A $10 billion settlement to resolve claims of foreclosure abuses by 14 major lenders is expected to be announced as early as Monday, several people with knowledge of the discussions said on Sunday.
The settlement comes after weeks of negotiations between federal regulators and the banks, and covers abuses like flawed paperwork and botched loan modifications, said these people, who spoke on condition of anonymity because the deal had not been made public.
An estimated $3.75 billion of the $10 billion is to be distributed in cash relief to Americans who went through foreclosure in 2009 and 2010, these people said. An additional $6 billion is to be directed toward homeowners in danger of losing their homes after falling behind on their monthly payments.
All 14 banks , including JPMorgan Chase, Bank of America and Citigroup, are expected to sign on.
The agreement comes almost a year after a sweeping deal in February between state attorneys general and five large mortgage lenders.
The settlement almost fell apart over the weekend. Some officials at the Federal Reserve threatened to scuttle the deal unless the banks agreed to pay an additional $300 million for their role in the 2008 financial crisis, which upended the housing market and led to millions of foreclosures.
The Fed officials argued for additional aid for homeowners ensnared in a flawed foreclosure process, according to several people briefed on the negotiations who spoke on condition of anonymity. The $300 million demand was to come on top of the $10 billion payout, but was met with resistance from the banks, especially because it was raised late in the day on Friday, according to these people.
The Federal Reserve officials backed down, allowing the $10 billion pact to move forward ahead of bank earnings releases this month, these people said.
During the last week, officials from the Federal Reserve met with community groups and consumer advocates to gather comments about a settlement. It was those talks that induced the Fed to forgo the request for additional money, according to three people familiar with the matter. The thinking, these people said, was that broad relief was better than a lengthy review process that had not yielded much relief.
Representatives from the Federal Reserve and the Office of the Comptroller of the Currency, which led banking regulators in the negotiations, declined to provide further details on the settlement.
Still, some housing advocates said the settlement did not go far enough in providing relief. Bruce Marks, chief executive of the Neighborhood Assistance Corporation of America, expressed cautious optimism about the deal, but added that the “devil is in the details.”
It is still unclear how the monetary relief will be distributed among homeowners, but one immediate result of the settlement is the end of a troubled review of millions of loan files.
As part of a consent order in April 2011, the comptroller’s office and the Federal Reserve established the Independent Foreclosure Review, which mandated that banks hire independent consultants to audit loan files and look for illegal fees, bungled loan modifications and instances where borrowers lost their homes even though they were current on their payments. Only 323,000 homeowners submitted files to be reviewed.
Within the comptroller’s office, senior officials raised concerns that the reviews had grown bloated and inefficient, especially after each loan took more than 20 hours to review, up from original estimates of eight hours a file.
The mounting costs of the reviews, up to $250 an hour, began to worry the banking regulators, according to several of the people with knowledge of the matter. So far, the foreclosure review program has cost the banks an estimated $1.5 billion, according to these people.
Banking regulators grew concerned that the reviews were not producing meaningful instances of banks wrongfully seizing the homes of borrowers who were current on their payments, according to these people.
Told last week of the plans to stop the foreclosure reviews, some consumer advocates expressed concern that the full extent of the damage to homeowners would never be known. Some of the advocates have questioned whether the banks were getting off too easily because they selected and paid the consultants charged with examining their loans.
Four people died at an Aurora, Colo., townhome early Saturday morning, including a gunman who barricaded himself inside for hours, police said.
Around 9 a.m., police said the suspect shot at officers from a second-story window. They returned fire, hitting the man. The suspect was pronounced dead in an upstairs bedroom.
Inside the home, police discovered two other men and one woman dead.
Another woman was able to escape early Saturday morning when she jumped from an upstairs window, and called police around 3 a.m., Aurora Police Sgt. Cassidee Carlson told the Denver Post. The woman, who escaped unharmed, told police she saw three bodies that "appeared lifeless," police said.
Several neighboring homes were evacuated and police sent out emergency notifications to neighbors at 3 a.m., KUSA-TV , an NBC affiliate, reported.
“After we arrived on scene, there were no more shots fired up until he fired at us,” Carlson told the Associated Press. “During this time he was all over the house. He moved furniture. He was throwing things. He was agitated. He was irrational.”
Aurora, a Denver suburb, is where a gunman killed 12 people and injured at least 70 others at a movie theater July 20.
[Updated at 1:41 p.m., Jan. 5: Carlson said in an email to the Los Angeles Times that there was no indication the four people had any connection to the theater shooting.]
Police said they told the suspect by phone and a bullhorn to exit the townhome. Police reached him by phone "intermittently" over several hours and the suspect hung up multiple times on hostage negotiators, police said.
Authorities did not release the name of the victims or suspect.
