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Washington, Philadelphia Begin Digging Out From Snowstorm; More in Store

February 6, 2010

By Dan Hart Feb. 7 (Bloomberg) — Baltimore, Washington and Philadelphia begin cleaning up and digging out today from a storm that dumped two feet of snow on much of the mid-Atlantic region and left thousands without power. Elkridge, Maryland, just south of Baltimore, recorded the region’s most snowfall with 38.3 inches (97 centimeters), followed by Crofton, Maryland, with 34 inches, the National Weather Service said. Baltimore’s airport had 26.5 inches while Washington posted 20 inches. Philadelphia registered in at 28.5, its second-biggest snowfall ever. “This was an epic storm,” said Andrew Ulrich , a meteorologist for AccuWeather.com Inc. in State College, Pennsylvania. “The sheer amount of snow was amazing.” And there is more in store. AccuWeather said another storm will arrive in the Northeast during the day on Feb. 9. Possible blizzard conditions are forecast for northeastern Pennsylvania to New England and as much as 12 inches of snow may fall. Baltimore and Washington may see as much as six inches of new snow, said Ulrich. The snow began falling in Washington the morning of Feb. 5 before settling in for 24 hours and dropping as much as 3 inches an hour. ‘Snowmaggedon’ Conditions prompted a blizzard warning from the Chesapeake Bay area in Maryland up to New Jersey’s shore. Hundreds of flights at Dulles, Reagan National and Baltimore-Washington International Thurgood Marshall Airport were canceled, as was Amtrak service. The Washington Metropolitan Area Transit Authority was forced to suspend above-ground rail service and bus service. President Barack Obama , at a speaking engagement at Washington’s Capital Hilton hotel yesterday, called it “Snowmaggedon in Washington D.C.” As of 6 p.m. yesterday, Dominion Resources Inc. had 93,406 customers without power, most of those in northern Virginia. Pepco Holdings reported 101,000 customers, most of them in Montgomery County, Maryland, in the dark. Baltimore Gas & Electric Co. had 25,000 households and businesses without service. More than 160,000 power outages were reported across Pennsylvania, Governor Ed Rendell’s office said. Washington Mayor Adrian Fenty said yesterday the city is “dedicated to nothing else but trying to clear the roads so that we can be ready for business on Monday morning.” About 250 trucks plowed streets and he advised residents to stay at home. The storm puts a strain on some state and municipal budgets. Before the storm’s arrival two days ago, Virginia had already spent the $79 million it budgeted for this year for snow removal. It had to pay for the current storm from a $25 million reserve fund. Karen Le Blanc, a spokeswoman for the city of Washington said the municipality was “probably over” its $6.2 million budget at this point. To contact the reporter on this story: Dan Hart in Washington at dahart@bloomberg.net .

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Al Norman: Wal-Mart Billionaire Wants $8 Million Subsidy

January 31, 2010

Missouri is the “show me the money” state — where using public funds to bail out billionaires is considered good business. An entrepreneur who married into Sam Walton’s extended family, and is listed high up on the Forbes Wealthiest Americans list, is asking Missouri taxpayers to help him build a bigger Wal-Mart. Enos Stanley Kroenke married into a fortune when he wed Ann Walton, the daughter of Sam Walton’s brother “Bud.” But Kroenke, already a successful businessman before his marriage, now apparently needs millions in public welfare to carry out his latest development plans. Owner of the Denver Nuggets basketball team, and hockey’s Colorado Avalanche, Kroene is part owner of the St. Louis Rams and the English soccer team Arsenal. His development firm, THF Realty (the acronym stands for “To Have Fun”) has asked for a Tax Increment Financing (TIF) deal to build a Wal-Mart supercenter in the tiny community of Bridgeton, Missouri. THF Realty owns 100 properties comprising more than 20 million square feet of leaseable area in 23 states. A concentration of THF properties exists in Missouri, Illinois, Pennsylvania and West Virginia. The company says its mission is to be the “best private developer in America.” But THF needs a little TIF from its public friends. Kroenke is the 117th richest American, with an estimated worth of $2.7 billion in 2009. According to the St. Louis Business Journal , in 1995, Kroenke bought a major stake in the Rams and relocated them from Los Angeles to St. Louis. Five years later, Kroenke blocked out former Broncos quarterback John Elway to purchase the Nuggets, the Avalanche, and the Pepsi Center arena. The 61-year-old Kroenke owns a piece of the Colorado Rapids soccer team, and the stadium they play in, plus the Colorado Mammoth lacrosse team. Six years ago Kroenke went live with the Altitude Sports & Entertainment network, a 24/7 TV network that broadcasts the Colorado teams that Kroenke owns. The use of state tax breaks by billionaires is emblematic of the ‘bail out’ mentality that still pervades the real estate industry in America. Kroenke’s Wal-Mart plan for Bridgeton, Missouri is not a form of economic development. There already are 19 Wal-Marts within 25 miles of Bridgeton, including a Wal-Mart that sits on the border of Bridgeton and St. Ann. Bridgeton is a city that has lost 15% of its population since 1990, and any revenue it gains from another Wal-Mart will come from its neighbor, St. Ann. The existing Wal-Mart on the St. Ann border will shut down if Kroenke builds his superstore, draining the city of at least $100,000 in sales taxes. When Bridgeton officials issued a bid for development of the former Value City property on St. Charles Rock Road, Kroenke responded. The proposed supercenter will be 159,000 square feet — only 40,000 square feet larger than the existing Wal-Mart store located just minutes away. THF says the supercenter will employ around 300 workers — but most of these workers are already employed at the “old” store. Building Wal-Marts is a family affair for Kroenke. Over the years, Kroenke and THF have been at the center of many controversial Wal-Mart developments in St. Peters, Columbia, High Ridge, Maplewood, and North St. Louis County, Missouri, as well as Glen Carbon, Illinois, Wheeling, West Virginia, and Buffalo, Minnesota. In January of 2010, Kroenke’s group presented Bridgeton with a plan requiring as much as $8 million in Tax Increment Financing to build a Wal-Mart. According to Kroenke, the Wal-Mart project will generate roughly $7 million in sales and property taxes. But this welfare deal is not without its detractors. Officials in neighboring St. Ann are not pleased with the project. The “old” Wal-Mart initially was entirely within Bridgeton — but when Wal-Mart expanded its store, the footprint stepped across the line into St. Ann. Bridgeton’s gain will be St. Ann’s loss. Tax Increment Financing has been used by municipal officials nationwide for years to try to lure developers away from neighboring communities. To discourage this form of retail pilfering, the Missouri state legislature in 2007 changed the power to grant a TIF to require cities to use a countywide approach to granting TIFs — rather than a town-level process only. The use of this financing “gift” to developers since the reform has dropped dramatically. Kroenke’s request for a subsidy is only the second in St. Louis county since the law became effective in January of 2008. But Bridgeton Mayor Conrad Bowers has been promoting Kroenke’s scheme for months. “The store is going be larger, and have many more products, and the sales will be higher,” the Mayor told the St. Louis Post Dispatch . The TIF has to pass muster with the Tax-Increment Financing Commission, which is a combination of county, city and other officials. “In my judgment,” the Mayor told the Dispatch , ” I think that it (the supercenter) will happen because I really believe it’s good for the area, it’s good for the county. It’s not like we’re stealing this from another area — the store is in Bridgeton.” The Mayor says this supercenter cannot happen without TIF money because of the demolition costs on the site — which the city failed to get from the former property owners. Now city officials want taxpayers to foot the bill for the billionaire Kroenke. The $8 million in sales and property taxes that will be given back to the billionaire developer in the form of site infrastructure costs, is money the taxpayers could have used to pay for the on-going police and fire protection that this new superstore will demand. “The point is,” Mayor Bowers told the Dispatch , “Wal-Mart is going to build a Supercenter and I’m pleased they want to be in Bridgeton and at a site that needs to be redeveloped. As far as I’m concerned it’s the correct use of a TIF.” Even if the TIF Commission says No to Kroenke, the Bridgeton City Council gets the final say. If the City Council can muster a two-thirds vote to override the TIF Commission, the billionaire gets his bail out. Over the years, Wal-Mart has swallowed hundreds of millions of dollars in federal, state, and local subsidies — a form of welfare not available to its smaller competitors and Main Street businesses. The use of such public funding has been criticized as a blunt tool for economic development, because in the end, the TIF investment produces little or no jobs — and low-paying jobs at that. St.Ann officials were rattled earlier this month when they learned that in addition to the potential Wal-Mart closing, their community was one of only 5 towns in the country that was losing its Macy’s store. The St. Ann Macy’s was located in the huge 1.8 million square foot Northwest Plaza — which is now in jeopardy of losing more tenants. Kroenke’s group has told Bridgeton officials that it is ready to move dirt immediately if the TIF is approved. This unnecessary superstore built with welfare funding could be open for shoppers by the fall of 2011. Given the foul mood the public is in regarding bail outs for the rich, it’s a wonder this proposal has any legs left. Al Norman is the founder of Sprawl-Busters. His website is http://www.sprawl-busters.com. He has been helping communities fight big box sprawl since 1993. He is the author of Slam Dunking Wal-Mart.

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U.K. Bankers Surrender on Darling Bonus Levy as Income Tax Increase Looms

January 13, 2010

By Andrew MacAskill, Ambereen Choudhury and Ben Martin Jan. 13 (Bloomberg) — Banks in the U.K. will pay the one- time, 50 percent tax on bonuses levied by the Treasury rather than reduce compensation, according to accountants and lawyers who advise financial institutions. Bankers who face increased income taxes on those payouts may not be so accommodating. Attention is shifting to how to minimize the effects of a personal income tax rise for high earners to 50 percent from 40 percent, which goes into effect in April, the accountants and lawyers said. One key strategy: Seeking more compensation in deferred stock, a form of pay classified as a capital gain and taxed at 18 percent in the U.K. “Inevitably, people are going to be pressed toward capital gains tax schemes, there’s no doubt about that,” said Nicholas Stretch, a tax lawyer at London-based law firm CMS Cameron McKenna. “We’re seeing greater interest from clients.” The levy on bonuses of more than 25,000 pounds ($40,300) and the increase in taxes on individuals earning more than 150,000 pounds a year mark efforts by the ruling Labour Party, facing an election to be held by June, to tap into popular anger over the 1 trillion-pound cost of bailing out U.K. banks during the financial crisis. Chancellor of the Exchequer Alistair Darling announced the tax on bankers’ bonuses last month. He said he introduced the measure, which covers payouts in cash and deferred stock, to encourage banks to build up capital, not raise revenue. Dimon’s Protest It may do the opposite. The Treasury, which initially said the tax would raise 550 million pounds, now estimates it may net as much as 2 billion pounds as banks opt to pay the tax rather than reduce bonuses, according to a government official who declined to be identified. U.K. banks are going to pay up because the legislation is tightly drawn and Treasury has been unwilling to negotiate, the accountants and lawyers said. An appeal to Darling last month from Jamie Dimon , JPMorgan Chase & Co.’s chief executive officer, made no difference. “People will be looking at the bonus tax and turning around and saying is there anything that we can do?” said Dominic Stuttaford, a partner at law firm Norton Rose LLP in London, which specializes in advising financial firms. “A lot of them will just say, with a very loud expletive: ‘Sorry, we’ve got to pay it.’” Representatives of Bank of America Corp. , Morgan Stanley and Citigroup Inc. said the banks hadn’t made a decision on how to deal with the tax. Barclays Plc, Royal Bank of Scotland Group Plc , HSBC Holdings Plc, JPMorgan , Credit Suisse Group AG and UBS AG declined to comment. ‘On The Chin’ There’s little appetite among the banks to circumvent the bonus tax because the legislation is rigorously drafted, said Sylvie Watts , a compensation lawyer at London-based Allen & Overy LLP. Banks also run the risk of negative publicity if they are caught trying to evade it, she said. “There aren’t many ways around it,” she said. Bankers “are just taking it on the chin.” That leaves banks such as Barclays and RBS, whose compensation committees are preparing to meet this month, with a choice if they pay the bonuses and the tax. They either risk the wrath of shareholders, who will receive a smaller slice of profits, or anger staff outside the U.K. by reducing the global bonus pool, or both, if they split the cost. “In principle, we can’t support the idea that the shareholders should pick up the bill,” said Peter Montagnon , director of investment affairs at the Association of British Insurers, whose members control about a fifth of the U.K. stock market, including banking stocks . Investors will have to consider whether to support the bank’s decision to add the cost of the tax to the wage bill on a case-by-case basis, he said. George Osborne Darling’s bonus tax, backed by Prime Minister Gordon Brown , has helped the Labour Party narrow the lead over the opposition Conservative Party in opinion polls. George Osborne, the lawmaker in line to become chancellor if the Conservatives win the election, has supported limits on cash bonuses and hasn’t ruled out extending the tax. London Mayor Boris Johnson warned this week that as many of 9,000 bankers may leave the U.K. as a result of the bonus tax. Ian Fleming, a managing director at Alvarez & Marsal Taxand LLC in London, disagreed, saying banks are unlikely to move to low- tax regimes because the Darling plan is a one-time levy. “Any extension of the bonus tax might tip the balance,” Fleming said. April Increase In addition to the charge on bonuses, U.K. bankers face an income tax increase in April. Any British banker making more than 150,000 pounds will have to pay half his income to the government for the first time since Prime Minister Margaret Thatcher cut the top rate of income tax to 40 percent in 1988. The top federal tax rate is 35 percent in New York, 45 percent in Frankfurt and 44 percent in Geneva. “You’ve got a generation of people who have not experienced paying half their income to the government,” said Chris Maddock, tax director of the London-based Vantis Group Ltd. “It’s a psychological barrier.” Bankers who try to dodge income tax by reclassifying their earnings as a capital gain may struggle to evade British tax authorities, accountants said. “The government isn’t stupid,” said John Whiting , tax policy director at the London-based Chartered Institute of Taxation, a professional body that promotes the study and practice of taxation. “They are on the lookout.” To contact the reporters on this story: Andrew MacAskill in London at amacaskill@bloomberg.net ; Ambereen Choudhury in London at achoudhury@bloomberg.net ; Ben Martin in London bmartin38@bloomberg.net .

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Federal Reserve Seeks Court Help to Block Release of U.S. Bailout Secrets

January 11, 2010

By David Glovin Jan. 11 (Bloomberg) — The Federal Reserve will ask a U.S. appeals court to block a ruling that for the first time would force the central bank to reveal secret identities of financial firms that might have collapsed without the largest government bailout in U.S. history. The U.S. Court of Appeals in Manhattan, after hearing arguments in the case today, will decide whether the Fed must release records of the unprecedented $2 trillion U.S. loan program launched after the 2008 collapse of Lehman Brothers Holdings Inc. In August, a federal judge ordered that the information be released, responding to a request by Bloomberg LP, the parent of Bloomberg News. Bloomberg argues that the public has the right to know basic information” about the “unprecedented and highly controversial use” of public money. Banks and the Fed warn that bailed-out lenders may be hurt if the documents are made public, causing a run or a sell-off by investors. Disclosure may hamstring the Fed’s ability to deal with another crisis, they also argued. The lower court agreed with Bloomberg. “The question is at what point does the government get so involved in the life of the institution that the public has a right to know?” said Charles Davis, executive director of the National Freedom of Information Coalition at the University of Missouri in Columbia. Davis isn’t involved in the lawsuit. The ruling by the three-judge appeals panel may not come for months and is unlikely to be the final word. The loser may seek a rehearing or appeal to the full appeals court and eventually petition the U.S. Supreme Court, said Anne Weismann, chief lawyer for Citizens for Responsibility and Ethics, a Washington advocacy group that supports Bloomberg’s lawsuit. Seeking Disclosure New York-based Bloomberg, majority-owned by Mayor Michael Bloomberg , sued in November 2008 after the Fed refused to name the firms it lent to or disclose the amounts or assets used as collateral under its lending programs. Most were put in place in response to the deepest financial crisis since the Great Depression. “Bloomberg has been trying for almost two years to break down a brick wall of secrecy in order to vindicate the public’s right to learn basic information,” Thomas Golden , an attorney for the company with Willkie Farr & Gallagher LLP, wrote in court filings. He said the Fed may be trying “to draw out the proceedings long enough so that the information Bloomberg seeks is no longer of interest.” The Fed’s balance sheet debt doubled after lending standards were relaxed following Lehman’s failure on Sept. 15, 2008. That year, the Fed began extending credit directly to companies that weren’t banks for the first time since the 1930s. Total central bank lending exceeded $2 trillion for the first time on Nov. 6, 2008, reaching $2.14 trillion on Sept. 23, 2009. Freedom of Information The lawsuit, brought under the U.S. Freedom of Information Act , or FOIA, came as President Barack Obama criticized the previous administration’s handling of the $700 billion Troubled Asset Relief Program passed by Congress in October 2008. Obama has said funds were spent by the administration of former President George W. Bush with little accountability or transparency. FOIA requires federal agencies to make government documents available to the press and public. In her Aug. 24 ruling, U.S. District Judge Loretta Preska in New York said loan records are covered by FOIA and rejected the Fed’s claim that their disclosure might harm banks and shareholders. An exception to the statute that protects trade secrets and privileged or confidential financial data didn’t apply because there’s no proof banks would suffer, she said. Burden Not Met The central bank “speculates on how a borrower might enter a downward spiral of financial instability if its participation in the Federal Reserve lending programs were to be disclosed,” Preska, the chief judge of the Manhattan federal court, said in her 47-page ruling. “Conjecture, without evidence of imminent harm, simply fails to meet the board’s burden” of proof. In its appeal, the Board of Governors of the Federal Reserve System argued that disclosure of “highly sensitive” documents, including 231 pages of daily lending reports, threatens to stigmatize lenders and cause them “severe and irreparable competitive injury.” “Confidentiality is essential to the success of the board’s statutory mission to maintain the health of the nation’s financial system and conduct monetary policy,” Assistant U.S. Attorney General Tony West and Fed lawyer Richard Ashton wrote in a legal brief to the appeals court. “The board’s ability to administer lending programs crucial to maintaining national financial and economic stability will be severely undermined” if lenders won’t come to the regional Federal Reserve Banks “for their funding needs, particularly in time of economic crisis,” they said. Protected From Disclosure Historically, the type of government documents sought in the case has been protected from public disclosure because they might reveal competitive trade secrets, Davis said. Laws governing such disclosures may be due for a change, he said, following the far-reaching U.S. bailout. “If you are in need of a bailout and turn to the federal government and say, ‘help,’ with that comes some requirements in terms of transparency,” Davis said. The Fed is joined in its bid to overturn Preska’s order by the Clearing House Association LLC, an industry-owned group in New York that processes payments between banks. The group assailed the judge’s decision for what it said were legal errors, such as applying the wrong standard in weighing the exception to FOIA. The group includes ABN Amro Bank NV, a unit of Royal Bank of Scotland Plc, Bank of America Corp., The Bank of New York Mellon Corp., Citigroup Inc. , Deutsche Bank AG, HSBC Holdings Plc, JPMorgan Chase & Co ., US Bancorp and Wells Fargo & Co. Directly Participate Preska allowed the association to join the case so that it could directly participate in the appeal. More than a dozen other groups or companies filed amicus, or friend-of-the-court, briefs, including the American Society of News Editors and individual news organizations. The judge postponed the application of her ruling to allow the appeals court to consider the case. Also today, the same appeals court will hear arguments in a lawsuit brought by News Corp. unit Fox News Network seeking similar documents. U.S. District Judge Alvin Hellerstein in New York sided with the Fed in that case and refused to order the agency to release the documents. The case is Bloomberg LP v. Board of Governors of the Federal Reserve System, 09-04083, U.S. Court of Appeals for the Second Circuit (New York). To contact the reporter on this story: David Glovin in the U.S. Court of Appeals for the Second Circuit in Manhattan at dglovin@bloomberg.net .

