxton said. "I think the whole business is based around nickel and diming."
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15) Blue Angels ready to roar, soar for Fleet Week
"For the city, raising the $500,000 to put on the first Fleet Week since the great recession hit with full force proved more difficult than usual. The CVS drugstore chain is sponsoring the event, and Hornblower Cruises and Events and other groups held a fundraiser but brought in only about a third of the $100,000 they were hoping to raise. Other funds came from private donations, the Port of San Francisco and a city grant."
Henry K. Lee, Heather Knight, Chronicle Staff Writers
Wednesday, October 7, 2009
http://www.sfgate.com/cgi-bin/article.cgi?f=/c/a/2009/10/07/MNV31A1PTT.DTL
The Navy's Blue Angels precision flight demonstration tea... One of the Blue Angels' F/A-18 Hornet jets arrives at San... The U.S. Navy's precision flight demonstration team, the ... The U.S. Navy's precision flight demonstration team, the ... More...
With smoke and a roar, the Blue Angels arrived in high style Tuesday in San Francisco, the star performers in the annual Fleet Week air show that promises to rattle windows, wow thousands of spectators and annoy those whose idea of city life does not include military flyovers.
Seven blue-and-gold F/A-18 Hornet jets touched down about 10:40 a.m. at San Francisco International Airport after a quick buzz over the bay. The seventh jet, a two-seater that tagged behind the six others flying in trademark "delta" formation, contained what the team calls "newbie" pilots, who will perform next year.
"What an amazing city, wonderful people," the leader of the Navy's elite demonstration team, Cmdr. Greg McWherter, said at a news conference with San Francisco Mayor Gavin Newsom at City Hall.
"It's just a gorgeous place to fly," said McWherter, who is in the city for the first time as a Blue Angel. "It's a challenging show site, but it's a very rewarding show site."
The Blue Angels will take to the skies Thursday and Friday for practice flights before performing this weekend, hurtling through the sky at up to 800 mph as close as 3 feet apart. With their return will come the inevitable complaints about noise and debates over the appropriateness of a military display.
"The complaint/compliment line for noise is 311," Newsom said. "What invariably happens is people didn't read about it, they didn't know about it, and the jets fly over, and the phones light up."
1.2 million spectators
The mayor was promptly interrupted by a ringing phone on his receptionist's desk. "That's the first complaint being logged," Newsom joked.
He said 1.2 million people are expected to enjoy Fleet Week from the bayfront, and many more will watch from rooftops and other remote locations. Fleet Week brings millions of dollars to the city, he said, thanks to people who come from around the Bay Area and Northern California to catch the show.
Factor in the Presidents Cup golf tournament, the 49ers game at Candlestick Park and the Italian Heritage Day parade Sunday in North Beach, and it should be a very crowded yet very lucrative weekend for the cash-strapped city, he said.
Justin Yonker, 29, whose construction contracting office on Bay Street is at ground zero of the earsplitting Blue Angels show, said Tuesday, "We welcome it. It's an incredible opportunity. It's very cool, a fun party once a year."
His advice for naysayers? "For 50 cents, you can buy a pair of earplugs," Yonker said.
At San Francisco's Society for the Prevention of Cruelty to Animals, staffers were girding for more howls of protest than usual.
Protecting the pooches
"If you've got a fearful, shy dog, loud noises are definitely going to be a problem for that animal, as opposed to dogs that are a little bit more outgoing and are not bothered by banging pots or cars or backfiring - or loud jets," said Tina Ahn, spokeswoman for the SPCA on 16th Street.
Accompanying the air shows will be the annual parade of ships Saturday. Four vessels, including the amphibious transport dock ship Green Bay, will parade from the Golden Gate Bridge to the waterfront, beginning at 11:30 a.m.
The air show begins at 1 p.m. Saturday and Sunday.
For the city, raising the $500,000 to put on the first Fleet Week since the great recession hit with full force proved more difficult than usual.
The CVS drugstore chain is sponsoring the event, and Hornblower Cruises and Events and other groups held a fundraiser but brought in only about a third of the $100,000 they were hoping to raise. Other funds came from private donations, the Port of San Francisco and a city grant.
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16) Police Brutally Attack Funk the War
by Rochester IMC
http://rochester.indymedia.org/feature/display/19958/index.php
Funk the War, a demonstration to demand an end to the war in
Afghanistan and for increased education funding, was violently
attacked by police this evening. At least 10 people were arrested,
many are still in custody right now. One of the arrestees was reported
to be bleeding from her face after being tackled by two cops into the
the base of a light pole, she is currently sitting in the back of a
police car without access to medical attention.
