World ushers in 2010, hoping for a better year
Happy New Year 2010 with Music from AbbaParties begin around the world to mark the end of a tough 12 months
World ushers in 2010, hoping for a better year
An expected 1.5 million New Year's revelers pitched tents and opened picnic baskets in Sydney on Thursday to get one of the world's biggest parties started — bidding farewell to a tough year and welcoming a new decade.
Preparations were under way across the world for pyrotechnics, parties and prayers in the final countdown to 2010, with far eastern points in Oceania and Asia the first to herald the end of the period dubbed "the Naughties."
The mood of celebrations was tempered in some places by the effects of the financial downturn, which bit hard in 2009, sending economies into recession, causing millions to lose their jobs and home foreclosures to rise dramatically in some countries.
There were also reminders of threats and the fight against terrorism that during the decade led to wars in Iraq and Afghanistan and rising militant violence in Pakistan.
The U.S. Embassy in Indonesia warned of a possible terrorist attack on the resort island of Bali on New Year's Eve, citing information from the island's governor. The e-mail warning to U.S. citizens said predominantly Muslim Indonesia's counterterrorism efforts have been partly successful in recent years, but violent extremists continue to pose a deadly threat.
Some hope about the economy
Signs of economic recovery emerged late in 2009, but the year may be one that many people are glad to put behind them.
"I think 2010 will be a good year — you can never tell, but I think so," said Marek Kiera, a Sydney property investor who watched interest rates tumble amid the global financial crisis.
"We have invested so much in something that may go up in value," said Kiera, who went with his wife and three young children to a park in inner Sydney to watch the fireworks show. "Hopefully there will be a boom like in the late '80s, when properties doubled in value."
Organizers said 1.5 million people were expected to line the shore for the annual fireworks extravaganza over Sydney's landmark harbor bridge and opera house — the centerpiece of Australia's celebrations that generates some of the most striking images from a night of revelry across the globe.
Smaller fireworks displays and partying were planned across Australia and the South Pacific, the first region to greet each new day because of its proximity to the International Date Line.
In New Zealand, 2010 was welcomed with dance parties, bands and fireworks. In the capital, Wellington, celebrations included a display by world unicycle games competitors.
Asia will be partying, too, though probably not as hard as most of Europe and the Americas. The world's most populous nation, 1.3-billion-strong China, uses a different calendar that will mark the new year in February. Islamic nations such as Pakistan and Afghanistan also use a different calendar.
In Beijing, President Hu Jintao was to make an end-of-year speech but no major celebratory events were planned.
Pyrotechnics displays were planned to illuminate Hong Kong's crowded skyline, high-glitz parties were planned in Singapore and thousands were expected to gather at Indonesia's national monument in the capital, Jakarta, for a fireworks show.
Japanese heading to shrines
Millions of Japanese were to welcome the new year by flocking to shrines to pray for good fortune in 2010.
In Tokyo, the Sensoji temple was draped with banners greeting the new year in preparation for traditional New Year's Day ceremonies when thousands of people pray for good fortune. Shoppers mobbed the city, stocking up on seafood and other items.
In Sydney, crowds defied gray skies and drizzling rain in the middle of summer to line parks and public places along the harbor. High-rise apartments with water views prepared for toney parties.
Sydney revelers were asked to wear something blue, the color chosen to match the fireworks show's theme: Awaken the Spirit.
"Sydney has an amazing spirit — soulful, sexy and sophisticated and we want to celebrate and awaken her spirit for the new year ahead," artistic director Rhoda Roberts said.
In other cities such as Melbourne and Adelaide, revelers sweltered in 100 degree F heat.
Thousands of police were deployed across Australia to guard against alcohol-fueled misbehavior, with commanders warning that troublemakers should stay home or face jail.
In Turkey, Istanbul Gov. Muammer Guler said authorities were deploying around 2,000 police officers around Taksim Square to prevent pickpockets and the molestation of women that have marred New Year celebrations in the past. Some officers would be under cover, disguised as street vendors or "even in Santa Claus dress," Guler said.
Firecrackers were already exploding across the Netherlands early Thursday on the only day of the year the Dutch are allowed to set off fireworks.
Unlike countries like Australia, the vast majority of fireworks shows in the Netherlands are do-it-yourself affairs where families spill onto the street in front of their homes and light strings of fire crackers and other fireworks.
