THE BURNED OVER DISTRICT

Wells Fargo & Co. is the nation’s leader in selling add-on services to its customers. The San Francisco bank, which has its East Coast headquarters in Charlotte, brags in earnings reports of its prowess in “cross-selling” financial products such as checking and savings accounts, credit cards, mortgages and wealth management. In addition to generating fees and profits, those services keep customers tied to the bank and less likely to jump to competitors.

But that success has come at a cost. The relentless pressure to sell has battered employee morale and led to ethical breaches, customer complaints and labor lawsuits, a Los Angeles Times investigation has found.

To meet quotas, employees have opened unneeded accounts for customers, ordered credit cards without customers’ permission and forged client signatures on paperwork. Some employees begged family members to open ghost accounts.

These conclusions emerge from a review of internal bank documents and court records, and from interviews with 28 former and seven current Wells Fargo employees who worked at bank branches in nine states.

Erick Estrada, a former Wells Fargo personal banker and business specialist at a Los Angeles branch, said managers there coached workers on how to inflate sales numbers.

Employees opened duplicate accounts, sometimes without customers’ knowledge, he said. Workers also used a bank database to identify customers who had been pre-approved for credit cards – then ordered the plastic without asking them, Estrada said.

“They’d just tell the customers: ‘You’re getting a credit card,’ ” Estrada said. He admitted to opening unneeded accounts, though never without a customer’s knowledge, he said.

When customers complained about the unwanted credit cards, the branch manager would blame a computer glitch or say the card had been requested by someone with a similar name, Estrada said.

One former branch manager who worked in the Pacific Northwest described her dismay at discovering that employees had talked a homeless woman into opening six checking and savings accounts with fees totaling $39 a month.

“It’s all manipulation. We are taught exactly how to sell multiple accounts,” the former manager said. “It sounds good, but in reality it doesn’t benefit most customers.”

Like many other workers interviewed by the Times, she requested anonymity, citing a fear of retribution from Wells Fargo or difficulty finding employment at other financial institutions.

The former manager said she helped the homeless woman close all but one account, which was needed for direct deposit of her Social Security disability benefits. She said she reported the situation to her boss, but never heard of any action taken by the bank.

Wells Fargo officials said they make ethical conduct a priority and punish or fire employees who don’t serve customers properly. They acknowledged the bank’s strong focus on selling, but said it is intended to benefit customers by identifying their needs.

“I’m not aware of any overbearing sales culture,” Chief Financial Officer Timothy Sloan said in an interview.

// posted by montag @ 7:38 PM 0 Comments

The conflict in Afghanistan has become the most unpopular in American history, a new poll shows, as U.S. and Afghan negotiators missed a deadline Tuesday to reach an agreement on whether U.S. troops can remain in the country after the official 2014 pullout of foreign forces.

About 82 percent of Americans don’t support the war in Afghanistan, according to a CNN-ORC poll released Monday. That’s up from around 46 percent in 2009. Those figures make America’s controversial conflicts in Iraq and even Vietnam seem relatively popular.

"Opposition to the Iraq war never got higher than 69% in CNN polling while U.S. troops were in that country, and while the Vietnam War was in progress, no more than six in 10 ever told Gallup's interviewers that war was a mistake,” said CNN’s Polling Director Keating Holland.

The United States had set a Tuesday deadline for Afghanistan to sign the pact but the White House has said it is prepared to let the deadline slip until early January.

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Amendment 64, the ballot initiative passed by voters in November 2012 that essentially legalizes marijuana, permits employers to prohibit its use both on and off the job.

Pot proponents said that’s an unfair double standard.

“No business would ever fire an employee simply because they had a couple beers over the weekend or a cocktail after work,” said marijuana advocate Mason Tvert. “So there’s really no logical reason why an employee should be fired just for using marijuana over the weekend — which is a far less harmful substance.”

But Tvert admits there is legal justification for the discrepancy.

“It’s currently still illegal under federal law to use marijuana and until that changes, they’re going to have that right,” said Tvert.

Employers also have legal precedent on their side.

A Colorado appeals court upheld the 2010 firing by Dish Network of a man who legally smoked medical marijuana while off duty. That case is now being heard by the Colorado Supreme Court.

Because random drug tests can’t determine exactly when marijuana was consumed, and the drug can remain in the human body for 30 days or more, off-duty pot use can put workers in jeopardy.

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When Mr. Bloomberg leaves office at midnight Tuesday, he will bequeath a litany of record-shattering statistics on crime reduction, sidewalk safety and skyline-altering construction. But perhaps the most staggering figure is the amount of his own money that he devoted, day in and day out, to being mayor — much of it unseen by the public.

An analysis by The New York Times shows that Mr. Bloomberg has doled out at least $650 million on a wide variety of perks and bonuses, political campaigns and advocacy work, charitable giving and social causes, not to mention travel and lodging, connected to his time and role as mayor. (His estimated tab for a multiday trip to China, with aides and security in tow: $500,000.)

In the process, he has entirely upended the financial dynamics surrounding New York’s top job.

In the past, the city paid its mayor; Mr. Bloomberg paid to be the city’s mayor.

In moves that would make a financial planner’s head spin, he rejected the $2.7 million worth of salary to which he was entitled (accepting just $1 a year) and, starting in 2001, turned on a spigot of cash that has never stopped gushing. He poured at least $268 million of his personal funds into three campaigns for mayor.

He donated at least another $263 million to New York arts, civic, health and cultural groups, personally and through his company, Bloomberg LP.

Campaign donations? He handed out about $23 million of them.

He even chipped in $5 million to renovate an official mayoral residence that he never inhabited. (He preferred the familiar privacy of his own nearby mansion.)

“A modern Medici” is how Mark Green, the former public advocate, described him, reaching back to 15th-century Italy for any kind of precedent.

Mr. Bloomberg’s all-expense-paid mayoralty was, depending on the vantage point, exhilarating (for his aides), infuriating (for his rivals) cost-saving (for his constituents) or selfless (for the beneficiaries of his largess).

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In a statement, the ACLU, which brought the lawsuit after former NSA leaker Edward Snowden brought the program to light, said it would appeal the case.

“We are extremely disappointed with this decision, which misinterprets the relevant statutes, understates the privacy implications of the government’s surveillance and misapplies a narrow and outdated precedent to read away core constitutional protections,” said Jameel Jaffer, an ACLU deputy legal director.

Justice Department spokesman Peter Carr said the government is “pleased the court found the NSA’s bulk telephony metadata collection program to be lawful.