Author’s note: Most people don’t realize that we knew in the 1920s that leaded gasoline was extremely dangerous. And in light of a Mother Jones story this week that looks at the connection between leaded gasoline and crime rates in the United States, I thought it might be worth reviewing that history. The following is an updated version of an earlier post based on information from my book about early 10th century toxicology, The Poisoner’s Handbook.
In the fall of 1924, five bodies from New Jersey were delivered to the New York City Medical Examiner’s Office. You might not expect those out-of-state corpses to cause the chief medical examiner to worry about the dirt blowing in Manhattan streets. But they did.
To understand why you need to know the story of those five dead men, or at least the story of their exposure to a then mysterious industrial poison.
The five men worked at the Standard Oil Refinery in Bayway, New Jersey. All of them spent their days in what plant employees nicknamed “the loony gas building”, a tidy brick structure where workers seemed to sicken as they handled a new gasoline additive. The additive’s technical name was tetraethyl lead or, in industrial shorthand, TEL. It was developed by researchers at General Motors as an anti-knock formula, with the assurance that it was entirely safe to handle.
But, as I wrote in a previous post, men working at the plant quickly gave it the “loony gas” tag because anyone who spent much time handling the additive showed stunning signs of mental deterioration, from memory loss to a stumbling loss of coordination to sudden twitchy bursts of rage. And then in October of 1924, workers in the TEL building began collapsing, going into convulsions, babbling deliriously. By the end of September, 32 of the 49 TEL workers were in the hospital; five of them were dead.
The problem, at that point, was that no one knew exactly why. Oh, they knew – or should have known – that tetraethyl lead was dangerous. As Charles Norris, chief medical examiner for New York City pointed out, the compound had been banned in Europe for years due to its toxic nature. But while U.S. corporations hurried TEL into production in the 1920s, they did not hurry to understand its medical or environmental effects.
In 1922, the U.S. Public Health Service had asked Thomas Midgley, Jr. – the developer of the leaded gasoline process – for copies of all his research into the health consequences of tetraethyl lead (TEL).
Midgley, a scientist at General Motors, replied that no such research existed. And two years later, even with bodies starting to pile up, he had still not looked into the question. Although GM and Standard Oil had formed a joint company to manufacture leaded gasoline – the Ethyl Gasoline Corporation - its research had focused solely on improving the TEL formulas. The companies disliked and frankly avoided the lead issue. They’d deliberately left the word out of their new company name to avoid its negative image.
In response to the worker health crisis at the Bayway plant, Standard Oil suggested that the problem might simply be overwork. Unimpressed, the state of New Jersey ordered a halt to TEL production. And because the compound was so poorly understood, state health officials asked the New York City Medical Examiner’s Office to find out what had happened.
In 1924, New York had the best forensic toxicology department in the country; in fact,, it had one of the few such programs period. The chief chemist was a dark, cigar-smoking, perfectionist named Alexander Gettler, a famously dogged researcher who would sit up late at night designing both experiments and apparatus as needed.
It took Gettler three obsessively focused weeks to figure out how much tetraethyl lead the Standard Oil workers had absorbed before they became ill, went crazy, or died. “This is one of the most difficult of many difficult investigations of the kind which have been carried on at this laboratory,” Norris said, when releasing the results. “This was the first work of its kind, as far as I know. Dr. Gettler had not only to do the work but to invent a considerable part of the method of doing it.”
Working with the first four bodies, then checking his results against the body of the last worker killed, who had died screaming in a straitjacket, Gettler discovered that TEL and its lead byproducts formed a recognizable distribution, concentrated in the lungs, the brain, and the bones. The highest levels were in the lungs suggesting that most of the poison had been inhaled; later tests showed that the types of masks used by Standard Oil did not filter out the lead in TEL vapors.
Rubber gloves did protect the hands but if TEL splattered onto unprotected skin, it absorbed alarmingly quickly. The result was intense poisoning with lead, a potent neurotoxin. The loony gas symptoms were, in fact, classic indicators of heavy lead toxicity.
After Norris released his office’s report on tetraethyl lead, New York City banned its sale, and the sale of “any preparation containing lead or other deleterious substances” as an additive to gasoline. So did New Jersey. So did the city of Philadelphia. It was a moment in which health officials in large urban areas were realizing that with increased use of automobiles, it was likely that residents would be increasingly exposed to dangerous lead residues and they moved quickly to protect them.
But fearing that such measures would spread, that they would be forced to find another anti-knock compound, as well as losing considerable money, the manufacturing companies demanded that the federal government take over the investigation and develop its own regulations. U.S. President Calvin Coolidge, a Republican and small-government conservative, moved rapidly in favor of the business interests.