Many Dutch families also fire up their deep-fat frying pans on New Year's Eve to cook the traditional treat of oliebollen — deep-fried balls of dough laced with raisins and dusted with icing sugar.
Taliban claim blasts that kill 13 Westerners
The Taliban claimed responsibility Thursday for two separate bomb attacks in Afghanistan that killed eight Americans, five Canadians and an Afghan in a surge of violence in the war-battered country. A U.S. congressional official said CIA employees were believed to be among the victims of a suicide blast at an American base in the volatile east.
The explosion at the Forward Operating Base Chapman base in Khost province on Wednesday killed eight American civilians and one Afghan, the worst loss of life for the U.S. in the country since October.
Separately, four Canadian soldiers and a journalist imbedded in their unit were killed Wednesday by a roadside bomb in the southern Kandahar province, the bloodiest single incident suffered by that country's military in 2009.
Michelle Lang, a 34-year-old health reporter with the Calgary Herald, was the first Canadian journalist to die in Afghanistan. She arrived in the country just two weeks ago.
The Taliban claimed responsibility for both attacks in messages to The Associated Press.
Also Thursday, a spokesman for the governor of Helmand province in the south said an airstrike by international forces killed and wounded civilians. Dawud Ahmadi said he did not have immediate information on how many were killed in the Wednesday incident in Babajid district, which he said occurred after an international forces patrol came under fire.
NATO said it was aware of the reports and was investigating. Claims of civilians killed by foreign forces are a highly emotional issue among Afghans and feed strong resentment of international soldiers.
It was not immediately clear how the suicide bomber at the American base at the edge of Khost city was able to circumvent security.
Taliban spokesman Zabiullah Mujahid said in a statement that an Afghan National Army officer wearing a suicide vest entered the Khost base Wednesday and blew himself up inside the gym. A U.S. official who was briefed on the blast also said it took place in the gym.
Khost is the capital of Khost province, which borders Pakistan and is a Taliban stronghold.
The U.S. official said eight American civilians and one Afghan were killed; it was not clear if the Afghan victim was military or civilian. Six Americans were wounded, the official said. The CIA has not yet commented on or confirmed the deaths.
There was no independent confirmation that the bomber was a member of the Afghan military. Gen. Mohammad Zahir Azimi, spokesman for the Afghan Ministry of Defense, said no Afghan National Army soldiers are at the base.
But an Afghan official in Khost said about 200 Afghans have been contracted by the U.S. to take care of security at the base. They are usually deployed on the outer ring of its walls, although some work inside, the official said on condition of anonymity because of the sensitivity of the issue.
"It's not the first time that Afghan forces have conducted such an attack to kill Americans or foreigners," the Taliban statement said, citing the killing of an American soldier and the wounding of two Italians this week in Badghis province. NATO has provided no details of that incident, but Afghan Gen. Jalander Shah Bahnam said an Afghan soldier opened fire on a base in the province's Bala Murghab district.
The congressional official in Washington said it was not clear how many of the victims in Khost were assigned to the CIA.
A former senior CIA officer who was stationed at the base said a combination of agency officers and contractors operated out of the remote outpost with the military and other agencies.
All the U.S. officials spoke on condition of anonymity because they were not authorized to discuss the matter with the media.
NATO said only that the base is used by provincial reconstruction teams, which consist of both soldiers and civilians, and other personnel.
A spokesman in Kabul for the international coalition force said no U.S. or NATO troops were killed in the explosion. The attack was the bloodiest for Americans since eight soldiers were killed in an insurgent attack on a base in eastern Afghanistan on Oct. 3.
In the south, NATO said the four Canadian troops and the reporter died when their armored vehicle hit a bomb while on an afternoon patrol south of Kandahar city. It was the third-deadliest day for Canadians in Afghanistan since the war began.
Lang "was one of those journalists who always wanted to get to the bottom of every story so this was an important trip for her," said a Calgary Herald colleague, Colette Derworiz.
The military has not disclosed the names of the Canadian troops because relatives have not all been notified.
Brig. Gen. Daniel Menard, commander of coalition forces in Kandahar, said the soldiers were conducting a community security patrol.
Wednesday's attack was the second lethal strike against Canadian forces in a week. One Canadian soldier and an Afghan soldier were killed Dec. 23 during a foot patrol in Panjwayi district of Kandahar province. According to figures compiled by The Associated Press, the latest casualties bring to 32 the number of Canadian forces killed in Afghanistan this year; in all, 138 have died in the war.