Currently, many of the arrestees are being held currently in the
public safety building (corner of Exchange and Court St, downtown). A
group is gathering outside to support them.
Reporters on the scene say that police attacked the crowd using clubs
without any warning or orders to disperse. The first arrested was an
African-American man who joined up midway into the march. Members of
the crown questioned the obvious racism behind this act and some were
arrested shortly after.
Those present estimate at least 35 cop cars present, including one
state trooper. We will continue to update this as more info comes in.
Video of Police Attack
http://blip.tv/file/2695340
Report from Harry Davis
http://www.harry2009.com/node/336
Update:The current arrest count is 12, everyone has been released from
jail. The protester who's face was bruised and cut was pushed by a
single police officer, not 2. A second protester went to Rochester
General Hospital for stitches because of the police attack.
RNews's coverage of the events is extremely misleading and inaccurate.
http://rochester.ynn.com/all-news-news-2134-content/top_stories/484506/war-prote
st-turns-violent
Democrat and Chronicle's coverage is relatively better, but still not
very informative.
http://www.democratandchronicle.com/article/20091007/NEWS01/91007036/War+protest
ers+arrested+downtown
Photos from the police riot tonight
http://picasaweb.google.com/RochesterAgainstWar/FunkTheWar2
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17) Companies Strike Deal on Testing for E. Coli
By MICHAEL MOSS
October 8, 2009
http://www.nytimes.com/2009/10/08/health/08meat.html?ref=us
In an expanding effort by the meat industry to make its hamburger safe, officials at the retail giant Costco said Wednesday that they had struck a new accord on testing for the pathogen E. coli.
Costco's food safety director, Craig Wilson, said the company would begin buying beef trimmings for making hamburger from Tyson, one of the largest beef producers, after an agreement reached with Tyson this week that allows Costco to test the trimmings before they are mixed with those from other suppliers.
The United States Department of Agriculture has encouraged such testing as a way to make hamburger safer, but some of the largest slaughterhouses have resisted the added scrutiny for fear that one grinder's discovery of E. coli will lead to expanded recalls of beef sent to other grinders, The New York Times reported Sunday.
Costco is one of the few large grinders to test ingredients for the pathogen as they arrive at its plant, and Mr. Wilson said Tyson had declined to sell trimmings to the company, citing its testing.
A Tyson spokesman has declined to respond to the accusation, but said that the company did not prohibit grinders from testing and that some of its customers did conduct some of their own testing, beyond the testing that Tyson performs.
The report by The Times focused on the hamburger patties that precipitated one of the 16 outbreaks of E. coli O157:H7 since 2007, and the injuries suffered by a children's dance instructor, Stephanie Smith, now 22. While most E. coli victims recover, Ms. Smith developed kidney and brain injuries, and emerged from a coma partly paralyzed.
In a statement this week, Cargill, the food giant that made the hamburger eaten by Ms. Smith, said it was committed to continuous improvements in food safety. "Our hearts go out to Ms. Smith and her family, as well as the others whose lives have been so affected by O157:H7," Cargill said.
Like other hamburger grinders, Cargill tests its ground beef for the pathogen only after it mixes trim from multiple suppliers, and Cargill officials told the U.S.D.A. that they could not identify the slaughterhouse that shipped the tainted beef in Ms. Smith's burger, company and government records showed. Slaughterhouses are viewed as the most likely source of E. coli because the pathogen emerges from fecal matter on hides and in the digestive tracts of cattle.
In its statement, Cargill said it required suppliers to test their trim and take other steps that are also effective in preventing contamination. "Over the past 10 years, Cargill has invested $1 billion in ongoing meat science research and new food safety technologies and interventions," the company added.
On Monday, Secretary of Agriculture Tom Vilsack said the Times report would stimulate the department's efforts to fight E. coli, which the department banned from ground beef in 1994.
"The story we learned about over the weekend is unacceptable and tragic," Mr. Vilsack said in a statement.
He said the U.S.D.A. had already increased inspections and drafted guidelines for industry.
But some critics in Congress say the department has an irreconcilable conflict. "The U.S.D.A. is supposed to be protecting public health and at the same time be promoting agricultural products, and my view is that those two things don't mix," said Representative Rosa DeLauro, Democrat of Connecticut and chairwoman of a House agriculture panel.
On the floor of the House, Representative Louise M. Slaughter, Democrat of New York and chairwoman of the Rules Committee, read parts of The Times article on Wednesday and said the lingering pathogens in meat and the industry's use of antibiotics were threatening to harm exports of beef to Europe.
