Web companies begin releasing surveillance information after U.S. deal

By Joseph Menn and Gerry Shih

SAN FRANCISCO (Reuters) - Facebook and Microsoft have struck agreements with the U.S. government to release limited information about the number of surveillance requests they receive, a modest victory for the companies as they struggle with the fallout from disclosures about a secret government data-collection program.
Facebook on Friday became the first to release aggregate numbers of requests, saying in a blog post that it received between 9,000 and 10,000 U.S. requests for user data in the second half of 2012, covering 18,000 to 19,000 of its users' accounts. Facebook has more than 1.1 billion users worldwide.
The majority of those requests are routine police inquiries, a person familiar with the company said, but under the terms of the deal with Justice Department, Facebook is precluded from saying how many were secret orders issued under the Foreign Intelligence Surveillance Act. Until now, all information about requests under FISA, including their existence, were deemed secret.
Microsoft said it had received requests of all types for information on about 31,000 consumer accounts in the second half of 2012. In a "transparency report" Microsoft published earlier this year without including national security matters, it said it had received criminal requests involving 24,565 accounts for all of 2012.
If half of those requests came in the second part of the year, the intelligence requests constitute the bulk of government inquiries. Microsoft did not dispute that conclusion.
Google said late Friday that it was negotiating with the government and that the sticking point was whether it could only publish a combined figure for all requests. It said that would be "a step back for users," because it already breaks out criminal requests and National Security Letters, another type of intelligence inquiry.
Facebook, Google and Microsoft had all publicly urged the U.S. authorities to allow them to reveal the number and scope of the surveillance requests after documents leaked to the Washington Post and the Guardian suggested they had given the government "direct access" to their computers as part of a National Security Agency program called Prism.
The disclosures about Prism, and related revelations about broad-based collection of telephone records, have triggered widespread concern and congressional hearings about the scope and extent of the information-gathering.
The big Internet companies in particular have been torn by the need to obey U.S. laws that forbid virtually any discussion of foreign intelligence requests and the need to assuage customers.
"We hope this helps put into perspective the numbers involved and lays to rest some of the hyperbolic and false assertions in some recent press accounts about the frequency and scope of the data requests that we receive," Facebook wrote on its site.
Facebook said it would continue to press to divulge more information. The person familiar with the company said that it at least partially complied with U.S. legal requests 79 percent of the time, and that it usually turned over just the user's email address and Internet Protocol address and name, rather than the content of the person's postings or messages.
It is believed that FISA requests typically seek much more information. But it remains unclear how broad the FISA orders might be.
Several companies have said they had never been asked to turn over everything from an entire country, for example. However, the intelligence agencies could ask for all correspondence by an account holder, or even all correspondence from the users' contacts.
Among the other remaining questions are the nature of court-approved "minimization" procedures designed to limit use of information about U.S. residents. The NSA is prohibited from specifically targeting them.
"If they are receiving large amounts of data that they are not actually authorized to look at, the question then becomes what are the procedures by which they determine what they can look at?" said Kevin Bankston, an attorney at the Center for Democracy & Technology. "Do they simply store that forever in case later they are authorized to look at it?"
In addition, some legal experts say that recent U.S. laws allow for intelligence-gathering simply for the pursuit of foreign policy objectives, not just in hunting terrorists and spies.
Google, Facebook and Microsoft have already directly contradicted the Guardian and Washington Post reports about "direct access" to their servers.
Both newspapers have since backtracked, and it now appears that at least some of the companies allowed neither government-controlled equipment on their property nor direct searches without company employees vetting each inquiry.
Google has been the most forthright on the technology issue, saying that it provides information only on request via an old-school data-transfer protocol called FTP and that Google legal staff must approve each request.
Beyond that, it is now clear that many of the companies have objected, at times strenuously, to both individual requests and the broad sweep of the program. It remains unclear how successful they have been.
WRESTLING OVER SECRET ORDERS
The initial reports about Prism included an internal NSA slide listing the dates that each of nine companies began allowing Prism data collection, starting with Microsoft in 2007 and Yahoo in 2008. The other companies include Apple, AOL and PalTalk as well as YouTube and Skype, which are owned by Google and Microsoft respectively.
Sources familiar with the conversations between the government and the Internet companies say there are frequent disagreements over how to handle specific requests.
Only one company, Yahoo, is known to have taken the highly unusual step of appealing an order from the Foreign Intelligence Surveillance Court. The company argued in 2008 that the order violated the Fourth Amendment protection against unreasonable searches and seizures.
But U.S. District Judge Bruce Selya, who headed the FISA court's Court of Review, ruled the data collection program did not run afoul of the Bill of Rights.
Selya's ruling was published in redacted form, only the second time such a decision had ever been made public. A Justice Department spokesman said it was published at the court's behest, but the executive branch would have had to approve the waiving of secrecy rules.
Two days after that, according to the leaked NSA slides, Google joined the Prism data-collection effort.
"When Yahoo lost that case, it dissuaded everyone else from going to court," a person at another company told Reuters.
"A provider seeing that decision erases the doubt about whether a judge would approve this process," said a former lawyer for Yahoo.
Twitter, which has positioned itself as a hard-line defender of free speech and customer privacy, is still not participating in Prism. But people familiar with talks between the tech companies and the government said it will likely be forced to comply.
In Twitter's case, as in that of some other companies, the objections have ostensibly been about the technological difficulty in complying with orders and the format in which the information will be shared, people familiar with the situation say.