Afghan President Hamid Karzai issued a statement of condolence to Americans and Canadians, saying "your children sacrificed their lives for the people of Afghanistan and the threat of terrorism. The Afghans will not forget your sacrifice."
New visa proposal to help create the next big thing
A proposal that will make it easier for foreign entrepreneurs in the US to start the next Google or Yahoo will be debated in the new year.
Congressman Jared Polis has proposed a start-up visa to entice "foreigners with good ideas" to stay in the US.
The issue has been gathering steam in Silicon Valley where half of all tech company founders are immigrants, according to Duke University research.
The idea is part of a proposed overhaul of the US immigration system.
"Every day the American economy is losing ground - not to mention high-tech jobs and technologies - to India and China because foreign-born entrepreneurs cannot secure a visa to stay in the US," he said.
Lost opportunity
Eric Diep, who has just turned 22, could be regarded as one entrepreneur who got away.
He came to Silicon Valley as a student like many immigrant founders who have helped start companies such as Google and PayPal.
Mr Diep was one of the first developers to get into social games with his application called Quizzes, initially launched on the social networking site Facebook.
Over a year ago he started to apply for a visa to allow him to carry on working in the Valley, but he soon encountered problems.
"The reason it was so difficult for me was because I dropped out of university and the stipulation for a lot of visas is undergraduate experience. My age also seemed to be an issue for the attorneys
"At the beginning it wasn't the expense in terms of legal fees but the big problem soon became one of distraction. I was trying to spend as much time working on perfecting my product but then I would have to go away and figure out the legalities of applying for the visa," Mr Diep told BBC News.
In the end, Mr Diep decided to base himself in his native Canada and travel back and forth to Silicon Valley.
"The flying is so tiring between the two places and it's expensive. At one point, I had no money left in my bank account but at the last minute money came in and now I feel pretty fortunate that I can still do this.
"It was a pretty close call," he added.
He backs a start-up visa because, for him, being in Silicon Valley is where he needs to be.
"Being there at the time really launched me. I would never have spotted the social gaming opportunity had I not been there."
Visa details
The start-up visa is aimed at streamlining the country's EB-5 visa system which was initially introduced in 1990 to attract foreign capital to the US.
Each year 10,000 EB-5 visas are available but to get one, applicants need to invest $1m and create 10 full-time jobs.
Mr Polis said he wants "a new class of eligibility" with the start-up visa.
It would be granted to foreign entrepreneurs if their business plan attracts either $250,000 from a venture capital operating company that is primarily US based or $100,000 from an angel investor.
They must also show that the business will create five to ten jobs or generate a profit and at least $1m in revenue.
Some of these requirements may well be changed when the bill goes to committee in the new year.
"Immigration reform is a big discussion in Washington," said supporter Brad Feld, who is also a managing director with venture company the Foundry Group.
"We think the start-up visa is an easy thing to talk about and get consensus around in terms of having a positive spin on entrepreneurship and creating jobs."
Job creation
Some critics fear that making it easier for entrepreneurs to set up shop will hurt Americans by taking jobs away from them.
"I feel incredibly strongly that that is a misinterpretation of the proposal," said Eric Ries a venture advisor and author.
"Some people have called those opposed to new immigration reform xenophobes and that is why I think it is important we craft this proposal so it addresses those concerns. This is not a new visa category but reform of an existing but flawed category," he told BBC News.
The proposal's backers say that far from taking away jobs, new jobs will emerge that were never there in the first place.
"If the capital is available for the market, we should jump to bring those people here. Those jobs only get created once the founders get funded. This is a market driven decision," said Dave McClure, an internet entrepreneur, investor and start-up advisor.
YouNoodle is a start-up company founded by two British entrepreneurs. It tracks the start-up sector and said the figures speak for themselves.
"If just ten thousand start-up visas were made available this would mean over 3000 additional new innovative and funded companies would be based in the US every year," said Kirill Makharinsky, YouNoodle co-founder.
"They would generate more than 10,000 jobs on average every year. In the first 10 years that would add up to over 500,000 highly-skilled new jobs
"So the upside is huge and the downside is negligible because no jobs are being taken away from US citizens," Mr Makharinsky told BBC News.
And for Mr McClure, the consequences of not establishing a start-up visa class are obvious.
"We will lose out because we are not being competitive with the rest of the world," he said.