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Josipovic Wins Croatia Presidential Election; Will Speed Up EU Entry Talks

January 10, 2010

By Boris Cerni Jan. 11 (Bloomberg) — Ivo Josipovic will lead Croatia for the next five years after winning a run-off presidential election as the former Yugoslav republic strives to complete European Union entry talks and seeks to revive the economy. Josipovic , with the support of the largest opposition party, the Social Democrats, garnered 60.3 percent of the people’s vote, results from the central electoral commission in Zagreb published on its Web site showed. Zagreb Mayor Milan Bandic got 39.7 percent of the vote in yesterday’s election. “When I announced I will run for president, I have said I want a European Croatia,” Josipovic, a law and music professor, said in an interview with Hrvatska Radiotelevizija , the national broadcaster, after the results were announced. “Croatia will be one of the shining stars on the European sky.” Bandic said in the same broadcast he will return to the Zagreb Mayor post after the defeat. The Adriatic Sea country, which aims to complete EU entry talks by June, must eliminate corruption and overhaul the judiciary and the shipping industries to become the next Yugoslav nation after Slovenia to join the world’s largest trading bloc by 2012. Josipovic will have a largely ceremonial role when he takes over from Stipe Mesic in February with limited powers over the economy. He would be “a good counselor” to Prime Minister Jadranka Kosor and he would “contribute to a quicker accession to the EU as he would spur other institutions to do their homework,” according to political analyst Damir Grubisa. Economic Growth The Balkan nation of 4.4 million people aims to spur economic growth after the worst contraction since the fall of communism two decades ago. Gross domestic product shrank an annual 5.7 percent in the third quarter from 6.3 in the previous three months as credit became scarce and consumption, as well as investment, faltered. GDP is set to expand this year as European demand rebounds, according to the government’s forecast. Kosor’s administration is considering setting up a 10 billion kuna ($1.98 billion) fund to spur economic growth by helping companies most affected by the global recession. Central bank Governor Zeljko Rohatinski expects exporters to lead the recovery, which the government sees at an annual 0.5 percent this year. To contact the reporter on this story: Boris Cerni in Ljubljana, Slovenia, at bcerni@bloomberg.net .

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JPMorgan Assails Britain’s Bonus Tax, Sparking Doubt on Canary Wharf Tower

December 29, 2009

By Elizabeth Hester and Linda Shen Dec. 29 (Bloomberg) — JPMorgan Chase & Co. Chief Executive Officer Jamie Dimon , whose bank had promised to build a European headquarters in London, told U.K. Chancellor of the Exchequer Alistair Darling a 50 percent tax on bonuses would unfairly penalize the U.S. lender, a person close to the firm said. Dimon reminded Darling that JPMorgan never took a U.K. bailout and said plans to build a European headquarters at Canary Wharf show the New York-based company’s commitment to London, the person said. JPMorgan, the second-largest U.S. lender by assets, may scrap its Canary Wharf project because of the bonus tax, the Financial Times reported, citing an unidentified bank executive. Financial firms may face higher costs after Darling said on Dec. 9 he’d impose a 50 percent tax on discretionary bonuses greater than 25,000 pounds ($40,000). European and U.S. regulators imposed pay curbs after the world’s financial firms ran up $1.7 trillion in losses and writedowns during the global crisis. “Jamie is quite a controlled character, so this is an example of the fury that has been created,” said Stuart Fraser , the head of policy for the City of London, the financial district’s lobby. “There is a real sense of indignation and anger about this tax.” The tax may apply to compensation for about 20,000 people with the cost imposed on employers. During the call, Dimon, 53, mentioned that JPMorgan has paid U.K. taxes and reminded Darling of plans to spend about $2.4 billion on the Canary Wharf project, according to the person, who declined to be identified because the discussions were private. U.K. Defends Tax The conversation with Darling was reported yesterday by the London Telegraph. JPMorgan spokesman David Wells declined to comment. A U.K. Treasury spokesman yesterday defended the tax as fair because it would apply to all banks and said he couldn’t confirm the telephone conversation with Dimon. “The government cannot allow itself to be blackmailed,” Liberal Democrat Vince Cable said today in an e-mailed statement. Financial firms are threatening to leave the U.K. because they say increased taxes and regulation make London less attractive. Tullett Prebon Plc, the inter-dealer broker, said it will help employees relocate. BlueCrest Capital Management Ltd., a London-based hedge- fund firm that oversees about $15.4 billion, plans to open a Geneva office, a person familiar with the situation said last month. As many as 50 of BlueCrest’s 300 employees in London may move, the person said. Deutsche Bank, Nomura Deutsche Bank AG CEO Josef Ackermann said on Dec. 12 that Germany has a “comparative advantage” over other financial hubs because it doesn’t plan to tax bonuses. The Frankfurt-based bank said it plans to spread the costs of the U.K. bonus tax to its employees worldwide. Nomura Holdings Inc., the Tokyo-based bank that bought the U.K. operations of the collapsed Lehman Brothers Holdings Inc., has no plans to reconsider its new City of London headquarters. Nomura, which in August signed a 20-year lease for a 525,000-square-foot (48,774-square-meter) building overlooking the River Thames, will move into new offices in July, spokesman Patrick Meyer said in London today. European Alternatives The bonus levy forced Dimon to consider, “Do we want to be in a more tax-friendly, corporate-friendly environment?” said Jeff Harte , an analyst in Chicago for New York-based Sandler O’Neill & Partners LP. “There are opportunities all over Europe. There are a lot of cities that could handle operation hubs.” JPMorgan agreed to pay about $349 million in November 2008 for land in London’s Canary Wharf financial district to build a 1.9 million-square-foot (176,500-square-meter) tower. Under the agreement with Canary Wharf’s owners, who will build the offices, JPMorgan can scale back the size of the project. The planned headquarters will house JPMorgan employees from seven other buildings after the bank scrapped plans to build an office in London’s main financial district. If construction is delayed or canceled, JPMorgan will have to pay a 76 million-pound fee to developer Canary Wharf Group Plc, according to a November 2008 statement when the deal was announced. The bank will be responsible for paying for completed work including design, planning and infrastructure, the statement said. Banks’ ‘Sticks’ Shifting business centers elsewhere is “one of the sticks they’ll use to try and fight this legislation, but in the end how realistic is it?” said Joe Sorrentino , managing director at executive compensation consultant Steven Hall & Partners specializing in financial services. “This is a people business. How do you get your talent, if they’re U.K-based, to move to other countries?” The U.K. Treasury is working with banks to identify employees who are excluded from the tax, and Darling said Dec. 16 he will resist calls to change the policy. Banks can’t avoid the levy by arguing that some activities aren’t defined as banking, he said. Shares of Songbird Estates Plc, which controlled more than half the buildings in the Canary Wharf estate, were little changed at 157 pence at 3:04 p.m. in London trading. A spokesman for Songbird declined to comment. JPMorgan’s stock fell 4 cents to $41.68 at 12:43 p.m. in New York Stock Exchange composite trading. “It comes as no surprise that the recent, knee-jerk and ill-thought-out tax grab by government to punish bankers is causing some of our most important institutions to consider their options,” said Mayor of London Boris Johnson . “This should act as a strong wake-up call to our leaders that their policies could seriously threaten our competitiveness.” To contact the reporters on this story: Elizabeth Hester in New York at ehester@bloomberg.net ; Linda Shen in New York at lshen21@bloomberg.net

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Senate Health Legislation Gets AMA Backing as Bill Heads for Second Vote

December 22, 2009

By Jonathan D. Salant and Ryan J. Donmoyer Dec. 22 (Bloomberg) — Senate Democrats, moving closer to passing the most sweeping health legislation in four decades, got a boost from an endorsement by the American Medical Association and one poll showing a rise in public support. Democrats are preparing for a second vote scheduled for about 7:20 a.m. today after surviving a crucial test yesterday to curtail debate on the bill. President Barack Obama lauded the vote ending the filibuster threat as a “big victory.” The Chicago-based AMA, the doctors’ lobby, said the Senate measure would make it easier for Americans to buy affordable health insurance, prevent insurers from denying coverage for pre-existing conditions, and provide doctors and patients with information about which treatments work best. “This bill advances many of our priority issues for achieving the vision of a health system that works for patients and physicians,” AMA President-Elect Cecil Wilson said. A [bn:URL= http://politicalticker.blogs.cnn.com/2009/12/21/cnn-poll-6-point-jump-in-support-for-health-care-bill

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Jonathan B. Mintz: The Consumer Financial Protection Agency: It Can Be Done, But Let’s Do It Right

December 14, 2009

Few realize that America is at a critical moment in the history of consumer protection. Last week Financial Services Committee Chairman Barney Frank led the House of Representatives to pass landmark legislation that would – for the first time – create a federal agency solely focused on protecting consumers from unsafe products and predatory practices in the financial marketplace. The fate of the strong and independent Consumer Financial Protection Agency (CFPA) envisioned by the Obama Administration is now in the hands of the Senate, who must do even better. It’s time to finally put an end to the charade that allowed financial products and services to be carved out of meaningful federal oversight during the last several decades. The consumers, small businesses and entire communities struggling with unsustainable debt payments and imploding mortgages have never had to work harder to avoid predators as they search for reliable financial solutions. And it’s certainly a fallacy that the promise of federal consumer protections in the financial marketplace comes too late. Though the passage of the legislation by the House was a momentous first step, certain amendments offered in the fight, several of which congressman Frank had to accept to win passage, have weakened the bill and need to be removed if we are serious about effective reform. These additions were pushed by a virtual “who’s who” of predatory lenders and are a red flag for hopeful consumers. Industry by industry, they came forward to gain carve-out exemptions that defied defensible policy. Seeking to cloak their efforts by classifying in benign terms who they are, they managed to change the focus from what they are doing. It should be obvious that a predatory loan is a predatory loan, whether offered by a bank, an auto dealer, a payday lender or a tax preparer . The Senate must resist this false debate and focus on where consumers need protection, not where their predators seek refuge. Under Mayor Bloomberg’s leadership in New York City, where I am the Commissioner of the Department of Consumer Affairs , our residents are afforded some of the strongest consumer protections in the nation because of our ability to regulate auto dealers , pawnbrokers, debt collectors and employment agencies , among dozens of other industries. We’ve also had remarkable success partnering with local and regional financial institutions so we can go beyond quality financial education and counseling to offer genuinely safe financial products . It can be done, but let’s make sure we do it right.

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Midway Airport Only Asset Chicago Actively Looking to Lease, Saffold Says

December 7, 2009

By John McCormick and Darrell Preston Dec. 7 (Bloomberg) — Chicago, the third-largest U.S. city by population, is open to leasing additional assets to private companies to bolster its budget, Chief Financial Officer Gene Saffold said in an interview at Bloomberg’s Chicago Bureau. “‘Nothing is off the table’ means that we would consider other alternatives that are out there,” he said. Besides leasing Midway Airport once market conditions improve, the city isn’t working on other transactions, Saffold said. “We’re not pursuing them as a means to address budgetary issues, but we look at privatizations as a means of being better able to provide critical services,” he said on Dec. 4. Saffold said the city hasn’t hired consultants to help it review additional leases, though Mayor Richard M. Daley is “open” to considering it. Other cities including Atlanta are reviewing asset leases. Kasim Reed , the former Georgia state senator who led the initial count in the city’s Dec. 1 mayoral election, said last week that he’s considering leasing roads and parking garages to private companies to raise revenue. The Chicago City Council, voting 38-12, passed Daley’s $6.1 billion spending plan for 2010 on Dec. 2. The opposition was larger than in past years and followed criticism that he tapped too deeply into reserves to close the budget gap. Daley anticipates using $370 million in such funds generated from a 75-year lease on parking meters. Saffold said the city plans to repay the reserves. Revenue has been hurt by declines in real estate tax collections, income taxes and the loss of convention business to warmer, less expensive cities such as Orlando, Florida, and Las Vegas. To save money, Daley has fired city workers and pressured unions to accept unpaid furlough days this year. JPMorgan Experience Saffold, 54, appointed to his job in March, previously was managing director for national accounts at New York-based JPMorgan Chase & Co. Daley, 67, leased thousands of parking meters, a toll highway and city-owned garages during the past five years, raising $3.45 billion. The meter deal angered residents who faced malfunctioning machines and quadrupled parking rates in many neighborhoods. Chicago Parking Meters LLC, majority-owned by Morgan Stanley infrastructure investment funds, paid $1.15 billion to run the 36,000 parking meters in a deal that closed in February. Daley later apologized for how the parking-meter changeover was handled. The mayor is serving his sixth term and next faces re-election in 2011. Debt Tripled Chicago’s debt burden tripled during Daley’s two-decade tenure. The city has an AA credit rating, the third-highest, from Fitch Ratings, which revised its outlook to negative from stable on Oct. 2. That same day, Chicago learned it lost to Rio de Janeiro in its bid to host the 2016 Summer Olympics. The mayor was counting on the Olympics to help bolster Chicago’s development. He anticipated receiving federal money for infrastructure projects for an event that organizers estimated would draw as much as $22.5 billion in tourism, construction and related spending to Illinois. Chicago’s efforts at privatization hit another rough patch in April when a $2.5 billion deal to lease Midway Airport for 99 years fell through during the credit crisis. The mayor wanted to use the proceeds to repay $1.15 billion of the airport’s debt, finance future infrastructure projects, contribute to underfunded pensions and plug a budget hole. The Daley administration’s problems with the parking deal and Midway Airport followed a successful leasing of the Chicago Skyway , a 7.8-mile (13-kilometer) toll road that became the first in the U.S. to be privatized when Macquarie Infrastructure Group and Cintra Concesiones de Infraestructuras de Transporte SA paid $1.8 billion in 2005 for a 99-year lease. The city will look to a Midway deal when “the market improves,” Saffold said. To contact the reporters on this story: Darrell Preston in Chicago at dpreston@bloomberg.net ; John McCormick in Chicago at jmccormick16@bloomberg.net .

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Arroyo May Have Congress Support to Keep Martial Rule in Philippine State

December 6, 2009

By Francisco Alcuaz Jr. Dec. 6 (Bloomberg) — Philippine President Gloria Arroyo may have enough legislative support to maintain martial law in Maguindanao province, where the ruling clan has been linked to the election-related killing of 57 people. Arroyo declared military rule in Maguindanao yesterday and arrested its governor and several relatives, alleging they plotted “rebellion” as the government took steps to charge and prosecute them in the killings. Invasion and rebellion are the only constitutional bases for martial law. While Congress can revoke martial law, the Senate and House of Representatives need to concur. Arroyo has enough support to win in the House, which would invalidate a vote for revocation in the Senate, leaving critics with only the option of a Supreme Court appeal, opposition Congressman Roilo Golez said. “We don’t have the numbers,” Golez said in a phone interview. “They even have the numbers to extend” the duration of martial law. Arroyo still controls fund releases. Next year is an election year and many congressmen still need her support.” Rebellion existed because supporters of the Ampatuan clan were preparing to fight the government if authorities arrested members of the family, Justice Secretary Agnes Devanadera said yesterday. Martial law was also justified because many provincial employees, including judges, had stopped reporting for work, she said. The Philippines has arrested 62 people, including 15 this morning, Andres Caro of the Philippine National Police told reporters today. ‎​Some of them “are possible suspects in the recent massacre,” Caro said. Three-Day Limit Exercising martial law powers, authorities arrested the clan leader, Maguindanao Governor Andal Ampatuan Sr. and at least four relatives: his vice governor, the regional governor, the mayor of the capital city and a town councilor. They have to be charged within three days or released, Devanadera said. The government earlier arrested Mayor Andal Ampatuan Jr., the governor’s son, and charged him with 25 of the 57 deaths, citing witnesses who said he was present at the killings and directed the executions by provincial militiamen. The Nov. 23 attack was the worst in the country’s history of political violence. According to government and media reports, about 100 armed men stopped a convoy composed of supporters of a politician who planned to challenge the clan for the governorship and journalists covering the activity. They were taken several hundred meters away, killed and buried. Thirty journalists and 15 unrelated motorists who witnessed the ambush were killed, local media reported. Murder Charges Police this week recommended the Department of Justice file murder charges against 12 people, including the clan leader and five relatives. Justice Secretary Devanadera yesterday summoned all 12 for questioning. The declaration of martial law and arrests followed two days of reports that authorities had seized several stashes of weapons and ammunition from the Ampatuans. One of the stockpiles was enough to arm 500 men, authorities said. They’ll investigate whether some of the arms were used in the killings. “I see the logic of using extraordinary means to neutralize the Ampatuans,” Golez said. “But there’s the danger that when the government embarks on something new, it might whet its appetite” to use the same powers in situations that don’t require them. The Ampatuan clan, which supported President Arroyo in the 2004 and 2007 elections, ruled Maguindanao in part through militia groups first organized to help fight the separatist Moro Islamic Liberation Front, the al Qaeda-linked Abu Sayyaf terrorist group and the communist New People’s Army. Authorities say militia members have been detained on suspicion of involvement in the executions. To contact the reporter on this story: Francisco Alcuaz Jr . in Manila at falcuaz@bloomberg.net ;

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Russian Billionaires May Spend $81 Million at London Sales as Demand Rises

November 30, 2009

By John Varoli Nov. 30 (Bloomberg) — Auction houses in London start selling as much as 49 million pounds ($81 million) of Russian art today, hoping that spending by billionaires will help the market further recover after a year of decline. Sotheby’s sells 19th-century and early 20th-century paintings this evening, followed by another sale tomorrow. Christie’s International holds auctions on Dec. 1, 2 and 3. MacDougall’s, an auction house specializing in Russian art, has sales on Dec. 2 and 3. Bonhams also holds a 168-lot sale today. In a sign that wealthy Russians are returning to the market, Sotheby’s in New York sold $13.8 million of Russian art on Nov. 2, beating the top presale estimate of $9 million. The Russian government forecasts some economic growth in 2010, after the country’s economy shrank about 10 percent in 2009’S first half as prices declined for commodities such as oil. “The recent New York sales confirmed a recovery,” said William MacDougall , co-director of MacDougall’s. “It may be a while before volume and overall results recover to the June 2008 peak. We’re clearly past the worst.” London auction houses form the center of global Russian art sales. Most works are sourced from private American and European collections, while most buyers are from Russia and Ukraine. “Ukrainian buyers have been important to us from our first auction five years ago,” MacDougall said, “typically 20-30 percent of the market, sometimes more.” In June, MacDougall’s top buyer was Alina Aivazova, wife of the mayor of Kiev. Topless Woman MacDougall’s offers 460 lots that have a presale estimate of 12.5 million pounds to 17.6 million pounds. It has the most expensive lot of the week, a picture of a topless woman by Zinaida Serebriakova with an estimate of 1 million pounds to 1.5 million pounds. MacDougall’s also offers Nicholas Roerich’s modernist “Sangacheling” (circa 1924) that shows a Buddhist monk sitting alone in mountains, and Vladimir Baranoff-Rossine’s “Femme Cubiste” (circa 1920). Both have estimates of 500,000 pounds to 700,000 pounds. “Russia was a net exporter of art for about 90 years — 1910 to 2000,” said MacDougall. “There is a lot abroad, and this is now being reversed.” Sotheby’s offers 540 lots with a presale estimate of 14.8 million pounds to 21.2 million pounds. These include 110 Imperial items, with many works by Romanov jeweler Faberge. The auction house’s most expensive lot is Alexandra Exter’s “Venice” (1925) with an estimate of 900,000 pounds to 1.2 million pounds. The painting is one of her first works painted in Paris after she fled the Soviet revolution. Christie’s offers 578 lots that have a presale estimate of 6.5 million to 9.3 million pounds. It has another Roerich painting, “Legend” (1923), showing a medieval scribe standing on a mountain and with an estimate of as much as 900,000 pounds. The most expensive lot at the Bonhams sale today is Ivan Aivazovsky’s “The Morning Catch” (1870), which may fetch 150,000 pounds to 250,000 pounds. Bonhams hasn’t provided a total presale estimate. ( John Varoli writes for Bloomberg News. Opinions expressed are his own.) To contact the writer on the story: John Varoli in Kiev at jvaroli@gmail.com .