"We've got to get people to understand what's going on here," said Ms. Slaughter, who is also a microbiologist.
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18) Thousands of Homeowners Cite Drywall for Ills
By LESLIE WAYNE
October 8, 2009
http://www.nytimes.com/2009/10/08/business/08drywall.html?ref=business
When Bill Morgan, a retired policeman, moved into his newly built dream home in Williamsburg, Va., three years ago, his hopes were quickly dashed.
His wife and daughter suffered constant nosebleeds and headaches. A persistent foul odor filled the house. Every piece of metal indoors corroded or turned black.
In short order, Mr. Morgan moved out. The headaches and nosebleeds stopped, but the ensuing financial problems pushed him into personal bankruptcy.
"My house is not worth the land it's built on," said Mr. Morgan, who could not maintain the mortgage payments on his $383,000 home in a Williamsburg subdivision called Wellington Estates and the costs of a rental property where his family decamped.
Mr. Morgan, like many other American homebuyers who tell similar tales of woe, is blaming the drywall in his new home - specifically, drywall from China, imported during the housing boom to meet heavy demand - that he says is contaminated with various sulfur compounds.
Hundreds of lawsuits are piling up in state and federal courts, and a consolidated class action is moving forward in Louisiana before Judge Eldon E. Fallon of Federal District Court, who will begin hearing cases in January.
Three hundred cases have been filed in Louisiana alone, many with similar complaints from homeowners - a noxious smell, recurrent headaches and difficulty breathing. In Florida, the health department has received over 500 complaints with such symptoms.
In addition, these suits say, metal objects in homes corrode quickly, causing kitchen appliances, air-conditioners, televisions and plumbing to fail.
"There could be 60,000 to 100,000 homes that are worthless and have to be ripped completely down and rebuilt," said Arnold Levin, a Philadelphia lawyer and co-chairman of the plaintiffs' steering committee.
While tainted Chinese imports like toothpaste, pet food and baby formula have been quickly removed from store shelves, drywall is installed throughout homes and does not lend itself to a quick fix.
This month, the Consumer Product Safety Commission, whose investigation into Chinese drywall is the largest in its history, will release the results of a study to determine why the drywall is causing the problem, and what kind of remediation programs might be effective.
Already, the commission has sent six investigators to Chinese gypsum mines and to meet with the government there. The Chinese government's counterpart to the federal safety commission sent two of its experts here to inspect affected homes.
The commission is also making sure that no more Chinese drywall comes into the country.
"Our ports are on alert," said Inez Tenenbaum, chairwoman of the commission. "They are not letting any in. The market, too, has corrected. No one wants Chinese drywall."
Even President Obama is being pressed by members of Congress to raise the issue on his November trip to China - the loudest cry coming from Senator Bill Nelson, Democrat of Florida, who has traveled to China on his own to learn more about the drywall problems.
Investigators are finding that getting scientific data, establishing legal accountability and following a supply chain is difficult when so many drywall sheets - millions in all were brought into the United States - were simply marked "Made in China," providing no clues to their actual source. The drywall was brought in because United States supplies ran low, not as a cost-saving measure for builders.
One target of the lawsuits is Knauf Plasterboard Tianjin, a German company with manufacturing plants in China that supplied about 20 percent of the Chinese drywall brought into the United States.
Don Hayden, the company's lawyer, said that its own toxicology tests from affected homes showed that the drywall presented no health problems. Even so, he said his company was cooperating with American government investigations.
"Unlike other Chinese manufacturers, we are the only one to come to the United States to address this problem," said Mr. Hayden. "We've spent considerable time and energy and hope that we can provide a workable solution to U. S. homeowners."
One puzzle is why problems have surfaced in the United States and not Asia, where drywall was also sold. According to a safety commission official who declined to be named because of the delicacy of the issue, a theory offered by Chinese officials during their visit to the United States was that American homes are more tightly built, with less ventilation than homes in China.
One drywall manufacturer, the Taishan Gypsum Company, which is controlled by the Chinese government, was found to be in preliminary default last week by a federal judge after the company failed to show up in court.
But whether the Florida builders who brought the class-action lawsuit could ever collect on any future judgment remains unclear, because of the difficulty of gaining jurisdiction and enforcing rulings against foreign companies, especially in China. In other cases, many of the Chinese companies cannot be found or have disbanded.