President Barack Obama suggested last week that he could make significant changes to the government’s vast surveillance programs, including the contentious mass collection of phone records. He said he will make a “definitive statement” about the programs next month after considering his options during a two-week family vacation in Hawaii.

Obama could administer some of the recommendations through executive actions, but others would require approval from a divided Congress, where support for NSA changes does not fall strictly along party lines.

Rep. Peter King, chairman of Homeland Security Subcommittee on Counterintelligence & Terrorism, called today’s decision "a victory for the patriotic men and women of the NSA" and "preserves a vital weapon for the United States in our war against international terrorism."

In a 53-page opinion, U.S. District Judge William Pauley said Friday the legality of the phone records program is “ultimately a question of reasonableness” under the Fourth Amendment and is a valid government response to try to eliminate the al-Qaeda terrorist network.

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A new American intelligence assessment on the Afghan war predicts that the gains the United States and its allies have made during the past three years are likely to have been significantly eroded by 2017, even if Washington leaves behind a few thousand troops and continues bankrolling the impoverished nation, according to officials familiar with the report.

The National Intelligence Estimate, which includes input from the country’s 16 intelligence agencies, predicts that the Taliban and other power brokers will become increasingly influential as the United States winds down its longest war in history, according to officials who have read the classified report or received briefings on its conclusions. The grim outlook is fueling a policy debate inside the Obama administration about the steps it should take over the next year as the U.S. military draws down its remaining troops.

The report predicts that Afghanistan would likely descend into chaos quickly if Washington and Kabul don’t sign a security pact that would keep an international military contingent there beyond 2014 — a precondition for the delivery of billions of dollars in aid that the United States and its allies have pledged to spend in Afghanistan over the coming years.

“In the absence of a continuing presence and continuing financial support,” the intelligence assessment “suggests the situation would deteriorate very rapidly,” said one U.S. official familiar with the report.

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In 2010, John F. McKeon, a New Jersey assemblyman, made what he thought was a mild comment on a radio program: Some of the public employees that Gov. Chris Christie was then vilifying had been some of the governor’s biggest supporters.

He was surprised to receive a handwritten note from Mr. Christie, telling him he had heard the comments, and that he didn’t like them.

“I thought it was a joke,” Mr. McKeon recalled. “What governor would take the time to write a personal note over a relatively innocuous comment?”...

In 2011, Mr. Christie held a news conference where he accused State Senator Richard J. Codey of being “combative and difficult” in blocking two nominees. Mr. Codey, a Democrat who had served as governor following the resignation of James E. McGreevey, responded by noting that he had not only signed off on the nominations, but had held a meeting to try to hurry them along.

Three days later, Mr. Codey was walking out of an event in Newark when he got a call from the state police superintendent informing him that he would no longer be afforded the trooper who accompanied him to occasional public events — a courtesy granted all former governors. That same day, his cousin, who had been appointed by Mr. McGreevey to the Port Authority of New York and New Jersey, was fired, as was a close friend and former deputy chief of staff who was then working in the state Office of Consumer Affairs.

“I understand politics, that a new administration comes in,” Mr. Codey said. “But this wasn’t about the usual he brings his own people in. This was all about sending a message.”...

Later that year, the governor was pressing hard on Alan Rosenthal, the Rutgers political scientist whom Republicans and Democrats had chosen as the tiebreaking member of the commission that was redistricting the state’s legislative districts. Mr. Christie wanted Mr. Rosenthal to vote for the map put forward by the Republicans on the commission, but instead he chose the Democrats’ plan, saying it offered more stability. That summer, Mr. Christie used his line-item veto to cut $169,000 for two programs at Mr. Rosenthal’s institute at Rutgers.

// posted by montag @ 2:04 PM 0 Comments

At least a dozen “super PACs” are setting up to back individual Republican candidates for the United States Senate, challenging the strategic and financial dominance that Karl Rove and the group he co-founded, American Crossroads, have enjoyed ever since the Supreme Court’s Citizens United decision in 2010 cleared the way for unlimited independent spending.

In wooing donors, the new groups — in states like Texas, Iowa, West Virginia and Louisiana — are exploiting Crossroads’ poor showing in 2012, when $300 million spent by the super PAC and a sister nonprofit group yielded few victories. Some are suggesting that Crossroads’ deep ties to the Republican establishment and recent clashes with conservative activists are a potential liability for Republican incumbents facing Tea Party challengers.

“Certainly I think there’s a level of frustration with the state of things in D.C.,” said Randy Cubriel, an Austin lobbyist who formed Texans for a Conservative Majority, a new super PAC, to back Senator John Cornyn...

In response, Steven J. Law, the president of Crossroads, and others have urged donors and other supporters to commit to Crossroads, according to Republicans involved in the discussions, emphasizing that the group will move more aggressively in this election cycle to establish local footprints in the states with big Senate races. The profusion of super PACs, they have argued, risks wasting advertising dollars and endangering Republican efforts to win control of the Senate.

The conflicts echo broader unease within Republican circles, as establishment figures like Mr. Rove seek to reassert their authority and expand the party’s appeal amid a searing internal assault from Tea Party-inspired conservatives.

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President Barack Obama issued an executive order Monday granting civilian and military employees a 1 percent pay raise in 2014.

Military employees have received a raise each year that Obama has been in the White House, but civilian pay has been flat over the last three years as members of Congress have tangled over the budget and the federal deficit.

On the campaign trail in 2010 and 2012, some Republicans targeted the pay scale of federal employees, suggesting that inflated government employment was contributing to the nation's fiscal problems, although their salaries make up a small portion of the overall budget...

"In the case of federal civilian employees, this will be the first cost-of-living adjustment since 2010, and given that these hardworking public servants have already contributed nearly $114 billion toward deficit reduction and some were furloughed as a result of the shutdown and the sequester, it is long overdue," Hoyer said in a statement. "As the economy improves after the most serious downturn in decades, this increase is the right decision and correctly honors the concept of pay parity that I have long supported."

// posted by montag @ 1:08 PM 0 Comments

One of the world’s biggest clothing buyers, the United States government spends more than $1.5 billion a year at factories overseas, acquiring everything from the royal blue shirts worn by airport security workers to the olive button-downs required for forest rangers and the camouflage pants sold to troops on military bases.

But even though the Obama administration has called on Western buyers to use their purchasing power to push for improved industry working conditions after several workplace disasters over the last 14 months, the American government has done little to adjust its own shopping habits.

Labor Department officials say that federal agencies have a “zero tolerance” policy on using overseas plants that break local laws, but American government suppliers in countries including Bangladesh, the Dominican Republic, Haiti, Mexico, Pakistan and Vietnam show a pattern of legal violations and harsh working conditions, according to audits and interviews at factories. Among them: padlocked fire exits, buildings at risk of collapse, falsified wage records and repeated hand punctures from sewing needles when workers were pushed to hurry up.