"There are similar programmes in Canada, the UK and Australia. They are all vying for the top entrepreneurs and if we only look at our own citizens, we are only taking 10-20% of the world's talent into consideration here. That would be short-sighted in the extreme."
Reports: 4 dead in shooting at Finnish shopping center
A shooting at a shopping center outside the Finnish capital of Helsinki on Thursday left at least 4 people dead, according to state broadcaster YLE.
The shooting happened midmorning in the town of Espoo, YLE and CNN affiliate MTV3 reported. There was one gunman involved, and police are still searching for him, MTV reported.
Parts of the shopping center, called Sello, have been sealed off, YLE reported. The entire shopping center was evacuated, it said.
The dead included three women and one man, YLE reported.
The gunman, who is 43, used a 9mm handgun, YLE reported. It said his identity was known to police.
In September 2008, student Matti Juhani Saari, 22, killed 10 people before shooting himself in the head at Seinajoki University of Applied Sciences in Kauhajoki, Finland. Saari, who had been armed with a semi-automatic pistol and Molotov cocktails, posted YouTube videos of himself firing weapons before embarking on the massacre.
Pekka-Eric Auvinen, 18, killed seven fellow students and the principal at Jokela High School in Tuusula in November 2007 before shooting himself in the head.
Auvinen posted a YouTube video titled "Jokela High School Massacre" before the killing spree. In it he warned that he planned to "eliminate all who I see unfit." Brandishing a shotgun, the teenager was seen in the video wearing a T-shirt proclaiming "Humanity is Overrated."
Finland enjoys a strong tradition of hunting and has a high proportion of gun ownership, with two million firearms owned in a nation of five million people.
EU Mission to Tehran Draws U.S. Ire
An 11-person European Parliament delegation is scheduled to visit Tehran next week, drawing a rebuke from U.S. lawmakers concerned the visit could legitimize Iranian President Mahmoud Ahmadinejad's government.
The Jan. 7-11 mission marks the first visit by a Western parliamentary body to Tehran in more than a year. It comes as Mr. Ahmadinejad's security forces have accelerated a crackdown on Iran's political opposition.
The trip, set to occur a week after the expiration of President Barack Obama's deadline for Iran to respond to international calls for negotiations over its nuclear program, is feeding debate among the U.S. and its European allies over how long to keep open the window for diplomacy with Tehran.
"We believe that a visit from the EP would send the wrong message to the Iranian government and undermine the international efforts to end their nuclear program," 15 U.S. House members wrote European Parliament President Jerzy Buzek last week. "We urge you not to authorize the visit at this time."
Both Democrats and Republicans signed the congressional letter, including Reps. Robert Wexler (D., Fla.), Mark Kirk (R., Ill.), and Shelley Berkley (D., Nev.). Ms. Berkeley heads the Transatlantic Legislators Dialogue within the House Foreign Affairs Committee.
A spokesman for the White House's National Security Council declined to comment on the European Parliament plans. Senior U.S. officials have stressed in recent days that the Obama administration intends to maintain an open diplomatic channel to Tehran, even as the U.S. and its allies move to enact new economic and financial sanctions on Iran.
The White House last week said it would support a possible trip to Iran by former Democratic presidential candidate John Kerry, chairman of the Senate Foreign Relations Committee. Mr. Kerry, a Massachusetts Democrat, has floated in recent weeks the idea of visiting Iran to meet with senior Iranian leaders and members of Iran's parliamentary body, the Majlis, according to people briefed on the potential mission.
A spokesman for Sen. Kerry stressed last week that the Democratic lawmaker had no plans to visit Tehran. But Iran's state media this week quoted senior Iranian officials saying Sen. Kerry had filed a formal request to visit Tehran.
Frederick Jones, a spokesman for Sen. Kerry, again said Wednesday that the senator has "no plans" to travel to Tehran and that "he never discusses any private or diplomatic conversations or correspondence." Mr. Kerry would be the highest-level U.S. official to visit Iran since the 1979 Islamic revolution.
The possibility of a Kerry visit has drawn concern from both sides of the ideological spectrum and from Iranian human-rights activists who say he could lend the Iranian government legitimacy.
The European Parliament delegation will be headed by Barbara Lochbihler, a noted German human-rights campaigner, and Kurt Lechner, a member of German Chancellor Angela Merkel's Christian Democratic Party. Ms. Lochbihler wrote her U.S. counterparts this week and stressed that she plans to go ahead with the mission.