Homeowners, insurers, home builders, drywall suppliers and Chinese manufacturers, if they can be identified, are often suing each other. Drywall installers and suppliers are also expected to be targets of the next wave of litigation. Many lawsuits need to be translated into Mandarin and follow rules of international law, adding layers of difficulty.
Among the homeowners filing suit are the lieutenant governor of Florida, Jeff Kottkamp; and Sean Payton, head coach of the New Orleans Saints, who has moved out of his Mandeville, La., home.
The product safety commission has received more than 1,300 complaints from 26 states, but the bulk are from Florida, Louisiana and Virginia, where hurricanes led to an unprecedented housing boom in 2006 and 2007.
In 2006 alone, nearly seven million sheets of drywall were imported from China. The federal court in the Eastern District of Louisiana has identified 26 brands of drywall, but 11 others had no markings other than variations of "Made in China."
Insurance companies, in particular, have become a popular target of lawsuits over their refusal to pay claims filed by homeowners and home builders, stating that their policies do not cover problems caused by pollutants.
There are estimates that it costs $100,000 to $150,000 per home to rip out and replace tainted drywall and the electrical equipment attached to it. In these cases, homes are being stripped down to the studs and new drywall is installed.
Some home builders, worried about their reputations, are doing just that. The Lennar Corporation has set aside $40 million for home repairs, while it tries to collect from its insurance company and sues several Chinese suppliers and American middlemen. Lennar declined to comment.
But many smaller home builders, hoping to survive the downturn, do not have such deep pockets. "This couldn't have come at a worse time for the industry," said Jenna Hamilton, assistant vice president of government affairs at the National Association of Home Builders.
For that reason, some members of Congress hope the federal government will provide financial assistance for their constituents, just as it does after natural disasters.
There may be local relief, too. Broward County, Fla., has cut property assessments as much as 20 percent in some affected areas and Miami-Dade is considering a similar tax break. "Florida is hypersensitive to hurricanes and this is like a silent hurricane," said Representative Robert Wexler, Democrat of Florida. "Whole neighborhoods are being wiped out in terms of property values and people's ability to remain in their homes."
Help could not come soon enough for Mr. Morgan's Virginia dream home.
"Every piece of drywall in the house except for four pieces is Chinese," said Mr. Morgan. "We built our home to be safe from floods, and for three years we've been breathing this stuff."
Mr. Morgan said that metal fixtures in his house turned black. His air-conditioner and electrical outlets failed. Lamps and mirrors tarnished immediately. Neighbors, too, had similar problems..
Mr. Morgan bought his house in 2006 after his family spent two years living in a trailer provided by the Federal Emergency Management Agency when their previous home was destroyed in 2003 by Hurricane Isabel. Mr. Morgan has lost the equity in his home, but he still drops by to cut the grass.
"When I drive by my house, it breaks my heart," he said.
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19) New Orleans Police Face Swarm of Inquiries
By CAMPBELL ROBERTSON
October 9, 2009
http://www.nytimes.com/2009/10/09/us/09orleans.html?ref=us
NEW ORLEANS - In its September newsletter, underneath a notice about using antibacterial wipes during flu season, the local Fraternal Order of Police reminded New Orleans officers they had a right to be represented by a lawyer when questioned by the F.B.I., whether as a witness or as a potential target.
The warning has become routine for the police over the last few months here.
Four years after the department was accused of acting lawlessly in suppressing violence in the wake of Hurricane Katrina, dozens of officers, some from an elite unit, have been interviewed by the F.B.I. or faced subpoenas to testify before federal grand juries. F.B.I. agents seized files from the department's homicide division.
And on a recent Saturday, a major city bridge, where police officers killed two men in the floodwaters of 2005, was shut by federal investigators for several hours.
At least three federal investigations into the police are under way; two concern civilian deaths in the anarchic days after the hurricane. Their outcomes could answer some of the most disconcerting questions of the storm's aftermath - in particular, whether these were singular tragedies in the extraordinary chaos of the time or whether they laid bare deep problems in the force.
If indictments are brought against the officers, who in some cases have been celebrated as heroes of the storm, the impact - on the city's race relations, on the coming mayoral election and on the essential but already brittle relationship between police officers and citizens - could be profound.
"Any one of those federal probes could be viewed as the most significant investigation in any F.B.I. office in the country," said Rafael C. Goyeneche III, a former New Orleans prosecutor who is the president of the Metropolitan Crime Commission, a nonprofit organization that focuses on crime and corruption in Louisiana. Unlike many federal civil rights investigations, which often involve only a few officers, Mr. Goyeneche said, "these are much more extensive."