(Reporting by Joseph Menn and Gerry Shih in San Francisco. Additional reporting by Alexei Oreskovic. Editing by Jonathan Weber and Xavier Briand)

Finance Week Ahead: Focus on the Fed

Another volatile trading week has come to an end, with the major U.S. indices in the red overall and the Dow on Friday seeing its fourth straight day of triple-digit swings. Central bank concerns, from lack of further Bank of Japan action to continued worries over the timing of Fed tightening, led the way; Japan's Nikkei also saw some serious action, plunging to officially enter bear market territory on Thursday before recovering a bit on Friday, while the yen soared against the dollar.

"Central banks are powerless!" cried Yahoo! Finance Breakout's Jeff Macke this week as he and Matt Nesto discussed how the Japanese crash mocks central bank intervention. But the Fed will rule next week as well, as the two-day policy meeting gets under way on Tuesday. Be sure to join our Breakout! team for special live coverage on Wednesday, straight from Yahoo! studios in midtown Manhattan. One not-to-miss feature of this live event: Yahoo! Finance columnist Rick Newman will tell us how Fed Chief Ben Bernanke cost him thousands of dollars. Really. You'll have to tune in to get the details, beginning at 3:45 p.m. ET.

Next week we'll also have guest David Stockman, former budget director under President Ronald Reagan, back on The Daily Ticker, talking about the Fed, budget issues and the general "corruption of capitalism" in the U.S. To refresh your memory, the last time he was on, he told us all, "There are bubbles all over, hide in cash!"

Here's everything else you should look out for in the next week:
Monday, June 18

• Stream of housing data kicks off with the housing market index at 10:00 a.m. ET
• Other data: Empire state manufacturing survey, credit card default rates, Treasury international capital
• G8 summit in Northern Ireland, hosted by UK PM David Cameron, to be attended by world leaders including Barak Obama, French President Francois Hollande, German Chancellor Angela Merkel, Japanese PM Shinzo Abe
• Paris Air Show begins, with Airbus vs. Boeing expected to dominate
• Possible IPOs this week: Regado Biosciences, Aratana Therapeutics, Bluebird

Tuesday, June 19

• The two-day FOMC meeting begins
• More housing data with housing starts at 8:30 a.m. ET
• Other data: Consumer inflation
• Following the conclusion of the G8 summit, Obama will make an official visit to Germany to meet with Angela Merkel and President Joachim Gauck. German elections will be held in September and if Merkel remains chancellor, she will become Germany's second-longest-serving postwar chancellor following Helmut Kohl.