In Bangladesh, shirts with Marine Corps logos sold in military stores were made at DK Knitwear, where child laborers made up a third of the work force, according to a 2010 audit that led some vendors to cut ties with the plant. Managers punched workers for missed production quotas, and the plant had no functioning alarm system despite previous fires, auditors said. Many of the problems remain, according to another audit this year and recent interviews with workers.

In Chiang Mai, Thailand, employees at the Georgie & Lou factory, which makes clothing sold by the Smithsonian Institution, said they were illegally docked over 5 percent of their roughly $10-per-day wage for any clothing item with a mistake. They also described physical harassment by factory managers and cameras monitoring workers even in bathrooms.

At Zongtex Garment Manufacturing in Phnom Penh, Cambodia, which makes clothes sold by the Army and Air Force, an audit conducted this year found nearly two dozen under-age workers, some as young as 15. Several of them described in interviews with The New York Times how they were instructed to hide from inspectors.

“Sometimes people soil themselves at their sewing machines,” one worker said, because of restrictions on bathroom breaks.

Federal agencies rarely know what factories make their clothes, much less require audits of them, according to interviews with procurement officials and industry experts. The agencies, they added, exert less oversight of foreign suppliers than many retailers do. And there is no law prohibiting the federal government from buying clothes produced overseas under unsafe or abusive conditions.

“It doesn’t exist for the exact same reason that American consumers still buy from sweatshops,” said Daniel Gordon, a former top federal procurement official who now works at George Washington University Law School. “The government cares most about getting the best price.”

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The hotter summers and ongoing drought conditions in the Midwest are forcing farmers here to forgo the plants of their ancestors and look down south for inspiration.

"We kept trying to grow sustainable tomatoes, but it was so hot that the plants got stressed and they wouldn’t produce fruit," said Courtney Skeeba, who started Homestead Ranch in the small town of Lecompton, Kan., about a decade ago. "By the end of the season, when it did get wetter and cooler, it was too late. So that’s when we started planting okra."

She's not the only one. It's that time of year when farmers are looking back at the summer past and planning for planting ahead. And what they see is a lot of hot and a lot of dry. That's why okra, once a plant squarely rooted in Southern cooking, is headed north — way north. Farmers in Wisconsin are planting okra as well.

Cary Rivard, a fruit and vegetable specialist at the Kansas State Horticulture Research and Extension Center in Olathe, said some growers are producing 1,200 pounds of okra a week to sell at local stores in Kansas City.

"That's a lot of okra for veggie growers around here! And I can't imagine what it takes to pick it all," he said.
Tomatoes, broccoli wither

Agriculture specialists say two things are happening: higher temperatures and a lower water table. The summer of 2012 was the third-hottest summer on record for the U.S., according to the National Climatic Data Center, with record-breaking heat waves continuing in 2013.

At the same time, little water fell. Much of Kansas, Missouri, Arkansas, Nebraska and Oklahoma fell into the "exceptional" or "worst" drought category in 2012, according to the U.S. Drought Monitor. It remained dry throughout much of 2013, rivaling the Dust Bowl years.

The corn wouldn't pollinate. The tomatoes crashed. Broccoli withered. So farmers started looking for hardy plants that could handle the long 100-degree spells in July and August.

The heat didn't just affect the plants. It was so dry last year, Skeeba said, that her goats went into heat months early. The goats had a set of kids in December — usually born in March or April — and then a second set at the end of June. Skeeba and her partner, Denise, kept some, sold some and processed others for meat.

"It was so dry for so long and everything was so stressed out, it triggered them to go into cycle earlier," she said.

// posted by montag @ 1:06 PM 0 Comments

Dietary supplements account for nearly 20 percent of drug-related liver injuries that turn up in hospitals, up from 7 percent a decade ago, according to an analysis by a national network of liver specialists. The research included only the most severe cases of liver damage referred to a representative group of hospitals around the country, and the investigators said they were undercounting the actual number of cases.

While many patients recover once they stop taking the supplements and receive treatment, a few require liver transplants or die because of liver failure. Naïve teenagers are not the only consumers at risk, the researchers said. Many are middle-aged women who turn to dietary supplements that promise to burn fat or speed up weight loss.

“It’s really the Wild West,” said Dr. Herbert L. Bonkovsky, the director of the liver, digestive and metabolic disorders laboratory at Carolinas HealthCare System in Charlotte, N.C. “When people buy these dietary supplements, it’s anybody’s guess as to what they’re getting.” ...

Americans spend an estimated $32 billion on dietary supplements every year, attracted by unproven claims that various pills and powders will help them lose weight, build muscle and fight off everything from colds to chronic illnesses. About half of Americans use dietary supplements, and most of them take more than one product at a time.

Dr. Victor Navarro, the chairman of the hepatology division at Einstein Healthcare Network in Philadelphia, said that while liver injuries linked to supplements were alarming, he believed that a majority of supplements were generally safe. Most of the liver injuries tracked by a network of medical officials are caused by prescription drugs used to treat things like cancer, diabetes and heart disease, he said.

But the supplement business is largely unregulated. In recent years, critics of the industry have called for measures that would force companies to prove that their products are safe, genuine and made in accordance with strict manufacturing standards before they reach the market.

But a federal law enacted in 1994, the Dietary Supplement Health and Education Act, prevents the Food and Drug Administration from approving or evaluating most supplements before they are sold. Usually the agency must wait until consumers are harmed before officials can remove products from stores. Because the supplement industry operates on the honor system, studies show, the market has been flooded with products that are adulterated, mislabeled or packaged in dosages that have not been studied for safety.

// posted by montag @ 1:39 PM 0 Comments

Last April, workers at Middlesex Hospital in Connecticut called the police to report that a psychiatric patient named Mark Russo had threatened to shoot his mother if officers tried to take the 18 rifles and shotguns he kept at her house. Mr. Russo, who was off his medication for paranoid schizophrenia, also talked about the recent elementary school massacre in Newtown and told a nurse that he “could take a chair and kill you or bash your head in between the eyes,” court records show.

The police seized the firearms, as well as seven high-capacity magazines, but Mr. Russo, 55, was eventually allowed to return to the trailer in Middletown where he lives alone. In an interview there recently, he denied that he had schizophrenia but said he was taking his medication now — though only “the smallest dose,” because he is forced to. His hospitalization, he explained, stemmed from a misunderstanding: Seeking a message from God on whether to dissociate himself from his family, he had stabbed a basketball and waited for it to reinflate itself. When it did, he told relatives they would not be seeing him again, prompting them to call the police.