The manufacturers agreed to suspend TEL production and distribution until a federal investigation was completed. In May 1925, the U.S. Surgeon General called a national tetraethyl lead conference, to be followed by the formation of an investigative task force to study the problem. That same year, Midgley published his first health analysis of TEL, which acknowledged a minor health risk at most, insisting that the use of lead compounds,”compared with other chemical industries it is neither grave nor inescapable.”
It was obvious in advance that he’d basically written the conclusion of the federal task force. That panel only included selected industry scientists like Midgely. It had no place for Alexander Gettler or Charles Norris or, in fact, anyone from any city where sales of the gas had been banned, or any agency involved in the producing that first critical analysis of tetraethyl lead.
In January 1926, the public health service released its report which concluded that there was “no danger” posed by adding TEL to gasoline…”no reason to prohibit the sale of leaded gasoline” as long as workers were well protected during the manufacturing process.
The task force did look briefly at risks associated with every day exposure by drivers, automobile attendants, gas station operators, and found that it was minimal. The researchers had indeed found lead residues in dusty corners of garages. In addition, all the drivers tested showed trace amounts of lead in their blood. But a low level of lead could be tolerated, the scientists announced. After all, none of the test subjects showed the extreme behaviors and breakdowns associated with places like the looney gas building. And the worker problem could be handled with some protective gear.
There was one cautionary note, though. The federal panel warned that exposure levels would probably rise as more people took to the roads. Perhaps, at a later point, the scientists suggested, the research should be taken up again. It was always possible that leaded gasoline might “constitute a menace to the general public after prolonged use or other conditions not foreseen at this time.”
But, of course, that would be another generation’s problem. In 1926, citing evidence from the TEL report, the federal government revoked all bans on production and sale of leaded gasoline. The reaction of industry was jubilant; one Standard Oil spokesman likened the compound to a “gift of God,” so great was its potential to improve automobile performance.
In New York City, at least, Charles Norris decided to prepare for the health and environmental problems to come. He suggested that the department scientists do a base-line measurement of lead levels in the dirt and debris blowing across city streets. People died, he pointed out to his staff; and everyone knew that heavy metals like lead tended to accumulate. The resulting comparison of street dirt in 1924 and 1934 found a 50 percent increase in lead levels – a warning, an indicator of damage to come, if anyone had been paying attention.
It was some fifty years later – in 1986 – that the United States formally banned lead as a gasoline additive. By that time, according to some estimates, so much lead had been deposited into soils, streets, building surfaces, that an estimated 68 million children would register toxic levels of lead absorption and some 5,000 American adults would die annually of lead-induced heart disease. As lead affects cognitive function, some neuroscientists also suggested that chronic lead exposure resulted in a measurable drop in IQ scores during the leaded gas era. And more recently, of course, researchers had suggested that TEL exposure and resulting nervous system damage may have contributed to violent crime rates in the 20th century.
Images: 1) Manhattan, 34th Street, 1931/NYC Municipal Archives 2) 1940s gas station, US Route 66, Illinois/Deborah Blum
(Reuters) – As political experts assess Republican Mitt Romney‘s failed U.S. presidential bid, an analysis of how his campaign and President Barack Obama‘s winning team used cable TV to target ads at specific groups of voters may offer some valuable tips for the future.
During the final weeks before the November 6 election, with polls showing a tight race, Obama’s campaign exploited cable TV’s diverse lineup to target women on channels such as Food Network and Lifetime and men on networks such as ESPN.
The Obama team used the fragmentation of cable TV’s audience to its fullest advantage to target tailored messages to voters in battleground states.
Meanwhile, Romney’s campaign relied on a more traditional mass saturation of broadcast TV. The Romney camp was entirely dark on cable TV for two of the campaign’s last seven days.
“We don’t know why. This was a week before the election and you’re in the fight for your life,” said Timothy Kay, political director for NCC Media, a cable TV industry consortium.
The race had narrowed to key counties in several battleground states, the kind of isolation ideally suited for cable’s geographical targeting and niche-marketing capabilities.
Republican Party operatives dismayed by Romney’s defeat continue to debate what went wrong in a campaign awash in cash and run by a candidate with a business background. The former Massachusetts governor’s campaign, like Democrat Obama‘s, spent a record-setting amount of cash; in Romney’s case, it was $ 580 million in 20 months.
Obama’s campaign outspent Romney’s campaign on advertising by as much as $ 200 million, according to a Reuters analysis. But when spending by pro-Romney and pro-Obama outside groups is considered, Romney had the edge in overall TV advertising spending.
Republican consultants and advertising experts said Romney had enough money to compete with Obama’s final advertising effort. Yet Obama cruised to a commanding Electoral College victory after a final concentration on a small group of battleground states.