She wrote that "serious representatives of the Iranian civil society" have "urged the delegation to travel."
The members of the European Parliament who plan to visit Iran represent a special parliamentary committee known as the Delegation for Relations with Iran. The group is one of several dozen delegations that monitor relations with different countries or regions.
Mr. Lechner, who serves as deputy chairman of the Delegation for Relations with Iran, said in an interview that the timing of the visit was "unfortunate" but that the delegation decided to go ahead because it is difficult to schedule such missions.
Two previously scheduled visits to Tehran were canceled on short notice by their Iranian counterparts, Mr. Lechner said. "I will be very interested to see whether this visit is also canceled," he added.
Mr. Lechner said the delegation plans to meet with Iranian lawmakers, diplomats based in Tehran, academics and members of Iran's opposition movement. The delegation specifically plans to discuss Iran's use of the death penalty against minors as well as women's rights. And he said he plans to raise economic and energy issues.
Mr. Lechner said he will also condemn Tehran's use of violence against democracy activists. "The talks will be difficult," he said, while adding that he doesn't see the visit as signaling a change in relations between the European Union and Iran. "We are not diplomats," Mr. Lechner said.
Arab League chief wants bigger UN role in Middle East
The United Nations must play a bigger role in trying to resolve the Palestinian-Israeli conflict and the United States should not be the only mediator, a senior Arab official said.
Arab League Secretary-General Amr Moussa told Reuters, without directly criticising U.S. policy in the Middle East, that any mediator must be objective.
"There should be a change in the direction of the peace process, by having a mediator who understands the needs of the two parties, and not one party," he said.
"The United Nations role which was marginalised at a certain stage with regards to the Arab-Israeli struggle should be brought back," he added.
The United Nations is part of a Quartet of mediators alongside the U.S., European Union and Russia, but the United States has taken a leading role in the peace process.
U.S. President Barack Obama's Middle East envoy George Mitchell is expected to visit the region in January for a fresh push to resume the Israeli-Palestinian peace talks stalled since a three-week Gaza war in which 1,400 Palestinians and 13 Israelis were killed. Months of Mitchell's shuttling between the sides yielded no concrete signs of progress in 2009.
Hints of movement in the deadlocked talks have emerged in discussions between the leaders of Egypt and Israel this week, Israeli and Palestinian officials said on Wednesday.
Neither side has divulged the details of what development may take place though both are cautiously optimistic that talks could resume sometime in 2010.
Moussa told Reuters on Tuesday that he trusted Obama, but added: "We must maintain the American role in the framework of other roles, European and United Nations and all countries that have links to and interests in the situation in the Middle East".
Moussa, who was Egypt's foreign minister between 1991 and 2001, won praise from many Egyptians and Arabs for his criticism of both Israel and past U.S. Middle East policies.
Asian markets close out 2009 on high note
Trade was quiet on Thursday, with several markets already shut, as most of the region's bourses closed out the year rising about 0.5% or more. The dollar was lower against the yen and euro, and crude oil prices neared $80 barrel.
The advance came after Wall Street finished a touch higher, drawing support from an economic report showing manufacturing in the country's Midwest region grew for a third consecutive month. The report found that production and new orders increased and employment improved.
The past 12 months saw massive gains across Asia, among the world's fast-growing regions and at the forefront of this year's global equities run.
In Hong Kong, the Hang Seng gained 375.88 points, or 1.8%, to 21,872.50 and Australia's main benchmark rose 0.7%.
Shanghai's key index was up 12.85, or 0.4%, at 3,275.85. Elsewhere, benchmarks in India and Taiwan rose 0.9%.
Markets in Japan, South Korea, Singapore, Indonesia and the Philippines were closed for public holidays.
Wednesday in the US, the Dow Jones industrial average ticked up 3.10, or less than 0.1%, to 10,548.51, its highest close since October 1, 2008.
With one trading day left in the year, the Dow is up 61.1% from the 12-year low it reached in March, but is still down 25.5 from its peak of 14,164.53 in October 2007.
The S&P 500 index edged up 0.22, or less than 0.1%, to 1,126.42, while the Nasdaq composite index rose 2.88, or 0.1%, to 2,291.28.
Oil prices headed toward $80 a barrel in Asia, with benchmark crude for February delivery up 44 cents at $79.72 a barrel. The contract added 41 cents to settle at $79.28 on Wednesday.