As for his guns, Mr. Russo is scheduled to get them back in the spring, as mandated by Connecticut law.

“I don’t think they ever should have been taken out of my house,” he said. “I plan to get all my guns and ammo and knives back in April.”

The Russo case highlights a central, unresolved issue in the debate over balancing public safety and the Second Amendment right to bear arms: just how powerless law enforcement can be when it comes to keeping firearms out of the hands of people who are mentally ill.

Connecticut’s law giving the police broad leeway to seize and hold guns for up to a year is actually relatively strict. Most states simply adhere to the federal standard, banning gun possession only after someone is involuntarily committed to a psychiatric facility or designated as mentally ill or incompetent after a court proceeding or other formal legal process. Relatively few with mental health issues, even serious ones, reach this point.

// posted by montag @ 1:24 PM 0 Comments

Bangladesh police charged the two owners of the Tazreen Fashions factory and 11 employees with culpable homicide Sunday over the nation's deadliest-ever garment factory fire, which killed 112 workers last year.

It was the first time Bangladeshi authorities had sought to prosecute factory owners. A series of recent deadly disasters — including the fire on Nov. 24, 2012, and a factory collapse in April that killed more than 1,100 workers — exposed how harsh and unsafe conditions can be for many of the country's 4 million workers providing clothing to major Western retailers.

Public Prosecutor Anwarul Kabir Babul said the 13 people charged Sunday could face life in prison if convicted of failing to ensure safety at the sprawling Tazreen Fashions Ltd. factory, located outside Dhaka, the capital...

Those charged include owners Delwar Hossain and his wife, Mahmuda Akter, as well as 11 factory managers, security guards and engineers, Babul said. A court will decide on Dec. 31 whether to accept the charges and allow a trial to proceed.

"The managers and security guards misguided the workers by saying that it was nothing but a part of a regular fire drill when the blaze broke out," Babul said. "So the workers went back to work after the fire alarm went off, but they got trapped as the mangers locked the gates."

// posted by montag @ 1:14 PM 0 Comments

The Dec. 12 strike by the Pentagon, launched from an American base in Djibouti, killed at least a half-dozen innocent people, according to a number of tribal leaders and witnesses, and provoked a storm of outrage in the country. It also illuminated the reality behind the talk surrounding the Obama administration’s new drone policy, which was announced with fanfare seven months ago.

Although American officials say they are being more careful before launching drone strikes in Yemen, Pakistan and elsewhere — and more transparent about the clandestine wars that President Obama has embraced — the strike last week offers a window on the intelligence breakdowns and continuing liability of a targeted killing program that remains almost entirely secret.

Both the Pentagon and the C.I.A. continue to wage parallel drone wars in Yemen, but neither is discussed publicly. A Pentagon spokeswoman declined to comment about the Dec. 12 strike, referring a reporter to a vague news release issued last week by the government of Yemen, written in Arabic.

It remains unclear whom the Americans were trying to kill in the strike, which was carried out in a desolate area southeast of Yemen’s capital, Sana. Witnesses to the strike’s aftermath said that one white pickup truck was destroyed and that two or three other vehicles were seriously damaged. The Associated Press reported Friday that the target of the strike was Shawqi Ali Ahmad al-Badani, a militant who is accused of planning a terrorist plot in August that led to the closing of more than a dozen United States Embassies. American officials declined to comment about that report...

The murky details surrounding the strike raise questions about how rigorously American officials are applying the standards for lethal strikes that Mr. Obama laid out in a speech on May 23 at the National Defense University — and whether such standards are even possible in such a remote and opaque environment.

In the speech, the president said that targeted killing operations were carried out only against militants who posed a “continuing and imminent threat to the American people.” Over the past week, no government official has made a case in public that the people targeted in the strike posed a threat to Americans.

Moreover, the president said in May, no strike can be authorized without “near certainty that no civilians will be killed or injured” — a bar he described as “the highest standard we can set.”

At the time, administration officials said that authority over the bulk of drone strikes would gradually shift to the Pentagon from the C.I.A., a move officials said was intended partly to lift the shroud of secrecy from the targeted killing program.

But nearly seven months later, the C.I.A. still carries out a majority of drone strikes in Yemen, with the remote-controlled aircraft taking off from a base in the southern desert of Saudi Arabia. The Pentagon strikes, usually launched from the Djibouti base, are cloaked in as much secrecy as those carried out by the C.I.A.

// posted by montag @ 1:52 PM 0 Comments

“It would be like, let’s say, plowing down the Vatican, for instance,” said Gregg Shutiva, the governor and executive leader of the Acoma Pueblo tribe. “Even a road that is established by taking, let's say, a grater, and removing the first foot of dirt. That may disturb cultural sites.”

Mount Taylor is considered sacred by the Navajo people, as well as the Acoma, Laguna, Zuni and Hopi tribes, and many sites on the mountain are central to the tribes’ oral history and religious practices. According to Shutiva, mining operations could affect about 70 acres of land in the area that’s been designated by the Forest Service as traditional cultural property.

“Taking our concerns as native peoples into consideration, especially about sacred sites, could be a welcome idea for us because we want to be heard and we want to protect what we have,” he said.

But Velasquez said Strathmore Minerals is committed to avoiding damaging culturally sensitive sites, adding that an archaeologist will be hired to observe mining activities in the area.

// posted by montag @ 1:40 PM 0 Comments

Britain’s best-selling Sun newspaper has called the topless women that are famously featured on its Page 3 a “British institution” — on par, seemingly, with a full English breakfast or quietly queueing at bus stops.

But for a new wave of feminists who are as tenacious as they are Twitter savvy, the Sun’s daily dose of bare breasts is not a quirky tradition worth celebrating, but a poignant example of modern-day sexism that urgently needs covering up.

The plainly named “No More Page 3” campaign has emerged as one of the highest-profile of the many feminist activist groups that have recently sprouted up in Britain, fueled by social media and online tools that are connecting feminists from Brighton to Birmingham.

For its part, the Sun is characteristically unrepentant when it comes to the calls to drop its signature pictures.

In an interview with the BBC last month, editor David Dinsmore said that the paper polled focus groups and that “the result comes back a resounding, ‘Keep it there, don’t take it away!’ ” He added, “I’m making a paper for the readers.”

When pressed on what Page 3 brings to readers, Dinsmore replied: “A smile.”

Not to everyone.

Canada’s highest court struck down the country’s anti-prostitution laws Friday, a victory for sex workers who stepped up their fight for safer working conditions following the serial killings of prostitutes by a pig farmer in British Columbia.

