Wednesday, June 9, 2010

Senate weakens bid to tax Wall Street like rest of us

WASHINGTON — Senate Democrats Tuesday weakened efforts to end a controversial Wall Street tax break, watering down a bid to raise taxes on managers of hedge funds, private-equity funds, venture capital firms and other business partnerships.

The Senate action retreated from a step taken last month by the House of Representatives, where lawmakers voted to get tough with Wall Street financiers, an apparent bow to election-year pressure from constituents outraged that some captains of finance were taxed at lower rates than their secretaries are.

Currently, managers of these investment funds are compensated with a share of the fund's profits, referred to as "carried interest." This compensation is taxed as a capital gain, and the capital gains tax is now 15 percent.

Senators scaled back the House plan to tax as "ordinary income" some 75 percent of the fund-income these managers receive. Instead, the Senate would trim the tax hit to 65 percent, and 55 percent for assets held longer than seven years.

In real-world terms, the Senate change means that fund managers most likely would fall into the top tax bracket for 65 percent of their compensation. The top bracket stands at 35 percent now, but absent a change by Congress would revert to 39.6 percent next year.

The Senate plan, part of an emergency spending and jobs bill, is expected to raise about $14.45 billion over a decade, some $3 billion less than the House version would. In both bills, the money would help pay for a series of economic aid programs, notably extended unemployment benefits and summer jobs for at-risk youth.

Congress wants to raise the tax to generate revenue to pay for new government spending when the federal deficit is at a record high. Many of the bill's provisions are considered emergencies, which is why most Democrats and some Republicans are willing to add to the deficit. In addition, extracting tax money from the wealthy is a popular way to appeal to voters.

Sen. Olympia Snowe of Maine, a centrist Republican, wants to see more deficit reduction and thought "some of these (fund-manager) earnings should definitely be treated as ordinary income."

Other senators said fairness is the issue.

"It's certainly unfair that a hedge fund manager never has to pay the same tax rate as a teacher or firefighter," said Sen. Claire McCaskill, D-Mo. "But then again, we want to continue to encourage the creation of capital investment."

The financial sector argued that's just what's at risk.

"The proposals will stifle innovation and the free flow of capital," said Scott Talbott, the chief lobbyist for the Financial Services Roundtable, which represents big financial firms. Money that could be reinvested would instead flow to government, their logic goes.

The National Venture Capital Association, whose members help finance start-up tech firms, welcomed the Senate retreat. Spokeswoman Emily Mendell described the Senate language as "moving in the right direction" because it made exceptions for longer-term investments.

While the change is designed to hit Wall Street, real estate partnerships would account for almost half the partnerships affected.

"According to the IRS, these real estate partnerships hold over $1.5 trillion of commercial real estate assets throughout America, including: rental housing, office buildings, shopping centers, medical facilities, hotels, senior housing and industrial properties," Jeffrey DeBoer, the president of the trade association The Real Estate Roundtable, said in a blog posting Tuesday. "The carried interest tax proposal would change the taxation of all these partnerships — for past and future investments."

McClatchy Newspapers 2010

Senator Nelson: The BP Well May Have Lost Structural Integrity Beneath the Sea Floor

On June 2nd, Bloomberg pointed out:

Plugging the well is another challenge even after BP successfully intersects it, Robert Bea, a University of California Berkeley engineering professor, said. BP has said it believes the well bore to be damaged, which could hamper efforts to fill it with mud and set a concrete plug, Bea said.

Bea is an expert in offshore drilling and a high-level governmental adviser concerning disasters.

On the same day, the Wall Street Journal noted that there might be a leak in BP's well casing 1,000 feet beneath the sea floor:

BP PLC has concluded that its "top-kill" attempt last week to seal its broken well in the Gulf of Mexico may have failed due to a malfunctioning disk inside the well about 1,000 feet below the ocean floor.


The broken disk may have prevented the heavy drilling mud injected into the well last week from getting far enough down the well to overcome the pressure from the escaping oil and gas, people familiar with BP's findings said. They said much of the drilling mud may also have escaped from the well into the rock formation outside the wellbore.

Yesterday, Senator Bill Nelson told MSNBC that he's investigating reports of oil seeping up from additional leak points on the seafloor:

Senator Bill Nelson (D-FL): Andrea we’re looking into something new right now, that there’s reports of oil that’s seeping up from the seabed… which would indicate, if that’s true, that the well casing itself is actually pierced… underneath the seabed. So, you know, the problems could be just enormous with what we’re facing.

Andrea Mitchell, MSNBC: Now let me understand better what you’re saying. If that is true that it is coming up form that seabed, even the relief well won’t be the final solution to cap this thing. That means that we’ve got oil gushing up at disparate places along the ocean floor.

Sen. Nelson: That is possible, unless you get the plug down low enough, below where the pipe would be breached.

Indeed, loss of integrity in the well itself may explain why BP is drilling its relief wells more than ten thousand feet beneath the leaking pipes on the seafloor (and see this).

And prominent oil industry insider Matt Simmons believes that the well casing may have been destroyed when the oil rig exploded. Simmons was an energy adviser to President George W. Bush, is an adviser to the Oil Depletion Analysis Centre, and is a member of the National Petroleum Council and the Council on Foreign Relations.

On May 27th, Simmons addressed this issue on MSNBC:

Visit for breaking news, world news, and news about the economy

On May 26th, Simmons referred to this again on a second appearance on MSNBC:

Visit for breaking news, world news, and news about the economy

And he referred to it again on Bloomberg on May 28th:

And again on MSNBC yesterday:

China finally Learns the Truth about the Jews

Who’s to blame for the current global financial crisis? According to a bestselling book in China, which is leading the sales charts in the country, the answer is clear: The Jews.

In the eyes of most Chinese, Jewish people are considered “smart,” “rich” and “good at making money.” Bookstores in China offer a variety of self-help books titled, “How to make money like Jews,” and “The secret of Jews’ global success.”

Until recently, the notion that Jews and money were inseparable carried no anti-Semitic undertone in the country, but a relatively new book called “Currency Wars” threatens to change all that.

The book’s author, Song Hongbing, claims that behind world-changing events like the battle of Waterloo, Adolf Hitler’s rise to power, President Kennedy’s assassination, and the deep recession in Asia during the 1990s stood an intricate conspiracy aimed at increasing Jews’ wealth and influence.

Song, a Chinese computer engineer and history buff who resides in the United States, writes that almost every defining historical moment has been instigated by Jewish bankers, and mainly the Rothschild family, which Song says dominates the global banking system, including the US Federal Reserve System.

‘important publication’ or ‘nonsense’?
Song’s book was published in China about a year and-a-half ago, and initially sold an insignificant number of copies. But in recent months the global crisis has turned the book into a hit. Estimates put sales of “Currency War” well over a million, not including hundreds of thousands of illegal copies that can also be downloaded off the net.

Responses among readers vary; online discussions about the book reveal that many are convinced this is the most important publication ever written, as it “exposes the truth behind global economy.” However, others claim that this is “nonsense” and say that Song, who has never studied economics, simply pieced together a theory made up of several delusional conspiracy theories published on the internet.

Song’s publishers, a subsidiary of a state-owned publishing house, boast the fact that the book has been read by all leading financial executives in the country, as well as state leaders.