The dollar fell to 92.24 yen from 92.44 yen. The euro was higher at $1.4410 from $1.4343.
Govt gives GMAC $3.8B in new aid, boosts stake
The government gave GMAC Financial Services another $3.8 billion in cash and took a majority stake in the auto lender, aiming to stabilize the company as it struggles with big losses in its home mortgage unit.
The fresh infusion is on top of $12.5 billion in taxpayer money Detroit-based GMAC has already received from the government. The new aid will boost the federal government's ownership in GMAC to 56 percent, from 35 percent, and means the U.S. now holds a majority stake in three companies that it bailed out with taxpayer funds — GMAC, General Motors and insurer American International Group Inc. The government also has taken control of mortgage giants Fannie Mae and Freddie Mac.
Keeping GMAC alive as it struggles with its mortgage loan problems has been a major component of the Obama administration's massive effort to rescue ailing automakers General Motors and Chrysler. The lender provides critical wholesale financing to thousands of GM and Chrysler auto dealers, allowing them to stock their showroom floors with vehicles.
That ability was crimped as loan losses mounted at GMAC's mortgage division — Residential Capital LLC, dubbed ResCap. The company disclosed Wednesday that it will take an additional $3.3 billion in mortgage-related write-downs, part of a $3.8 billion expected charge in the fourth quarter. GMAC is also preparing to sell off mortgage assets in an effort to reduce volatility.
GMAC's core auto lending business has shown some signs of revival even as auto sales slumped this year. The auto financing division earned a profit of $395 million during the third quarter. The company's online consumer banking unit, Ally Bank, has also been a bright spot by bringing in billions of dollars in new deposits by offering relatively high interest rates. It now accounts for about 29 percent of GMAC's assets.
Even with the government upping its stake, Treasury officials said the government intends to stick to its policy of leaving day-to-day business decisions about financing to GMAC management. Still, with the additional stake, the government will have the right to appoint two additional directors to the company's board, bringing the total to four of nine, Treasury officials said.
GMAC will continue to be subject to executive pay restrictions imposed by the government's pay czar.
GMAC was granted bank holding company status a year ago, allowing it to borrow funds from the Federal Reserve and receive a portion of the government's bailout fund. It later failed the government's stress test, largely because of ResCap's big losses. That triggered a Treasury Department requirement that it raise $11.5 billion — including $9.1 billion of new Tier 1 capital — in additional capital this year. When it failed to do so, an extra government infusion became necessary.
"By protecting the financial performance and strength of our core automotive finance operations, we expect to increase the pace at which we can fully repay the U.S. taxpayer," Michael Carpenter, GMAC's chief executive, said in a statement on Wednesday.
The Treasury Department said the new aid, which comes from a taxpayer-financed bailout fund, is less than the roughly $6 billion the government had earlier thought GMAC would need to steady the company. That's because the impact from General Motors' bankruptcy filing wasn't as severe as originally projected. It marked the third time the government has thrown GMAC a lifeline.
Even after the latest capital infusion, the government will likely take steps to help GMAC as it tries to ensure the recovery of GM and Chrysler, said Kirk Ludtke, senior vice president at CRT Capital Group LLC. That includes helping GMAC refinance its debt as it comes due, he said.
"The government has come this far, it is not going to destabilize GMAC at this point," he said.
GMAC still remains on shaky financial ground. Last month, it reported a quarterly loss of $767 million, though the results were an improvement over a giant loss a year ago. ResCap lost $747 million during the third quarter as homeowners continued to default on their mortgages in large numbers.
GMAC, which also provides financing to car buyers, had been hurt by the rapid decline of the U.S. auto industry after sales crumbled due to the recession and financial woes at big automakers. Sales of cars and trucks fell 24 percent through November compared with the same period last year. The industry is expected to sell around 10 million cars this year, one of the worst performances for autos sales in decades.
13 state AGs threaten suit over health care deal
Republican attorneys general in 13 states say congressional leaders must remove Nebraska's political deal from the federal health care reform bill or face legal action, according to a letter provided to The Associated Press Wednesday.
"We believe this provision is constitutionally flawed," South Carolina Attorney General Henry McMaster and the 12 other attorneys general wrote in the letter to be sent Wednesday night to House Speaker Nancy Pelosi and Senate Majority Leader Harry Reid.