The 9-0 Supreme Court ruling found that the laws violated the guarantee to life, liberty and security of the person. But the ruling won’t take effect immediately because it gave Parliament a one-year reprieve to respond with new legislation.

Prostitution isn’t illegal in Canada, but many of the activities associated with prostitution are classified as criminal offenses.

The high court struck down all three prostitution-related laws: against keeping a brothel, living on the avails of prostitution, and street soliciting. The landmark ruling comes more than two decades after the Supreme Court last upheld the country’s anti-prostitution laws.

The decision upheld an Ontario Court of Appeal ruling last year that struck down the ban on brothels on the grounds that it endangered sex workers by forcing them onto the streets.

Chief Justice Beverley McLachlin, writing on behalf of the court, said Canada’s social landscape has changed since 1990, when the Supreme Court upheld a ban on street solicitation.

“These appeals and the cross-appeal are not about whether prostitution should be legal or not,” she wrote. “They are about whether the laws Parliament has enacted on how prostitution may be carried out pass constitutional muster. I conclude that they do not.”

// posted by montag @ 1:46 PM 0 Comments

From the moment the government’s massive database of citizens’ call records was exposed this year, U.S. officials have clung to two main lines of defense: The secret surveillance program was constitutional and critical to keeping the nation safe.

But six months into the controversy triggered by former NSA contractor Edward Snowden, the viability of those claims is no longer clear.

In a three-day span, those rationales were upended by a federal judge who declared that the program was probably unconstitutional and the release of a report by a White House panel utterly unconvinced that stockpiling such data had played any meaningful role in preventing terrorist attacks.

Either of those developments would have been enough to ratchet up the pressure on President Obama, who must decide whether to stand behind the sweeping collection or dismantle it and risk blame if there is a terrorist attack.

Beyond that dilemma for the president, the decision by U.S. District Judge Richard J. Leon and the recommendations from the review panel shifted the footing of almost every major player in the surveillance debate.

NSA officials, who rarely miss a chance to cite Snowden’s status as a fugitive from the law, now stand accused of presiding over a program whose capabilities were deemed by the judge to be “Orwellian" and likely illegal. Snowden’s defenders, on the other hand, have new ammunition to argue that he is more whistleblower than traitor.

Similarly, U.S. officials who have dismissed NSA critics as naive about the true nature of the terrorist threat now face the findings of a panel handpicked by Obama and with access to classified files. Among its members were former deputy CIA director Michael J. Morrell and former White House counterterrorism adviser Richard A. Clarke, both of whom spent years immersed in intelligence reports on al-Qaeda.

A day after the panel’s report was made public, U.S. officials said its findings had stunned senior officials at the White House as well as at U.S. intelligence services, prompting a scramble to assess the potential effect of its proposals as well as to calculate its political fallout.

The president is “faced with a program that has intelligence value but also has political liabilities,” said Mark M. Lowenthal, a former senior CIA official. “Now that he has a set of recommendations from a panel he appointed, if he doesn’t follow them people are going to say, ‘are they just for show?’ Or if he does follow them, he scales back a program that he supported.”

// posted by montag @ 1:27 PM 0 Comments

Target said Thursday that about 40 million credit and debit card accounts may have been affected by a data breach that occurred just as the holiday shopping season shifted into high gear.

The chain said that accounts of customers who made purchases using their cards at its U.S. stores between Nov. 27 and Dec. 15 may have been exposed. The stolen data includes customer names, credit and debit card numbers, card expiration dates and the three-digit security codes located on the backs of cards.

The Minneapolis-based company said that it immediately told authorities and financial institutions once it became aware of the breach, and that it is teaming with a third-party forensics firm to investigate the matter and prevent future breaches. The company said it is putting all "appropriate resources" toward the issue.

Target advised customers to check their statements carefully. Those who suspect there has been unauthorized activity on their cards should report it to their credit card companies and call Target at 866-852-8680. Cases of identity theft can also be reported to law enforcement or the Federal Trade Commission.

Target did not say exactly how the data breach occurred, but it said that it had since fixed the problem and that credit card holders can continue shopping at its stores.

// posted by montag @ 1:19 PM 0 Comments

Like millions of Americans, Capil thought she had solid individual health insurance. Then she got sick and found that her coverage was woefully inadequate.

The financial problems that followed would aggravate Capil’s health struggles, force her into bankruptcy and trigger a fraud lawsuit over $230,000 in unpaid medical bills against HealthMarkets Inc., the parent company of her former insurer.

The litigation is nothing new for HealthMarkets. The North Richland Hills, Texas, insurer, formerly known as UICI, has a long history of battles with state regulators trying to root out “junk insurance” in the individual market. But numerous sanctions and a host of consumer protections in the Affordable Care Act have put a financial squeeze on the company and forced it to change its business model.

Beginning in January 2014, the health care law prohibits the kind of limitations, exclusions and benefit spending caps that made Capil’s coverage so problematic.

But after falsely promising that Americans could keep their health insurance if they liked it, President Barack Obama bowed to political pressure in November and OK’d a one-year extension on 2013 individual policies – even those facing cancellation next year because they don’t meet the health law’s new minimum standards.

Now Capil, a software project manager, wonders how many Americans will use the president’s canceled-policy “fix” to unwittingly renew another year of “junk insurance” like she used to have.

“It’s sad that there are people who have this insurance who don’t know that they’re going to end up like me if they ever get sick,” she said. “I feel like people are upset that they’re losing these plans and they’re upset because they think their plans are comprehensive. But they aren’t. These insurance companies have been selling Americans coverage that will bankrupt them if they ever have a serious illness.”

// posted by montag @ 12:43 PM 0 Comments

We are about to round into what is going to be the most manifestly expensive -- and, therefore, the most manifestly corrupt -- midterm election in our history. We are doing so with the untrammelled power of money still the most important issue in our politics. We are doing so with the Voting Rights Act eviscerated and minority voters, most of them poor, having their franchise restricted by their state legislatures. We are doing so with campaign money virtually unregulated, and with the Supreme Court likely warming up to remove the adverb from in front of "unregulated." And the institution charged with controlling this mess on behalf of the rest of us might as well be a two-man law firm in west Texas. Is there anything else that anyone would need to create a plutocracy?

// posted by montag @ 7:06 PM 0 Comments

The deferred-prosecution deal is a hair short of a guilty plea. The bank has to acknowledge the facts of the government's case and pay penalties, but as has become common in the Too-Big-To-Fail arena, we once again have a situation in which all sides will agree that a serious crime has taken place, but no individual has to pay for that crime.