Song himself has become a local celebrity in China, and is often invited to lecture at financial conventions and is interviewed on TV as a famous financial analyst.

Source (Jewish Newspaper)

Student loan market created a tuition bubble rivaling the housing bubble. When banks and government subsidize markets the average ....

Student loan market created a tuition bubble rivaling the housing bubble. When banks and government subsidize markets the average American gets an education in debt serfdom. For profit schools dominate the Pell Grant market.

Recently a handful of articles have discussed the rise of subprime debt in higher education. Broadly speaking a college educated American has lower unemployment, higher earnings, and a better potential for financial success. Like the housing market, the emotional notion that everyone should own a home allowed the predatory banking industry with government support to funnel out mortgages to people with no ability to pay it back. The consequences are still rippling throughout the current economy. Today the higher education market is seeing all the traits of a bubble and certain parts of the industry dominate the toxic loan market. Many of the for profit schools are more adept at tapping into Federal funds and marketing and pump out degrees with learning outcomes a step above a paper mill. They have no student learning outcomes attached to their funding source so they have no federal mandate to report how successful their students are in getting careers after graduation.

If we look at the rise of education costs and housing from 1993 to the present, we can see an exact trend with housing:

Source: Census

It should come as no surprise that over this timeframe, the cost of college and housing have risen at nearly the same pace. Why? Part of this comes from the massive amount of debt used to finance these markets. With housing for the large part of the last decade people were able to purchase homes with nothing down. Qualifications for loans were diluted so anyone with the mere desire to buy did. A fleet of commission hungry brokers and companies made sure they gave loans to everyone even if they had no ability to repay it back. When you disconnect success from the lender to the borrower you will find that predatory lending will take place. The student loan market has been the major reason why college costs have inflated at bubble like trends:

Source: New York Times

Over the last 30 years the cost of college has soared by approximately 500 percent. This has outpaced medical care costs and the median family income by a sizeable portion. The outrage should be directed at Wall Street and the government for inflating the market. You will hear these people argue that costs are rising because operational costs demand prices to go up but this is simply nonsense. Even studies that look at increases in federal grants and loans show that institutions will basically raise their tuition to meet the change in financial aid:

“(Chronicle) The finding tends to support what is known as the “Bennett hypothesis” — the notion, first popularized in the 1980s by the U.S. secretary of education at the time, William J. Bennett, that colleges and universities tend to absorb most federal student aid by increasing their tuition revenue.

The new paper, by Larry D. Singell Jr. and Joe A. Stone, both professors of economics at Oregon, employs a much larger data set than most previous tests of the Bennett hypothesis. Mr. Singell and Mr. Stone examined data from 1,554 four-year colleges and universities from 1988 to 1996. They drew on institutional data collected by the National Science Foundation and by the U.S. Department of Education.

Mr. Singell and Mr. Stone found that public colleges’ tuition for in-state students did not rise in tandem with Pell Grant levels. But private colleges’ tuition, and public colleges’ out-of-state tuition, increased by roughly $800 for every $1,000 increase in Pell recipients’ average grants.

Much of that additional tuition burden, the scholars suggest, is borne by students whose family income is relatively high. The Pell Grant program generally succeeds at expanding lower-income students’ access to college and at allowing lower-income students to attend more expensive institutions than they otherwise would, according to the paper.”

So the market simply adapts to suck up this added easy money like a debt hungry vacuum. You can see how flawed this policy is with the Pell Grant program. The Pell Grant like most programs started off with good intentions. It was designed to help low income families finance the cost of college. A National Postsecondary Study found that in 2000 families making less than $41,000 accounted for 90 percent of Pell Grant recipients. Now this in itself isn’t a problem if students come out with solid educational outcomes. But what is happening is a perverse scamming of the system by the for profit machine of education. This is the true subprime market of education.

They argue that everyone should have an opportunity to have an education no matter the cost (sounds familiar to the everyone should own a home argument). Of course these so-called equal opportunists don’t work for free and charge massively higher rates than local public state schools (you can see the massive profits of these for profits as they trade on the stock exchanges). And here is where you see the problem arise. For profit schools cover 6 percent of students but eat up 20 percent of the Federal Pell Grant money. University of Phoenix is number one here pulling in $656 million in revenues from Pell Grants. This is taxpayer money going to an institution that does not have to show educational learning or career placement outcomes. How many of their graduates are working in the field that they studied for? What is their career placement data? Of course these for profit institutions are fighting tooth and nail to stop any legislation that will tie funding to educational outcomes because it will expose them for the subprime education market that they are exploiting.

Then on the other side you have massive amounts of loans subsidized by the government for other students. Story after story is now coming out about students coming out with $50,000, $75,000, and over $100,000 in student loan debt from private schools and students are unable to find jobs. The tired argument is that a student signed on the dotted line and got an education. But that doesn’t address the bigger issue of college tuition inflation. Of course the hand of Wall Street is deeply involved here as well:

Recognize a few names? You should. These are the same players in the toxic mortgage lending market that received trillions in taxpayer bailouts for their horrible loans in real estate. Of course they don’t care about originating standards or putting undue stress here because they know the government is on the hook here as well. So now, what we see is this inflation bleeding over into the public school system:

Source: OC Register

Here is an interesting chart. The University of California is one of the biggest public higher education systems in the world with a solid reputation. Back in 1990 the cost to attend the UC was under $2,000 per year. At that time, the median household income was making $33,000 in California. So the cost was 6% of total median annual household income. Today, the median household income is $57,000 and the cost is over $10,000 per year. It now eats up 17% of the annual household gross income. In other words, the increase in tuition is far outstripping any gains in family income. Clearly people are finding other ways to pay and school are finding other ways to make money.

So why is this all happening? Because the government is operating under the advice of the banking system. Wherever Wall Street has had its hand in the last few decades bubbles just seem to spring up, (i.e., housing, higher education, tech boom etc) because it enslaves the population to debt while not actually paying attention to longer-term fundamentals. The reason college costs keep going up is because people can get government backed grants and loans without any outcome showing the ability to payback. Institutions simply raise fees to match this added funding. Just look at the housing market once the easy money is pulled back. Prices fall. This will happen in higher education as well if we stop spending money needlessly. Why not use that money to add classes at local community colleges? And those that currently capitalize are the for profit schools that market heavily to poor populations, enroll students, saddle them with debt, and have no need to show their long-term outcomes. This is subprime part two and the American people will be on the hook again while the predatory leeches get away with another bailout. When will people see that anything the banking industry touches turns into a method for bleeding it dry?

Obama says ready to "'kick ass" over Gulf oil spill

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VENICE La/WASHINGTON (Reuters) - President Barack Obama said he wanted to know "whose ass to kick" over the Gulf of Mexico oil spill, adding to the pressure on energy giant BP Plc as it sought to capture more of the leak from its gushing well.

In an interview with NBC News' "Today" aired on Tuesday, Obama also said that if BP Chief Executive Tony Hayward worked for him, he would have fired him by now over his response to the 50-day-old spill, the worst environmental disaster in U.S. history. It was triggered by an April 20 well blowout and rig explosion that killed 11 workers.

The U.S. president, who himself faces growing criticism that his administration was slow to react to the economic and ecological catastrophe hitting four U.S. Gulf states, said he did not want to prejudge the investigation into the incident.