Wednesday, June 20

• FOMC meeting announcement/forecasts in at 2:00 p.m. ET, Bernanke presser at 2:30 p.m. ET
• Data: Weekly mortgage applications, oil inventories
• Earnings: FedEx (FDX)
• From Germany, Obama will deliver a speech at Bradenburg Gate in Berlin
• There will be a National Press Club luncheon, at which AP President/CEO Gary Pruitt will discuss the seizure of AP phone records first reported in May

Thursday, June 21

• More real estate data with existing home sales at 10:00 a.m. ET
• Other data: Jobless claims, PMI manufacturing index, Philadelphia Fed survey, leading indicators, natural gas inventories, Fed balance sheet/money supply
• Shareholder meeting: Best Buy (BBY)

Friday, June 22

• Quadruple witching day: This is when the contracts for stock index futures, stock index options, stock options and single stock futures all expire. This happens four times a year, on the third Friday of March, June, September and December.

Australia embraces new gender guidelines

Australia has embraced a growing global trend towards acknowledging greater gender diversity with individuals now able to be referred to as "indeterminate, intersex or unspecified" on official documents rather than male or female.

Attorney-General Mark Dreyfus said new national guidelines, which come into force on July 1, will make it simpler for people to establish or change their sex or gender in personal records held by government departments and agencies.
"We recognise individuals may identify, and be recognised within the community, as a gender other than the gender they were assigned at birth or during infancy, or as an indeterminate gender," he said in a statement late Thursday.
"This should be recognised and reflected in their personal records held by departments and agencies."
The move comes after the Australian Human Rights Commission in 2009 recommended the government consider developing national guidelines concerning the collection of sex and gender information.
The new guidelines state that "where sex and/or gender information is collected and recorded in a personal record, individuals should be given the option to select M (male), F (female) or X (Indeterminate/Intersex/Unspecified)".
They state that sex reassignment surgery and/or hormone therapy are not pre-requisites for the recognition of a change of gender in Australian government records.
When someone requests the sex on their personal record be changed, Dreyfus said the government would accept a statement from their doctor or psychologist, a valid Australian passport (which have allowed X under sex for several years), or a state or territory birth certificate or other document which shows their preferred gender status.
"Transgender and intersex people in Australia face many issues trying to ensure the gender status on their personal records matches the gender they live and how they are recognised by the community," Dreyfus said.
"These guidelines will bring about a practical improvement in the everyday lives of transgender, intersex and gender diverse people."
The move comes just weeks after a New South Wales ruled that sex does not just mean male or female, which suggests terms like "sex not specified" could become more prevalent.
Organisation Intersex International Australia welcomed the new guidelines.
But it noted that many people who were intersex, either because they have the biological attributes of both sexes or lack some of the biological attributes considered necessary to be defined as one or the other, may still identify as male or female.
"What happened yesterday was a major leap forward because it helps to ensure there is consistency in how people are treated at the federal level," Morgan, a spokesperson for the organisation who did not want to use his surname, told AFP.
"We would rather not have to participate in these binary boxes if we don't want to. People should be able to choose something if they really want."
Australia's move is seen as part of a global trend towards greater acceptance of sex and gender diversity.
In 2011, UN High Commissioner for Human Rights Navi Pillay described Australia as "in the vanguard of change" when it enabled its citizens to have their sex and gender identity properly recognised on their passports.
"Increasingly, states around the world are starting to recognise the need to reflect sex and gender diversity," Pillay said at the time, saying pioneering steps had been taken in recent years in Nepal, Portugal, Britain and Uruguay."
Earlier this week Nepal's Supreme Court ordered the government to alter passports so that transgenders no longer have to describe themselves as male or female.
The move comes more than six years after the court ordered the government to enact laws to guarantee the rights of transgender, gay, lesbian and bisexual people.

Tesco stops sourcing from a Bangladesh factory due to safety concerns

LONDON (Reuters) - Tesco, the world's No. 3 retailer, has stopped sourcing clothes from a factory in Bangladesh after discovering serious problems with the safety of a building, the company said on Saturday.