As University of Michigan law professor David Uhlmann noted in a Times editorial at the end of last week, the use of these deferred prosecution agreements has exploded since the infamous Arthur Andersen case. In that affair, the company collapsed and 28,000 jobs were lost after Arthur Andersen was convicted on a criminal charge related to its role in the Enron scandal. As Uhlmann wrote:

From 2004 through 2012, the Justice Department entered into 242 deferred prosecution and nonprosecution agreements with corporations; there had been just 26 in the preceding 12 years.

Since the AA mess, the state has been beyond hesitant to bring criminal charges against major employers for any reason. (The history of all of this is detailed in The Divide, a book I have coming out early next year.) The operating rationale here is concern for the "collateral consequences" of criminal prosecutions, i.e. the lost jobs that might result from bringing charges against a big company. This was apparently the thinking in the Madoff case as well. As the Times put it in its coverage of the rumored $2 billion settlement:

The government has been reluctant to bring criminal charges against large corporations, fearing that such an action could imperil a company and throw innocent employees out of work. Those fears trace to the indictment of Enron's accounting firm, Arthur Andersen . . .

There's only one thing to say about this "reluctance" to prosecute (and the "fear" and "concern" for lost jobs that allegedly drives it): It's a joke...

But most importantly, Madoff and Stanford were simple scam artists who could have come from any generation. There was nothing systemic about their crimes. It was possible to throw them in jail without exposing widespread corruption in our financial system.

That's what's so disturbing about this latest Justice Department cave. It underscores the increasingly obvious fact that the federal government is not interested in getting to the bottom of our financial corruption problem. They seem more to be treating bank malfeasance as a PR issue for the American financial markets that has to be managed away, instead of a corruption problem to be thoroughly investigated and fixed.

In a way, the administration seems to have the same motivation as Chase itself – as CEO Jamie Dimon put it last week, "We have to get some of these things behind us so we can do our job."

// posted by montag @ 4:48 PM 0 Comments

As drug prices have soared in recent years and insurers have increased co-payments, a new type of charity has blossomed to fill a vital niche — helping patients pay the steep out-of-pocket costs for their medicines.

But the largest of these co-payment assistance charities, the Chronic Disease Fund, is now in turmoil after questions have arisen about its relationship with a pharmaceutical company that is itself under investigation for marketing practices.

The practice is casting a spotlight on what has long been an open secret: The bulk of the contributions to these charities come from the pharmaceutical companies themselves. The foundations not only help hundreds of thousands of patients a year, they also raise drug company sales and profits.

After all, if a patient cannot afford out-of-pocket costs of $5,000 for a $100,000-a-year drug, the drug company gets nothing. But if the manufacturer pays the $5,000, the patient gets the drug and the company receives $95,000 from the patient’s insurance company or Medicare.

The contributions — which also provide tax deductions to drug makers — are legal as long as a company does not require that the money it donates be used exclusively to pay for its own drugs.

But articles circulating in the investment world have suggested that the Chronic Disease Fund might be showing improper favoritism toward Questcor Pharmaceuticals, which sells an expensive drug for immune diseases. Moreover, the articles noted that the charity was purchasing millions of dollars a year in services from for-profit companies owned by the charity’s founder and president, Michael Banigan.

// posted by montag @ 4:25 PM 1 Comments

Six American soldiers died Tuesday when their helicopter crashed in a remote area of southern Afghanistan, in the single largest loss of life for foreign troops in nearly six months.

There is believed to be at least one survivor, according to coalition officials. Shortly after the episode, Afghan forces were sent to the crash area, local officials said.

Afghan officials said the crash occurred around 4 p.m. in the Shajoe District of Zabul Province, a mountainous area roughly 50 miles from the capital. The coalition said there were no indications of militant activity in the area at the time of the crash, though the Taliban immediately claimed responsibility for it, as the group often does...

Throughout the war, bad weather or technical problems have been the most frequent causes of helicopter crashes, despite Taliban claims. In March of this year, five American soldiers were killed when their helicopter crashed in Kandahar. A month later, another crash claimed the lives of two more American soldiers, this time in Nangarhar. Neither incident was found to have been caused by the Taliban.

But the Taliban have shot down helicopters before.

// posted by montag @ 1:29 PM 1 Comments

New data from the Kaiser Family Foundation shows that minorities will make up 53 percent of the estimated 4.8 million low-income Americans who will fall into the "coverage gap," leaving them without viable options to obtain health insurance next year.

In the 25 states that won't expand eligibility for the Medicaid program, many adults earn too much to qualify for Medicaid, but not enough to qualify for tax credits that would help them purchase marketplace insurance.
That puts them into the bureaucratic no-man's land known as the "coverage gap."
According to Kaiser, minorities makeup about 2.6 million of people in the gap, 27 percent of whom are black.
Hispanics account for 21 percent, while 5 percent are from other races. Whites account for 47 percent of people in the gap.
Additional demographic breakdowns show 76 percent of those in the gap are adults without dependent children, 60 percent come from a working family and while 49 percent are women.
States with the highest numbers of uninsured residents account for most of the people in the coverage gap.
For example, 34 percent of the 2.2 million whites in the gap reside in Florida, Texas and Pennsylvania. While 43 percent of the 1.3 million black adults in the gap hail from Florida, Georgia and Texas.
While Texas alone accounts for a whopping 59 percent of Hispanics in the gap followed by another 20 percent in Florida.
While the legislative, judicial and executive branches all had a hand in creating the
coverage gap, it was not done by design. Rather the gap was an unintended consequence of the 2012 Supreme Court decision that upheld the Affordable Care Act.
The health law was supposed to provide health insurance for most Americans next year by expanding Medicaid in all states to people earning up to 138 percent of the federal poverty level. That’s about $15,900 for an individual in 2013, or nearly $32,500 for a family of four.

Tax credits would then go to other low- and middle-income people to help them buy coverage on the insurance marketplaces.

If the Medicaid expansion was implemented in every state as originally planned, an estimated 22.3 million Americans likely would have gained coverage next year, according to the Urban Institute, a nonpartisan social and economic policy think tank.

But when the Supreme Court ruled that states could opt out of the expansion, Republican-led states took advantage. Rather than expand their Medicaid programs, most kept their programs as is – open mainly to the poorest of the poor.

// posted by montag @ 12:34 PM 0 Comments

Acting like a big dick doesn’t make people think you have one.

// posted by montag @ 12:19 PM 0 Comments

The Food and Drug Administration announced on Monday that it was requiring manufacturers of antibacterial soaps to demonstrate that their products are safe for long-term use or reformulate them.