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Philippines Prosecutors Prepare Murder Charges Against Mayor in 57 Deaths

November 26, 2009

By Francisco Alcuaz Jr. Nov. 27 (Bloomberg) — Philippine prosecutors are preparing to file murder charges today against a mayor allegedly linked to the killing of at least 57 people on the southern island of Mindanao, the nation’s worst act of election-related violence. “I believe we have a very strong case,” Justice Secretary Agnes Devanadera told reporters in Manila after escorting Andal Ampatuan Jr., mayor of the town of Datu Unsay, from the Mindanao province of Maguindanao to the National Bureau of Investigation in the capital. The Ampatuan clan controls the province, the scene of the Nov. 23 massacre in which about 100 gunmen ambushed and killed backers of a politician intending to challenge the family for the post of provincial governor in elections next year. Journalists traveling with the group were among the dead. The Ampatuans helped President Gloria Arroyo win election in 2004, when she took more than 75 percent of the vote in the province. The charges will be filed in Cotabato City in Maguindanao, the justice secretary said late yesterday. She asked the Supreme Court for the trial to be held in Manila for security reasons. “The tension in the area is very high,” Local Government Secretary Ronaldo Puno said yesterday. Ampatuan turned himself in to authorities yesterday, according to officials. He denied involvement in the killings. After he was flown to Manila, traffic was stopped as he was taken to the National Bureau of Investigation in a speeding motorcade. He was shown on television inside the building, sometimes smiling. Militiamen Held Authorities detained 347 Maguindanao militiamen for questioning about their possible involvement in the killings and suspended civilians’ permits to carry firearms in the province, officials said at a briefing in Manila. “Why wasn’t this done before the massacre happened?” said Rey Trillana , a fellow at the Center for Civic Education and Democracy in Manila. “It’s common knowledge that warlords like the Ampatuans have hordes of bodyguards. Ever since the massacre happened the government has been in reactionary mode.” While militias are armed to help police and the army fight Muslim and communist insurgents, they are often used by local leaders as private security forces in feuds with rivals. Muslim rebel groups are waging a separatist war in Mindanao and the al-Qaeda-linked militant group Abu Sayyaf is active in the region. The communist New People’s Army has been fighting the state in several parts of the country, including Mindanao, since the late 1960s. ‘Fawning’ Meeting The Makati Business Club yesterday described as “fawning” a meeting of a representative of Arroyo and members of the Ampatuan clan, whom it described as “staunch” allies of the president. The magnitude of the crime is a result of “the warlord politics the current administration allowed to flourish in Maguindanao and exploited for its political ends,” the Manila- based association of the nation’s biggest businesses said in a statement. In 2007, while all except three of Arroyo’s 12 candidates for the national Senate lost, they swept the vote in Maguindanao. “That is the root of the political debt of the president to the Ampatuans,” Trillana said. It took four days to arrest Ampatuan in part because Maguindanao militiamen surrounded the main government building in the province, said Puno, the local government secretary. “The capitol was becoming a garrison,” he said. “The military and police had to prepare. We had to make sure that in addressing this crime, we won’t lose control of the area. They are political allies but we were directed to uphold the law.” Politician Unharmed The ambushed convoy was mostly made up of supporters of Buluan City Vice Mayor Esmael Mangudadatu, on their way to file his candidacy for Maguindanao governor. Mangudadatu, who wasn’t in the convoy, told local media his wife and two sisters were among the dead and that some of the women in the group were raped before they were murdered and buried in mass graves. Eleven bodies were recovered two days ago, two of them inside vehicles that were also buried. A backhoe with provincial government markings was found at the site, local media reported. Arroyo on Nov. 24 put Maguindanao and neighboring Sultan Kudarat province under a state of emergency to prevent further violence in the region. The helicopter that transported Ampatuan was shot at on its way to pick up the mayor, Puno said. Police are on alert for “spillover attacks” on the homes of Ampatuan and Mangudadatu family members outside the province, including Manila, said Andres Caro, national police operations chief. Philippine elections are often marred by bloodshed. About 126 candidates and supporters were killed in the months leading to the 2007 elections and 186 in 2004, according to the Philippine Daily Inquirer . To contact the reporter on this story: Francisco Alcuaz Jr . in Manila at falcuaz@bloomberg.net .

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Philippine Local Police Chief Detained After 46 Dead in Political Massacre

November 24, 2009

By Cecilia Yap and Joel Guinto Nov. 25 (Bloomberg) — Philippine authorities detained a provincial police chief and deployed 1,000 soldiers to search for suspects after gunmen killed 46 people in one of the worst acts of political violence in the nation’s history. Abusana Maguid, the police chief of Maguindanao province, was relieved of his duties after witnesses saw three of his officers at the scene of the attack two days ago on the southern island of Mindanao, National Police spokesman Leonardo Espina said yesterday. Maguid may bear “command responsibility” for the actions of his officers, who were also detained, Espina said. “All who are responsible will be made accountable. There will be no sacred cows.” President Gloria Arroyo yesterday put Maguindanao and neighboring Sultan Kudarat province under a state of emergency and vowed to hunt down those behind the massacre. Many of the victims, among them women and journalists, were found in a mass grave after about 100 gunmen stopped a convoy of people on their way to file a local politician’s application to run for provincial governor, the military said. The killings represent the worst single incident of election-related violence in the nation’s history, according to the Philippine Center for Investigative Journalism . United Nations Secretary-General Ban Ki-moon “condemns this heinous crime committed in the context of a local election campaign,” his office said in a statement . Ban hopes that “no effort will be spared to bring justice and to hold the perpetrators accountable.” Vice Mayor Buluan City Vice Mayor Esmael Mangudadatu, who planned to run for provincial governor in elections next year, wasn’t in the convoy that came under attack. He told local media his wife was killed and that some of the women in the group were raped before they were murdered. The military has said that backers of a rival candidate may have been involved. Jesus Dureza , Arroyo’s adviser on Mindanao affairs, said he has met with the Mangudadatu family and relatives of Maguindanao Governor Andal Ampatuan. The two families, who were once allies, are now political rivals, the Philippine Daily Inquirer said. The Mangudadatus pleaded for justice, Dureza said in a phone interview late yesterday before he was cut off. The Ampatuans pledged to cooperate with any investigation, he said in a GMA News TV interview. “No effort will be spared to bring justice to the victims and hold the perpetrators accountable,” Arroyo said yesterday. She deployed extra troops and ordered Director General Jesus Versoza, the national police chief, to lead the investigation into the killings. Bodies Exhumed Twenty-four bodies were exhumed yesterday, bringing the death toll to 46, Chief Superintendent Josefino Cataluna, central Mindanao police director, said in a phone interview. Police will continue to dig at the site where the bodies were found, he said. Some 1,000 soldiers have been deployed to search for the suspects and secure Maguindanao’s “exit points,” Romeo Brawner , the armed forces spokesman, told reporters in Manila. Arroyo declared a state of emergency to prevent further violence in the region, Press Secretary Cerge Remonde said at a briefing in Manila. The last time an area in Mindanao was placed under a state of emergency was March 31, when militants from the Islamist Abu Sayyaf group threatened to behead one of three Red Cross workers who were taken hostage. Emergency Rule Declaring a state of emergency gives the president the authority to use the military to quell violence, Cabinet Secretary Silvestre Bello III said in the same briefing. It may also give the president the legal basis to suspend the privilege of the writ of habeas corpus, he said. The writ allows courts to require the military or police to present persons they are holding and justify their detention. At least 12 journalists were among those killed, Reporters Without Borders said. “Never in the history of journalism have the news media suffered such a heavy loss of life in one day,” the Paris-based organization said in a statement, alleging there is a “culture of impunity and violence in the Philippines, especially in Mindanao.” Elections in the Philippines are often marred by bloodshed, with provincial politicians maintaining private militias. About 126 candidates and supporters were killed in the months leading to the 2007 elections and 186 in 2004, according to the Inquirer . The Southeast Asian nation will choose a new president and thousands of national and local officials in May. The nation’s Commission on Elections will accept filings for candidacies until Dec. 1. Mindanao is home to most of the nation’s Muslim minority some of whom have been fighting a separatist war for decades. It’s also home to the al-Qaeda-linked militant group Abu Sayyaf and other groups engaged in kidnapping and other forms of terrorism. To contact the reporters on this story: Cecilia Yap in Manila at cyap19@bloomberg.net ; Joel Guinto in Manila at jguinto1@bloomberg.net .

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Philippines Declares Emergency in Mindanao as 46 People Abducted, Killed

November 24, 2009

By Cecilia Yap and Joel Guinto Nov. 24 (Bloomberg) — Philippine President Gloria Arroyo declared a state of emergency in parts of the southern island of Mindanao a day after gunmen abducted and killed at least 39 people in an attack on supporters of a local politician. The government ordered the police and military to “prevent and suppress all lawless violence” in Maguindanao province, where yesterday’s attack took place, Press Secretary Cerge Remonde told reporters in the capital, Manila. The decree also covers the province of Sultan Kudarat and Cotabato City. “No effort will be spared to bring justice to the victims and hold the perpetrators accountable,” Arroyo said at the start of a Cabinet meeting today. She deployed extra troops and ordered the national police chief to lead investigations into the killings. The death toll rose to 39 after 17 bodies were exhumed today, Chief Superintendent Josefino Cataluna, regional director of police in central Mindanao, said in a phone interview. Police continue to dig at a site in the town of Ampatuan, where the bodies were found, he said. Some 1,000 soldiers have been deployed to search for the suspects and secure Maguindanao’s “exit points,” Romeo Brawner , the armed forces spokesman, told reporters in Manila. The Philippine Stock Exchange Index rose 0.9 percent to 3,077.66 at the noon close in Manila. The peso closed 0.3 percent lower against the U.S. dollar at 47.045. Some 100 Gunmen The military said about 100 gunmen yesterday stopped a convoy of 40 people on their way to file papers in support of Buluan City Vice Mayor Esmael Mangudadatu, who planned to run for provincial governor in elections next year. The politician’s wife and sister as well as journalists were among those abducted, possibly by backers of a rival candidate, according to the military. Arroyo declared a state of emergency to prevent further violence in the region, Remonde said. The last time an area in Mindanao was placed under a state of emergency was March 31, when militants from the Islamist Abu Sayyaf group threatened to behead one of three Red Cross workers who were taken hostage. “When the president declares a state of emergency, the legal implication would be for the president to have the authority to call the armed forces to quell lawless violence,” Cabinet Secretary Silvestre Bello III said in the same briefing. “It may also afford the president the legal basis for the suspension of the writ of habeas corpus,” he said, a reference to the ordering of a person to be brought before a court, with a requirement for authorities to justify the detention. Journalists Killed At least 12 journalists were among those killed, Reporters Without Borders said. “Never in the history of journalism have the news media suffered such a heavy loss of life in one day,” the Paris-based organization said in a statement. “We have often condemned the culture of impunity and violence in the Philippines, especially in Mindanao. This time, the frenzied violence of thugs working for corrupt politicians has resulted in an incomprehensible bloodbath.” National Police Chief General Jesus Versoza is now in Mindanao to oversee the investigation, the police spokesman, Chief Superintendent Leonardo Espina, said in a mobile phone text message. Arroyo ordered her adviser in Mindanao, Jesus Dureza , to set up a crisis committee, her office said. May Elections The Southeast Asian nation, which was wracked by violence during election campaigning in 2007, will choose a new president and thousands of national and local officials in May. The nation’s Commission on Elections will accept filings for candidacies until Dec. 1. Elections in the Philippines are often marred by bloodshed, with provincial politicians maintaining private militias. The province is a “hotspot” for political unrest, Brawner, the armed forces spokesman, told ANC television yesterday. The bodies were found in the mountainous area of Barangay Salman, Brawner said. Mangudadatu, who wasn’t traveling with the convoy, said yesterday he suspected female members of the group were raped before they were killed. In the 2007 mid-term elections, about 60 candidates were killed, according to a May 2007 Philippine Daily Inquirer report , citing data from the police. That number rose 46 percent from 41 in 2004. The southern Philippines is home to the al-Qaeda-linked militant group Abu Sayyaf and several Muslim rebel groups. To contact the reporters on this story: Cecilia Yap in Manila at cyap19@bloomberg.net ; Joel Guinto in Manila at jguinto1@bloomberg.net .

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Cuomo Took Campaign Donations From Lawyers With Matters Before His Office

November 23, 2009

By Linda Sandler and Karen Freifeld Nov. 23 (Bloomberg) — New York Attorney General Andrew Cuomo’s campaign fund took tens of thousands of dollars from law firms representing clients his office investigated or accused of wrongdoing, state records show. Boies Schiller & Flexner LLP, a New York law firm led by David Boies , gave Cuomo $35,000 this year, records show. The firm represents former American International Group Inc. Chief Executive Officer Maurice “Hank” Greenberg in a civil fraud case the attorney general is pursuing. Lawyers defending Dell Inc. , Deutsche Bank AG and a former state political party chief in Cuomo cases also contributed to him, records show. Cuomo’s donation forms ask contributors to sign a statement saying they have no “matter” pending with him. That rule “does not extend to attorneys representing persons or entities with matters before the NYS Attorney General’s office,” the form states, mirroring his predecessors’ policies. The exception creates the appearance of impropriety, ethics experts said. “If Cuomo doesn’t want to accept contributions that have the appearance of being corrupting, then he would need to include those attorneys as well,” said Allison Hayward, a former Federal Election Commission chief of staff and counsel who teaches legal ethics at George Mason University School of Law in Arlington, Virginia. Middlemen, such as lawyers, are sometimes seen as a bigger threat to an official’s integrity than their clients, because “they are working the political system for a profession, and the public sees them as insincere and manipulative,” she said. $974,000 Cuomo in 2006 and 2008 raised $974,000 from lawyers and lobbyists across the U.S., out of a total $18 million, according to FollowTheMoney.org, the Web site of the nonprofit National Institute on Money in State Politics, which analyzes campaign funding. He raised more than $10 million as of July, records show. The next filing is due in mid-January by which time Cuomo, 51, plans to have $20 million in donations, a person familiar with his plans said. Cuomo plans to run for governor, according to a person familiar with his plans. His ‘Andrew Cuomo 2010’’ campaign fund has raised $16 million to challenge fellow Democrat, Governor David Paterson , a person familiar with his plans said. If Cuomo were to reject lawyer donations to avoid any appearance of conflict, he could still raise enough for “a credible campaign,” said Ronald Michaelson, a former national chairman of the Council of Governmental Ethics Laws who teaches at the University of Illinois at Springfield. “Even if he’s going to use the money in a gubernatorial race, he would still be the attorney general,” he said in an e- mail. “The perception of impropriety is obviously clear, and that’s reason enough to refuse the money.” Hurt Chances Excluding large groups of donors might make Cuomo a leader in ethics while hurting his chance to be elected, said Susan Lerner, executive director of Common Cause, New York, a nonprofit that promotes honesty in government. “People who run for office are between a rock and a hard place,” she said. “The system stinks. If you don’t want people running for office to be influenced by campaign contributions, then you have to give them public money to run.” Richard Bamberger , a Cuomo spokesman, said in an e-mail, “Lawyers appear constantly before all sorts of government agencies, whether it is the Mayor’s Office, the Governor’s Office, or countless agencies and boards. No one would argue that lawyers can’t donate to candidates for any of these offices. Indeed, the ABA and New York State rules specifically encourage lawyers to participate in the political process.” The Rules The American Bar Association “Model Rules” for lawyers, which don’t address attorneys general, prohibit donations to judges made for the purpose of getting hired. Cuomo, who doesn’t hire outside lawyers, abides by that principle, Bamberger said. New York State rules for attorneys allow contributions to judges or public officials as long as the recipient is allowed to accept gifts. Eliot Spitzer , attorney general from 1999 to 2006, took lawyer donations too from those with cases before him. Boies gave him $15,000 and the Boies Schiller firm gave $10,000 in 2004, according to state records. “Candidates in New York State for district attorney, judge, attorneys general, and all other offices have operated under the very same rules for decades,” Bamberger said. Spitzer, who resigned as New York State governor amid a call-girl scandal in March 2008, declined to comment. Peter Harvey , a partner at Patterson Belknap Webb & Tyler LLP, who attended a Nov. 18 lawyer fundraiser for Cuomo and has been a supporter since Cuomo ran for attorney general, said that a contribution means “you get a meeting.” No Special Treatment “You get an opportunity to communicate your thoughts but that doesn’t mean the person listening is going to agree with you,” said Harvey, New Jersey’s former attorney general. In fact, he said, “because you are a supporter they will be careful not to give you any special treatment” so they can’t be accused of anything. Cuomo’s campaign chest is being swelled by lawyer donations and pledges from recent fundraisers including a Nov. 12 event at the Trump National Golf Club in Briarcliff Manor, New York, and the Nov. 18 lawyers breakfast, held at New York’s Sheraton Hotel with a requested $1,000 minimum donation. Maria Vullo of Paul Weiss Rifkind Wharton & Garrison LLP, co-chair of the “Lawyers Committee for Andrew Cuomo,” said about 200 people attended the Nov. 18 breakfast, exceeding the target in a non-election year for Cuomo. The attorney general spoke about “integrity” in state government, she said. Sponsoring firms at the event included Sullivan & Cromwell LLP and Skadden Arps Slate Meagher & Flom LLP. The Greenberg Case Cuomo’s case against Greenberg, inherited from Spitzer, is pending in New York state court. Greenberg, pushed out by AIG’s board during a 2005 probe by Spitzer, asked a judge in September to dismiss the suit, which accused him of distorting the company’s financial condition. If the case isn’t dismissed, Cuomo could still drop or settle it, both of which would benefit Boies. Boies, who represented the U.S. Justice Department in a successful antitrust case against Microsoft Corp. and former Vice President Al Gore in a court fight to recount Florida votes in the 2000 presidential election, didn’t respond to a call and e-mail seeking comment. Spokeswoman Dawn Schneider declined to comment. New York-based Kramer Levin & Frankel LLP gave Cuomo $33,459 in 2005 and 2006 for his successful attorney general race, records show. This year at least 21 Kramer Levin partners gave Cuomo amounts of $100 to $500 each on June 3, according to state Board of Elections data. Raymond Harding Co-Chair Gary Naftalis is representing former New York Liberal Party Chairman Raymond Harding , who pleaded guilty Oct. 6 to wrongfully taking $800,000 from investment firms that sought access to New York public pension fund money. Since 2007, Cuomo has been investigating kickbacks at the $116.5 billion state fund. Harding, who agreed to cooperate with Cuomo, eventually will be allowed to withdraw his felony plea, the judge handling the case said in court. “Our firm, like many other law firms, makes contributions to candidates whose policies we support,” said Kramer Levin Managing Partner Paul Pearlman in an e-mailed statement. “All our contributions are vetted to insure that they comply with all applicable ethical and legal standards. These contributions are not intended to have any impact whatsoever on client matters involving regulatory bodies.” Cuomo in 2007 sued Dell, the third-biggest personal- computer seller, accusing it of deceptively advertising financing and warranties. The company committed to pay $4 million in restitution and penalties, Cuomo said in a Sept. 15 release. Featherstonhaugh Wiley & Clyne LLP, Dell’s local counsel in Albany, New York, gave Cuomo $18,000 in 2008 and 2009, state records show. No Benefit Name partner James Featherstonhaugh said he hasn’t noticed that his donations helped clients. He failed this year to win money for a client who had a ski accident at a state-owned resort that Cuomo’s office defended, Featherstonhaugh said. “I contributed because I have known him since he was 20, am an old friend of his father’s, and his brother Chris used to work for me as an intern,” Featherstonhaugh said. Cuomo’s campaign, according to state records, took $2,500 on Dec. 15 from Philadelphia-based Morgan Lewis & Bockius LLP, which represented Deutsche Bank as Cuomo probed banks that allegedly underrated the risks of auction-rate securities. Settling with Cuomo, the Frankfurt-based lender agreed to pay $15 million in penalties to state regulators, Cuomo said in August. It was one of a series of deals that made banks, including Goldman Sachs Group Inc. and Merrill Lynch & Co., return $61 billion to investors who bought illiquid securities after being told they were safe, Cuomo estimated in July. TD Ameritrade Morgan Lewis Chairman Francis Milone didn’t respond to calls and e-mails seeking comment. Chicago-based Mayer Brown LLP, which represented TD Ameritrade Holding Corp. in Cuomo’s auction-rate securities probe, gave the attorney general $2,000 on May 4, according to state records. The Omaha, Nebraska-based online brokerage agreed in July to buy back $456 million of the illiquid investments from customers, Cuomo said in a July 20 release. Kenneth Geller , managing partner at Mayer Brown, didn’t respond to e-mails and calls seeking comment. In a September settlement with Cuomo, Philadelphia-based life insurer Coventry First LLC said it agreed to pay the state $10.5 million to end a lawsuit originally filed by Spitzer in 2006 that alleged it had defrauded policy holders. Los Angeles-based O’Melveny & Meyers LLP, Coventry’s law firm, gave Cuomo $7,500 on May 10, 2006, through a political action committee, according to state data. Wouldn’t Contribute “We do not think that the attorney general of New York would make it any easier for lawyers or cut any slack for their clients because of the lawyers’ prior campaign contributions,” said Arthur Culvahouse Jr ., the law firm’s chair, who was counsel to President Ronald Reagan in the 1980s. “That was not our thinking in 2006 or now. Indeed, as officers of the court we would not contribute to a candidate if we thought that were the case.” Lawyers probably regard campaign contributions as “a cost of doing business,” said Peter Henning , a former U.S. Securities and Exchange Commission senior lawyer who teaches legal ethics at Wayne State University Law School in Detroit. “They take the view that it will help us down the road.” Former New York Attorney General Dennis Vacco , who lost to Spitzer in 1998 and has a case before Cuomo, has contributed to him even though his own policy was not to take money from lawyers who had pending matters. He did accept money from such a lawyer’s firm, he said. Such an exemption, he said, might be interpreted as “splitting hairs.” To contact the reporters on this story: Karen Freifeld in New York at kfreifeld@bloomberg.net ; Linda Sandler in New York at lsandler@bloomberg.net .