“In market after market, the Obama campaign ended up putting more ads on target than the Romney campaign did,” said Ken Goldstein, president of Kantar Media’s Campaign Media Analysis Group, a nonpartisan consulting firm that tracked political ads and worked with both campaigns.
Stephanie Kincaid, who managed Romney’s advertising campaign, declined to answer questions and referred inquiries to top Romney campaign officials Stuart Stevens and Russell Schriefer, her bosses at The Stevens and Schriefer Group, a political consulting firm. They did not respond to phone calls.
OBAMA’S ADVANTAGE
Cable television political advertising jumped from $ 136 million in 2006 to $ 650 million in 2012, although broadcast TV still garnered 80 percent of the campaign advertising spending last year.
Even with major broadcast networks and their affiliates, the Obama campaign appeared to out-perform the Romney camp.
A campaign spending review shows the Obama camp frequently spent far less than Romney for ads aired by the same stations during the same shows.
For example, a review of TV station filings with the Federal Communications Commission showed Romney, on the Sunday before Election Day, paid $ 1,100 for an ad aired during CBS’s “Face the Nation” program on WRAL in Raleigh, North Carolina. Obama paid $ 200 for a comparable ad on the same station during the same program.
Part of the reason for the Obama campaign’s pricing advantage is that the president faced no Democratic primary challenge and was able to buy autumn TV time months in advance when the slots – like airline tickets – were discounted. Romney faced a tough battle for the Republican nomination.
The Romney campaign also simply did not have enough bodies to handle the labor-intensive business of planning, negotiating and placing ads on hundreds of TV stations simultaneously, according to several Republican consultants and media analysts who asked not to be identified.
Obama’s campaign had 30 full-time media buyers. The Romney campaign relied heavily on a single person, Kincaid, with help from one or two others from time to time, according to sources close to the campaign. Senior officials with the campaign declined to discuss its advertising staffing.
“It’s the equivalent of having a budget the size of a Coca- Cola commercial campaign and having two people managing it, where a Madison Avenue agency might have 50 people,” said NCC’s Kay. Kincaid and her small staff were overwhelmed, according to numerous political vendors who dealt with them.
Jim Margolis, an Obama campaign senior adviser whose firm GMMB handled its advertising, said the campaign also took advantage of information provided by companies like Rentrak Corp, a Portland, Oregon-based company that monitors the digital boxes attached to TVs in households using satellite dishes.
EXPLOITING FRAGMENTATION
In the past, political advertisers relied on the major networks rather than cable TV in a quest to reach the most television viewers.
But cable TV’s increasing popularity has brought dramatic fragmentation to television viewership. In many markets, cable offers a hundred or more channels, giving advertisers a chance to target specific demographics.
For instance, the Obama campaign identified zip codes surrounding Ohio tire-manufacturing plants and purchased cable ads touting Obama’s efforts to block tire imports from China.
Obama ran 600,000 cable ads to the Romney’s 300,000 around the nation during the campaign, said NCC’s Kay. Obama’s cable TV push started in April. Romney’s began in September.
Obama’s team also mixed and matched its messages to sharpen the appeal in key counties.
“My impression was there was much more examination and analytics done with the Obama campaign,” Kay said. “The Romney campaign had the same rigid schedule in every state.”
(Reporting by Marcus Stern in Washington and Tim McLaughlin in Boston; Editing by Claudia Parsons, Marilyn W. Thompson and Will Dunham)
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One consequence of our elders’ extended lifespans is that we half expect them to keep chugging along forever. My father, a busy yoga practitioner and blackjack player, celebrated his 90th birthday in September in reasonably good health.
So when I had the sad task of letting people know that Murray Span died on Dec. 8, after just a few days’ illness, the primary response was disbelief. “No! I just talked to him Tuesday! He was fine!”
And he was. We’d gone out for lunch on Saturday, our usual routine, and he demolished a whole stack of blueberry pancakes.
But on Wednesday, he called to say he had bad abdominal pain and had hardly slept. The nurses at his facility were on the case; his geriatrician prescribed a clear liquid diet.
Like many in his generation, my dad tended towards stoicism. When he said, the following morning, “the pain is terrible,” that meant agony. I drove over.
His doctor shared our preference for conservative treatment. For patients at advanced ages, hospitals and emergency rooms can become perilous places. My dad had come through a July heart attack in good shape, but he had also signed a do-not-resuscitate order. He saw evidence all around him that eventually the body fails and life can become a torturous series of health crises and hospitalizations from which one never truly rebounds.
So over the next two days we tried to relieve his pain at home. He had abdominal x-rays that showed some kind of obstruction. He tried laxatives and enemas and Tylenol, to no effect. He couldn’t sleep.
On Friday, we agreed to go to the emergency room for a CT scan. Maybe, I thought, there’s a simple fix, even for a 90-year-old with diabetes and heart disease. But I carried his advance directives in my bag, because you never know.