The agency said that some data suggested that long-term use of certain ingredients in the soap that give it the antimicrobial qualities — triclosan in liquid soaps and triclocarban in bar soaps — could pose health risks, such as bacterial resistance or hormonal effects. Some soaps labeled “deodorant” may also contain these ingredients.

Millions of Americans use these products, and agency officials said that accumulated scientific evidence and “concerns raised by health care and consumer groups” had prompted the drug agency to re-evaluate these products and whether their active ingredients are safe...

Scientists have raised concerns about triclosan for decades. Senator Edward J. Markey, Democrat of Massachusetts, who has pressed federal regulators to more closely control the substance, said on Monday in a statement that federal authorities “have acknowledged the potential for triclosan to interfere with the body’s thyroid hormone, which is important for brain development and function, particularly in children.” Other studies, he said, showed that it disrupted other hormone functions important for puberty and fertility.

// posted by montag @ 1:43 PM 0 Comments

“I’ve been shot, I’ve been stabbed,” said Nazyat, 39, now a machinist and father who credited “good people” with helping him turn his life around. “That was that life back then. I was scared.”

But gun violence in the neighborhood has declined sharply since his teenage years, so he was puzzled by Boston Police Department plans to buy about 30 military-style semiautomatic rifles and train nearly 100 patrol officers to use them.

“Everybody’s seen shootings, but not like before,” said Nazyat, who wore a black Boston Celtics baseball hat and matching jacket, referring to Roxbury residents.

The plans to deploy the powerful weapons have triggered a major debate in New England’s largest city. On the one hand, many residents, especially in neighborhoods dominated by minorities, worry about a creeping militarization of their local police force, fearing that deploying such rifles on the streets could create more dangers than they solve. Some security analysts agree, seeing the move as part of a larger shift toward the militarization of police departments that has been happening in the rest of Massachusetts and across the country.

But on the other hand, the police and their supporters see a real need to combat often heavily armed criminals and prepare for terrorist threats, as in the case of the city’s recently targeted marathon. Police say they need the guns to do their jobs effectively and protect the city and its people.

Boston Police superintendent Kenneth Fong said police “routinely” seize semiautomatic assault rifles from the streets. They need the high-powered AR-15-style rifles, he said, to contend with “active shooter-type situations” and suspects who may be clad in body armor, heavily armed or beyond the range of handguns.

“The city and the world we live in now is different than in years past,” he said, “and we need to have equipment to meet the threat that we’re facing now.”...

[In 2009] Boston police ordered about 200 semiautomatic M16s from the U.S. military under a federal surplus program and planned to distribute them to neighborhood officers before Mayor Thomas Menino thwarted the plan, the Boston Globe reported at the time. But some 82 police departments elsewhere in Massachusetts, many facing little or no violent crime but fearing terrorist attacks, have obtained more than 1,000 such weapons.

// posted by montag @ 1:29 PM 0 Comments

Barhate, business development manager for Jain Irrigation Systems Ltd. (JI), Asia’s largest irrigation-equipment maker, said the Indian embassy had warned him against investing in a solar-power plant in Afghanistan. Karzai, who met billionaire Malvinder Singh in New Delhi at the start of a trip to India that ended yesterday, said little to reassure Barhate that the country would be safe if all U.S. troops withdraw next year.

“There’s no problem of competition, money, land or potential in Afghanistan,” Barhate said after Karzai’s Dec. 14 speech in Pune, India, where the president met about a dozen business leaders. “There’s just one major risk, and that’s security.”

As Karzai explains his reluctance to sign a security pact with the U.S. to political and business leaders in the region, investors are voicing concerns. The agreement would assuage businesses seeking to tap mineral resources estimated at $3 trillion and ensure that the country’s 31 million people, who live on an average of less than $2 per day, receive billions of dollars in aid money over the next decade.

“I don’t think the Americans are thinking of the zero option,” Karzai told reporters in New Delhi two days ago, referring to a scenario under which all U.S. troops might leave Afghanistan in 2014. “It’s a brinkmanship they’re playing with us. Even if they did, then come what may.”

Karzai said he would not sign the pact until the U.S. shows that it has put an end to attacks on Afghan homes and publicly starts peace talks with the Taliban. The two conditions are an “absolute prerequisite” to conclude the agreement, he told reporters.

Later in the day, the Afghan leader told a group of business leaders in the western city of Pune that President Barack Obama’s administration would succumb to his demands.

// posted by montag @ 2:22 PM 1 Comments

The Cayman Islands, Switzerland and the British Virgin Islands capture headlines for laws and tax rates that allow multinational corporations and the rich to shelter income from the American government. The Cook Islands offer a different form of secrecy. The long arm of United States law does not reach there. The Cooks generally disregard foreign court orders, making it easier to keep assets from creditors, or anyone else.

Win a malpractice suit against your doctor? To collect, you will have to go to the other side of the globe to plead your case again before a Cooks court and under Cooks law. That is a big selling point for those who market Cook trusts to a broad swath of wealthy Americans fearful of getting sued, and some who have been.

“You can have your cake and eat it too,” says Howard D. Rosen, a lawyer in Coral Gables, Fla., who has set up Cook trusts for more than 20 years, in a video on his website. Anyone with more than $1 million in assets, his firm’s site suggests, should consider Cook trusts for self-preservation, but especially real estate developers, health care providers, accountants, architects, corporate directors and parents of teenage drivers.

International regulators have become more aggressive in efforts to clamp down on tax haven countries, offshore banks and their customers, but they have paid scant attention to the Cooks. Yet Americans are the biggest customers of the trusts, which may be held only by foreigners, not Cook Islanders. The islands’ official website calls the Cooks a “prime choice” for “discerning wealthy clients.” There are 2,619 trusts, according to the Cooks’ Financial Supervisory Commission, offering anonymity as well as legal protections. The value of the assets is not disclosed and it is against the law in the Cooks to identify who owns the trusts or to provide any information about them.

// posted by montag @ 1:42 PM 0 Comments

Students in same-sex marriages will be treated the same as their straight married classmates when it comes to federal college loan applications, Education Secretary Arne Duncan said, in a shift that reflects this year's Supreme Court ruling that broadened gay rights.

"We must continue to ensure that every single American is treated equally in the eyes of the law, and this important guidance for students is another step forward in that effort," Duncan said Friday in a news release.

The department said it would recognize a student — and parents — as legally married if the couple wed in a state that permits same-sex marriages.

The department also said students' eligibility for federal aid would be the same in all 50 states, regardless of where the student attends school.