"But the initial reports indicate there may be situations in which not only human error was involved, but you also saw some corner cutting in terms of safety," Obama said in some of his angriest public words yet about the catastrophe.

Hayward says a "series of failures" led to the accident but denies these resulted from BP efforts to save costs.

Responding to critics who say his response to the spill should be more engaged and forceful, Obama said: "I was down there a month ago, before most of these talking heads were even paying attention to the Gulf."

"And I don't sit around just talking to experts because this is a college seminar; we talk to these folks because they potentially have the best answers, so I know whose ass to kick," he added.

In London, BP's share price was down more than 2 percent after Obama's remarks. BP shares have lost about a third of their value since the crisis erupted, and the company suffered another blow when Goldman Sachs downgraded its rating on BP to "neutral" from "buy" this week.

The stakes are high for Obama too.

A Washington Post/ABC poll found that 69 percent of Americans believe the government had done a "not so good" or "poor" job handling the spill. Just over 1,000 people were surveyed in the poll, conducted between June 3 and 6.

The spill has affected 120 miles of coastline, fouling wildlife refuges in Louisiana and barrier islands in Mississippi and Alabama and also sending tar balls ashore on northwest beaches of Florida, where the $60 billion-a-year tourism industry accounts for nearly 1 million jobs.


The Obama administration has imposed a six-month moratorium on new drilling permits for exploration and development wells in waters deeper than 500 feet. But the U.S. Interior Department may issue new safety and environmental requirements as soon as Tuesday for companies that want to drill in shallow waters.

The Gulf of Mexico incident has also started to have international ramifications.

Britain said it would increase its inspection of North Sea drilling rigs and monitoring of offshore practices in light of the Gulf of Mexico spill.

The International Energy Agency said it may cut its oil output estimates for the Gulf of Mexico by up to 300,000 barrels a day for 2015 on potentially tighter U.S. laws on deepwater drilling after the BP well accident.

While a complete halt to the flow of oil is not expected until August at the earliest, BP has reported an increase in the amount of oil it is capturing from the well in its latest containment effort.

Coast Guard Admiral Thad Allen, who leads the government's relief effort, said on Monday that London-based BP hoped to collect 20,000 barrels (840,000 gallons/3.18 million liters) per day in its latest effort.

BP said it had collected 7,541 barrels of oil in the first 12 hours of Monday. If it collected the same amount the rest of the day, the total for Monday would be more than 15,000 barrels, about 35 percent higher than the amount collected on Sunday.

Neither Allen nor BP gave an estimate of how much oil is still flowing into the Gulf. BP's latest attempt involves placing a containment cap on top of the gushing pipe on the ocean floor.

Away from the action in the Gulf, the political heat remains intense in Washington with yet another congressional hearing set to bring BP and its peers under renewed scrutiny.

The Senate Judiciary Committee holds a hearing at 10:00 EDT (1400 GMT) on Tuesday titled: "The Risky Business of Big Oil: Have Recent Court Decisions and Liability Caps Encouraged Irresponsible Corporate Behavior?" Democrats in Congress have been looking at lifting such caps.


The Senate hearing follows one in Chalmette, Louisiana, where two women who lost their husbands in the explosion that unleashed the crisis urged members of Congress to hold BP accountable.

"I am asking you to please consider harsh punishments on companies who choose to ignore safety standards before other families are destroyed," said Courtney Kemp, whose husband, Wyatt, was killed in the explosion.

The gravity of the spill was spelled out by Admiral Allen, who said its environmental consequences could last for years.

"Dealing with the oil spill on the surface is going to go on for a couple of months" once the well is plugged, he said. "Long-term issues of restoring the environment and the habitats ... will be years."

Images of birds struggling through oil-soaked waters ringing Louisiana's ecologically fragile barrier islands and marshes have added to the public outcry and pressure on Obama.

One-third of the Gulf's federal waters, or 78,000 square miles (200,000 square km), remains closed to fishing, and the toll of dead and injured birds and marine animals is climbing.

(Additional reporting by Tom Bergin in London, Jennifer Tan in Kuala Lumpur, and Tom Doggett in Washington; writing by Ed Stoddard and Pascal Fletcher; editing by Mohammad Zargham)

New media filling news void

TORONTO - New media and social networks are helping to strengthen community resilience during times of disaster, such as the oil spill in the Gulf Coast, a conference heard on Monday.

Twitter, Facebook and My Space all play a role in bringing the community together by sharing information, Dr. Jeannette Sutton, assistant research professor adjoint trauma, health and hazards centre at the University of Colorado said at the World Conference of Disaster Management at the Metro Toronto Convention Centre.

The capacity for informal communications has been transformed by social media technologies, Sutton said.

People are now “creating maps” on the Internet in which citizens provide information.

“A year ago in Kenya before the election the people created (which means testimony), so when people witnessed violence they posted the information and created a testimony,” Sutton said.

Now that technology is being used in the Gulf Coast.

People on the web page Crisis Commons report the conditions of the wild life, report on smell, injured people and who is getting sick.

“It is fantastic that this came out of Kenya and now it is being used for a technological disaster. People walking on the beach can report what they see (with their phone). So much information about the spill is not being released (through normal channels),” Sutton said.

“Citizen reporting is changing the game. People are no longer waiting for information to come from the top. Information is not going into a black hole.”

Bildt rejects Israel boycott calls

Sweden will not boycott Israeli goods or break its relations to Israel, foreign minister Carl Bildt has said in a response to opposition demands in a parliamentary debate on the Israeli boarding of the Ship to Gaza aid convoy.

The Swedish parliament held a debate on the Ship to Gaza convoy on Monday at the request of the opposition Left Party. During the debate Carl Bildt reiterated that the Israeli attack on the convoy was in violation of international law and should thus be subject to an investigation conducted by the international community.

"The fact that Israel needs to investigate the incident itself is understandable, but it is not enough. It happened in international waters and it is thus necessary that the investigation is undertaken within a framework involving the UN," said Bildt.

The Left Party's foreign affairs spokesperson Hans Linde welcomed Carl Bildt's clear stand on the issue, but argued that tough talk was not enough.

"It is becoming increasingly apparent that condemnation alone is not enough, those responsible for this carnage must be brought to justice," he said.

"Swedish military cooperation with Israel must be ended; each year our tax revenues are placed in the Israeli war machine. Why is this allowed to continue?" Linde asked.

Urban Ahlin of the opposition Social Democrats argued that a boycott of Israeli goods from the occupied areas would be an appropriate course of action.

But Carl Bildt rejected all demands for a boycott of Israel and for Sweden to call home its military attaché.

"Politics must rise above the petty," said Bildt and summarized the debate in that the opposition gave a clear indication that they are in agreement on one thing - to call home the military attaché.

"And they are also in agreement that it would not make an ounce of difference. Good morning! Get Serious! Foreign policy is no play house," said Bildt.

He stressed that the breadth of the international reaction could however have an impact on Israel.

"Israel has been hit by a massive diplomatic backlash. Let's not stand outside of this by acting alone," he said.

The Liberal Party's Fredrik Malm pointed out that the reason behind Israel's blockade of Gaza is the ongoing Hamas attacks on Israel.

"I note that no one mentions Hamas, whose totalitarian and theocratic rule does not strive for democracy or peace with Israel, we must support the moderate and democratic forces. The problem is that the main organizer behind Ship to Gaza is closely allied with Hamas," Malm said.