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Ex-Mayor Giuliani Decides to Run for U.S. Senate, New York Daily News Says

November 19, 2009

By Bill Koenig Nov. 19 (Bloomberg) — Former New York Mayor Rudy Giuliani has decided to run for U.S. Senate, the New York Daily News reported, citing people familiar with the decision it didn’t identify. The New York Times earlier reported Giuliani had opted not to run for governor of New York, citing people who had been told of the decision it didn’t identify.

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L.A. Mayor Pitches Obama for $9 Billion to Prevent 7 Mile-an-Hour Gridlock

November 19, 2009

By Alan Ohnsman Nov. 19 (Bloomberg) — Los Angeles Mayor Antonio Villaraigosa said his goal to speed up construction of 12 transit projects and ease congestion in the second-biggest U.S. city requires “creative” funding help from Washington. Villaraigosa is pushing a plan to complete about $20 billion of subway and rail-line work by 2019, 20 years sooner than an initial estimate by Los Angeles County’s Metropolitan Transportation Authority . The mayor said he’ll seek a funding advance from the U.S. government against future local sales tax revenue, along with federal grant money. “What we’re saying to them is we’re one of the few cities coming in with our own money,” Villaraigosa said in an interview yesterday. “You figure it out.” Voters in Los Angeles, ranked as having the nation’s worst gridlock based on the INRIX National Traffic Scorecard , approved a half-cent increase in sales taxes last year that the city says will generate $13 billion over the next 30 years for transportation projects. To accelerate them, the city will ask the federal government for $9 billion, Villaraigosa said. Construction must happen sooner to address the city’s 14 percent unemployment rate and congestion, the mayor said. “People recognize the traffic in this town is unbearable,” said Villaraigosa, 53. Without significant mass- transit improvements, the city estimates average speeds across Los Angeles at rush hour will drop to “just 7 miles per hour by 2020,” he said. Work on the rail lines would create at least 210,000 jobs, Villaraigosa said, citing data from the non-profit Los Angeles County Economic Development Corp. ‘First-Class’ Transit The city won’t be able to relieve congestion “unless you get a first-class transit system,” Michael Dukakis , a visiting professor of public policy at the University of California, Los Angeles, said in an interview. “Two things will happen if you improve transit in L.A.: There will be some reduction in congestion and there will be development flowing into the city,” said Dukakis, former Massachusetts governor and 1988 Democratic presidential nominee. “Once you have this transit system in place and more under construction, you will see investment flow,” he said. The mayor’s top priorities are to complete an 8.7-mile western extension of the subway under Wilshire Boulevard and build a 1.7-mile downtown connector between existing rail lines. The city has 73 miles of rail lines, according to the MTA Web site . The subway extends 17 miles from downtown to North Hollywood in the San Fernando Valley, with a spur running west along Wilshire Boulevard. That is the portion targeted for extension. Work on the existing subway ended in 2000. Extensions were thwarted until last year by a lack of funds and a federal law, since rescinded, that barred tunneling under Wilshire. Subway Impact “The subway is the project which by far will carry the most people, have the most impact on traffic in the region, bar none,” Villaraigosa said. New subway and rail lines alone won’t solve congestion in Los Angeles, said Martin Wachs , director of transportation research at Rand Corp., a think tank in Santa Monica, California. “The idea that public transit investments reduce congestion is fundamentally wrong,” Wachs said. “In major global centers like New York, Paris, London, they haven’t solved congestion but they have better mass-transit options, which helps make them appealing cities.” Cheaper, faster options for Los Angeles include adding dedicated bus lanes on major streets, expanding the city’s network of express bus routes, adopting so-called congestion pricing for use of area highways and creating a better network of bicycle lanes and pathways, said Wachs, former professor of city engineering and city planning at the University of California, Berkeley. “The important thing is not to eliminate the congestion, but to offer viable alternatives to the automobile,” Wachs said. To contact the reporter on this story: Alan Ohnsman in Los Angeles at aohnsman@bloomberg.net

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Wall Street Lost Fewer Jobs Than Expected, New York State Comptroller Says

November 17, 2009

By Henry Goldman Nov. 17 (Bloomberg) — Wall Street is recovering faster than the national economy, with New York City’s four largest investment firms reaping profits of $22.6 billion through Sept. 30 after losing more than $40.3 billion last year, state Comptroller Thomas DiNapoli reported. The numbers, contained in the comptroller’s annual report on the city’s securities industry, found job losses may not exceed 35,000, less than the 47,000 officials predicted when preparing the city’s June financial plan. The six largest U.S. bank holding companies set aside $112 billion for compensation in the first nine months of 2009, and the bonus pool including stock options may be higher than last year, DiNapoli wrote. While the federal government has moved to restrict cash bonuses and defer compensation to future years in an effort to rein in excessive risk-taking, reducing income-tax collections in the short term, the state and city stand to benefit from the financial industry’s increased stability in the long run, DiNapoli’s report concluded. “Wall Street remains the economic engine of both New York State and New York City,” according to the report released today. DiNapoli’s findings come as the Legislature is meeting in the capital of Albany to close an estimated $10 billion budget gap over the next 17 months. Some state Senate Democrats have opposed spending cuts on the theory that higher compensation and bonuses will produce a tax revenue rebound. New York City officials ordered department heads yesterday to find $1.75 billion in cuts over the next 18 months amid a revenue gap projected to reach $5 billion out of a $60 billion budget for fiscal 2011. Executive Compensation Kenneth Feinberg , the Obama administration’s special master for executive compensation, has ordered pay cuts averaging 50 percent for the top 25 executives at Citigroup Inc. , Bank of America Corp., American International Group Inc. and four other companies that took U.S. bailout money. He will rule on pay structures covering the next 75 highest-paid employees at those firms by year-end. The financial industry, which accounted for 20 percent of New York state tax collections two years ago, will produce about 15 percent in the fiscal year ending March 31, the report stated. In New York City, tax collections from Wall Street declined by about 40 percent, or $1.9 billion, in the 2009 fiscal year that ended June 30, the study found. Setbacks Possible The comptroller cautioned that the industry “may still experience setbacks,” should the economic recovery falter. Businesses and consumers still experience difficulty obtaining credit, the report stated. “Although volatility in the U.S. equity markets has subsided markedly in recent months, it still remains above pre- crisis levels,” the comptroller found. The findings summarized an industry in which the financial crisis had “permanently changed the landscape,” with JPMorgan Chase & Co. ’s acquisition of Bear Stearns Cos. in March 2008; the failure of Lehman Brothers Holdings Inc. in September 2008; Bank of America’s purchase of Merrill Lynch & Co. in December; and the conversion of Goldman Sachs Group Inc. and Morgan Stanley into commercial banks from investment banks. The changes required the comptroller’s office to narrow its annual survey of pretax profits to four firms from seven, the report said. As of September 2009, the securities industry lost 28,300 jobs, representing a 15 percent decline from a peak of 189,200 in November 2007, the report stated. Shrinking Industry Employment in the city’s entire financial industry declined by 8.9 percent, or 42,000 jobs, from its November 2007 peak, compared with a 2.4 percent decline, or 6,300 jobs, in the rest of New York state. The comptroller’s office forecast that total job losses in New York City are unlikely to exceed 175,000, which the comptroller’s study said would hurt the local economy, although less than the city’s June 2009 forecast of 328,000 terminated positions. “With severe job losses in the securities industry, Wall Street’s multiplier impact — which had enormous benefit to New York City’s economy during the economic expansion — worked in reverse, leading to job losses in the rest of the city’s economy,” the report stated. “While the pace of Wall Street job losses has slowed considerably, the industry is not yet adding jobs on a sustained basis.” New York Mayor Michael Bloomberg is founder and majority owner of Bloomberg news parent Bloomberg LP. To contact the reporter on this story: Henry Goldman in New York City Hall at hgoldman@bloomberg.net .

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London’s `New Era’ of Air Pollution From Diesel Threatens Olympics in 2012

November 16, 2009

By Brian Lysaght Nov. 16 (Bloomberg) — London, which has some of Europe’s worst air pollution, may have to ban cars and reschedule events during the 2012 Olympics to ensure optimum conditions for athletes, a leading air-quality scientist said. The U.K. capital is in a “new era” of air pollution, mostly caused by emissions from diesel-powered cars, vans and buses, said Professor Frank Kelly, director of the King’s College Environmental Research Group . The city of 7.5 million residents has the worst record for nitrogen dioxide pollutants among European capitals and one of the worst for dangerous airborne particles. Politicians including Mayor Boris Johnson aren’t doing enough to cleanse the air, Kelly said. Beijing last year and Athens in 2004 struggled with air pollution during the games. “Whether we get a few months of good air quality during the Olympics — it will be totally in the hands of the gods, it will depend on weather conditions,” Kelly said in a Nov. 11 interview. Organizers may have to limit traffic, reschedule events to a time of day with better air quality or move them to less polluted sites, he said. The U.K. is spending 9.3 billion pounds ($16 billion) on construction for the games, one of Europe’s largest building projects. It includes the main Olympic Park in east London. Organizers expect 14,000 athletes to attend, along with 20,000 members of the media, and may sell 9 million tickets. ‘Rain-Dispersal’ China spent $17 billion on cleaning the air, including firing “rain-dispersal rockets” at clouds, removing two-thirds of Beijing’s 3.3 million cars from the road for two months and shutting factories. It won plaudits as weather conditions improved. London’s dirty air, though less serious than Beijing’s, dates to medieval times, when soft sea-coal was burned in homes, breweries and factories, according to “The Big Smoke,” author Peter Brimblecombe’s book on air pollution. King Edward I tried unsuccessfully to ban the high-sulfur fuel in 1306. In 1661, London diarist John Evelyn observed that the city was covered “in such a cloud of sea-coal, as if there be a resemblance of hell upon earth.” In 1879, a coal-smoke saturated fog hovered over London for four months, and another in December 1952 was blamed for as many as 4,000 deaths. Parliament passed the Clean Air Act in 1956, and natural gas replaced coal in most homes, eliminating the city’s so- called “pea soup” fogs. Diesel Sales The popularity of diesel-powered vehicles has boosted airborne particulates, said Kelly, whose Environmental Research Group operates 160 monitoring sites around the city and analyzes the data for the Department for Environment, Food and Rural Affairs . Sales of diesel-powered cars made up 43 percent of Britain’s sales last year, compared with 14 percent in 2000, according to the U.K. Society of Motor Manufacturers and Traders . Diesel engines are generally more fuel efficient than gasoline models. They produce a type of particle, known as PM10, which can hamper breathing. Factories, construction sites and wind-blown material from other countries also contribute. Particulate concentrations have increased 0.4 percent a year in London since the late 1990s, according to King’s, a University of London college. EU rules require an average of no more than 40 micrograms of PM10s per cubic meter of air and a daily level of 50 micrograms may not be exceeded more than 35 times annually. Greater London had an average of 43.3 micrograms in 2007, and exceeded 50 micrograms on 102 occasions, according to DEFRA. Prime Minister Gordon Brown’s government has asked the EU for more time to meet the particulates and nitrogen dioxide targets. ‘Country Mile’ London’s nitrogen dioxide levels exceed EU rules by “a country mile,” said Gary Fuller, an air-quality expert at King’s. The pollutant is a product of burning fuel by vehicles, aircraft, power stations and heating systems. Some inner London roadside locations exceed the limits by a factor of two, according to the mayor’s draft Air Quality Strategy . The city estimates that 2.3 million residents were exposed to excessive nitrogen dioxide levels in 2006. London air pollution contributes to as many as 3,000 premature deaths a year, the city’s legislative assembly said in a May report . Johnson, who is a member of the Olympic Board that oversees games planning, has reversed some of predecessor Ken Livingstone’s anti-pollution programs. He is scrapping the western section of the congestion-charge zone that requires drivers to pay an 8-pound daily entry fee. Banning Taxis He postponed an extension of a low-emission zone that fines the owners of the dirtiest heavy trucks to include smaller vans, saying the rules would be too costly for small businesses during the recession. The mayor’s clean-air plans include buses powered by diesel-electric hybrid engines, banning older taxis and upgrading public transportation. His office said Nov. 12 that “the smooth running of London’s Olympic games will not be affected by poor air quality.” London’s PM10 levels will fall by 25 percent by the time the games begin, Johnson said. Kelly is skeptical. “If we have heavy cloud cover and very little wind, we’re going to get pollution episodes and everybody will say, ‘Why didn’t we do more to improve air quality in London?’” said Kelly. To contact the reporter on this story: Brian Lysaght in London at blysaght@bloomberg.net .

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New York Terror-Suspect Trial Plan a `Mistake,’ Former Mayor Giuliani Says

November 15, 2009

By Alan Bjerga Nov. 15 (Bloomberg) — The Obama administration’s decision to try five Sept. 11 suspects in federal court in Manhattan is a “mistake” that’s inappropriate for combating terrorism, former New York City Mayor Rudy Giuliani said. Giuliani said moving Khalid Sheikh Mohammed , the self- proclaimed mastermind of the Sept. 11, 2001, attacks, and four others from Guantanamo Bay, Cuba, to New York for civilian trials will create additional costs and security concerns for the city. The White House plan is politically motivated, said Giuliani, New York’s mayor during the attacks, in interviews on “Fox News Sunday” and CNN’s “State of the Union.” The Democratic administration’s plan, announced by Attorney General Eric Holder , marks a shift from the Republican Bush administration’s anti-terrorism strategy. Bush officials created military tribunals for the Guantanamo Bay prisoners, a process that was criticized by Democrats. Obama also is moving to close the prison in Cuba and relocate the detainees. The decision of the Obama White House shows that “both in substance and reality, the war on terror in their point of view is over,” Giuliani told Fox. “There seems to be an over- concern with the rights of terrorists and a lack of concern with the rights of the public.” White House senior adviser David Axelrod , speaking on CNN’s “State of the Union” today, defended the decision, saying that “we believe that these folks should be tried in New York City, as you say near where their heinous acts were conducted, in full view in our court system.” Strength, Not Fear The chairman of the Senate Judiciary Committee, Senator Patrick Leahy , said Manhattan trials show the U.S. “acts out of strength, not out of fear.” “We’re the most powerful nation on Earth,” the Vermont Democrat said today in an interview on CBS’s “Face the Nation” program. “We have a judicial system that’s the envy of the world. Let’s show the world that we can use that power.” The Sept. 11 attacks killed almost 3,000 people in New York, at the Pentagon outside Washington and in the crash of one airliner in Pennsylvania. To be tried along with Mohammed are his alleged co-conspirators: Walid Bin Attash , Ali Abdul Aziz Ali, Ramzi Binalshibh and Mustafa al-Hawsawi . The five who are to be tried in New York have been accused by the U.S. of conspiring to finance, train and direct the 19 hijackers who seized four airliners used in the attacks that destroyed the World Trade Center and damaged the Pentagon. 1993 Bombing Major terror trials in New York included that of Ramzi Yousef , who was convicted of masterminding the 1993 World Trade Center bombing. Giuliani, who also was mayor during that trial, said the new trials will cost “millions and millions of dollars.” “Anyone that tells you this doesn’t create additional security problems, of course, isn’t telling you the truth,” he told CNN. Mayor Michael Bloomberg of New York, Giuliani’s successor, said in a statement he supports Obama’s decision and has “great confidence” the New York Police Department and federal authorities “will handle security expertly.” Bloomberg is the founder and majority owner of Bloomberg News parent Bloomberg LP. To contact the reporter on this story: Alan Bjerga in Washington at abjerga@bloomberg.net .