For instance, a same-sex couple from Massachusetts, where gay marriage is legal, would be treated the same as a straight couple if one or both applied for a federal loan to attend a school in one of the 34 states that do not permit gay marriage. The same standards would apply to parents in same-sex marriages.

// posted by montag @ 1:05 PM 0 Comments

China on Saturday became the third country to steer a spacecraft onto the moon after its unmanned Chang’e-3 probe settled onto the Bay of Rainbows, state-run television reported.

The United States and the Soviet Union are the other countries to have accomplished so-called soft landings on the moon — in which a craft can work after landing — and 37 years have passed since the last such mission.

The successful arrival of the Chang’e-3 after a 13-day journey from Earth was reported on Chinese state television. At the time of the last soft landing, by the Soviet Union in 1976, Mao Zedong lay a month from death and China was in the twilight of his chaotic Cultural Revolution. Now China, much richer and stronger, aspires to become a globally respected power, and the government sees a major presence in space as a key to acquiring technological prowess, military strength and sheer status.

Chinese media celebrated the landing as a demonstration of the country’s growing scientific stature. Television reports showed engineers at the mission control center in Beijing crying, embracing and taking pictures of one another on their cellphones.

“The dream of the Chinese people across thousands of years of landing on the moon has finally been realized with Chang’e,” said the China News Service, a state-run news agency. “By successfully joining the international deep-space exploration club, we finally have the right to share the resources on the moon with developed countries.”

In a sign of the increased tensions between the United States and China on the open seas, navy vessels from the two countries almost collided in the South China Sea when a Chinese ship cut across the bow of an American cruiser, a senior United States defense official said on Saturday.

An accident was averted when the missile-carrying cruiser Cowpens, traveling in international waters, maneuvered to avoid the Chinese vessel, the official said. At the time, the American ship was observing China’s new aircraft carrier, which was also in the vicinity.

// posted by montag @ 2:00 PM 0 Comments

American intelligence and law enforcement investigators have concluded that they may never know the entirety of what the former National Security Agency contractor Edward J. Snowden extracted from classified government computers before leaving the United States, according to senior government officials.

Investigators remain in the dark about the extent of the data breach partly because the N.S.A. facility in Hawaii where Mr. Snowden worked — unlike other N.S.A. facilities — was not equipped with up-to-date software that allows the spy agency to monitor which corners of its vast computer landscape its employees are navigating at any given time.

Six months since the investigation began, officials said Mr. Snowden had further covered his tracks by logging into classified systems using the passwords of other security agency employees, as well as by hacking firewalls installed to limit access to certain parts of the system.

“They’ve spent hundreds and hundreds of man-hours trying to reconstruct everything he has gotten, and they still don’t know all of what he took,” a senior administration official said. “I know that seems crazy, but everything with this is crazy.”

// posted by montag @ 1:48 PM 0 Comments

The Islamist consolidation of power over Syria’s rebel movement in recent weeks is another indication that foreign policy strategists are correct when they warn that the Syrian conflict is likely to grind on for years before either side is prepared for serious peace negotiations.

Despite the staggering death toll and worsening humanitarian crisis, experts say, the conflict isn’t yet “ripe” – a term professional mediators use for the point when warring parties recognize that they’re each suffering from a stalemate and are ready to find a mutually acceptable settlement. That phase is a long way off in Syria, analysts say, and the collapse of the moderate rebel command underlines why next month’s peace summit in Geneva is considered an exercise in futility.

Holding the conference at this juncture presents a difficult choice for the United States, which is struggling to find Syrian opposition partners who can form a credible, representative delegation to sit across the table from the more sure-footed, fully supported representatives of President Bashar Assad’s regime.

The biggest challenge now is how to have a rebel voice in the room, when the Western-backed Supreme Military Council is in tatters and its Islamist rivals reject the Geneva process outright.

In other words, the only rebels who’d show up are those with little or no influence on the battlefield. And the entire exercise is anathema to the fighters who do hold enough sway to implement any agreement under the so-called Geneva communique, a document that calls for talks to a mutually agreeable transitional government that would assume full executive power.

// posted by montag @ 1:00 PM 0 Comments

Graham sharply criticized Senate Democrats’ elimination of the 60-vote threshold to break a filibuster in a bid to confirm judicial and executive nominees of President Barack Obama that Republicans had blocked.

“You’re going to have more ideologically driven (executive) picks and judicial nominations because the filtering device of having to at least talk to the other side” is minimized, Graham said.

“You’re going to find that the judicial selections in the future are going to be the ones that the people who are the most rabid partisans are going to pick – the most faithful to the cause, not the most faithful to the law,” he said.

The Senate, where Democrats currently hold 53 seats, voted Nov. 21 along party lines to require only a simple-majority threshold for presidential nominations to fill executive branch posts and judgeships except for the Supreme Court.

// posted by montag @ 12:43 PM 0 Comments

JPMorgan Chase and federal authorities are nearing settlements over the bank’s ties to Bernard L. Madoff, striking tentative deals that would involve roughly $2 billion in penalties and a rare criminal action. The government will use a sizable portion of the money to compensate Mr. Madoff’s victims.

The settlements, which are coming together on the anniversary of Mr. Madoff’s arrest at his Manhattan penthouse five years ago on Wednesday, would fault the bank for turning a blind eye to his huge Ponzi scheme, according to people briefed on the case who were not authorized to speak publicly.

A settlement with federal prosecutors in Manhattan, the people said, would include a so-called deferred-prosecution agreement and more than $1 billion in penalties to resolve the criminal case. The rest of the fines would be imposed by Washington regulators investigating broader gaps in the bank’s money-laundering safeguards.

The agreement to deferred prosecution would also list the bank’s criminal violations in a court filing but stop short of an indictment as long as JPMorgan pays the penalties and acknowledges the facts of the government’s case. In the negotiations, the prosecutors discussed the idea of extracting a guilty plea from JPMorgan, the people said, but ultimately chose the steep fine and deferred-prosecution agreement, which could come by the end of the year.

Until now, no big Wall Street bank has ever been subjected to such an agreement, which is typically deployed only when misconduct is severe. JPMorgan, the authorities suspect, continued to serve as Mr. Madoff’s primary bank even as questions mounted about his operation, with one bank executive acknowledging before the arrest that Mr. Madoff’s “Oz-like signals” were “too difficult to ignore,” according to a private lawsuit.

JPMorgan, which declined to comment for this article, has repeatedly said that “all personnel acted in good faith” in the Madoff matter. No one at JPMorgan has been accused of wrongdoing and the bank was not the only one to miss Mr. Madoff’s fraud, which duped regulators and clients for decades.

// posted by montag @ 12:36 PM 0 Comments