Another Gulf oil spill: Well near Deepwater Horizon has leaked since at least April 30

Ocean Saratoga.jpg
View full sizeA crew boat appears to be spraying dispersant on a slick emanating from the Diamond Offshore drilling rig Ocean Saratoga, working in deepwater about 12 miles off the tip of Louisiana. Skytruth, which monitors environmental problems via satellite, discovered the apparent leak three weeks ago in a satellite image.
The Deepwater Horizon is not the only well leaking oil into the Gulf of Mexico for the last month.

A nearby drilling rig, the Ocean Saratoga, has been leaking since at least April 30, according to a federal document.

While the leak is decidedly smaller than the Deepwater Horizon spill, a 10-mile-long slick emanating from the Ocean Saratoga is visible from space in multiple images gathered by, which monitors environmental problems using satellites.

Federal officials did not immediately respond when asked about the size of the leak, how long it had been flowing, or whether it was possible to plug it.

Skytruth first reported the leak on its website on May 15. Federal officials mentioned it in the May 1 trajectory map for the Deepwater Horizon spill, stating that oil from the Ocean Saratoga spill might also be washing ashore in Louisiana.

The only other mention the Press-Register was able to find of the spill in federal documents occurred in a May 17 transcript of a U.S. Coast Guard media conference. In that transcript, Admiral Mary Landry said that she was unaware there was another drilling rig leaking oil in the Gulf.

Officials with Diamond Offshore, which owns the drilling rig, said that they could not comment on the ongoing spill and referred the Press-Register to well owner Taylor Energy Co., which hired Diamond. Taylor Energy officials did not return calls seeking comment.

Saturday, the Southwings environmental group flew over the Ocean Saratoga with photographer J. Henry Fair of Industrial and returned with photos that appear to show a large oil crew boat pumping dispersants into the water at the spill site.

"It appeared the crew boat had barrels of dispersant on board," said Tom Hutchings of Southwings, a volunteer organization of pilots who monitor environmental problems from airplanes.

Henry Fair said that his photos show a large hose coming off the boat and disappearing into the water with several buoys tied to it. It was unclear how far the hose extended underwater.

"I see a hose going over the side. The boat was not moving, but it was making a wake, disturbing the water a lot," Fair said. "I see a glossy slick that one would usually identify as petroleum, and it goes a long way away."

Officials at the National Response Center said that the spill had been reported, but would not say when it began. The U.S. Coast Guard did not immediately respond to e-mails seeking comment.

"We accidentally discovered this spill looking at the Deepwater Horizon images. The question is, what would we see if we were systematically looking at the offshore industry?" said John Amos with "Is this an aberration, or are things like this going on all the time? That's why we are calling for public, transparent monitoring everywhere offshore drilling is going on in U.S. waters."

Devastation: You Can Smell The Oil From A Helicopter And Birds Are Frying!

Click this link ......

Teachers Encourage Kids to Work to Donate to Teachers

And you thought liberal public schools didn’t believe in making kids work hard. Why they’re ready to bring back indentured servitude!

That’s what a mom named Laura Wellington just found out. Her daughter came home from school with instructions to “accomplish chores around the house with the goal of being paid by me for those chores the sum of $20,” Wellington wrote on her blog. “She would then have to hand the full $20 over to the school to make up for the shortfall in their overall budget.”

Her daughter’s participation, according to the information the school sent home, was mandatory. So you’re supposed to shake mom down for $20 and give it all to the teachers - no questions asked?

You’ll be stunned to learn this happened at a school in New Jersey.

And isn’t it interesting that this school was sending its little Johnnies and Julies home to collect, not for a field trip or class pizza day, but for the actual operating budget of the school. As in teacher salaries and benefits. This puts even more pressure on the kids. After all, now it’s nice Mrs. Johnson’s paycheck at stake.

Mystery Crop Damage Threatens Hundreds Of Acres

BP 'manipulating search results' on Google following oil spill

BP is being accused of trying to manipulate the search results on sites like Google and Yahoo, as it attempts to salvage its battered image following the oil slick in the Gulf of Mexico.

The company is purchasing terms such as “oil spill”, “Deepwater Horizon” and “Gulf of Mexico”, so that when a user types these words into the search engines, the results prominently feature a “sponsored link” to BP’s official page on its response to the spill.

Critics have described BP’s move as unethical. Maureen Mackey, a writer on the Fiscal Times, an online news site, said: “What it effectively does is that it bumps down other legitimate news and opinion pieces that are addressing the spill... and \[BP are\] paying big money for that.”

The criticism comes as President Obama expressed unease at the amount of money the company was spending to counter the negative attention the company has received following the oil spill.

BP has confirmed that its digital teams based in Houston and London, together with the company’s marketing executives, are currently engaged in buying search terms.

The company sought to downplay the strategy, saying that it was aimed at helping those most affected by the spill, by providing accurate information on the correct forms to fill in and key people to contact.

When a user types any term into Google, the search engine returns the most relevant internet links relating to that term. In addition, companies can bid against each other, so that their advert also appears in the search results. These “sponsored links” are clearly distinguished and can appear above or alongside normal search results.

Groups can bid pennies or thousands of pounds for a search term, but the highest bid does not necessarily win. Google demands that adverts are “relevant” - for example, that the link is proven useful as many people have clicked on it.

BP have not revealed how much buying search terms such as “oil slick” has cost the firm. Companies are charged “per click”, meaning the more people click on the adverts, the more it will cost the firm. The New York marketing analyst Scott Slatin, who specializes in search engines, has estimated that BP is paying search engines over $10,000 a day to “own the top positions”.

Other analysts say that the move is a legitimate tactic that has been used successfully by other organisations in crises.

As the importance of the internet has grown, companies have increasingly tried to control their public image through buying advertising on search engines. Political parties across the world, include the Conservative Party during this years general election, have bought key search terms to ensure their messages are at the top of search engine results.

BP accused of judge-shopping for seeking Republican judge to handle lawsuits

BP has been accused of “judge shopping” after pushing for a specific judge in Houston, Texas — the centre of America’s oil and gas industry — to handle the lawsuits against it.

In a move condemned yesterday by several legal experts as indicative of corporate arrogance but defended by others as accepted tactical manoeuvring, the British energy group has filed papers requesting that all pre-trial matters in litigation relating to the Deepwater Horizon disaster be assigned to US District Judge Lynn Hughes.

Judge Hughes, 69, who was nominated in 1985 by the Republican President, Ronald Reagan, is also a lecturer for the American Association of Petroleum Geologists, whose 31,000 members work mainly in the oil and gas industry and which works with oil companies including BP.

He has also earned thousands of dollars in royalties from leasing energy exploration companies the mineral rights on land that he owns — though not to BP — owned stock in Big Oil and has granted significant rulings in the industry’s favour.

“This kind of thing is not par for the course, definitely not. Is it corporate arrogance? Absolutely. It’s horrifying,” said David Guest, a lawyer for the Washington-based environmental group Earthjustice.

He added: “I have a feeling it’s not going to play out the way BP wants it. It looks such scandalous behaviour that it seems it would be hard to stick.”

Other legal sources point out, however, that plaintiffs’ lawyers are also attempting similar moves, lobbying for their cases to be heard in Louisiana, where the Deepwater Horizon spill has generated the greatest public anger and economic impact.