When it is someone else’s narrative, it’s easier to see where things go off the rails, where a loving family authorizes procedures whose risks outweigh their benefits.
But when it’s your father groaning on the gurney, the conveyor belt of contemporary medicine can sweep you along, one incremental decision at a time.
All I wanted was for him to stop hurting, so it seemed reasonable to permit an IV for hydration and pain relief and a thin oxygen tube tucked beneath his nose.
Then, after Dad drank the first of two big containers of contrast liquid needed for his scan, his breathing grew phlegmy and labored. His geriatrician arrived and urged the insertion of a nasogastric tube to suck out all the liquid Dad had just downed.
His blood oxygen levels dropped, so there were soon two doctors and two nurses suctioning his throat until he gagged and fastening an oxygen mask over his nose and mouth.
At one point, I looked at my poor father, still in pain despite all the apparatus, and thought, “This is what suffering looks like.” I despaired, convinced I had failed in my most basic responsibility.
“I’m just so tired,” Dad told me, more than once. “There are too many things going wrong.”
Let me abridge this long story. The scan showed evidence of a perforation of some sort, among other abnormalities. A chest X-ray indicated pneumonia in both lungs. I spoke with Dad’s doctor, with the E.R. doc, with a friend who is a prominent geriatrician.
These are always profound decisions, and I’m sure that, given the number of unknowns, other people might have made other choices. Fortunately, I didn’t have to decide; I could ask my still-lucid father.
I leaned close to his good ear, the one with the hearing aid, and told him about the pneumonia, about the second CT scan the radiologist wanted, about antibiotics. “Or, we can stop all this and go home and call hospice,” I said.
He had seen my daughter earlier that day (and asked her about the hockey strike), and my sister and her son were en route. The important hands had been clasped, or soon would be.
He knew what hospice meant; its nurses and aides helped us care for my mother as she died. “Call hospice,” he said. We tiffed a bit about whether to have hospice care in his apartment or mine. I told his doctors we wanted comfort care only.
As in a film run backwards, the tubes came out, the oxygen mask came off. Then we settled in for a night in a hospital room while I called hospices — and a handyman to move the furniture out of my dining room, so I could install his hospital bed there.
In between, I assured my father that I was there, that we were taking care of him, that he didn’t have to worry. For the first few hours after the morphine began, finally seeming to ease his pain, he could respond, “OK.” Then, he couldn’t.
The next morning, as I awaited the hospital case manager to arrange the hospice transfer, my father stopped breathing.
We held his funeral at the South Jersey synagogue where he’d had his belated bar mitzvah at age 88, and buried him next to my mother in a small Jewish cemetery in the countryside. I’d written a fair amount about him here, so I thought readers might want to know.
We weren’t ready, if anyone ever really is, but in our sorrow, my sister and I recite this mantra: 90 good years, four bad days. That’s a ratio any of us might choose.
Paula Span is the author of “When the Time Comes: Families With Aging Parents Share Their Struggles and Solutions.”
Poor and homeless people waited for food on Tuesday at a New Delhi temple.
NEW DELHI — India has more poor people than any nation on earth, but many of its antipoverty programs end up feeding the rich more than the needy. A new program hopes to change that.
On Jan. 1, India eliminated a raft of bureaucratic middlemen by depositing government pension and scholarship payments directly into the bank accounts of about 245,000 people in 20 of the nation’s hundreds of districts, in a bid to prevent corrupt state and local officials from diverting much of the money to their own pockets. Hundreds of thousands more people will be added to the program in the coming months.
In a country of 1.2 billion, the numbers so far are modest, but some officials and economists see the start of direct payments as revolutionary — a program intended not only to curb corruption but also to serve as a vehicle for lifting countless millions out of poverty altogether.
The nation’s finance minister, Palaniappan Chidambaram, described the cash transfer program to Indian news media as a “pioneering and pathbreaking reform” that is a “game changer for governance.” He acknowledged that the initial rollout had been modest because of “practical difficulties, some quite unforeseen.” He promised that those problems would be resolved before the end of 2013, when the program is to be extended in phases to other parts of the country.
Some critics, however, said the program was intended more to buy votes among the poor than to overcome poverty. And some said that in a country where hundreds of millions have no access to banks, never mind personal bank accounts, direct electronic money transfers are only one aspect of a much broader effort necessary to build a real safety net for India’s vast population.
“An impression has been created that the government is about to launch an ambitious scheme of direct cash transfers to poor families,” Jean Drèze, an honorary professor at the Delhi School of Economics, wrote in an e-mail. “This is quite misleading. What the government is actually planning is an experiment to change the modalities of existing transfers — nothing more, nothing less.”