The police are not alone as subjects of federal scrutiny. The list of city agencies under investigation seems to grow by the day, and news of another guilty plea or another high-level resignation - and the often shady circumstances surrounding it - is a regular feature of the front pages and evening news reports.
But the investigations of the Police Department have a particular resonance, given the force's troubled past and the city's continuing high crime rate, including a murder rate that is the country's highest. Contentious episodes have kept the department in litigation, including a 2008 racially charged bar brawl involving off-duty police officers and transit workers; the integrity bureau reported that officers tried to cover up the facts of the brawl, and some officers were fired. Officials acknowledge that there is a grave degree of mistrust between civilians and the police.
The most highly publicized episode under federal investigation took place on the Danziger Bridge in eastern New Orleans on Sept. 4, 2005, six days after the hurricane struck. The police, responding to a report that shots had been fired at officers and rescue workers, opened fire on six people, seriously wounding four and killing two, including a mentally retarded man.
The police said the officers were reacting to gunfire. Those who were injured, and the families of those killed, said they were victims of a police ambush. In 2006, the officers involved in the shootings were charged with murder and attempted murder, but the charges were dismissed last year by a judge who cited improprieties in the handling of the case.
Soon after, Jim Letten, the United States attorney for the district that includes New Orleans, announced that his office would open an investigation, along with the F.B.I. and the Department of Justice.
Many residents are skeptical of efforts to re-examine the actions of anyone who responded to the anarchy of the flood, much as they have been to the questioning of doctors who may have played a role in the deaths of at least 17 patients at Memorial Medical Center here.
The circumstances were traumatic, skeptics say, and the city faces too many grave problems - a crowded crime blotter, a lack of medical facilities, thousands of blighted houses - to focus on the first responders, especially those who stayed to help, in the days after the storm.
"I don't sense a lot of enthusiasm down here," Peter Scharf, a criminologist at Tulane University in New Orleans, said of the investigation into the Danziger Bridge shooting. "What's the endpoint of all this? Is this the best use of prosecutorial resources?"
Mr. Scharf pointed out that on a recent weekend, 13 people had been shot in a 12-hour period. While he supported investigations into corruption, he said there were legitimate doubts about scrutinizing "decision making in an extremely complex, chaotic environment."
There are indications, like the seizing of files from the department's homicide division, that the federal investigation is reaching broadly through the department. Watchdog groups say they are cautiously encouraged by the federal attention, pointing also to a recent scathing review of the city's prison by the Justice Department.
Another hurricane-related police case, one that some analysts say could be far more explosive, involves the death of 31-year-old Henry Glover, who was shot by an unknown attacker four days after the hurricane and whose remains were eventually discovered in a car parked behind a police station. The car belonged to William Tanner, who has become a key witness in the federal investigation.
Mr. Tanner said he had driven the severely wounded Mr. Glover to a school that was serving as the temporary headquarters of a police special-operations unit, one that was later hailed as heroic for its hurricane rescue operations. There, Mr. Tanner said, the police handcuffed and hit him and confiscated his car. Weeks later, he said, he found the charred body of the car behind a district police station. Mr. Glover's burned remains were inside.
Mr. Glover's killing was not investigated by the authorities until an article about it appeared in The Nation magazine in December 2008 and at ProPublica.org.
A Police Department spokesman, Bob Young, said the police were looking into the circumstances of Mr. Glover's death and cooperating with the United States attorney and federal authorities in their investigations.
Federal agents are scrutinizing the department's special-operations unit, including some senior officers, for possible involvement in Mr. Glover's killing and its aftermath.
Some, like Mr. Goyeneche, say fallout from the charges could be at least as significant as it was in the middle 1990s, when a soaring murder rate and police involvement in horrific crimes brought intense federal scrutiny.
Others are not as confident.
"The department's needed changing for some time now," said Eric Hessler, a former New Orleans police officer and now a lawyer who represents officers in the investigations. "If the F.B.I. has this level of interest in the department, they can't not see that the department's being neglected."
Skeptically, Mr. Hessler added, "I would like to think that."
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20) Study Finds High Rate of Imprisonment Among Dropouts
By SAM DILLON
October 9, 2009
http://www.nytimes.com/2009/10/09/education/09dropout.html?ref=us
On any given day, about one in every 10 young male high school dropouts is in jail or juvenile detention, compared with one in 35 young male high school graduates, according to a new study of the effects of dropping out of school in an America where demand for low-skill workers is plunging.