Judge Hughes is a respected figure with experience of handling large-scale and complicated corporate litigation. He has also ruled against the oil industry in the past and operates with integrity and impartiality.

Heading the hunt for a judge without conflict or the perception of conflict is the US Judicial Panel on Multidistrict Litigation (MDL), which is expected to announce a decision next month.

Its task will not be straightforward. Of the 64 federal judges in Louisiana, Mississippi, Alabama and Florida that sit in districts where Deepwater Horizon lawsuits have been filed, 37 have financial links to the oil and gas industry, an investigation has found.

A number receive royalties on mineral leases while others own stocks or bonds in BP, as well as in Transocean, the company that operated the ill-fated rig, and Halliburton, which cemented the well that is spewing up to 25,000 barrels (1.05 million US gallons) of oil a day.

All three companies are at the heart of about 150 lawsuits brought by families of the 11 men who died and thousands of victims of the economic and environmental catastrophe that the oil leak has caused.

President Obama warned that the economic fallout from the oil leak would be substantial and Admiral Thad Allen, the head of the US Coast Guard, said that logistical moves were being put in place to try to prevent the oil coming ashore in greater quantities.

“The MDL panel must try to appoint a judge that is neutral and unbiased on both sides,” said Dane Ciolino, a professor of law at Loyola University, New Orleans.

“BP are doing no more than the plaintiffs’ lawyers are doing, which is to request a judge that for strategic reasons is going to provide them with what they believe to be a better forum.

“Both sides are looking to whatever tactical advantage they perceive exists . . . obviously the economic and environmental impact in Texas is significantly less than in Louisiana.”

According to the National Law Journal, seven of the 12 federal judges in the eastern district of Louisiana have recused themselves from hearing oil spill cases because of their connections to the industry.

They include US District Judge Mary Ann Vial Lemmon in New Orleans, who owns stock in BP. District Judge Carl Barbier, also of New Orleans, who is favoured by a number of plaintiffs’ lawyers, divulged that he holds investments in Transocean and Halliburton but is selling them to avoid any conflict.

“It may seem a little sinister to outsiders that so many judges are in the thrall of the oil and gas industry, but along with fishing the industry is king in this part of the world,” said Martin Davies, an expert in maritime law at Tulane University, New Orleans.

Buddy Caldwell, the attorney-general of Louisiana, appealed last week for federal funds to help him to line up a legal case against BP and other parties involved in the spill, revealing that he was finding himself competing against the oil company to snap up industry experts to give testimony.

“You want your people on the ground now and BP is out there trying to hire the same experts,” he told the Times-Picayune newspaper in Louisiana. “You’ve got to get the best lawyers. They’re going to have lawyers that charge $1,000 (£690) an hour. I want something close to a level playing field.”

CIA Goes 14 Months without Internal Watchdog

(AP) More than a year after the CIA's inspector general stepped down, frustrated members of Congress are urging the White House to fill the internal watchdog position that was central in uncovering abuses inside the spy agency.

Several possible candidates have fallen by the wayside despite assurances from the Obama administration that a nominee will be chosen soon.

The pressure from Congress comes as the administration is contending with concerns about its intelligence structure. A spate of failed terrorist attacks since December exposed flaws in the intelligence community's oversight. The administration also faces congressional unease over its new nominee for national intelligence director, James R. Clapper, after the forced resignation of the previous director, Dennis Blair.

The government's inspectors general root out corruption, fraud and other abuses that rarely surface otherwise. Because the CIA's activities are mostly conducted in secrecy, the position is of special value.

"I am disturbed that it has not been filled up to this point," said Fred Hitz, who served as the CIA inspector general for eight years until 1998. "I am wondering what is going on."

The CIA's previous inspector general, John Helgerson, showed the post's influence by investigating detainee deaths and abuses and reviewing the agency's harsh Bush-era interrogation program and use of secret prisons around the world.

Helgerson left in March 2009 and later retired. His deputy, Patricia A. Lewis, had served as acting inspector general until federal law forced her to return to her old post. She continues to run the office in the deputy position.

The Senate's intelligence leadership - Democrat Dianne Feinstein and Republican Kit Bond - wrote to President Barack Obama pressing him to fill the position.

"While the deputy inspector general has very capably led this office in an acting capacity, this function needs to be directed by an official formally endorsed by the president and the Congress," the senators wrote in late April. "For this reason, we believe it is important for you to promptly nominate a permanent replacement."

Bond said in an interview, "There is a real sense of frustration."

The White House did not detail its response, but said a nominee was coming. "The CIA currently employs a committed team of professional investigators and inspectors, and the president is very appreciative of their good work," White House spokesman Tommy Vietor said. "We look forward to putting forward a nominee to lead the office of inspector general in the near future."

Former and current U.S. intelligence officials say a possible candidate - a former CIA employee - emerged months ago but the Senate Intelligence Committee raised concerns about that person's ability to do the job. The officials said the White House shot down another prospect for reasons that remain unclear. Another possible nominee is in the mix now and was currently being vetted, according to officials who spoke under condition of anonymity because they were not authorized to discuss the matter publicly.

Danielle Brian, executive director for the Project on Government Oversight, said the unfilled job is vital because the CIA is so secretive. "There is no question given the lack of transparency at the CIA, this IG is singularly important to have in place," she said. "This should be a top priority given the history we've seen at the CIA."

BP suffers $1bn setback in Siberia

In pictures: the clean-up operation

The political storm engulfing BP intensified yesterday as the group came under renewed pressure on its Russian front.

Gazprom, the Kremlin-controlled gas monopoly, has raised new questions over the future of a giant gasfield in Siberia controlled by the British group’s Russian joint venture TNK-BP.

As at least two international brokerages cut their recommendations on BP to “neutral”, citing spiralling costs from the Gulf of Mexico oil spill and a potential cut to the dividend, Gazprom piled on the pressure by ending hopes that it might buy Kovytka from TNK-BP for up to $1 billion.

Speaking in Moscow, Viktor Timoshilov, the Gazprom executive responsible for Siberian developments, claimed that Russia’s gas export monopoly had no need for access to Kovytka’s resources because it had ample supplies elsewhere.

Last week, TNK-BP said that Rusia Petroleum, its unit that controls Kovytka, had filed for bankruptcy after a lengthy battle with the Russian State over the development.

The news is another body blow to BP, which yesterday announced some modest success in its efforts to contain the Gulf spill by fitting a cap on the leaking seabed riser pipe. The company said that it had siphoned off 11,100 barrels of oil on Sunday, a slight improvement on the previous 24 hours.

Discovered in 1987, the Kovytka field in Irkutsk contains an estimated two trillion cubic metres of gas and has been earmarked as a key source of energy supplies for China. Since the mid-1990s it has been majority-owned by TNK-BP, which started limited development of the field in 2001.

However, in the interim Moscow identified Kovytka as a strategic field that could be developed only by a company with majority Russian ownership. As the Kremlin has increasingly flexed its muscles over the country’s resources, state officials have repeatedly threatened to strip TNK-BP of its licence to develop Kovytka.

In 2007, TNK-BP struck a deal to sell the field to Gazprom for nearly $1 billion. But the talks subsequently ground to a halt.

Decreased demand amid the global economic downturn plus a glut of gas supplies have undermined the rationale for developing new gas projects.