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Bon Jovi, Barenboim Celebrate Fall of Berlin Wall With Dominos, Fireworks

November 6, 2009

Preview by Catherine Hickley Nov. 6 (Bloomberg) — Daniel Barenboim , who was in town the night the Berlin Wall came down in 1989, is joining Bon Jovi , Mikhail Gorbachev , Lech Walesa and Hillary Clinton to celebrate the 20th anniversary. The 5 million euro ($7.4 million) party opens at 7 p.m. on Nov. 9, with Barenboim conducting the Staatskapelle Berlin at the Brandenburg Gate. The program comprises an excerpt from Richard Wagner’s “Lohengrin,” Arnold Schoenberg’s “A Survivor From Warsaw,” the fourth movement of Ludwig van Beethoven’s seventh symphony and a piece by the composer Friedrich Goldmann. The fall of the wall “has changed so much of Europe for the better,” Barenboim said in an interview at the Berlin Staatsoper , where he is chief conductor. “It has given so many thousands, probably millions of people a better existence.” Some 1,000 giant dominos will topple along the former path of the wall on the evening of Nov. 9, the night when, 20 years ago, bewildered guards allowed streams of East Germans through the most heavily fortified border in the world. Five months later, East Germany held its first democratic election and within a year, East and West were reunified. The dominos, 2.5 meters high, have been illustrated by school children and students under the patronage of political leaders such as Nelson Mandela and Vaclav Havel and with the help of artists. Stretching 1.5 kilometers from Potsdamer Platz to the Reichstag, the parliament building, they are on view to the public from tomorrow. They represent “the chain reaction that the fall of the wall sparked off in Europe and the world,” according to a statement by the organizers . Excited Musicians On that fateful day in 1989, “I was recording a Mozart opera, ‘Cosi Fan Tutte,’ with the Berlin Philharmonic ,” Barenboim recalled. “On the Friday morning, we had a session, and the orchestra was in great agitation. They wanted to do a concert for the inhabitants of East Berlin.” Barenboim described people lining up all morning for tickets. Though the Nov. 12 concert was free, only those holding an East German identity card were given tickets. “For most of them it was the first time hearing the Berlin Philharmonic, and the first time in the Philharmonie” concert hall, Barenboim said. “It was wonderful.” For the anniversary “Fest der Freiheit” (Freedom Festival), the New Jersey rock band Bon Jovi will perform their current single, “We Weren’t Born to Follow,” on an outdoor stage at the Brandenburg Gate, the backdrop for scenes of jubilation and reconciliation as Germans from East and West scaled the wall 20 years ago. Fireworks Finale Paul van Dyk , an electronic dance music DJ and producer who left East Germany shortly before the fall of the wall, is composing a hymn called “We Are One” to be performed at the end of the concert. As the last domino falls, a firework display will begin. As well as Clinton and German Chancellor Angela Merkel , speakers will include U.K. Prime Minister Gordon Brown , French President Nicolas Sarkozy and Russian President Dmitry Medvedev as representatives of the four powers that occupied Germany after World War II. Gorbachev and Hans-Dietrich Genscher , West German foreign minister in 1989, will also speak. Giant screens will be erected to project the speeches and performances along the route of the dominos. Berlin Mayor Klaus Wowereit told a news conference in October that he is expecting people to come for the weekend from across Germany and Europe. Commemorating the fall of the Berlin Wall is all the more important as a generation of Germans who never experienced it grows up, Wowereit said. “Many people now don’t understand the significance of the fall of the wall, because they never knew the horror of it,” the mayor said. For more information on the “Fest der Freiheit,” go to http://www.mauerfall09.de/ . Sponsors of the domino spectacle include Coca-Cola Co., Fiat SpA’s Lancia Automobiles SpA, Berlin gas supplier Gasag Berliner Gaswerke AG and advertising company Wall AG. To contact the reporter on the story: Catherine Hickley in Berlin at chickley@bloomberg.net .

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Michael Bloomberg Wins Third Term as NYC Mayor, Beats Comptroller Thompson

November 4, 2009

By Henry Goldman Nov. 4 (Bloomberg) — New York Mayor Michael Bloomberg won re-election yesterday in a tighter race than public opinion polls had projected, becoming the first three-term chief executive of the largest U.S. city by population since 1989. Bloomberg, running on the Republican and Independence Party lines, beat Democratic city Comptroller William Thompson , 51 percent to 46 percent, with all of the city’s 6,110 election districts counted, according to unofficial results tabulated by the Associated Press. Polls in the campaign’s final week found Bloomberg ahead by at least 10 percentage points. Bloomberg’s victory gave him another four years to begin balancing a city budget with a projected $5 billion deficit in the fiscal year beginning July 1, while making good on promises to improve schools and municipal services. New York’s unemployment rate rose to 10.3 percent in September from 6 percent a year earlier. “While we can’t fix the national recession, we can and we will get our city through these tough times and we’ll come out stronger than ever,” Bloomberg said. “We’re going to show we can keep outperforming the rest of the country.” Thompson conceded shortly after 11 p.m., thanking his campaign staff and volunteers and offering Bloomberg his congratulations. “Your support, your enthusiasm and desire for change is what carried me to this point,” he told the crowd. “This campaign was about standing strong, standing tall, and never backing down in the face of a formidable challenge.” Prior Polls Bloomberg’s 4.6 point victory margin was inconsistent with public opinion polls released in the closing week of the campaign. His lead was 12 percentage points in a Nov. 2 Quinnipiac University survey and 15 points in an Oct. 30 Marist College poll. “The polls didn’t measure intensity,” said Kenneth Sherrill , a political science professor at Hunter College in Manhattan. “Bloomberg’s problem was that the people who liked him didn’t feel as strongly as the people who were unhappy. In low turn-out elections, the people who feel most intensely dominate.” In New Jersey, Republican Chris Christie denied incumbent Jon Corzine a second term as governor, 49 percent to 45 percent, in a contest that polls released Nov. 2 showed as a statistical tie. Republican Robert McDonnell won the Virginia governor’s race, defeating R. Creigh Deeds , 59 percent to 41 percent. Incumbent Timothy Kaine was barred by term-limit law from seeking re-election. About 1.1 million voters turned out for the New York City election, 200,000 less than in 2005 when Bloomberg won his second term, beating former Bronx Borough President Fernando Ferrer by 250,000 votes, 57 percent to 38 percent. Power of Incumbency “A spread between the two of less than 5 points is not typical for an incumbent election,” said Joseph Mercurio , a political consultant who has worked for Democrats and Republicans. “It indicates that Bloomberg really did have to spend all that money.” Aside from the advantages of incumbency, Bloomberg, 67, benefited from a treasury that totaled more than $85 million 10 days before election, breaking a national record for a personally financed campaign. Bloomberg spent his tens of millions of dollars campaigning as a political independent and assailing Thompson, 56, by characterizing his past service as a Board of Education president as a failure, as well as his acceptance of campaign contributions from managers of pension funds that Thompson supervised, as “politics as usual.” Term Limits The mayor, whose wealth Forbes magazine estimated last month at $17.5 billion, is founder and majority owner of Bloomberg LP, parent of Bloomberg News. He gained the ability to run for re-election last year after persuading the City Council to change the law and remove a restriction that limited officials to two, four-year terms. Bloomberg vowed to continue to reduce crime after eight years in which it fell 35 percent, improve the city’s environment by planting 1 million trees, build affordable housing and pursue an ambitious public health agenda that during his first two terms included bans on smoking in the workplace and use of trans fats in processed food. The tight vote might prove problematic for Bloomberg in governing the city during the next four years, Sherrill said. Several council members that supported Bloomberg’s effort to abolish term limits lost bids for re-election in the September primary election, he noted. Mayoral Opposition Newly elected Public Advocate Bill de Blasio and city Comptroller John Liu , the first Asian to win citywide office, both Democrats who opposed Bloomberg on term limits, have mayoral ambitions, Sherrill said. “The lesson is that there’s peril in supporting the mayor and less risk in challenging him, so the close vote will embolden people to be independent of the mayor and question his agenda,” Sherrill said. At the Sheraton New York hotel in Manhattan campaign workers enjoyed miniature hamburgers and watched five television monitors displaying reports declaring the race closer than expected. Democratic U.S. Representative Andrew Weiner, who decided against running against Bloomberg in May, said Thompson benefited from voter resentment of tax increases and the mayor’s overturning of term limits. “Thompson has a better sense of the notion of helping to lift up the middle class,” Weiner said. Newspaper Endorsements Bloomberg received endorsements from each of the city’s four major daily newspapers — the New York Times, the Daily News, the New York Post and the Staten Island Advance — and from dozens of neighborhood and ethnic newspapers. Former Mayor Ed Koch , a Democrat who has a radio show on Bloomberg Radio, supported him, as did several Democratic city council members. Thompson won backing from about 30 labor organizations including the city’s largest municipal labor union, District Council 37 of the American Federation of State, County and Municipal Employees, which represents 125,000 city workers and 50,000 retirees; the Uniform Firefighters Association, and the Transportation Workers Union. The United Federation of Teachers remained neutral. Bloomberg’s re-election makes him the fourth three-term mayor for the city in the past 100 years. Ed Koch was mayor from 1978 to 1989; Fiorello LaGuardia served from 1934 to 1945 and Robert Wagner Jr., from 1954 to 1965. To contact the reporter on this story: Henry Goldman in New York City Hall at hgoldman@bloomberg.net .

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Time to take a stand against Little Brussels

October 10, 2009

Conservative Mayor of London, can agree to agree. But the ill-conceived and badly drafted directive on Alternative Investment Fund Management is one. By Kamal Ahmed Published: 7:06PM BST 10 Oct 2009 The AIFM directive, overly complicated and written in

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Obama Says Congress Approaching `Historic Moment’ for Health-Care Debate

October 10, 2009

By Kate Andersen Brower Oct. 10 (Bloomberg) — President Barack Obama said his plan to overhaul the U.S. health-care system has gained momentum in Congress where lawmakers are approaching a “historic moment” in crafting the legislation. Obama said his push for a bill was aided by the Congressional Budget Office’s report that the version being considered by the Senate Finance Committee would trim the federal deficit while insuring millions more people. He also cited endorsements of his effort by prominent current and former Republican officeholders, such as California Governor Arnold Schwarzenegger . “What’s remarkable is not that we’ve had a spirited debate about health insurance reform, but the unprecedented consensus that has come together behind it,” Obama said in his weekly address on the radio and Internet. “Now is the time to rise above the politics of the moment.” The Senate finance panel’s $829 billion plan would cut the deficit by $81 billion over 10 years, with new taxes and savings more than offsetting the measure’s cost, the CBO said in a preliminary analysis released Oct. 7. It would continue to reduce the deficit in the subsequent decade, the CBO said, though the nonpartisan agency said it couldn’t give precise figures. The panel’s legislation would require that millions of Americans purchase health insurance, impose new restrictions on insurers, and tax high-end insurance plans. Supporters Obama said revamping health care has gained broad support from leaders such as New York City Mayor Michael Bloomberg , an independent, and Republicans Schwarzenegger, Bob Dole and Bill Frist , both former Senate majority leaders, and Tommy Thompson , who was Health and Human Services secretary under President George W. Bush . Bloomberg is founder and majority owner of Bloomberg LP, parent of Bloomberg News. “These distinguished leaders understand that health insurance reform isn’t a Democratic issue or a Republican issue, but an American issue that demands a solution,” Obama said. He said they are joining doctors and nurses and representatives of the hospital and drug industries who already have expressed their support. The Senate Finance Committee, the last of five congressional committees working on proposals, plans to vote on its bill Oct. 13, according to Senate Majority Leader Harry Reid . The legislation will be combined with a separate Senate version approved by the chamber’s health committee in July. Three House committees have also acted. Republican Address In the Republican address , Senator George LeMieux of Florida said the Democratic-backed health-care plans would cost at least $1.8 trillion over 10 years and will take nearly $500 billion out of Medicare funding. “Taking money from a program already in financial trouble is not responsible; it’s not fair to our seniors who paid into the program and it’s not fair to our children and grandchildren who will be burdened with massive debt obligations,” he said. LeMieux said the overhaul would force millions of people onto Medicaid, the state and federal insurance program for the poor. He said that will add a burden on state governments. “Piling on additional obligations would mean even more severe cuts to roads, schools, law enforcement and other essential state services,” he said. LeMieux said requiring all Americans to purchase health- care insurance would add “a new tax burden” for people who can’t afford it. Every adult would be charged a $750 penalty if they don’t buy health insurance, LeMieux said. That would break a promise Obama made not to raise taxes on families earning less than $250,000 a year. “If it looks like a tax, and it’s paid like a tax, then it is a tax, plain and simple,” he said. Democrats are working on the legislation without Republican input and are rushing toward a resolution, LeMieux said. To contact the reporter on this story: Kate Andersen Brower in Washington at Kandersen7@bloomberg.net

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Yankees Home Playoff Games Are Worth $6.7 Million Each to City Businesses

October 6, 2009

By Aaron Kuriloff and Erik Matuszewski Oct. 7 (Bloomberg) — Each home game the New York Yankees play in the 2009 Major League Baseball postseason is worth $6.7 million to city businesses, according to data from the Economic Development Corporation . That includes money spent by visiting fans, players and media members on hotels, retail, transportation and dining, assuming that 34,150 people attend the game who don’t live in the city, the analysis said. Indirect benefits to New York bring the total economic benefit of each game to $11.9 million. Payroll spending in the city will also rise by about $900,000 per game, including $260,000 for seasonal and contract employees at the stadium, the corporation said. The Yankees would play 11 home games if they advanced to the World Series and each of the three postseason series went the maximum. “Restaurants, hotels and transportation all benefit from this,” said Lonn Trost , Yankees chief operating officer, in an interview. “More employees work more days, not only the day of the game but in preparation and breakdown.” The Yankees tonight begin a best-of-five division series against the Minnesota Twins, who last night beat the Detroit Tigers 6-5 in 12 innings in a tiebreaker to determine the American League Central Division winner. After making the playoffs for 13 straight years with Joe Torre as manager, the Yankees failed to reach the postseason in 2008, their first year with Joe Girardi at the helm. They responded by luring free-agent pitchers CC Sabathia and A.J. Burnett with multiyear contracts worth a total of $243.5 million. New York also gave first baseman Mark Teixeira an eight-year contract worth $180 million. No. 1 Record The changes resulted in a 103-59 record this season, the best in baseball. Teixeira tied for the AL lead with 39 home runs and Sabathia’s 19 wins were tied for the most in baseball. Captain Derek Jeter batted .334, his best since 2000, with 18 home runs and 30 stolen bases. This is the first season for the team’s stadium in the Bronx, built across the street from its former home. The tax-exempt bonds that the Yankees sold in January through a city agency to complete the $1.5 billion stadium have rallied more than 17 percent as yield-hungry investors sought out lower-rated municipal bonds. Yankee Stadium LLC bonds due in 2049 were sold to a customer Sept. 9 in a $100,000 block at about 117.4 cents on the dollar to yield 4.7 percent versus 7 percent at issue, Municipal Securities Rulemaking Board trade data show. They are insured against default by Assured Guaranty and carry underlying ratings of Baa3 from Moody’s Investors Services and BBB- from Standard & Poor’s, the lowest investment grades. Cost of Stadium The team will cover the cost of the stadium by paying off the city-issued bonds instead of property taxes, and with $225 million of its own money. The city is also contributing $306 million in capital funding for new parks and recreational facilities, its share of the new commuter-rail station and pedestrian bridge near the stadium and other infrastructure upgrades, Andrew Brent , a spokesman for the Mayor Michael Bloomberg’s office, said in an e-mail. The state contributed $70 million to stadium parking facilities and its Metropolitan Transportation Authority added $52 million for the Metro North train station and bridge, according to Brent. Brodsky’s Opposition State Assemblyman Richard Brodsky said the stadium hasn’t created enough jobs or economic development to justify obtaining low-cost financing through tax-exempt bonds. The Westchester Democrat, who chairs a committee on public authorities, says the team and city have understated the cost to taxpayers. “‘This whole deal is a case history of how the Bloomberg administration has been giving away money to private parties without a public benefit,” Brodsky said. Andrew Zimbalist , a professor of economics at Smith College, said he thinks the team’s success will mean some economic benefit to the city from tourism or consumer purchasing. “There is a modicum of economic advantage,” he said. “The visiting teams travel with their press corps and entourage, some people will travel to New York, stay overnight and spend money on hotels and restaurants.” The Economic Development Corporation based its totals on about 6,000 spectators traveling to each game from outside the tri-state area, along with 27,500 fans from within the metropolitan region, 200 players and team officials and 300 out- of-town media. The analysis excluded spending from another 16,850 spectators, assuming them to be city residents. Indirect Impact The analysis also calculated $5.2 million in indirect economic impact from each postseason game, as workers, for example, spend money earned at the stadium. Trost said the team’s games would also focus attention on the city as people around the country tuned in. “We’re constantly rekindling the importance of the centrifuge of New York,” he said. “When you’re bringing in that many people for that many games, hotels are booked, your cab drivers and private cars are happy they’re working, Metro North is working,” Trost said. The mayor is founder and majority owner of Bloomberg News parent Bloomberg LP. To contact the reporter on this story: Aaron Kuriloff in New York at akuriloff@bloomberg.net ; Erik Matuszewski in New York at matuszewski@bloomberg.net

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London Bankers Rail Against EU Oversight as Lea Invokes Secession Option