The picture is even bleaker for African-Americans, with nearly one in four young black male dropouts incarcerated or otherwise institutionalized on an average day, the study said. That compares with about one in 14 young, male, white, Asian or Hispanic dropouts.
Researchers at Northeastern University used census and other government data to carry out the study, which tracks the employment, workplace, parenting and criminal justice experiences of young high school dropouts.
"We're trying to show what it means to be a dropout in the 21st century United States," said Andrew Sum, director of the Center for Labor Market Studies at Northeastern, who headed a team of researchers that prepared the report. "It's one of the country's costliest problems. The unemployment, the incarceration rates - it's scary."
A coalition of civil rights and public education advocacy groups and a network of alternative schools in Chicago commissioned the report as part of a push for new educational opportunities for the nation's 6.2 million high school dropouts.
"The dropout rate is driving the nation's increasing prison population, and it's a drag on America's economic competitiveness," said Marc H. Morial, the former New Orleans mayor who is president of the National Urban League, one of the groups in the coalition that commissioned the report. "This report makes it clear that every American pays a cost when a young person leaves school without a diploma."
The report puts the collective cost to the nation over the working life of each high school dropout at $292,000. Mr. Sum said that figure took into account lost tax revenues, since dropouts earn less and therefore pay less in taxes than high school graduates. It also includes the costs of providing food stamps and other aid to dropouts and of incarcerating those who turn to crime.
Daniel J. Losen, a senior associate at the Civil Rights Project at the University of California, Los Angeles, said the study was consistent with other economic studies of the dropout crisis, though he said the methodology of its cost-benefit analysis "lacked transparency."
"The report's strength is that it reveals in clear terms that there's a real crisis with the high numbers of young, especially minority males, who drop out of school and wind up incarcerated," Mr. Losen said.
Previous studies have come up with estimates of the same order of magnitude on the social cost of low graduation rates. A 2007 study by Teachers College, Princeton and City University of New York researchers, for instance, estimated that society could save $209,000 in prison and other costs for every potential dropout who could be helped to complete high school.
The new report, in its analysis of 2008 unemployment rates, found that 54 percent of dropouts ages 16 to 24 were jobless, compared with 32 percent for high school graduates of the same age, and 13 percent for those with a college degree.
Again, the statistics were worse for young African-American dropouts, whose unemployment rate last year was 69 percent, compared with 54 percent for whites and 47 percent for Hispanics. The unemployment rate among young Hispanics was lower, the report said, because included in that category were many illegal immigrants, who compete successfully for jobs with native-born youths.
The unemployment rates cited for all groups have climbed several points in 2009 because of the recession, Mr. Sum said.
Young female dropouts were nine times more likely to have become single mothers than young women who went on to earn college degrees, the report said, citing census data for 2006 and 2007.
The number of unmarried young women having children has increased sharply in some communities in part, Mr. Sum said, because large numbers of young men have dropped out of school and are jobless year round. As a result, young women do not view them as having the wherewithal to support a family.
"None of these guys can afford to own a home, they just don't have any money," he said. "And as a result, any time they father a child it's out of wedlock. It wasn't like this 30 years ago."
He cited his hometown, Gary, Ind., as an example. "Back in the 1970s, my friends in Gary would quit school in senior year and go to work at U.S. Steel and make a good living, and young guys in Michigan would go to work in an auto plant," he said. "You just can't do that anymore. Today, you have a lot of dropouts who are jobless year round."
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21) U.S. Mortgage Backer May Need Bailout
By DAVID STREITFELD and LOUISE STORY
October 9, 2009
http://www.nytimes.com/2009/10/09/business/09fha.html?ref=us
A year after Fannie Mae and Freddie Mac teetered, industry executives and Washington policy makers are worrying that another government mortgage giant could be the next housing domino.
Problems at the Federal Housing Administration, which guarantees mortgages with low down payments, are becoming so acute that some experts warn the agency might need a federal bailout.
Running questions about the F.H.A.'s future - underscored by interviews with policy makers, analysts and home buyers - came to the fore on Thursday on Capitol Hill. In testimony before a House subcommittee, the F.H.A. commissioner, David H. Stevens, assured lawmakers that his agency would not need a bailout and that it was managing its risks.
But he acknowledged that some 20 percent of F.H.A. loans insured last year - and as many as 24 percent of those from 2007 - faced serious problems including foreclosure, offering a preview of a forthcoming audit of the agency's finances.
"Let me simply state at the outset that based on current projections, absent any catastrophic home price decline, F.H.A. will not need to ask Congress and the American taxpayer for extraordinary assistance - we will not need a bailout," Mr. Stevens said in his testimony.