The program is based on models in Mexico and Brazil in which poor families receive stipends in exchange for meeting certain social goals, like keeping their children in school or getting regular medical checkups. International aid organizations have praised these efforts in several places; in Brazil alone, nearly 50 million people participate.
But one of India’s biggest hurdles is simply figuring out how to distinguish its 1.2 billion citizens. The country is now in the midst of another ambitious project to undertake retinal and fingerprint scans in every village and city in the hope of giving hundreds of millions who have no official identification a card with a 12-digit number that would, among other things, give them access to the modern financial world. After three years of operation, the program has issued unique numbers to 220 million people.
Bindu Ananth, the president of IFMR Trust, a financial charity, said that getting people bank accounts can be surprisingly beneficial because the poor often pay stiff fees to cash checks or get small loans, fees that are substantially reduced for account holders.
“I think this is one of the biggest things to happen to India’s financial system in a decade,” Ms. Ananth said.
Only about a third of Indian households have bank accounts. Getting a significant portion of the remaining households included in the nation’s financial system will take an enormous amount of additional effort and expense, at least part of which will fall on the government to bear, economists said.
“There are two things this cash transfer program is supposed to do: prevent leakage from corruption, and bring everybody into the system,” said Surendra L. Rao, a former director general of the National Council of Applied Economic Research. “And I don’t see either happening anytime soon.”
The great promise of the cash transfer program — as well as its greatest point of contention — would come if it tackled India’s expensive and inefficient system for handing out food and subsidized fuel through nearly 50,000 government shops.
India spends almost $14 billion annually on this system, or nearly 1 percent of its gross domestic product, but the system is poorly managed and woefully inefficient.
Fear of embarrassment and budget cuts led California parks officials to intentionally conceal millions of dollars in a department account, according to an investigation conducted by the state attorney general's office.
The report, released Friday, is the most detailed official narrative yet regarding the root of the accounting scandal at the parks department.
The scandal broke last summer when it was revealed that the parks department had a hidden surplus of nearly $54 million even though it was threatening to close dozens of facilities.
About $20 million was found in an account where entrance fees and other revenues are deposited. Accounting discrepancies appeared to begin innocently more than a decade ago, leading to fluctuating reports on how much money was in the fund, investigators said.
But in 2002, when the problems were identified, parks officials made a "conscious and deliberate" decision not to reveal the money to officials at the Department of Finance, which plans the state budget.
Multiple high-ranking officials were involved, including the former chief deputy director, Michael Harris, who later lost his job over the scandal. However, the report said it remained unclear whether ousted director Ruth Coleman knew about the accounting problems. Coleman declined to be interviewed for the investigation.
Parks officials didn't report the money because they were concerned that their already reduced budget would be cut even further if the state's number-crunchers knew they had more money in a department account, the report said. Interviews conducted by investigators also showed that officials feared embarrassment if the accounting problems were revealed.
"Throughout this period of intentional non-disclosure, some parks employees consistently requested, without success, that their superiors address the issue," the report said. It wasn't until a new deputy director was installed at the parks department in January 2012 was the issue reported.
Richard Stapler, a spokesman for the California Natural Resources Agency, said officials are still determining whether the investigation will result in criminal charges.
John Laird, the resources secretary, said new policies and staff are in place to prevent similar problems in the future.
"It is now clear that this is a problem that could have been fixed by a simple correction years ago, instead of being unaddressed for so long that it turned into a significant blow to public trust in government," Laird, who oversees the parks department, said in a statement.
The rest of the $54 million was found in an account for off-road vehicle parks. Investigators said accounting discrepancies there appeared to be unintentional, and the result of various bookkeeping problems involving loans and tax changes.
For example, a 2010 modification to the gas tax mistakenly pumped millions of excess dollars into the off-road account, the report said. That problem has been fixed and the money has been reallocated, according to the Department of Finance.
The investigation from the attorney general's office is the third review of the parks department in recent weeks. One more report, from the state auditor, is expected to be released.
In reading the coverage of the FTC announcement that it was not going to pursue any real action against Google for favoritism of its own products in the web search market, I was surprised to see how few commentators have raised the point that there can’t be a search “market” when no one pays for that service. And that the users of web search are, in fact, the product that Google sells to the consumers of the market it does monopolize — online advertising. Or the fact that by using its advertising revenues to provide services to users for free or greatly discounted it can collapse those markets and own them as well.
For over a year and a half, many experts who follow the internet economy have wisely pointed out that the real consumers in the online search business are advertisers, not the users who interact with the search engine. One of the most profound “aha” moments for me came when I read Nathan Newman’s article “You’re Not Google’s Customer — You’re the Product: Antitrust in a Web 2.0 World” back in March 2011. He correctly argued that web browser users who interact with Google search are in fact the product that gets sold to the real customer — the online advertiser.