The move follows a survey the British-based supermarket chain conducted in the wake of the collapse of the Rana Plaza factory complex in Dhaka in April that killed 1,129 people.
"A structural survey of a site we source from in Bangladesh, owned by Liberty Fashions, has revealed serious problems with the safety of one of the buildings," Tesco said in a statement.
"We immediately made the owners aware of our findings, and tried to find an alternative to ceasing production of Tesco products on this site. We are disappointed that this was not possible...
"Our concerns about the structure of this building are so serious that we decided our only option was to stop taking clothes from this site with immediate effect."
Tesco, which has promised to conduct structural surveys of all the factories it sources from, said it had urged the owners of the site to stop all production and to evacuate the premises to ensure the safety of its workers.

It had also informed the relevant authorities, other customers of the site and the Bangladesh Garment Manufacturers and Exporters Association (BMGEA) of the survey results and its decision to stop sourcing from the site.

The retailer said it had stopped using 15 factories of concern in Bangladesh in the past 12 months.
Bangladesh has pledged to improve safety in the garment industry after the Rana Plaza collapse but has not pledged any new money to relocate dangerous buildings.
The collapse of Rana Plaza, a factory built on swampy ground outside Dhaka with several illegal floors, on April 24 ranks amongst the world's worst industrial accidents and has galvanized brands to look more closely at their suppliers.
Very low labor costs and, critics say, shortcuts on safety, makes the country of 160 million the cheapest place to make large quantities of clothing.

Companies are split over how to improve conditions. Big European names have signed an accord that would make them legally responsible for safety at Bangladesh factories. U.S. firms like Wal-Mart Stores Inc have broken ties with non-compliant factories.

(Reporting by Stephen Addison; Editing by Susan Fenton)

Can Superheroes Save the Hollywood Box Office?

Can Superman Beat Iron Man? Warner Bros. sure hopes so. The studio’s $225 million Superman reboot “Man of Steel" will open in 4,207 theaters this weekend and is expected to be the blockbuster of the summer.

The last time Superman hit theaters was in 2006 with "Superman Returns." Producers of "Man of Steel" are hoping their version of Superman will not only revive the sleepy comic book franchise but also become a bigger box office draw than "Iron Man 3" -- which has collected $1 billion in ticket sales worldwide.

Blockbusters have earned $11 billion in profits so far this year, according to Lynda Obst, a long-time Hollywood movie producer and author of the new book, Sleepless in Hollywood: Tales from the New Abnormal in the Movie Business.

Hollywood no longer makes movies says Obst, who produced "Sleepless in Seattle," "Contact" and "How to Lose a Guy in 10 Days."

“We make franchises, sequels, reboots…movies that are basically an enterprise for future movies. We don’t make them because they’re good, we make them because they’re a business proposition that can be doubled, tripled or quadruped into six or seven future movies,” she tells The Daily Ticker.

Since 1995, 10 of the top 19 grossing movies have been franchise films. Six starred superheroes.

Obst says Hollywood no longer wants to appeal to Americans, with the focus instead on international sales. ‘That’s where the big profits are coming from," she says.
And Hollywood needs them -- especially because of new competition from streaming video and on-demand movies. Obst says new technology and the resulting DVD crash wiped out half of the profits in Tinseltown.

Movie moguls have decided to rely on markets where the profits are steady such as overseas destinations like China.

China is currently the No. 2 market for movies and is on track to be No. 1 by 2020, Obst says. Theaters are closing in the U.S. as new picture houses are popping up all over China, especially Imax and 3-D theaters.

“That means that the product we’re going to make is going to be 3-D and Imax movies. That’s what the world wants from us,” says Obst.

Ticket sales in the U.S and Canada rose 6% in 2012 while sales in China gained 36%. The number of movies released in the U.S. in 2012 fell 9% to 128 while the number released globally rose more than 10% to 677.

What does award-winning producer Linda Obst hope that Hollywood will do to remedy this situation? Watch the video above to find out!

Tell Us What You Think!