October 1, 2009

By Simon Clark and Tom Cahill Oct. 1 (Bloomberg) — In a Georgian townhouse four minutes walk from Parliament, bankers, lawyers and economists held an off-the-record evening meeting to plot how to fight European Union financial regulation that they deem a threat to London. “I am extremely worried about the City of London,” said Ruth Lea , a director at Arbuthnot Banking Group Plc, who agreed after the Sept. 24 meeting at the Institute of Economic Affairs for her comments to be published. “Britain may be able to influence EU regulation, but we won’t be calling the shots. Britain should consider the nuclear option of leaving the EU.” Europe is making new laws and institutions that may challenge London’s ability to set the rules in the region’s largest financial center. At meetings across the city, investors are discussing how to respond to Brussels, the EU capital. Where some see the rules as a threat to Britain, others argue that the challenge is to capitalism across all of Europe. “It’s good to avoid mentioning London in every single sentence and start looking at this from a European point of view,” said Mats Persson, research director at Open Europe , a London lobby group that’s critical of EU integration. Persson also spoke at the IEA. “I am Swedish, and I have sympathy for this kind of thinking.” The EU last week proposed three regulatory agencies with the power to overrule national authorities. The European Parliament is preparing to debate the Directive on Alternative Investment Fund Managers — proposed rules pushed by European Socialist Party President Poul Nyrup Rasmussen to limit borrowing by private-equity firms and hedge funds and to enforce them to establish bases within the EU. Added Costs “Bit by bit we’ll have these three EU regulators above us,” Lea said. “There’s one for banking, one for insurance and one for securities inevitably calling the shots.” London’s hedge fund and private-equity managers argue that the directive targeting their industries will restrict Europeans’ ability to invest worldwide and make it harder for non-EU managers to raise money in Europe. The new rules could cost funds as much as 1.9 billion euros ($2.8 billion) through increased compliance costs in the first year and 985 million euros annually thereafter, according to Open Europe. “Everywhere in Europe people feel an unease about the Anglo-Saxon way of doing business in markets,” Hans Hoogervorst , chairman of the Netherlands Authority for the Financial Markets, said at a conference in London yesterday. ‘Political Agenda’ “Clearly there’s a political agenda when so many regulators and politicians are saying the Anglo-Saxon model is wrong,” Steven Woolfe , a London-based general counsel for hedge fund Boyer Allan Investment Management LLP said after Hoogervorst spoke. “Why should the U.K. allow its finance industry to be attacked? The French wouldn’t allow their farmers to be attacked like this, and neither would the Germans stand by as their automakers were attacked.” U.K. Prime Minister Gordon Brown is also criticizing the city as he prepares for an election next year. “We will pass a new law to intervene on bankers’ bonuses whenever they put the economy at risk,” Brown told the Labour Party’s annual conference in Brighton, England, on Sept. 29. In the past, London’s financial community has warned of an exodus of financial companies and the wealthy when faced with the threat of higher U.K. taxes or regulation. Up to now, that hasn’t happened. The IEA debate took place in a 54-year-old research organization whose goal is “to explain free-market ideas to the public.” IEA Panel Lea, 62, is a former head of policy at the U.K.’s Institute of Directors, an employers’ lobby group, and a former Lehman Brothers Holdings Inc. economist. Charles Leach , a member of Parliament’s House of Lords, and a director of Jardine Lloyd Thompson Group Plc, the U.K.’s biggest publicly traded insurance broker, led the discussion. Hugh Trenchard , a member of the House of Lords, and Simmons & Simmons lawyer Richard Perry also spoke. Arguments against EU legislation in terms of the threat to London are counterproductive, said Angela Crawford-Ingle , who advises private-equity firms at Ambre Partners. “You’re missing a trick here,” she said. “If you take the emotion out of the debate for a moment, there are a lot of areas where you can get a European focus.” Investors, including real estate funds across Europe, oppose the directive, Crawford-Ingle said. Open Europe’s Persson said that three-quarters of Europe’s 1,785 private-equity firms are based outside Britain. ‘Not a French Plot’ The proposed EU directive on hedge funds and private equity “is not a French plot against the city,” Patrice Berge- Vincent, head of asset management at French regulator Autorite des Marches Financiers, told London investors at a conference yesterday. “We do welcome the directive, however we have to redraft almost all the proposals,” he said. Two days before the IEA debate, 300 dinner-jacketed city workers dined beneath the gold-topped pillars of The Great Egyptian Hall in the Mansion House, the official residence of the Lord Mayor of the City of London. Mayor Ian Luder said financial services were “a national asset” and toasted Queen Elizabeth II . Luder criticized Adair Turner , chairman of the Financial Services Authority, who has said some banking activities are “socially useless.” “Few people realize more than you the vital role the financial-services sector plays in providing the fuel for our economy,” Luder said to Turner. “We must do nothing in the spheres of tax, regulation and other business bureaucracy which damages our competitiveness.” Turner Critical Turner wouldn’t retract his criticism of bankers. “The real enemies of the city’s success and of the market economy, with all its great potential to spread prosperity and opportunity, are not those who raise these issues, but those who want to ignore them,” Turner said at the dinner. Arbuthnot’s Lea said in an interview that Turner’s arguments may aid London’s socialist critics across Europe such as Rasmussen. “I was dismayed to hear his comments about socially useless banking activities,” Lea said. “We should all be talking the city up, not down.” For Martin Allison, a diner at the Mansion House banquet and dean of Leeds Metropolitan University’s business faculty, Turner’s criticism may be vital to the city’s survival as Europe’s financial center. “I came away feeling very refreshed that people can openly disagree in public,” Allison said. “That is essential if London is to thrive as a financial center that serves Britain, Europe and the world. It’s a sign of a healthy cosmopolitan nation.” To contact the reporters on this story: Simon Clark in London at sclark4@bloomberg.net Tom Cahill in London at tcahill@bloomberg.net

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City targets abandoned buildings (Sentinel & Enterprise)

September 27, 2009

LEOMINSTER — Abandoned and condemned buildings are open invitations for vandals and squatters, and they are serious risks for personal injury as structures become unsound and overgrown, Mayor Dean J.

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Ex-Giants Receiver Plaxico Burress Sentenced to Two Years Behind Bars

September 22, 2009

By Karen Freifeld Sept. 22 (Bloomberg) — Plaxico Burress , the former New York Giants wide receiver who accidentally shot himself in the leg at a nightclub last year, surrendered today and was sentenced to two years behind bars. Burress, 32, pleaded guilty last month in state court in Manhattan to attempted possession of a weapon, as part of an agreement with prosecutors. He was indicted on more serious weapons-possession charges that carried a mandatory 3 1/2 years in prison. With good behavior on a two-year sentence, Burress will be released in 20 months. The National Football League said last month he was suspended by Commissioner Roger Goodell and could join a team after the prison term. The Giants dropped him in April. “There is nothing I can say that can change the outcome of this morning’s proceedings,” Benjamin Brafman , Burress’s attorney, told Justice Michael H. Melkonian of the state Supreme Court. “If anything good can come out of this tragic case, perhaps other athletes, other young people, will think about the severe consequences that can befall them should they unlawfully possess a weapon.” Brafman called Burress “a fundamentally decent man,” not “a criminal in the true sense of that word.” Apologizes to Family Burress was teary-eyed after he hugged and kissed his pregnant wife, Tiffany, 3-year-old son, Elijah, and other family members in the courtroom. He apologized to them in a barely audible voice. “We will all get through this,” Brafman quoted Burress as saying. The couple has a daughter due in November, Brafman said. Burress was dressed casually in a white crew neck and jeans as opposed to a suit and tie he has worn for past appearances. He left the courtroom without handcuffs. Brafman said Burress was bound for Rikers Island, a New York City jail, and then Downstate Correctional Facility in Fishkill, New York, before he would be processed and sent to a another facility. Brafman asked that when Burress is on supervised release that he be permitted to travel for business purposes as an athlete. The court agreed. Burress carried a Glock semiautomatic pistol in the waistband of his jeans and shot himself Nov. 28 in the Latin Quarter club in Manhattan. The bullet went through his leg, just missing a security guard, prosecutors said. ‘Horrible Predicament’ The player will be under two years’ supervision after his prison term, the judge said when Burress pleaded guilty Aug. 20. Brafman said at the time that his client, after “an agonizing period of discussion,” wanted to put his “horrible legal predicament” behind him and resume his career. Burress on Aug. 12 turned 32, an age when NFL receivers are typically nearing the end of their careers. Brafman today criticized mandatory sentencing laws that leave no flexibility. He has said the gun was a lawfully purchased weapon and that Burress had a pistol permit in another state. The gun wasn’t used to commit a crime, and only Burress was injured, Brafman has noted. The weapon wasn’t licensed in New York or New Jersey, where Burress has a home. Brafman also reiterated today that he didn’t think Burress got “a level playing field.” He again pointed to New York Mayor Michael Bloomberg’s comment following Burress’s arrest that, “It would be an outrage if we didn’t prosecute to the fullest extent of the law particularly people who live in the public domain.” The mayor, the founder and majority owner of Bloomberg News parent Bloomberg LP, said today the decision on whether to prosecute Burress was up to Manhattan District Attorney Robert Morgenthau . ‘Toughest Gun Laws’ “We have some of the toughest gun laws in the country and the DAs have some flexibility, and in this case Morgenthau used some of that flexibility,” Bloomberg said at a news conference in Manhattan. “You just can’t carry guns in the streets. Guns are killing children and police officers and I think the laws should apply to everyone.” Burress was released by the Giants on April 3. He signed a five-year, $35 million contract extension in September after leading the Giants with 70 catches for 1,025 yards during the 2007-08 season, playing most games with an ankle injury. The player caught the winning touchdown pass in the final minute of the Giants’ 17-14 victory over the New England Patriots in the Super Bowl that season. Last month, Donte’ Stallworth , 28, was suspended for the 2009 National Football League season after the Cleveland Browns’ wide receiver killed a pedestrian while driving drunk. Stallworth in June pleaded guilty to manslaughter while driving under the influence of alcohol and received a 30-day jail sentence. He was also sentenced to two years of house arrest, eight years of probation and 1,000 hours of community service. To contact the reporter on this story: Karen Freifeld in New York at kfreifeld@bloomberg.net .

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Xinjiang’s Party Chief Deploys `Harmony Makers’ to Calm Streets of Urumqi

September 6, 2009

By Bloomberg News Sept. 7 (Bloomberg) — Wang Lequan , the Communist Party chief of China’s Xinjiang region, ordered more than 7,000 government officials to walk door-to-door in the city of Urumqi to ease tensions after rioting last week killed five people and left 14 injured, the official Xinhua News Agency reported. The “harmony makers” will explain government policies and “solve disputes,” Xinhua cited Wang as saying late yesterday. Tens of thousands of people protested in Xinjiang’s capital last week to demand better security after a spate of stabbings with syringes, the agency reported. Some protesters had called for Wang’s resignation, the Associated Press reported. Urumqi, the capital of the northwestern region, remained calm yesterday, with no reports of ethnic conflict after China fired the city’s party boss and deployed armed police to prevent a recurrence of last week’s rioting. The syringe attacks, which started on Aug. 17, followed July riots that left 197 people dead as tensions between Uighurs and Han Chinese turned violent. “Wang has a very strong record in terms of imposing stability,” said Kenneth Lieberthal , the former Asia director on President Bill Clinton’s National Security Council and now director of the John L. Thornton China Center at Washington’s Brookings Institution. The latest unrest “certainly isn’t a gold star on his record.” Wang, 64, a member of the party’s 25-member ruling Politburo, has been the region’s party chief since 1994. Like President Hu Jintao , Wang spent time in the 1980s serving in the country’s Communist Youth League, according to his official biography . ‘Terrifying Precedent’ “Forcing Wang to step down would be seen, as everyone in Chinese political circles must know, as a terrifying precedent for further demotions and transfers,” said Russell Leigh Moses , a Beijing-based academic who specializes in Chinese politics. “There is nothing conclusive in the state media that indicates he’s about to be dropped.” Urumqi officials confirmed 531 victims stabbed with medical syringes as of Sept. 4. Military medical staff examined 217 of them and found no signs of toxic or radioactive contamination, CCTV reported . Traffic restrictions were eased and stores reopened in the city, with the Tianshan Shopping Mall and a Carrefour SA store crowded with shoppers, Xinhua reported. Police had to fire tear gas three days ago to shut down protests over alleged attacks by Uighurs against Han Chinese. More than 1,000 protesters faced police who stopped them entering Nanhu Square in the city center, Xinhua said. Uighurs, who make up less than half of Xinjiang’s 20 million people after years of Han migration, complain of discrimination and unfair division of the region’s resources. Han Chinese make up more than 90 percent of China’s population. Ethnic Backlash On July 5, hundreds of Uighur protesters attacked Han Chinese. Two days later, thousands of Han Chinese armed with machetes, steel bars and other weapons marched seeking retribution and accusing local authorities of having failed to protect them. Xinjiang police have detained 21 suspects in the syringe attacks, including four who have been arrested and face criminal prosecution, according to Xinhua. Deputy Mayor Zhang Hong said the syringe attacks had caused panic and resentment. Public Security Minister Meng Jianzhu was in Urumqi to help defuse the unrest, Xinhua reported, while Li Zhi, Urumqi’s top party official, and the director of Xinjiang’s public security department have both been replaced. Thousands of armed police patrolled the city yesterday as traffic and pedestrians returned to the streets, Agence France- Presse reported. — John Liu , Michael Forsythe . With assistance from Helen Yuan in Shanghai and Cathy Chan in Hong Kong. Editors: Ben Richardson , To contact Bloomberg staff on this story: Michael Forsythe in Beijing +8610-6649-7580 or mforsythe@bloomberg.net ; John Liu in Shanghai at +86-21-6104-7024 or jliu42@bloomberg.net

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Urumqi Streets Return to Order After Protest Deaths, Party Boss Replaced

September 6, 2009

By Bloomberg News Sept. 6 (Bloomberg) — Traffic restrictions were eased and stores reopened as calm returned to the western Chinese city of Urumqi after five people were killed and 14 injured in protests this week, China Central Television reported today. China replaced the city’s Communist Party boss and his security director, Xinhua New Agency reported yesterday, after police had to fire tear gas two days ago to shut down protests over alleged attacks by Uighurs against Han Chinese. More than 1,000 protesters faced armed police who stopped them entering Nanhu Square in the city center, the news agency said. Military medical experts examined 217 victims who said they’d been stabbed with medical syringes, and found no toxic or radioactive substances, CCTV reported, citing a press conference yesterday in the Xinjiang province city. Thousands of armed police patrolled Urumqi today as traffic and pedestrians returned to the streets, Agence France-Presse reported today. Xinjiang police have detained 21 suspects in the syringe attacks, including four who have been arrested and face criminal prosecution, Xinhua reported. Li Zhi, Urumqi’s top party official, and the director of Xinjiang’s public security department have both been replaced, Xinhua said yesterday. The syringe attacks, which started on Aug. 17, follow riots in July which left 197 people dead as tensions between Uighurs and Han Chinese turned violent. Uighurs, who make up less than half of Xinjiang’s 20 million people after years of Han migration, complain of discrimination and unfair division of the region’s resources. Han Chinese make up more than 90 percent of China’s population. Panic & Resentment Deputy Mayor Zhang Hong said the syringe attacks had caused panic and resentment. Zhang gave the figures for deaths and injuries at a press briefing, Xinhua reported Sept. 4. Public Security Minister Meng Jianzhu has arrived in Urumqi to help defuse unrest, the state-run news agency said. Hong Kong Chief Executive Donald Tsang said Sept. 4 that he’s “deeply concerned” by the arrest of journalists from the city who were reporting on the protests. Tsang asked the Hong Kong Economic & Trade Office in Beijing to follow up on the incidents, he said in a statement posted on a government Web site. Detained Reporters Two staff of Hong Kong’s Television Broadcasts Ltd., a journalist and a cameraman, were assaulted and arrested by military police while filming a confrontation, the broadcaster said in a statement Sept. 4. A NOW Television cameraman was also arrested, Hong Kong Cable TV reported. All three were later released, Cable TV said. TVB said that journalist Lam Chi-ho and cameraman Lau Wing- chuan were filming a confrontation between hundreds of Han Chinese protesters and police. Police pushed the pair to the ground and bound their hands and feet, Hong Kong’s biggest television station said. TVB said it lodged a complaint with organizations including the State Council’s Hong Kong and Macau Affairs Office. On July 5, hundreds of Uighur protesters attacked Han Chinese. Two days later, thousands of Han Chinese armed with machetes, steel bars and other weapons marched seeking retribution and accusing local authorities of having failed to protect them. To contact the reporter on this story: Cathy Chan in Hong Kong at kchan14@bloomberg.net Helen Yuan in Shanghai at hyuan@bloomberg.net

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Urumqi Communist Party Chief Fired After Protests Kill Five, Injure 14

September 5, 2009

By Cathy Chan Sept. 6 (Bloomberg) — Five people died and 14 were injured in protests in the past week in the Chinese city of Urumqi, where ethnic unrest exploded in July, Xinhua News Agency said. The city’s communist party chief was fired, it also reported. Li Zhi, the top party official in the city, was replaced by Zhu Hailun, Xinhua reported yesterday. The director of Xinjiang province’s public security department also was replaced. Deputy Mayor Zhang Hong gave the figures for deaths and injuries at a press briefing, the state-run news agency reported Sept. 4. Public Security Minister Meng Jianzhu has arrived in Urumqi to help defuse unrest, the news agency said. Police fired tear gas two days ago to disperse protestors after people were attacked with syringes in the city in western Xinjiang province, Xinhua reported. More than 1,000 protesters faced armed police who stopped them entering Nanhu Square in the city center, the news agency said. The syringe attacks, which started on Aug. 17, follow riots in July which left 197 people dead as tensions between Uighurs and Han Chinese turned violent. Uighurs, who make up less than half of Xinjiang’s 20 million people after years of Han migration, complain of discrimination and unfair division of the region’s resources. Han Chinese make up more than 90 percent of China’s population. The situation was “basically under control,” Xinhua reported earlier, citing the deputy mayor, who added that the syringe attacks had caused panic and resentment. The fatalities came during bigger protests on Sept. 3, Zhang said. Police have detained 21 suspects, including four who have been arrested and face criminal prosecution, according to the report. ‘Deeply Concerned’ Hong Kong Chief Executive Donald Tsang said Sept. 4 that he’s “deeply concerned” by the arrest of journalists from the city who were reporting on the protests. Tsang asked the Hong Kong Economic & Trade Office in Beijing to follow up on the incidents, he said in a statement posted on a government Web site yesterday. Two staff of Hong Kong’s Television Broadcasts Ltd., a journalist and a cameraman, were assaulted and arrested by military police while filming a confrontation, the broadcaster said in a statement Sept. 4. A NOW Television cameraman was also arrested, Hong Kong Cable TV reported. All three were later released, Cable TV said. TVB said that journalist Lam Chi-ho and cameraman Lau Wing- chuan were filming a confrontation between hundreds of Han Chinese protesters and police. Police pushed the pair to the ground and bound their hands and feet, Hong Kong’s biggest television station said. TVB said it lodged a complaint with organizations including the State Council’s Hong Kong and Macau Affairs Office. On July 5, hundreds of Uighur protesters attacked Han Chinese. Two days later, thousands of Han Chinese armed with machetes, steel bars and other weapons marched seeking retribution and accusing local authorities of having failed to protect them. To contact the reporter on this story: Cathy Chan in Hong Kong at kchan14@bloomberg.net

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Hamptons Cesspools Keep Character of Towns as Sewers Stay Unbuilt for Now