Given that no money changes hands between a web user and Google or any other web search engine provider, there is no search engine market. The information provided by the user is collected by Google and used to match the user with paid ads. The revenue event takes place when the user clicks on a link to an advertiser’s website and at that point, the monetary transaction takes place — between Google and the advertiser. In Newman’s most recent article (FTC “Brought Forth a Couple of Mice” in Slapping Google on the Wrist), he makes many of the same points again.
So for the FTC to consider the users of search engines as consumers, when these users do not pay for the web search session, seems incredibly misguided. It is not surprising that the FTC had a tough time determining harm to the consumer when they have been looking at the wrong consumer all this time.
Yet, there are at least two areas where there is a clear consumer-provider relationship, where there is evidence of harm and yet the FTC has completely ignored the markets.
Advertisers Are Harmed by Google’s Search Monopoly
While web search engine users pay nothing to conduct an online search, advertisers pay dearly for premier ad placement beside the search results in the hope that the user will click on their link, go to their site and buy their product or service. This is a great model since end users are matched up with relevant ads based on the keywords that are used in the search. Yet there is a dark side to this model. Given that Google has a monopoly position in online search, advertisers really have no other choice when it comes to buying effective online ads. As more advertisers use Google AdWords, the cost per click for each keyword goes up as more companies vie for user eyeballs. This scramble for placement “above the fold” drives the price for keywords ever higher in a land grab for attention. With no other viable alternative for search engine advertising, the prices spiral upward at alarming rates. The result is that advertisers pay more and more for advertising while getting no improvement in the quality of click-throughs. And Google sits back and simply collects the cash.
I know for my own business, the cost per click for Google AdWords has gone up substantially over the last six years. I spend more on AdWords now than I do for healthcare plans (and we all know how expensive healthcare plans are).
The New York Times ran a very interesting series on this phenomenon. In the words of Sharon Geltner, an analyst at the Small Business Development Center, “AdWords can bleed many a small business dry.”
Plus you now have a situation where Google is entering new markets and is able to give its new offerings free prime advertising placement while its competitors have to pay substantial fees for similar placement. Just try doing a Google search for “smartphone” or “cloud computing” or “web apps” and see where Google’s ads appear. Note that this is subtly different than the search bias that the FTC looked into. In my opinion, this is much worse.
So for advertisers, you could definitely build a case that Google is harming consumers (i.e., businesses placing ads) by exploiting its monopoly in the web search space to drive up the price of advertising. But it appears the FTC does not care about this type of “consumer.”
Google Apps Customers Will Ultimately Be Harmed
While advertising makes up 96 percent of Google’s revenue, Google does generate some revenue selling Google Apps to business, education and government customers. Many customers have welcomed the extremely low (or even free as is the case in education) per-user prices that Google charges for Google Apps which includes Gmail, Drive and other cloud-based services. Yet again, there is a dark side to this model. Google is running a well-known tactic of using profits from a monopoly business (online advertising) to subsidize a low-priced offering in an adjacent market (cloud-based productivity applications such as e-mail and document management) with the goal of driving out competitors who are not able to cross-subsidize their offerings. At the moment, consumers only see the short-term positive side, which is lower pricing. But once the other competitors are driven out of the new market, Google will be left as the only competitor and will be free to raise prices, dictate the features or reduce investment – all of which will ultimately harm consumers.
There are other areas of potential harm to these consumers related to privacy and the use of personal user or business information in order to enhance Google’s advertising business. This is particularly an issue for government customers who are storing sensitive government and taxpayer data in these services. Many, including myself, have written about these data protection issues and this has been an area of focus for regulators around the world.
Again, the FTC has passed up the opportunity to investigate these Google consumer relationships and the potential long-term harm of Google’s business practices.
With the FTC case closed, the ball is now in the court of European regulators and many state attorneys general. It will be interesting to see if these regulators “get it” and will focus on the harm to the real consumers of Google’s offerings: advertisers and Google Apps customers.
Doug Miller is an independent IT consultant who specializes in cloud computing, enterprise migration, mobility and competitive strategy. He is a regular contributor to SafeGov.org and NewInformationEconomy.com.
LOS ANGELES (Reuters) – Oscar-winning actress Helen Mirren finally got her wish on Thursday, receiving a star along the Hollywood Walk of Fame right next to dashing fellow Briton Colin Firth.
“I couldn’t be prouder and more happy that I’m actually going to finally lie next to Colin Firth, something I’ve been wanting to do for a very long time,” Mirren said wryly.
Mirren, 67, who won the best actress Oscar for her portrayal of Queen Elizabeth in 2006′s “The Queen,” was honored with the iconic terrazzo and brass star along Hollywood Boulevard in the historical heart of the U.S. film industry.