Yesterday, a spokesman for BP in Moscow said that the future of the Kovytka field would be decided by a bankruptcy court in Irkutsk. He said: “It looks like the assets will be sold. It is hard to say when but I don’t expect it to be a very quick procedure.”

The remarks yesterday from Gazprom came a few days after President Medvedev questioned the future of BP. He said: “There is even an uncertainty as to what will happen to the firm. The nature of environmental responsibility is such that it can destroy anyone.”

Rusia Petroleum is 63 per cent-owned by TNK-BP, with the rest owned by other groups including the regional government of Irkutsk.

Separately, it has emerged that BP’s under-fire chairman Carl-Henric Svanberg is nursing a £1.4 million loss on shares he bought in the oil giant earlier this year.

The Swede, who joined BP on January 1, less than four months before the explosion on the Deepwater Horizon rig, paid £5.4 million for 925,000 shares in the company in two separate transactions in February and April. The average price Mr Svanberg paid was 584p a share. Yesterday the price had slumped to 432p each, making the shares worth just under £4 million.

Mr Svanberg, the former chief executive of Ericsson who has been heavily criticised for his low profile during the crisis, continued to buy shares in BP after the accident on the Deepwater Horizon.

He paid just under £1.1 million for 175,000 shares on April 28 — eight days after the deadly accident in the Gulf of Mexico. He had earlier paid £4.3 million for 750,000 shares at 575p each via his investment vehicle Chas Aludden — his first purchase of BP shares.

The Government will set out plans today to strengthen its safety regime in the North Sea oil industry, doubling annual rig inspections and creating a new taskforce to examine the country’s ability to prevent and respond to oil spills (Robin Pagnamenta writes).

In the first official British response to the Deepwater Horizon spill, Chris Huhne, the new Energy Secretary, said that the events in the Gulf of Mexico were devastating and would have many long-term effects for the industry.

Mr Huhne said: “What we are seeing will transform the regulation of deep water drilling worldwide.”

He added that Britain’s safety and environmental regime was “fit for purpose”.

However, he continued: “But the Deepwater Horizon gives us pause for thought and, given the beginning of exploration in deeper waters West of Shetland, there is every reason to increase our vigilance.”

Norwegian oil company struggles to normalize pressure at oil rig

For over a week, a Norwegian oil company has been scrambling to stabilize pressure levels in one of its North Sea oil platforms. Norwegian environmental groups say the company has lost control over the situation.

Last Thursday, Norwegian oil company Statoil partly evacuated the Gullfaks oil rig off the western coast after unexpected fluctuations in pressure were encountered while drilling.

The company said all 89 non-essential workers were taken off the rig as a precaution, while the other workers remained to normalize well pressure.

This image made from video released by British Petroleum shows equipment being used to try and plug a gushing oil well in the Gulf of Mexico on Wednesday, May 26, 2010Bildunterschrift: Großansicht des Bildes mit der Bildunterschrift: Pressure maintenance in oil wells can be highly complicated

That task, however, has proved more difficult than thought, with pressure levels still unstable six days later.

Pressure fluctuations no light issue

Statoil spokesman Gisle Johanson told Deutsche Welle that "highly variable pressure levels" in the rock formation being drilled were most likely the cause of the sudden pressure change, adding that this "happened from time to time."

He said that, although the situation was still not completely normalized, the pressure levels were now virtually under control.

"I underline that we have now been able to handle the pressure in the well, and that we assess the potential for leakages as very low."

Statoil, which has been drilling in the North Sea for over 20 years, has never suffered a blowout or a major spill. Still, Johanson said, unstable pressure levels were nothing to take lightly.

"We always take pressure problems in the well as very serious, and we do our best to do what we can to re-establish the full, normal safety situation in this well as soon as possible."

Comparisons to BP disaster

Environmental groups in Norway, meanwhile, have been quick to lash out at Statoil for what they see as an increasingly uncontrollable situation.

Fredric Hauge, the president of the Bellona Foundation, an environmental NGO based in Oslo, said Statoil was concealing the extent of the danger at the Gullfaks rig.

This image made from video released by British Petroleum shows equipment being used to try and plug a gushing oil well in the Gulf of Mexico on Wednesday, May 26, 2010Bildunterschrift: Großansicht des Bildes mit der Bildunterschrift: Pressure fluctuation led to massive leakage at the BP rig

"This is a completely unacceptable situation with regard to all security principles for the Norwegian shelf," an impassioned Hauge told Deutsche Welle.

"And, furthermore, I think it's very cynical of Statoil to fail to communicate this. They are scared now, because there are definitely similarities between what's happening at the Norwegian shelf and what's going on at BP in the Gulf [of Mexico]," he added.

Strange circumstances

Norway's state-run petroleum safety watchdog has been monitoring the situation in Gullfaks carefully since pressure levels began fluctuating there last week.

Inger Anda, a spokeswoman at the authority, told Deutsche Welle that normal pressure disturbances should not take this long to normalize.

The Norwegian 'Troll' natural gas rig on the North Sea off BergenBildunterschrift: Großansicht des Bildes mit der Bildunterschrift: Germany is a large consumer of Norwegian gas

"We sometimes see such instances of pressure variation in this industry, but it rarely happens that such a long time is needed to regain control of a well," Anda said.

Anda also called it "very serious" that only one protective barrier is currently all that is preventing leakage of oil and gas in the Gullfaks well.

She hesitated, however, to draw comparisons between the Statoil and BP situations.

"It's also difficult to compare situations before you know exactly what they're working on. We know the safety situation and the risk measurements that they are taking just now, but we don't know the details and we haven't been comparing it to other incidents so far."

In the history of Norway, which has been drilling for oil for decades, there has been one major spill. In 1977, a blowout occurred at a rig off the country's southern coast, resulting in leakage of some 30,000 tons of oil.

That amount has already been exceeded in the BP Gulf of Mexico disaster, to which there is still no end in sight.

Author: Gabriel Borrud

Editor: Susan Houlton

Capitalism in the dock as Kerviel goes on trial

Rogue trader Jérôme Kerviel is on trial. The case for the defence: the insanity of global banking culture. John Lichfield reports

If you want to hide a leaf, find a forest. Jérôme Kerviel, alleged to be the world's biggest rogue trader, will attempt to hide a €5bn leaf in a multi-trillion euro forest when he goes on trial in Paris today. Mr Kerviel's defence will be horrendously complex – and very simple. His lawyers will admit that what he did in 2007-8 – to bet more than the value of France's second largest bank on a series of trades on stock exchange futures – was insane. However, they will also argue that his actions were rational, even tacitly approved, within a global banking culture which had, itself, broken off relations with reality.

Put another way, the chief exhibits in Mr Kerviel's defence will be the subprime mortgage crisis and the global financial meltdown of 2008-9.

His legal team will be led by the star of the French bar, Maître Olivier Metzner. They will argue that Mr Kerviel, 33, was not a "rogue" trader at all. He never tried to steal a centime of the hundreds of billions of euros that flickered across his computer-screen.

Although he repeatedly broke the rules of his bank, Société Générale, and pulverised his nominal trading limits, so did many of his colleagues, Mr Metzner will say. Thousands of computer records of Société Générale trades in 2007 suggest that Mr Kerviel and his colleagues had been bending the rules for 12 months before he was "caught". So long as he was making huge profits – including a €1.5bn (€1.2bn) "surplus" in 2007 – his supervisors said nothing.