"As chief legal officers of our states we are contemplating a legal challenge to this provision and we ask you to take action to render this challenge unnecessary by striking that provision," they wrote.
In a rare Christmas Eve vote, Senate Democrats pushed sweeping health care legislation to the brink of Senate passage, crushing a year-end Republican filibuster against President Barack Obama's call to remake the nation's health care system. The 60-39 vote marked the third time in as many days Democrats posted a supermajority needed to advance the legislation.
The letter was signed by top prosecutors in Alabama, Colorado, Florida, Idaho, Michigan, North Dakota, Pennsylvania, South Carolina, South Dakota, Texas, Utah, Virginia and Washington state. All are Republicans, and McMaster and the attorneys general of Florida, Michigan and Pennsylvania are running for governor in their respective states.
Last week, McMaster said he was leading several other attorneys general in an inquiry into the constitutionality of the estimated $100 million deal he has dubbed the "Cornhusker Kickback."
Republican U.S. Sens. Lindsey Graham and Jim DeMint of South Carolina raised questions about the legislation, which they said was amended to win Nebraska Sen. Ben Nelson's support.
"Because this provision has serious implications for the country and the future of our nation's legislative process, we urge you to take appropriate steps to protect the Constitution and the rights of the citizens of our nation," the attorneys general wrote.
A conference committee begins meeting next year to work out a compromise between House and Senate versions of the bill. Experts expect those talks will likely last into February.
McMaster says if the bill goes through to final approval with the benefit to Nebraska, taxpayers in the other 49 states will have to pay for it.
House Majority Whip Jim Clyburn, D-S.C., said the letter was a political ploy.
"This threat stinks of partisan politics," he said in a statement. "If Henry McMaster wants to write federal law he should run for Congress not governor."
Meanwhile, Nelson is taking his message on health care reform directly to his constituents. In a television ad beginning during Wednesday night's Nebraska-Arizona Holiday Bowl football game, the Democrat says he stuck by his principles throughout the debate and doesn't want Nebraskans to be confused on his position.
While it's not uncommon for states to challenge federal laws in court, one legal expert said political bluster was likely behind the letter.
"I do think that it is some combination of the losers just complaining about the officiating, or complaining about how the game was played, in combination with trying to make the bill look as seedy and inappropriate as possible, for political purposes," says Andy Siegel, a former University of South Carolina School of Law professor now teaching at Seattle University School of Law.
"It is smart politics to try to tarnish it and make it look less like an achievement and more like some sort of corrupted bargain," he said.
Flores drug indictment gives clues to Mexican cartels’ networks in the U.S.
The Flores brothers had never looked like much in the eyes of local narcotics agents. But by the time it all came crashing down this year, the drug-distribution network allegedly run by the 28-year-old twins from the Mexican American barrios of Chicago was one of the largest and most sophisticated ever seen in the U.S. heartland, according to interviews and federal indictments.
Pedro and Margarito Flores allegedly operated as an American annex to a major Mexican drug mafia, and their arrest and the dismantling of their purported network opened a window on how powerful Mexican cartels operate in the United States, distributing cocaine and heroin with the corporate efficiency of UPS, while back home competitors are tortured and beheaded.
The fortunes of the Flores twins changed because the war on the cartels being waged in Mexico with U.S. help has reshaped the criminal landscape in both countries, generating unprecedented violence but also contributing to the kinds of vicious splits and betrayals that helped in the brothers' arrests, according to narcotics agents and federal indictments.
The sprawling drug operation was essentially a $700 million-a-year distributorship for the Sinaloa cartel, the largest criminal organization in Mexico. It used tractor-trailers to import two tons of cocaine each month for distribution from Chicago warehouses, with cash proceeds shrink-wrapped and shipped back across the border.
The crackdown launched by Mexican President Felipe Calderón has cost more than 16,000 lives and been widely criticized in both countries as ineffective in reining in the drug barons and slowing the flow of drugs into the United States. But the campaign has exposed networks such as the one allegedly run by the Flores brothers, which shipped cocaine from Los Angeles to Chicago and then distributed it to cities across the Midwest, according to interviews and the indictments.
Other than the indictments, few court papers have been filed in the case. The Flores brothers are in U.S. custody; attempts to reach their attorneys were unsuccessful.
Chicago is hardly alone as a home to Mexican cartels; the traffickers operate in 230 U.S. cities, the Justice Department says. But the competition in Chicago might be unusually fierce, with each of the five major Mexican cartels vying for business.