Mirren’s star, the 2,488th since the Walk of Fame began in 1958, serves as a de facto lifetime achievement award for those in the entertainment industry.
Firth, who received his Walk of Fame star in 2011, won an Oscar as best actor for his portrayal of Britain’s King George VI in 2010′s “The King Speech.”
“Well I’m very pleased and proud and I think it’s very good for the British monarchy that here on Hollywood Boulevard, the King and the Queen are going to actually sleep together, for the rest of history,” said Mirren said at the unveiling.
The actress posed for photographers lying on her side next to her star and blew kisses to the crowd.
Writer and director David Mamet introduced Mirren.
“Helen’s performances reap higher praise than being praised, they’re loved,” Mamet said.
“And by one who’s had the absolute kick of working with her, I want to say as (British poet) Rupert Brooke said, somewhere there will be a little piece of foreign ground that is always a bit of England, and that’s right there,” Mamet said.
Mirren is starring alongside Al Pacino in Mamet’s upcoming TV film about troubled music producer Phil Spector’s murder trial.
The Hollywood Walk of Fame is administered by the Hollywood Chamber of Commerce.
(Reporting by Alan Devall, writing by Eric Kelsey, editing by Jill Serjeant and Sandra Maler)
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The Food and Drug Administration on Friday proposed two sweeping rules aimed at preventing the contamination of produce and processed foods, taking a long-awaited step toward codifying the food safety law that Congress passed two years ago.
Nicole Bengiveno/The New York Times
A new rule imposed by the F.D.A. would establish different standards for ensuring the purity of water that touches fruits and vegetables.
The proposed rules represent a sea change in the way the agency polices food, a process that currently involves swinging into action after food contamination has been identified rather than protecting against it before it hits grocery shelves.
“These new rules really set the basic framework for a modern, science-based approach to food safety and shifts us from a strategy of reacting to problems to a strategy for preventing problems,” Michael R. Taylor, deputy commissioner for foods and veterinary medicine at the F.D.A., said in an interview.
The F.D.A. is responsible for the safety of about 80 percent of the food that the nation consumes. The remainder of the burden falls to the Department of Agriculture, which is responsible for meat, poultry and some eggs. One in six Americans becomes ill from eating contaminated food each year, the government estimates; of those, roughly 130,000 are hospitalized and 3,000 die.
Congress passed the groundbreaking Food Safety Modernization Act in 2010 after a wave of incidents involving tainted eggs, peanut butter and spinach sickened thousands of people and led major food makers to join consumer advocates in demanding stronger government oversight.
But it took the Obama administration two years to move the rules through the F.D.A., prompting accusations by advocates that the White House was more concerned about protecting itself from Republican criticism than about public safety.
Mr. Taylor said, however, that the delay was a function of the wide variety of foods that the rules had to encompass and the complexity of the food system. “Anything that is important and complicated will always take longer than you would like,” he said.
The first rule would require manufacturers of processed foods sold in the United States to identify, adopt and carry out measures to reduce the risk of contamination. Food companies also would be required to have a plan for correcting any problems that might arise and for keeping records that F.D.A. inspectors could use for audit purposes.
One such preventive measure might be the roasting of raw peanuts at a temperature guaranteed to kill salmonella bacteria, which has been a problem in nut butters in recent years. Roasted nuts might then be sequestered from incoming raw nuts to further reduce the risk of contamination, said Sandra B. Eskin, director of the safe food campaign at the Pew Charitable Trusts.
“This is very good news for consumers,” Ms. Eskin said. “We applaud the administration’s action, which demonstrates its strong commitment to making our food safer.”
The second rule would apply to the harvesting and production of fruits and vegetables in an effort to combat the bacterial contamination that has arisen over the last decade, particularly from E. coli, a bacterium that is transmitted through feces. It would address what advocates refer to as the “four Ws” — water, waste, workers and wildlife.
Farmers would establish different standards for ensuring the purity of water that touches, say, lettuce leaves and the water used to saturate soil, which will only nourish plants through their roots.
A farm or plant where vegetables are packaged might, for example, add lavatories to ensure that workers do not urinate in fields and post signs similar to those in restaurants that remind employees to wash their hands.
The food industry cautiously applauded the arrival of the proposed rules, with most companies and industry groups noting that they would be poring over them and making comments as necessary in the coming weeks.
“Consumers expect industry and government to work together to provide Americans and consumers around the world with the safest possible products,” the Grocery Manufacturers Association said in a statement. “FSMA and its implementation effort can serve as a role model for what can be achieved when the private and public sectors work together to achieve a common goal.”
The association noted that the F.D.A. will have to issue more than 50 regulations to fully carry out the new law.