September 2, 2009

By Leon Lazaroff Sept. 2 (Bloomberg) — Commercial and residential development in the Hamptons, the seaside playground for wealthy New Yorkers, is being held up as politicians fight over a choice between sewers and cesspools. Southampton Mayor Mark Epley is lobbying for sewers with federal and state officials, aiming to end the reliance on cesspools that stunts growth in the resort village where George Soros , Henry Kravis , and radio celebrity Howard Stern own homes. A Suffolk County task force is urging 19 sewer projects, for about $910 million, in eastern Long Island, which includes Southampton. Proponents, including Suffolk County legislator Wayne Horsley and a group called Citizens Campaign for the Environment, say new drains and pipes for carrying away waste will create 36,000 jobs, spur building of apartments and stores, safeguard water and stem the flight of adults ages 20 to 34 who can’t afford houses. Michael Armando , a 58-year-old printer, is among critics who say adding sewers will increase traffic, taxes and costs for police and schools — and may revive the civic corruption that marked Suffolk sewer expansion a generation ago. “With sewers, the growth limit would be lifted and the character of the community would forever be changed,” Armando, the leader of a group fighting apartment development, said in a telephone interview. Armando said his Rocky Point Residents Action Group, in the Suffolk County town of Brookhaven, has 1,100 members who prefer single-family houses over apartments that they expect will increase with added sewers. The federal economic-stimulus package helped the U.S. provide $14.4 million so far toward the sewers, and the county and its communities expect to get more money, according to Gilbert Anderson , the county’s public works commissioner. Spurring Development Suffolk politicians, planners, environmentalists and developers are seeking state and federal funds for sewers to spur development, Anderson said in a telephone interview. Many of the projects are likely to be completed within a decade, said Eric Alexander , director of Vision Long Island, a planning group in Northport, New York. “We’re seeing more activity on the state and federal level than we’ve seen in a number of years,” Alexander said in a telephone interview. “The push for sewers is heating up, and unlike in the past it’s happening from the bottom up, from the communities themselves, which gives the projects greater momentum.” Suffolk’s central business districts were neglected for at least four decades as the region blossomed into bedroom and vacation communities for New York City residents, said Lawrence Levy, executive director of the National Center for Suburban Studies, at Hofstra University in Long Island’s town of Hempstead. ‘You Need Sewers’ “For a long time, the county was infatuated with the idea that one-acre zoning, single-family homes on grids, was preferred by most people,” Levy, 59, said in a telephone interview. “There’s now a consensus that to revitalize certain Suffolk towns, you need sewers.” The county health code limits the use of cesspools and septic tanks for office and apartment buildings. Cesspools, which are pits with cement, concrete, brick or glass-fiber walls, hold wastewater until it migrates into soil through perforations. Septic tanks contain bacteria that break down waste, in a filtering process that removes substances such as nitrates. Discharging Effluent Sewers are a system of pipes used to transport wastewater to plants where contaminants are removed. In Suffolk County, the plants discharge effluent into the Atlantic Ocean and Long Island Sound, and in some cases into the groundwater, said Ben Wright, the county’s chief sanitation engineer. Sewers will help prevent nitrate contamination of Suffolk’s aquifer, the underground layer that is the county’s primary source of drinking water, said Anderson, the works commissioner. People can become ill or die after drinking water with nitrate contamination , according to the Web site of the U.S. Environmental Protection Agency. Cesspools and septic tanks handle 70 percent of Suffolk’s wastewater, and leakage has been blamed for groundwater contamination, said Adrienne Esposito , executive director of Citizens Campaign for the Environment , a nonprofit group with an office in the Long Island town of Farmingdale. “We’ve never had an overall plan for growth in Suffolk, so it’s been more cesspools and more contamination,” Esposito said in an interview. The proposed projects include sewers for Patchogue and Shirley on the island’s southern coast, Rocky Point in its center, and Sag Harbor on its east end. Benefits Quantified Eight of Suffolk’s proposed sewers are ready for construction, while others may be as much as 15 years away, Anderson said. Building the sewers may yield as much as $4.7 billion in economic activity and lower property taxes, according to the Suffolk County Wastewater Treatment Task Force. Suffolk raised about $3 million to study sewers and hasn’t obtained most of the funds needed to build them, according to Wright, the engineer. The county budgeted $30 million in 2009 for sewer maintenance and expansion, according to Anderson. Separately, Suffolk has received federal sewer loans totaling $14.4 million, partly from the $787 billion economic-stimulus law signed in February by President Barack Obama, according to Anderson. Seeking Aid Suffolk and its communities have applied for about $664 million more in federal and state funds for sewers, said Deidrea Miller, a spokeswoman for New York State’s Environmental Facilities Corp. , based in Albany. Southampton Mayor Epley, 46, said he has met with U.S. Senator Kirsten Gillibrand , a New York Democrat, to lobby for federal money for sewers, including the project — now estimated at $12 million — in his village. “The pockets of local government simply aren’t deep enough to do all the sewer projects that are needed,” U.S. Representative Tim Bishop , a Democrat whose district includes the Hamptons, said in an interview. Sewer construction is scheduled to begin in January in Wyandanch. The hamlet is Long Island’s most impoverished, according to Newsday. Wyandanch had per capita income of $13,153 in 2000 compared with the U.S. average of $21,587, according to the latest profile on a U.S. Census Bureau Web site. Reserve Fund The sewer project is critical to attracting businesses and jobs, said Steve Bellone , the town supervisor for Babylon, which includes Wyandanch. The community was found to be 78 percent black by the U.S. census in 2000, while neighboring Farmingdale was 87 percent white. The town of Babylon is spending $5 million to $6 million from a reserve fund, separate from the county money, to begin work on connecting the Wyandanch business district to Suffolk’s existing Southwest Sewer District. “Sewers don’t guarantee the kind of development or revitalization that we want, but they are absolutely a prerequisite,” Bellone said in a telephone interview. In Southampton, Epley said he wants to create housing for municipal employees and those working at hospitals, schools and country clubs. The average price of a home in Southampton village was $1.9 million in the second quarter, according to Town & Country Real Estate , an agency based in neighboring East Hampton. “For the school teacher, nurse or police officer, you’re looking to find housing priced at $250,000 to $400,000,” Epley said in an interview. “To build affordable housing, you need density, and right now the greatest limitation to that is not having sewers.” Legacy of Scandal The portion of Long Island’s population represented by 20- to 34-year-olds dropped by 2 percentage points, twice the national average, from 2000 to 2007, according to the Rauch Foundation , based in Long Island’s Garden City. The reason was a lack of “vibrant downtowns” and residences available for rent, the Rauch report said. After money, the biggest obstacle to building sewers is citizen resistance that is partly the legacy of a 1970s scandal surrounding construction of the Southwest Sewer District in the towns of Babylon and Islip, said Horsley, the legislator, who heads the wastewater task force. Southwest was supposed to cost $281 million, according to Newsday. After almost 15 years of work, the price mushroomed to $1.1 billion, said Anderson, the public works commissioner. Kickbacks, sweetheart deals and shoddy construction were to blame, according to Horsley. “In the mindset of a lot of people here, sewers long brought forth the idea of corruption,” Horsley said. “The scandal became a cause celebre across Long Island for everything that was wrong with government.” To contact the writer on the story: Leon Lazaroff in New York at llazaroff@bloomberg.net .

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Federal Reserve Says Emergency-Loan Disclosures Would Hurt Banks, Economy

August 27, 2009

By Mark Pittman Aug. 27 (Bloomberg) — The Federal Reserve argued yesterday that identifying the financial institutions that benefited from its emergency loans would harm the companies and render the central bank’s planned appeal of a court ruling moot. The Fed’s board of governors asked Manhattan Chief U.S. District Judge Loretta Preska to delay enforcement of her Aug. 24 decision that the identifies of borrowers in 11 lending programs must be made public by Aug. 31. The central bank wants Preska to stay her order until the U.S. Court of Appeals in New York can hear the case. “The immediate release of these documents will destroy the board’s claims of exemption and right of appellate review,” the motion said. “The institutions whose names and information would be disclosed will also suffer irreparable harm.” The Fed’s “ability to effectively manage the current, and any future, financial crisis” would be impaired, according to the motion. It said “significant harms” could befall the U.S. economy as well. The central bank didn’t say when it would file its appeal. The Fed has refused to name the financial firms it lent to or disclose the amounts or the assets put up as collateral under the emergency programs, saying disclosure might set off a run by depositors and unsettle shareholders. Bloomberg LP, the New York-based company majority-owned by Mayor Michael Bloomberg , sued on Nov. 7 under the Freedom of Information Act on behalf of its Bloomberg News unit. Public Interest “Our argument is that the public interest in disclosure outweighs the banks’ interest in secrecy,” said Thomas Golden , a lawyer with New York-based Willkie Farr & Gallagher LLP who represents Bloomberg. Preska’s Aug. 24 ruling rejected the Fed’s argument that the records should remain private because they are trade secrets and would scare customers into pulling their deposits. “What has the Fed got to hide?” said Senator Bernie Sanders , a Vermont independent who sponsored a bill to require the Fed to submit to an audit by the Government Accountability Office. “The time has come for the Fed to stop stonewalling and hand this information over to the public,” he said in an e-mail. The Clearing House Association LLC, an industry-owned group in New York that processes payments between banks, filed a declaration that accompanied the request for a stay. Negative Consequences     “Experience in the banking industry has shown that when customers and market participants hear negative rumors about a bank, negative consequences inevitably flow,” Norman Nelson, vice president and general counsel for the group, said in the document. “Our members have accessed the discount window with the understanding that the Fed will not disclose information about their borrowing, especially their identity.”      Members of the Clearing House are ABN Amro Holding NV , Bank of America Corp. , Bank of New York Mellon Corp. , Citigroup Inc. Deutsche Bank AG , HSBC Holdings Plc , JPMorgan Chase Inc. , UBS AG , U.S. Bancorp and Wells Fargo & Co.      The case is Bloomberg LP v. Board of Governors of the Federal Reserve System, 08-CV-9595, U.S. District Court, Southern District of New York (Manhattan). To contact the reporter on this story: Mark Pittman in New York at mpittman@bloomberg.net

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Schwab Vows Court Fight Against Cuomo in Auction Rate Securities Suit

August 18, 2009

By Bob Van Voris and Andrew M. Harris Aug. 18 (Bloomberg) — Charles Schwab Corp. , accused by New York Attorney General Andrew Cuomo of deceiving customers about auction-rate securities, said Cuomo was letting the real culprits go and vowed the company will defend itself in court. Cuomo sued the San Francisco-based discount brokerage yesterday in state court in Manhattan, claiming it falsely described the securities as liquid investments without disclosing their risks. Schwab countered by accusing the attorney general of going too soft on the banks that underwrote the products. In a July 24 letter released yesterday, the firm said the state let underwriters including Citigroup Inc. , UBS AG and Goldman Sachs Group Inc. off the hook by settling claims related to the securities. “I do view it as a legitimate point by Schwab and other brokerage firms,” said Jay Ritter , a University of Florida finance professor. “For many years the auction-rate market had operated very smoothly. I don’t think many people envisioned that there was a scenario where the market would freeze up the way it did in the last two years.” It’s unfair for Cuomo’s office to try to force the brokerage to repurchase remaining securities held by its customers after dropping claims against the banks when they agreed to buy back more than $50 billion in debt from their retail customers, the company’s attorney, Faith Gay , wrote to David A. Markowitz , chief of Cuomo’s investor-protection bureau. “Schwab submits that, having released the real culprits from responsibility for their acts,” Cuomo is seeking to “shift that responsibility to Schwab,” the lawyer wrote. Cuomo’s Actions “The attorney general permitted the major Wall Street securities firms that controlled the ARS market to buy back ARS only from investors who held the securities at those firms rather than from all investors who owned ARS that those firms underwrote,” Gay wrote, referring to auction-rate securities. Gay, a New York partner of Los Angeles-based Quinn Emanuel Urquhart Oliver & Hedges LLP, also said Cuomo lacks jurisdiction over its customers outside New York state. The demand that Schwab “act as an insurer for an unprecedented market collapse” is legally unsound and unjust and “the company will vigorously defend itself in court,” Gay wrote. Alex Detrick , Cuomo’s press secretary, declined to comment on the Schwab letter. “We look forward to a fair hearing in court, and we’re confident that we will prevail when we have the chance to expose the workings of the Auction Rate Securities market completely rather than just through selective sound bites in the press,” Sarah Bulgatz , a spokeswoman for Schwab, said in an e-mail. Auction-rate securities are long-term debt, primarily issued by municipalities, with interest rates reset periodically through auctions. The $330 billion market collapsed last year as dealers stopped bidding to keep auctions from failing, leaving clients unable to sell their supposedly liquid investments. What Schwab Knew Schwab knew or should have known of “a steep decline in demand for auction rate securities in the last months of 2007,” the state said in its lawsuit. It asked that a court order it to repurchase the securities from investors and pay penalties and costs. “Schwab brokers repeatedly and persistently misrepresented the liquidity risks in auction-rate securities, comparing them to money market funds or certificates of deposit, selling auction-rates as suitable for cash management purposes, or otherwise telling customers they would always be able to retrieve their cash,” Cuomo’s office said in a statement. Cuomo, a Democrat and possible candidate for New York governor in next year’s election, has raised more campaign money than the current governor, David Paterson . The attorney general would lead Paterson among Democrats 61 percent to 15 percent in a primary as of June 24, a Quinnipiac University poll found. Customers’ Plight In February 2008, Schwab customers were left holding $789 million worth of the securities. That amount “has come down considerably” since then, Schwab spokesman Greg Gable said last month. Schwab’s efforts to avoid a settlement and charges related to the securities come after retail brokers Fidelity Investments and TD Ameritrade Inc. settled probes, agreeing to buy back $756 million in the securities from clients. Schwab blamed the Wall Street firms for creating, marketing and then abandoning the market. Cuomo said July 17 in a letter to the online brokerage New York might sue Schwab unless it provided investors “the liquidity they were promised” when they bought the securities. Schwab brokers “repeatedly misled investors about the risks of investing in auction-rate securities,” Markowitz said in the letter, citing recorded conversations between brokers and customers. Executives didn’t tell clients of reports they received in late 2007 that the auction-rate securities market was declining, Cuomo’s office said. Schwab’s Arguments Schwab argued that Cuomo’s “failure to acknowledge that Schwab and its customers were misled by the ARS underwriters” is one of the flaws of his investigation. One underwriter “continued to deceive Schwab and conceal critical information right up to its complete withdrawal from the auction market,” the brokerage said. Schwab said Cuomo’s office contacted its clients to urge them to complain, and took “one-sided testimony” at sessions where Schwab’s lawyers weren’t allowed to ask questions or get a transcript. Political strategist Hank Sheinkopf rejected the notion that Cuomo’s settlements with the investment firms that underwrote the auction rate securities had political motivation. ‘Nonsensical Garbage’ “It is nonsensical garbage. The public won’t believe it,” he said yesterday in a phone interview. The attorney general has done “everything possible” to not engage in political activity while holding that office, he said. “He’s just done his job,” the strategist said. “To accuse him of engaging in politics is just not fair not true.” The principal of New York-based Sheinkopf Communications, the strategist has worked on campaigns for former President Bill Clinton and former New York Attorney General Eliot Spitzer . He is also a consultant to New York City Mayor Michael R. Bloomberg , the founder and owner of Bloomberg LP, parent company of Bloomberg News. In the campaign for the 2002 Democratic Party gubernatorial primary, Sheinkopf worked for then-New York Comptroller H. Carl McCall , whose opponent was Cuomo. Cuomo dropped out of the race prior to the primary election. Schwab yesterday fell 87 cents to $17.39 at 4 p.m. in Nasdaq Stock Market trading. To contact the reporters on this story: Bob Van Voris in New York at rvanvoris@bloomberg.net ; Andrew M. Harris in Chicago at aharris16@bloomberg.net .

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Alicia Whitaker: NYCSeed: More than a Dollar and a Dream for Start Up Technology Companies

August 11, 2009

“Funding is alive and well in New York City. Not on every corner, but there are opportunities to get funded if you have a great idea, a great plan, and a great team.” These are the words of NYCSeed’s Managing Director, Owen Davis, a serial entrepreneur with a track record of success in internet start ups and other technology businesses. NYCSeed makes money and mentoring available for entrepreneurs who have a software or web-oriented technology plan. NYCSeed has now funded four start-up companies: PlaceVine, Path 101, Domdex and VAlign Software, and is close to funding investments in several more. NYCSeed is the city’s first seed-funding venture that will help to nurture technology start-ups at a very early, pre-revenue stage of their development. This new fund was announced by Mayor Bloomberg in a press conference at the beginning of the city’s Internet Week in June, 2008. Like the city’s latest new business incubator at 160 Varick Street, the fund reflects a partnership among a number of government, not-for-profit and academic organizations. Three organizations played a particularly critical role: the NYC Investment Fund (NYCIF), the NY State Foundation for Science, Technology and Innovation (NYSTAR) and NYU Polytechnic Institute. NYSTAR is working to establish and help capitalize seed funds throughout New York State with regional partners such as venture capital funds, universities, angels and other investors. “Very early stage capital sources are scarce and investments at the early seed stage are considered riskier than those at later stages of a company’s development. Start ups often need more operational and technical assistance than traditional funding sources are prepared or able to provide. So this mix of government and private resources makes an enormous difference to start ups” according to information provided by spokesperson for NYSTAR Jannette Rondo. Another catalyst for the fund is the NYC Investment Fund which has the mission of supporting entrepreneurs in emerging growth sectors in NYC. SVP Jalak Jobanputra explained that NYCIF had begun investigating the start of this fund before the financial meltdown but its mission is more critical than ever. “Our goal is to build an ecosystem to support early stage entrepreneurs beyond just funding. This includes access to mentors and ventures capitalists as well as plugging these entrepreneurs into the vibrant business community that exists here. It’s through this support that we can create the next generation of great tech and digital media companies.” New York University Polytechnic Institute plays a special role in supporting new technology businesses. Among other activities, it operates two business incubation centers in NY: BEST, the Brooklyn Institute on Science and Technology and a new center at 160 Varick Street in Manhattan. Director Bruce Niswander oversees both programs and provides affordable space as well as a variety of support services for start up businesses. NYCSeed has an initial pool of $2 million for the program and companies are eligible for up to $200,000. According to Davis “this amount of money gives a start up clear space to work, focus and move the company forward. Our goal is to give them enough runway to test their hypothesis in the market and to get traction.” There’s an investment committee comprised of representatives from the partner organizations and a venture advisory board made up of entrepreneurs, technologists and venture capitalists with a track record of success in technology start ups. “We want to create a great community here with a variety of resources coming together under one roof to make a difference.” Several stars of the venture capital world are on the advisory board, including Fred Wilson of Union Square Ventures, Todd Pietri of Milestone Venture Partners, Daniel Schultz of DFJ Gotham Ventures and Drew Lipsher of Greycroft. Many people with a good idea have struggled to find money for start-up, the earliest stage of business development, so NYCSeed fills an important gap. A proven idea or technology can go on to get angel investors or early-stage venture capital, but this fund provides a way for businesses to move from concept to prototype and actually get off the ground. The mentoring and guidance available through the advisory board and network of the fund will help people to raise more money from other sources at the next stage of their growth. Application criteria are simple: at least two people must be working on the project and one of them must be “tech savvy” and they have to be based in one of the five boroughs. Beyond that, Owen Davis evaluates each idea and related business plan, looking for factors such as a scalable business model, the potential for dealing with a large market and a team that has both technology and business savvy. “There are certain elements of the profile that make a start-up venture fundable versus non-venture fundable. There’s no one thing…there are many shades of grey…and you can see that in the diverse backgrounds of the three companies we’ve funded to date.” People who lead the start ups funded to date come from a variety of backgrounds and include IT professionals, people with business degrees, former senior people at large technology companies and entrepreneurs. Another thing the successful companies have in common is a beta version of code that works. “There is so much open-source software available for product prototypes…if they can’t successfully create working code, they shouldn’t be running a software company.” Start ups that make it through his screening process are evaluated by the investment committee. Successful applicants get up to $200,000 in convertible debt that converts to a fixed equity percentage in the next round of financing. Some companies may not make it to the next round, but the business mentoring and technical support provided by the team should make a tremendous difference in their success and ability to move to the next stage. The four ventures currently funded by NYCSeed include: PlaceVine, Inc. , a web-based service connecting brands and agencies to top product placement and sponsorship opportunities in film, television, and new media Path 101 , a novel approach to job placement. Rather than simply listing available openings, Path 101 helps job seekers find employment that better suits their interests through novel algorithms and a more personalized approach. Domdex , a next-generation ad network that collects keyword information from “parked domains.” This information is used by websites to better target advertising when users visit. VAlign Software provides tools for virtualized computing environments, allowing for detailed chargeback and capacity planning of the next generation of corporate computing. Davis is an ideal midwife for these ventures in view of his wide experience in the online world and success in developing profitable software and web-based businesses. In addition to working with early versions of AOL and MSN, he founded Thinking Media, an online marketing firm which pioneered client-side tracking of pages and advertisements and co-founded Sonata, a wireless company that provided location-based services and marketing to cell phones. “There really is money available and I would be encouraged if I were a start up because there will be even more available in the next twelve to eighteen months.”