But to its critics, the F.H.A. looks like another Fannie Mae. The hearings on Thursday came on the same day that the federal agency charged with overseeing Fannie Mae and Freddie Mac provided a somber assessment of those giants' health. In the year since the government stepped in to rescue them, the companies have taken $96 billion from the Treasury, and may need more.
Since the bottom fell out of the mortgage market, the F.H.A. has assumed a crucial role in the nation's housing market. Created in 1934 to help lower-income and first-time buyers purchase homes, the agency now insures roughly 5.4 million single-family home mortgages, with a combined value of $675 billion.
In addition, these loans are bundled into mortgage-backed securities and guaranteed through the Government National Mortgage Association, known as Ginnie Mae. That means the taxpayer is responsible for paying investors who own Ginnie Mae bonds when F.H.A.-backed mortgages hit trouble.
"It appears destined for a taxpayer bailout in the next 24 to 36 months," Edward Pinto, a former Fannie Mae executive, said in testimony prepared for the hearing. Mr. Pinto, who was the chief credit officer from 1987 to 1989 for Fannie Mae, went further than most housing analysts and predicted that F.H.A. losses would more than wipe out the agency's $30 billion of cash reserves.
The issue has polarized Congress. Republicans, who led efforts to rein in Fannie Mae and Freddie Mac before those companies ran into trouble, are now seeking to bridle the F.H.A. Many Democrats insist the F.H.A. is playing a vital role in the housing market, which is only just starting to stabilize.
"F.H.A. has stepped into the void left by the private market," Representative Maxine Waters, Democrat from California, said at the hearing. "Let's be clear; without F.H.A., there would be no mortgage market right now."
That was the case for Bernadine Shimon. Like many Americans, Ms. Shimon has recently been through some rough times. She lost a house to foreclosure, declared bankruptcy, got divorced and is now a single mother, teaching high school English in a Denver suburb.
She wanted a house but no lender would touch her. The Federal Housing Administration was more obliging. With the F.H.A. insuring her mortgage, Ms. Shimon was able to buy a $134,000 fixer-upper in August.
"The government gave me another chance," she said.
The government is giving as many people as it possibly can the chance to buy a house or, if they are in financial difficulty, refinance it. The F.H.A. is insuring about 6,000 loans a day, four times the amount in 2006. Its portfolio is growing so fast that even F.H.A. backers express amazement.
For decades it was an article of faith that helping people of limited means like Ms. Shimon get a house was good for the new owner, good for the neighborhood and good for American capitalism. Then came the housing bust, which demonstrated that when lenders allowed people to buy houses they ultimately could not afford, it hurt the parties - while putting the economy itself in a tailspin.
In the aftermath of the crash, there is wide divergence on how easy, or how hard, it should be to become a homeowner. Skittish lenders are asking for 20 percent down, which few prospective borrowers have to spare. As a result, private lending has dwindled.
The government has stepped into the breach, facilitating loans with down payments as low as 3.5 percent and offering other incentives to stabilize the market. Real estate agents in some hard-hit areas say every single one of their clients is using the F.H.A.
"They're counting their pennies, scraping up that 3.5 percent," Bonni Malone of Prudential Americana in Las Vegas said. "Mostly they're buying foreclosed homes from banks, although I had one client who bought from a guy that was dying. It's turning around the market."
While the government's actions have helped avert full-scale economic disaster, there is growing concern that it might have doled out its favors with too generous a hand.
Many of the loans the F.H.A. insured in 2007 and last year are now turning delinquent, agency officials acknowledge. The loans made in those two years are performing "far worse" than newer loans, dragging down the whole portfolio, Mr. Stevens of the F.H.A. said in an interview.
The number of F.H.A. mortgage holders in default is 410,916, up 76 percent from a year ago, when 232,864 were in default, according to agency data.
Despite the agency's attempt to outrun its fate by insuring ever-larger amounts of new loans to such borrowers as Ms. Shimon - the current rate is over a billion dollars a day - 7.77 percent of the portfolio is in default, up from 5.6 percent a year ago.
Barney Frank, the Massachusetts Democrat who is chairman of the House Financial Services Committee, said in an interview that the defaults were, in essence, worth it.
"I don't think it's a bad thing that the bad loans occurred," he said. "It was an effort to keep prices from falling too fast. That's a policy."
The troubled loans are nevertheless weighing on the agency's capital reserve fund, which has fallen to below its Congressionally mandated minimum of 2 percent, from over 6 percent two years ago.