In other words, Mr Kerviel and his lawyers will try to turn France's financial trial of the century into something even bigger: a trial of the world banking industry. They may succeed.

A couple of weeks before his trial, Mr Kerviel set the parameters for his defence by publishing his autobiography, L'Engrenage ("The vicious spiral"). Mr Kerviel, with his boy-band looks and plausible manner, has become a cult hero since he was accused, in January 2008, of "losing" €4.9bn in rogue trades. He has a fan club. He has been the protagonist of a comic book. His story is to be made into a film. More than 70 per cent of French people say he was a victim rather than a villain. Mr Kerviel, they suggest, was a single finger-on-the-keyboard in the frenzy of speculation which helped to create the Madoff affair and the subprime crisis and has now switched its sights to the debt of Greece, Spain and other euroland countries.

Video: Kerviel faces 'rogue trader' trial

In his book, Kerviel puts a more subtle, and more arrogant, variant of the argument. He was not just a foot-soldier, he boasts. He went further than anyone else, betting at one stage over €300bn, far more than Société Générale was worth, on shares futures in European stock markets. He suggests that his superiors' greed for immense profit led them to ignore the extraordinary risks that he took.

"No doubt I committed errors," he wrote. "I overrode the usual methods, loaded false data to disguise gains, as well as losses. In a word, I pushed the system to its limit... But [what] was happening around me? [A] giant fraud perpetrated by all the trading floors in the world. To get good results, any tricks were permitted. The golden rule of the banking culture was simple: if you win, you are in the right; if you lose you are wrong and you're out."

This defence has been rejected by the prosecution, by Société Générale and by the two examining magistrates. The prosecution will be led by another of the leading figures of the French bar, Maître Jean Veil. He will argue that Mr Kerviel was motivated by the lure of giant bonuses; or by a desire to prove himself the best trader in the world; or by the resentment of a clever provincial with modest qualifications against the graduates of the élite colleges, or Grandes Ecoles, who floated effortlessly up the hierarchy at Société Générale.

Mr Metzner says that thousands of computer records of the bank's trades handed over to the defence in recent months, will transform understanding of the case and clear Mr Kerviel.

The prosecution says they prove Société Générale's argument: that Kerviel made vast, unauthorised trades and covered his tracks by entering fake counter-trades in the bank's computer (seeming to lay off his bets). Senior executives at Société Générale originally called Mr Kerviel a "financial terrorist" and a "genius of fraud". They and the prosecution have been forced to accept that the clean-cut young Breton – officially never more than a "junior trader" – did not steal a centime. Potential fraud or embezzlement charges were dropped a year ago.

Instead, Mr Kerviel stands accused of "abuse of confidence, forgery, using forgeries and placing fraudulent information into a computer". If found guilty, he could be sent to jail for five years, fined €375,000 and ordered to pay up to €4.9bn in damages to Société Générale. From his present €30,000 a year salary, that might take a little time.

Mr Kerviel admits the facts but denies the charges. He will plead not guilty. He will argue that his superiors knew what he was doing and that forging documents, breaking limits and loading "fake trades" was standard practice at Société Générale (and not only there).

"The methods I used were not invented by me. They were being used all around me, although probably not to the same extent that I used them. Why did the (official) alerts received by my managers not lead to any effort to restrain me? There were numerous signals that I was no longer just a market-maker (making tiny amounts of money on cautious trades) but a speculator."

Much of Mr Kerviel's argument in his book is compelling. There are also flaws. From the computer records, it appears that his superiors must have known that Kerviel was operating way beyond his nominal limits. His declared profit in 2007 was €55m – more than five times his target. His actual profit was €1.5bn – 150 million times his target. He achieved this astronomic figure by betting massive sums on a downward movement in the futures of shares on European stock markets. Officially, he was supposed to cover trades in one direction by making smaller trades in the other direction. His covering trades were usually fictitious.

By July 2007, betting that shares would go down, he was €2bn in the red. Was Société Générale aware of what was going on? Mr Kerviel insists they were and said nothing. In the second half of the year, the gathering subprime crisis pushed shares downward and Mr Kerviel made a massive killing. By December 2007, he was €1.5bn up.

Was Société Générale aware of his triumph? Mr Kerviel, and his lawyers, say that they were. He did not declare the immense profit. He made computer manipulations to carry his "winnings" over into 2008. Then things started to go badly wrong.

Mr Kerviel switched the direction of his "bets" to a recovery of the European share market which did not immediately materialise. His 2007 gains were in danger of being wiped out just as Société Générale senior executives started to question him about them. When they discovered in January 2008 that he had a further €50bn in exposed trades, they panicked, he says. Another trader was ordered to unwind his positions.

The sheer volume of trades undermined the market. Société Générale lost €6.4bn in a couple of days – which Mr Kerviel's previous winnings reduced to a net loss of €4.9bn. Mr Kerviel insists that it was Société Générale which lost all this money. The market soon recovered, as he had predicted. If he had been left alone, he suggests, the loss would have been small. He might even have come out with a profit.

There are yawning gaps in his argument. Why did he not declare the huge profit of €1.5bn in 2007? Why did he bet such large amounts in the first place? He admits that, although his colleagues were also making fake trades, none of them wagered such astronomical amounts.

Mr Kerviel says that he knew he had "overstepped the limits of the reasonable" but he could no longer "stop the machine". He denies he is a compulsive gambler but admits he became hooked on the "taste of victory" and felt "an anxiety to do better and better". He rejects the suggestion that, as a provincial hick, he was driven by a desire to outperform the products of France's élite colleges. But his book is littered with references to the Grandes Ecoles attended by his colleagues.

It appears that Mr Kerviel may have become scared by the size of his winnings in 2007. He "hid" the €1.5bn and may have actually set out to "lose" some of the money. Why, otherwise, suddenly change his strategy to bet on an sudden upturn in a falling share market?

Maître Olivier Metzner will, doubtless, make a different argument. Mr Metzner is not famous for flights of rhetoric. He is known for his ability to place his clients' alleged misdoings into a wider context which casts them in a more favourable light.

Mr Kerviel's "irrational exuberance", he will say, was unforgivable, seen in the light of the real world. Within a few months, the subprime crisis revealed that an estimated $47trn – that is to say three-and-a-half times the size of the US economy – had been invested, or speculated, in global markets on credit default swaps spinning off from a much smaller amount of doubtful American home mortgages. Financial institutions around the world lost an estimated €1trn.

In comparison, Maître Metzner, might say Jérôme Kerviel was taking a flutter on the Euromillions lottery.

Mutant cows die in GM trial

Genetically modified cows were born with ovaries that grew so large they caused ruptures and killed the animals.

The bungled experiment happened during a study by AgResearch scientists at Ruakura, Hamilton, to find human fertility treatments through GM cows' milk.

AgResearch is studying tissue from one of three dead calves to try to find out what made the ovaries grow up to the size of tennis balls rather than the usual thumbnail-size.

Details of the deaths - in veterinary reports released to the Weekend Herald under the Official Information Act - have reignited debate over the ethics of GM trials on animals.

AgResearch's applied technologies group manager, Dr Jimmy Suttie, said he did not see the deaths as a "big deal", and they were part of the learning process for scientists.