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Nine Presumed Dead After Helicopter, Small Plane Collide Over Hudson River

August 8, 2009

By Dan Hart (Corrects model of aircraft in 11th paragraph.) Aug. 8 (Bloomberg) — Nine people likely died when a sightseeing helicopter showing off Manhattan’s landmarks collided with a small plane heading out from New Jersey, plunging both aircraft into the Hudson River. Two bodies have been found in the wreckage of what may be the helicopter, said New York Mayor Michael Bloomberg in a televised press conference. It’s unlikely there were any survivors, he said. “Sadly, there is not a lot of rescue to do here,” Bloomberg said. “It is all recovery.” The U.S. National Transportation Safety Board will be leading the investigation into the accident, he said. The helicopter was carrying a pilot and five Italian tourists, while the plane that left Teterboro Airport in New Jersey had a pilot and two passengers, one of them a child, the mayor said. The helicopter, operated by Liberty Helicopter Tours of New York, took off from the West 30th Street heliport, and was climbing and heading southbound, when it was struck by the plane, Bloomberg said. He said he didn’t know how high the aircraft were when they collided. Loud Bang Ron Marsico , a spokesman for the Port Authority of New York & New Jersey, which operates Teterboro, said the plane was a single-engine Piper Saratoga. It landed at 11:20 a.m. local time to pick up two passengers, and took off at 11:54 a.m. bound for Ocean City, New Jersey. Bloomberg said authorities will remove the bodies from what is likely the helicopter wreckage, which is 30 feet (9 meters) under the surface of the Hudson River. Divers are having trouble with visibility in the water, the mayor said. “I heard a very loud bang, and saw a plane, a small plane which looked like it had a wing missing,” Arnold Stevens, who was staying at a hotel in Manhattan near the river, told CNN. “The plane was corkscrewing into the water and the helicopter dropped like a rock,” he said. He said debris remained on the surface for about 20 minutes after the accident. Piper Aircraft The airplane was a Piper PA-32R-300, which was registered to LCA Partnership of Fort Washington, Pennsylvania, according to U.S. Federal Aviation Administration records. The helicopter was a Eurocopter AS 350 BA, owned by Meridian Consulting I Corp. of Linden, New Jersey. The accident is the second one in the river since the beginning of the year. In January, a US Airways Group Inc. Airbus SAS A320 was forced to ditch in the river after losing thrust from both engines on takeoff from New York’s LaGuardia Airport. All 155 passengers and crew on board survived, and New York Governor David Paterson hailed the incident as a “miracle on the Hudson.” The mayor is founder and majority owner of Bloomberg News’s parent, Bloomberg LP. To contact the reporter on this story: Dan Hart in Washington at dahart@bloomberg.net

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Nine Presumed Dead After Helicopter Collides With Small Plane Over Hudson

August 8, 2009

By Dan Hart Aug. 8 (Bloomberg) — A sightseeing helicopter showing a group of Italians the landmarks of Manhattan collided this afternoon with a small plane heading out from New Jersey, plunging both aircraft into the Hudson River and likely killing all nine people aboard. Two bodies have been found in the wreckage of what may be the helicopter, said New York Mayor Michael Bloomberg in a televised press conference. “Sadly, there is not a lot of rescue to do here,” Bloomberg said. “It is all recovery.” The helicopter was carrying a pilot and five Italian tourists, while the plane that left Teterboro Airport in New Jersey had a pilot and two passengers, he said. To contact the reporter responsible for this story: Dan Hart in Washington at dahart@bloomberg.net

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Russia Beats California in Bond Market as Credit-Default Swaps Favor BRICs

August 7, 2009

By Laura Cochrane Aug. 7 (Bloomberg) — Investor demand for emerging-market bonds is driving the cost of insuring against debt defaults below industrialized governments for the first time. Credit-default swap prices from Turkey to Indonesia are falling as bonds rise amid signs that their economies are recovering faster than developed nations. As the U.S. and U.K. borrow record amounts to fund bank bailouts and stimulus, Brazil, Russia, India and China have $3 trillion in reserves, up 19 percent from January 2008 and now 43 percent of the worldwide total, data compiled by Bloomberg show. The annual cost of protecting holdings in Turkey’s bonds fell by half to $200,000 per $10 million for five years, or 200 basis points, sinking below New York City swaps for two weeks starting July 22, Bloomberg data show. Indonesia debt insurance dropped below Michigan the next day. Brazil swaps just had their biggest four-month slide ever. For China , protection is near the cheapest in a year. Eleven years after Russia defaulted, investors want less to insure its debt than California’s. “This would have been impossible to imagine a year ago,” said Dmitry Sentchoukov , an emerging-market credit strategist at Dresdner Kleinwort in London. “Now it’s clear emerging economies are going to outperform the Group of Seven in growth, and that makes investors comfortable with the idea that developing countries can be priced richer than developed.” Speculation Swaps pay the buyer the amount protected in exchange for the defaulted debt’s market value or the bond itself if the borrower reneges. Created to protect lenders, the contracts also are used by hedge funds and insurance companies that don’t hold the underlying bonds to speculate on swings in the market’s perception of debtors’ creditworthiness. The average cost of swaps for sovereign debt from 45 developing countries has declined to 314 basis points, the lowest since October, from 785 basis points five months ago, data compiled by Bloomberg show. Emerging-market bond funds held almost $49 billion on July 31, the most since October, after their biggest weekly cash influx in a year. They’ve attracted more deposits than withdrawals every week since April 13, following eight months of declines, said EPFR Global , a Cambridge, Massachusetts, researcher. “CDS spreads have come in because there are a lot less worries about default,” said Paul McNamara , who invests in swaps while overseeing $2 billion in emerging-market debt at Augustus Asset Managers in London. His funds have received $500 million in new investments this year, he said in a phone interview. Softer Downturn Increased government and consumer spending are mitigating the economic downturn in emerging markets amid the worst global recession since World War II. Manufacturing in China expanded in July to the highest in a year, spurred by a $585 billion government stimulus package and a record $1 trillion of new bank loans in the first half. The country’s 4.25 percent bonds due 2013 rose to a one-year high of 105 cents on the dollar last month from October’s record low 97 cents. China swaps cost 66 basis points, down from 297 on Oct. 24. That’s cheaper than Greece and Ireland and within 9 points of Austria , Italy and Spain . Consumer spending in Indonesia accounts for about two- thirds of the economy , which expanded 4.4 percent in the first quarter, the fastest pace in Southeast Asia. Indonesia’s 2014 dollar bonds sold in March climbed to a record 121.5 cents on Aug 4. Default swaps on the country’s debt fell below 200 basis points for the first time since January 2008 this week, dropping to 197 on Aug. 3. They were at 207 basis points yesterday. IMF Predictions Emerging economies probably will expand 1.5 percent this year and 4.7 percent in 2010, the International Monetary Fund forecast July 8. Developed economies likely will shrink 3.8 percent in 2009 and grow 0.6 percent next year, the IMF said. The U.S. is in its worst downturn since the 1930s with consumer spending, 70 percent of gross domestic product, dropping at a 1.2 percent pace in the second quarter. Developing economies have been able to draw on reserves accumulated before the credit crunch started in 2007 to shield their economies. Russia spent about $49 billion from its Reserve Fund as of July 31 and will empty the stockpile by the end of 2010 to plug an estimated budget shortfall equivalent to as much as 9.4 percent of GDP, according to the government. Turkey, the world’s 17th largest economy , has $67 billion in foreign reserves, more than the U.S.’s $41.9 billion, Bloomberg data show. California’s IOUs In the West, governments are selling debt to fill budget gaps and fund bank bailouts. California has sold nearly $14 billion of general obligation bonds this year, up from $8.18 billion during all of 2008. The most populous U.S. state cut spending, raised taxes and issued IOUs as it battled with $60 billion in deficits over the past two fiscal years. Swaps on California have risen more than three-fold in the past year as its credit rating was lowered two levels to Baa1 by Moody’s, the same level as Russia, which reneged on $40 billion of sovereign debt payments in 1998. Russian default swaps are near a 10-month low of 255 basis points, about 20 basis points less than contracts linked to California. The former Soviet state’s 7.5 percent, 2030 dollar bonds are at a 2 1/2-month high of 101.74 cents on the dollar. “If California is issuing their own dummy currency in the form of IOUs, that’s not a good sign,” said Augustus’ McNamara. Russia has an “extremely low” debt-to-GDP ratio of about 10 percent which is attractive to “any type of bond investor,” said Luis Costa , an emerging-market debt analyst at Commerzbank in London. “For as long as U.S. municipal and state governments are in trouble, I think this trend will continue.” Increased Borrowing By comparison, the U.S.’s $11.2 trillion of debt is about 79 percent of its $14.1 trillion in GDP, Bloomberg data show. Issuance of Treasuries by the U.S., which has spent more than $300 billion to prop up its banks, may total $446 billion this quarter, up 30 percent from the prior three months, according to a Securities Industry and Financial Markets Association survey published July 30. The extra yield investors demand to own developing country bonds over similar-maturity U.S. Treasuries dropped to near a one-year low of 3.41 percentage points this week, from 6.95 in March, JPMorgan Chase & Co. indexes show. “This trend of lower sovereign spreads will continue,” said Richard House , who manages $1.1 billion in emerging-market debt at Threadneedle Asset Management in London. “Balance sheets are so strong now and most governments don’t need to sell debt in the external markets.” Yield Spreads Even as investors buy up developing economies’ debt, the countries still pay more to borrow on international markets. Investors on average demand an extra 112 basis points in yield over Treasuries to own China’s debt, two basis points less than Ireland’s 1.10 percentage-point spread, Merrill Lynch & Co. Inc. indexes show. Credit-default swaps on China cost less than half the 143 basis points for Ireland, which contracted a record annual 8.5 percent in the first quarter as the bursting of a decade-long property boom drove unemployment to a 13-year high, forced the government to raise taxes and cut spending and left banks nursing billions of euros in souring loans. The cost of protecting against a default by Turkey plunged below New York City’s for two weeks before climbing back above yesterday. The country is negotiating a new IMF loan accord to add to the equivalent of about $49 billion in assistance it has received since 1984. Turkey increased its 2009 budget deficit forecast to $33 billion in April. The government is attempting to end a 25-year conflict with Kurdish rebels that has cost almost 40,000 lives and spread into neighboring Iraq. Stocks Rally Swaps for New York increased more than three-fold in the past year. The world’s financial capital, rated nine levels higher than Turkey by Moody’s Investor’s Service at Aa3, faces unemployment close to 10 percent and reduced tax revenue from Wall Street firms. New York City Mayor Michael Bloomberg is founder and majority owner of Bloomberg News parent Bloomberg LP. As emerging-market bonds rally and swaps plummet, stocks from those economies are leading a climb in global equities. The MSCI Emerging Market Index has added 51 percent this year, compared to a 15 percent increase in the MSCI World Index of developed stocks. McNamara of Augustus Asset Management said he has reduced his investments in credit-default swaps this year because they are less liquid than bonds and have higher capital requirements and regulatory risks. “They have lost their competitive advantage to bonds,” he said. To contact the reporter on this story: Laura Cochrane in London at lcochrane3@bloomberg.net

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Shanghai Mayor Han Will Lift Land Supply, Check `Too High’ Property Prices

August 5, 2009

By Bloomberg News Aug. 5 (Bloomberg) — Shanghai will take steps to cool the city’s real-estate market as housing prices in China’s financial capital are “too high,” Mayor Han Zheng said. The city government will increase the supply of land for property development and speed up construction of affordable housing for low-income families in the second half of this year, Han, 55, said today in an interview in Shanghai.

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Alicia Whitaker: NYC’s Newest Business Incubator

July 28, 2009

Here’s some good news: there are twenty two business start ups benefiting from access to space, interns and support services in a loft-like space at 160 Varick Street in lower Manhattan. The City of New York, the Real Estate Division of Trinity Church, NYU and NYU Polytechnic Institute collaborated to open this new business incubator on July 1.

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Gates’s Arrest to Be Probed by Police Experts as Cambridge Weighs Action

July 27, 2009

By Tom Moroney July 27 (Bloomberg) — Cambridge, Massachusetts, named two police experts to review the arrest of Harvard University professor Henry Louis Gates Jr. and the mayor said she wouldn’t rule out disciplining officers.

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China’s Hu May Agree to Summit With Taiwan After Ma Elected Head of Party

July 27, 2009

By Weiyi Lim July 27 (Bloomberg) — China’s President Hu Jintao congratulated Taiwan President Ma Ying-jeou on his election as head of the Kuomintang party in the first public exchange of messages between the two sides’ leaders in 60 years. Ma received 94 percent of votes cast yesterday, Chen Shu- rong , a Kuomintang spokeswoman said in Taipei. Ma was the only candidate for the four-year term, and will replace Wu Poh-hsiung when his stint expires in September

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Earthquake Shift of Nation Puts Kiwis Closer to Aussies in Distance Only

July 27, 2009

By Joanna Cooney July 27 (Bloomberg) — Rob Valentine, the mayor of Hobart in Australia’s island state of Tasmania, says New Zealanders should be thankful their biggest earthquake in 78 years pushed the neighbors 30 centimeters (12 inches) closer. “They’re just that little bit closer to paradise,” Valentine said. “As neighbors, we’re really close, we can work together to take on the rest of the world.” The magnitude 7.8 quake on July 15, the strongest in the world this year, struck off New Zealand’s South Island, according to seismological monitor GeoNet . Hobart is the Australian city nearest to New Zealand, separated by 1,530 kilometers (951 miles) of water across the Tasman Sea.

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Dwek Laundered $3 Million in FBI Sweep Snaring Mayors

July 24, 2009

By Oshrat Carmiel, Dunstan McNichol and Pat Wechsler July 24 (Bloomberg) — Solomon Dwek bribed a politician, arranged to buy a kidney and tried to hide assets from creditors in a bankruptcy — all with the blessing of prosecutors. Dwek, a real-estate developer from Deal, New Jersey, who was charged with bank fraud in 2006, is the “CW” — cooperating witness — in criminal complaints against 44 people arrested yesterday in a corruption and money-laundering case, according to three people familiar with the matter

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Diana Taylor, Bloomberg’s Girlfriend, Named Citigroup Director

July 24, 2009

NEW YORK — Citigroup Inc. named three new outside directors Friday as the bank seeks to shift its focus back to traditional banking after it suffered a bruising hit from risky mortgage-backed securities. The New York-based company installed four new independent board members earlier this year, but still faced criticism from shareholders that it was not enough change as many felt the board did not have enough commercial banking experience. It hopes that Friday’s naming of former banking regulator Diana Taylor, Timothy Collins and Robert Joss – which bring the board’s total to 17 – will be enough to satisfy its critics.

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Dwek Laundered $3 Million With Rabbis in FBI Sweep Ensnaring Hoboken Mayor

July 24, 2009

By Oshrat Carmiel, Dunstan McNichol and Pat Wechsler July 23 (Bloomberg) — Solomon Dwek bribed a politician, arranged to buy a kidney and tried to hide assets from creditors in a bankruptcy — all with the blessing of prosecutors.

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Mayors of Hoboken, Secaucus, Rabbis Arrested in U.S. Money-Laundering Case

July 23, 2009

By David Voreacos July 23 (Bloomberg) — The mayors of Hoboken and Secaucus, New Jersey, and several rabbis were among at least 30 people arrested today as part of a public corruption and money- laundering investigation by U.S. authorities. Hoboken Mayor Peter Cammarano, 32, and Secaucus Mayor Dennis Elwell, both Democrats, Jersey City Council President Mariano Vega Jr., and State Assemblyman Daniel Van Pelt, a Republican from Ocean Township, were among those arrested by the Federal Bureau of Investigation.

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Israel Won’t Restrict Jews From Building in East Jerusalem, Netanyahu Says

July 19, 2009

By Gwen Ackerman and Alisa Odenheimer July 19 (Bloomberg) — Prime Minister Benjamin Netanyahu said Israel will not place restrictions on Jews seeking to buy land or live in east Jerusalem after reports that the U.S. has objected to a planned city development. “Our sovereignty in Jerusalem is indisputable,” Netanyahu said before the weekly Cabinet meeting today in remarks broadcast on Army Radio .

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Israel Won’t Restrict Jews From Building in East Jerusalem, Netanyahu Says

July 19, 2009

By Gwen Ackerman and Alisa Odenheimer July 19 (Bloomberg) — Prime Minister Benjamin Netanyahu said Israel will not place restrictions on Jews seeking to buy land or live in east Jerusalem after reports that the U.S.

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Circumcising HIV-Infected Men Doesn’t Stop Transmission to Women Partners

July 19, 2009

By Carey Sargent July 17 (Bloomberg) — Circumcising men infected with HIV didn’t stop transmission of the virus to female partners, a study published in The Lancet medical journal found. The trial, which took place in Uganda, was stopped early after 18 percent of the female partners of the circumcised men became infected with the virus compared with 12 percent of the partners of men who hadn’t undergone the procedure

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