The optimism expressed by Mr. Stevens, the F.H.A. commissioner, places him at odds not only with some outside experts but with Kenneth Donohue, the inspector general of the Housing and Urban Development Department, who is also F.H.A.'s watchdog. Mr. Donohue said the drop in reserves was "a flashing red light" that the agency was not taking seriously enough.
"It might be we'll get ourselves out of this and that everything will be fine, but I don't paint that rosy a picture," Mr. Donohue said. "They're banking on the fact that the economy will continue to improve, that the housing market will begin to sustain itself."
He noted that if private lenders had raised their down payment requirements in the last two years, it raised the question, "what does the F.H.A. think it is doing by asking only 3.5 percent?"
Any more than that and Ms. Shimon, 45, would still be a renter. As it was, she cashed in her retirement savings account to come up with the necessary funds. She did not have enough to spare for closing costs, so her mortgage broker arranged a deal where the charges were wrapped into the loan at the cost of a higher interest rate. She cried when the deal was done.
The house was empty and trashed. Slowly, she is trying to bring it back to life. She spent the first few weeks picking up garbage in the backyard.
Is Ms. Shimon a good bet? Even she has no easy answer. Her mortgage payment, $1,100, is half of what she takes home every month. It is not easy to make ends meet. Teachers can get laid off like everyone else.
"The government," she said, "is doing what it needed to do - taking a risk on people."
Chaz Fullenkamp, an automotive technician in Columbus, Ohio, got an F.H.A. loan even though he was living on the financial edge. "If I got unemployed, I'd be wiped out in a month or two," he says. Thanks to the F.H.A., however, he is better off than he used to be.
Mr. Fullenkamp used F.H.A. insurance to buy a house this spring for $179,000. The eager seller paid the closing costs and also gave Mr. Fullenkamp $2,500 in cash. He immediately applied for the $8,000 tax rebate. Even taking his down payment into account, he came out ahead.
"I knew in my heart I could not really afford the house, but they gave it to me anyway," said Mr. Fullenkamp, 22. "I thought, 'Wow, I'm surprised I pulled that off.' "
As the number of loans has soared, random quality control checks have decreased sharply, F.H.A. staff members say. Mr. Donohue, the inspector general, cited numerous examples of organized fraud in testimony to Congress earlier this year.
"They need to stop taking bad loans in the door," he said in an interview. "They're taking on all this volume, they have to have very active underwriting standards."
Jack Healy contributed reporting from New York.
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22) Fannie and Freddie Continue to Struggle, Lawmakers Told
By JACK HEALY
October 9, 2009
http://www.nytimes.com/2009/10/09/business/economy/09loan.html?ref=us
In the year since the government stepped in to rescue the collapsing mortgage giants Fannie Mae and Freddie Mac, the agencies have taken $96 billion from the Treasury, and may still need more.
That was the somber assessment delivered Thursday by the federal agency charged with overseeing the government-controlled Fannie and Freddie, which have lost a combined $165 billion since July 2007 as their bets on the housing market went bad.
"The short-term outlook for the enterprises remains troubled," said Edward J. DeMarco, acting director of the Federal Housing Finance Agency, in testimony before the Senate Banking Committee.
Fannie Mae and Freddie Mac, which bought millions of home mortgages, were taken over by the government last September after their share prices plummeted and investors abandoned the companies, fearing they would collapse under the weight of their loan portfolios. The government put Fannie and Freddie into a conservatorship and offered billions in federal lifelines.
Now, as housing prices struggle higher and an $8,000 tax credit has enticed many first-time home buyers into the market, Fannie and Freddie are limping along. The Federal Reserve is buying more than $1 trillion in mortgage-backed securities in an effort to loosen credit and restart the mortgage-financing markets.
Yet even as the broader economy tries to turns a corner, Fannie and Freddie face huge obstacles, Mr. DeMarco said.
Their books are still bleeding red as foreclosures rise and homeowners - even the highest-quality borrowers - fall behind on their mortgage payments. Several crucial positions remain vacant, and Mr. DeMarco said the agencies were worried about losing workers because of the uncertainties surrounding their fate.
Right now, 3.1 percent of Freddie Mac loans are seriously delinquent, and Fannie's seriously delinquency rate is an even higher 4.2 percent, Mr. DeMarco testified. And as unemployment nears 10 percent and homeowners struggle to persuade lenders to refinance their mortgages, delinquency rates are rising.
Fannie and Freddie now manage nearly 100,000 foreclosed properties, and those numbers are almost certain to grow.
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