"Much like any legitimate corporation, the drug organizations utilize Chicago as both a distribution and trans-shipment point for their product," Stephen A. Luzinski, acting special agent-in-charge of the Drug Enforcement Administration office here, said in an interview. "The extensive accessibility to various modes of transportation, as well as the large and diverse population with an established customer base, makes Chicago an ideal location as a hub."
The family business
Pedro and Margarito Flores were born into a Mexican immigrant family with strong ties to the narcotics trade. Chicago detectives say their father ran drugs for the Sinaloa cartel, as did an older brother. The family melded into the culture in rough neighborhoods such as Little Village and Pilsen, where the Latin Kings and Two-Six gangs fight for turf.
The brothers eventually took over a barbershop and a Mexican restaurant called Mama's Kitchen. They moved to a more expensive neighborhood and drove better cars. But unlike in Mexico, where high-level traffickers are household names, the twins had low profiles.
In Chicago, "you are only as good as your connection," said a former drug dealer who served 10 years in prison and spoke on the condition of anonymity because of security concerns. And the Flores brothers reportedly had the best connections in town.
Authorities said the brothers worked for two factions of the Sinaloa cartel. One was headed by Joaquín "El Chapo" Guzmán, the most wanted man in Mexico, recently named by Forbes magazine as the 41st most-powerful person in the world. The other was by Arturo Beltrán Leyva, whose self-appointed nickname -- the Boss of All Bosses -- frequently appeared on messages displayed next to mutilated corpses.
As described in court documents, the brothers' reach extended deep into Mexico, where Guzmán, Beltrán Leyva and their associates used Boeing 747 jets, private aircraft, submarines, container ships, fishing vessels and speedboats to consolidate enormous shipments of cocaine from Central and South America, including Colombia and Panama.
The Sinaloa cartel in Mexico was tasked with getting the drugs across the border for pickup in a warehouse outside Los Angeles. The Flores brothers allegedly employed dozens of operators to bring the drugs north, including truck drivers who concealed the contraband amid shipments of fruit, vegetables and other consumer goods, and off-loaded cocaine and heroin in the Chicago area at nondescript warehouses, condominiums and brick duplexes managed by their criminal gang. The drugs were split into smaller quantities and "fronted" to customers, who would pay after they sold the contraband on the street.
But the two Sinaloa factions split last year over the Mexican government's arrest of Beltrán Leyva's brother. The resulting violence consumed several Mexican states and, ultimately, Chicago, as the factions fought over "control of lucrative narcotics trafficking routes into the United States, and the loyalty of wholesale narcotics customers, including the Flores Brothers," according to an indictment filed in U.S. District Court for the Northern District of Illinois.
The brothers were said to be caught in the middle, with both Sinaloa factions threatening violence against them to maintain control over the critical distribution network. Ultimately, U.S. authorities were able to infiltrate the purported Flores crew, setting up sham cocaine sales to make dozens of arrests and to seize more than three metric tons of cocaine.
Pressure on both sides
It is not clear whether the Flores brothers are cooperating with the authorities, but they face life in prison if convicted, and authorities are seeking the forfeiture of more than $1.8 billion. In August, Patrick J. Fitzgerald, the U.S. attorney for the district, called the indictments "the most significant drug importation conspiracies ever charged in Chicago."
Authorities and people familiar with the drug trade say violence in Mexico and increased enforcement -- symbolized by the Flores case -- are having a dramatic effect on Chicago street sales, at least for now. The wholesale price for a kilo of cocaine -- about 2.2 pounds -- has surged in the past 18 months, from $18,000 to $29,000 and often more, according to authorities.
U.S. officials declined to discuss specifics of the case or whether information from the investigation helped lead Mexican authorities to Beltrán Leyva, who was killed this month during a two-hour gun and grenade battle with Mexican forces in the city of Cuernavaca.
But Anthony Placido, chief of intelligence for the DEA, said in an interview that pressure on both sides of the border has forced the cartels to rely increasingly on inexperienced operators such as the Flores twins.
"There have always been gatekeepers -- people who use their familial relationships to facilitate the movement of drugs across the border," Placido said. "Those people used to be gods, and they would control an area for years. Now they often last months before they are arrested or assassinated.
"What that creates is opportunities for a 28-year-old who . . . isn't worried about dying," he said.