But GE-Free NZ spokesman Jon Carapiet said details of the calf trial showed the animal welfare committee overseeing AgResearch's work was "miles away from the ethics and values of the community".

The calves died last year, aged six months. They were formed when human genetic code injected into a cow cell was added to an egg from a cow's ovary and put into a cow's uterus.

The scientists hoped that the genetic code, a human follicle stimulating hormone (FSH), would enable the cows that were produced to produce milk containing compounds that could be used as a human fertility treatment.

Under permits issued by the Environmental Risk Management Authority last month, AgResearch can put human genes into goats, sheep and cows for 20 years to see if the animals produce human proteins in their milk.

The proteins could eventually be used to treat human disorders.

Anti-GM groups said the cost to animal welfare was too high, citing cases of aborted and deformed fetuses, deformed calves and respiratory conditions among animals bred at Ruakura.

The Official Information Act documents show a Ministry of Agriculture and Forestry (MAF) investigation found deformities and respiratory problems among animals at the facility - something AgResearch had been open about - but said that was a foreseeable by-product of the project.

Overall, the investigator found cows were better cared for by vets at Ruakura than they would be on a standard dairy farm.

Scientists noticed that four calves carrying the FSH gene grew more quickly than their clone sister, which did not have the gene.

The FSH calves had bigger abdomens and thicker necks but seemed otherwise healthy, apart from one that easily grew short of breath, said a vet's report.

Dr Suttie said the abnormalities were reported to the animal ethics committee, which told the company to monitor the calves.

Tests five months later found three of the four calves had abnormally large ovaries.

When the calves were six months old, one died suddenly of a haemorrhage to her uterine artery, probably because of stretching and distortion caused by her deformed ovaries.

Five days later, a second calf died, after her ovary became twisted and separated from her uterus.

The third calf with over-sized ovaries was killed the same day so scientists could study her tissue.

Dr Suttie said the root of the trouble was that the human FSH genes had affected the whole calf and not the mammary glands only, as was intended - a problem that did not show up in trials on mice.

"This was not intended to happen. But, bluntly, this is what research is all about."

Emails between AgResearch and MAF reveal Agriculture Minister David Carter sought more information about animal welfare when he learned of the calves deaths last year.

He said yesterday that he was satisfied with AgResearch's response.

Current Oil Spill Images

Courtesy of ROFFS Deepwater Horizon Rig Oil Spill Monitoring

Latest HYCOM-GFS Oilspill Forecast

Courtesy of Florida State University

Federal Fishery Closures In The Gulf of Mexico

UN warns climate change could trigger ‘mega-disasters’

(AFP) – Weather-related catastrophes brought about by climate change are increasing, the top UN humanitarian official said Sunday as he warned of the possibility of “mega-disasters”.

John Holmes, the UN Under-Secretary General for Humanitarian Affairs, said one of the biggest challenges facing the aid community was the problems stemming from changing weather patterns.

“When it comes meteorological disasters, weather-related disasters, then there is a trend upwards connected with climate change,” Holmes, who is in Australia for high-level talks on humanitarian aid, told AFP.

“The trend is there is terms of floods, and cyclones, and droughts.”

Holmes, who is the UN’s emergency relief coordinator, said it had been a tough year due to January’s devastating earthquake in Haiti, which killed more than 250,000 people. Full article here

Obama to reopen waters for shallow water drilling

Facing an angry tsunami from oil companies, oil company employees and oil company servicers in the Gulf Coast, the Obama Administration is set to quickly reopen drilling sites in the Gulf.

The Administration will release new safety requirements in the wake of a massive BP oil spill. After a rig blew up and sank in April, a drillhole created by BP began leaking tens of thousands of barrels of oil into the sea off the coast of Louisiana.

The Wall Street Journal reported Tuesday that the oil industry claims "each deepwater rig employs 180 to 280 workers, with each of those jobs supporting another four industry workers, for a total potential loss of more than 40,000 jobs. The moratorium 'will result in crippling job losses and significant economic impacts for the Gulf region.'"

The Journal adds:

The oil industry is awaiting new safety regulations from the Interior Department's Minerals Management Service, which canceled some offshore drilling permits last week and has had others on hold since early May. Administration officials say new rules for shallow water oil and gas drilling could be released as soon as Tuesday.

The White House also said Monday that it supported lifting the cap on liability damages altogether for any oil companies drilling offshore. The cap is $75 million unless the government can show criminal negligence.

Some Republicans and industry groups have cautioned that putting the liability cap too high could make it tough for smaller companies to drill offshore.

President Barack Obama met with Cabinet officials on the spill Monday and expressed optimism that it would be contained, but he pointed to the potential for long-term economic damage. "What is clear is that the economic impact of this disaster is going to be substantial and it is going to be ongoing," he said.

The new drilling regulations are expected to require drillers to have independent operators certify that the blowout preventers work as designed to shut off the flow of oil; that independent operators certify the well design plan is adequate, including proper casing, or cement lining; that the driller certifies it is in compliance with all regulations and have done all needed tests.

BP has begun to siphon oil from the leaking site using a cap placed over the spill. The company plans to "complete" the closure operation by drilling two relief wells near the existing site, which are slated to be completed in August.

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Obama Looking for "Whose Ass To Kick" Tip: Start Looking at Your Own Appointees

For OpEdNews: Rob Kall - Writer

Yesterday, President Obama said, I don't just sit around talking to experts because this is a college seminar. We talk to these folks because they have the best answers so I know whose ass to kick. "

Matt Drudge, of the Drudge report used this tough talk to tap the not very far beneath the surface racism of his right wing readers, with the scarey, angry black president headline, ", OBAMA GOES STREET: SEEKING 'ASS TO KICK' ."

But I'm more interested in whose asses he finds. I think he should own up to his own failures first. He should be looking, first, in the White House.

Get rid of the fat cats and the people who totally screwed up his image in handling the BP Gulf spill, so now, a majority of people think this disaster is being handled worse than Katrina. Start with asses-- I mean-- the asses of-- Rahm Emanuel and David Axelrod, then quickly clear out the corporate friendly asses of Robert Rubin alumni-- Geithner, Summers and Orszag. Or maybe, first off, as I've been saying, kick corpo-whore Ken Salazar's ass out of the government and watch how fast he, how all of them take lobbyist or industry jobs.

Hire Van Jones back and tell Glen Beck to go f*ck himself instead of America. Hire the strongest advocates for a healthy ecology-- Paul Hawkens, Bill McKibben, Robert F. Kennedy, Jr. and show some serious action by empowering people who have a history of seriously protecting the environment.

There's been a lot of talk about Obama getting some passion, some anger going in that placid heart of his. But I hope if he finds that "fire in the belly," as Robert Bly described, that he used it to stand up to those bad advisers who have helped put him in the uncomfortable place he now finds himself.

Hopefully today's super tuesday of primaries will further demonstrate to the president that he's been taking the wrong sides-- for the status quo he campaigned against (like Blanche Lincoln, banksters, big Health Care, the Oil industry) rather than for the USA's people and environment.

The American people didn't vote for a corporate friendly contortionist president who bends over double backwards to please the people they defeated. It's time for him to throw out the Clinton DLC DINOs he started his presidency with and replace them with people who will watch the backs of the american people first. It just might save OBAMA's ass.