Explosion at Louisiana chemical plant kills 1, injures 73

 

 

By Jonathan Bachman

GEISMAR, Louisiana (Reuters) - An explosion and fire killed one person and injured 73 at the Williams Olefins chemical plant in Geismar, Louisiana, on Thursday, unsettling an industrial town where authorities ordered people to remain indoors for hours to avoid the billowing smoke.
The blast at 8:37 a.m. (0937 ET) sent a huge fireball and column of smoke into the air. The plant along the Mississippi River, about 60 miles from New Orleans, is one of 12 chemical plants along a 10-mile (16-km) stretch of the river.
The fire, fueled by the petrochemical propylene, burned for more than three hours, though government monitors had yet to detect dangerous levels of emissions, Louisiana Governor Bobby Jindal told a news conference near the scene.
"Once the investigations are done, once there's a responsible party, they will absolutely be held responsible," Jindal said.
Louisiana State Police said the victim was Zachary C. Green, 29, of Hammond, but gave no further information on him.
Some 300 workers from the plant were evacuated and all the employees were accounted for, among them 10 who stayed behind in a safe room inside the plant, Jindal said.
Emergency responders took 73 people to hospital, Jindal said, including at least five who were being treated at Baton Rouge General Hospital's burn center, said Dr. Floyd Roberts, a physician there.
Plant operations were shut, and the company's own emergency response crews were assisting at the scene, parent group Williams Cos said in a statement.
Authorities ordered people within a 2-mile (3-km) radius to remain in their homes, in part because of the smoke, said Lester Kenyon, a spokesman for Ascension Parish.
That "shelter in place" order was later lifted for residents but remained in effect for four other plants in the area that scaled down their operations, Jindal said.
"It's a sad day in Geismar, and particularly for the Williams Olefins work family, and frankly for the petrochem community in this area," Ascension Parish Sheriff Jeffrey Wiley said. "It's an industry that practices safety every second of every day, but regrettably, things do happen."
The same plant had an accident in 2009 when about 60 pounds (27 kg) of a flammable mixture was released, resulting in a fire that caused property damage but no injuries, according to the Right-to-Know Network, citing data from the U.S. Environmental Protection Agency's risk management database.
The plant produces approximately 1.3 billion pounds (590 million kg) of ethylene and 90 million pounds (40 million kg) of polymer grade propylene per year, which are used to make plastics, according to the Williams website.
Only propylene was burning, officials said.
Williams operates the plant and holds an 83 percent stake in it, the company said.
Shares of Williams Cos fell as much as 4.3 percent on Thursday and ended the trading day down 1 percent.
With massive equipment operating under intense pressure and high heat, the petrochemical industry is particularly prone to occasional fires and explosions, most of which are quickly brought under control with limited injury or damage.
Southern Louisiana is home to a large share of the country's petrochemical facilities and has seen at least two other blasts in the past two years.
An explosion at Geismar's Westlake Chemicals vinyl plant sent a cloud of toxic vinyl chloride and hydrochloric acid over the town in March of 2012, and in June 2011 there was an explosion at a Multi-Chem Group plant in New Iberia, about 50 miles from Geismar. Neither blast caused injuries.
Pressure on the industry to improve safety has increased since a 2005 blast at a BP refinery in Texas City, Texas, killed 15 people and injured 170 in one of the worst such industrial accidents in decades.
An explosion at a fertilizer plant in West, Texas, that killed 14 people in April has also sharpened attention on handling of volatile chemicals.
(Reporting by Karen Brooks, Francesca Trianni, Kathy Finn, Jonathan Leff, Michael Pell and Robert Gibbons; Writing by Daniel Trotta; Editing by Jackie Frank, Bernard Orr)

David Morgan: gold is not just a commodity. It is money.

Episode 132: Félix Moreno talks to David Morgan, publisher of The Morgan Report and the proprietor of silver-investor.com (www.silver-investor.com). They discuss the bond bubble and the coming collapse of fiat money, the difference between “paper gold” and physical precious metals, fractional reserve in gold markets, the price of gold and silver and why gold is not just another commodity, but rather a monetary metal. They also talk about central bank gold reserves — particularly those of Germany and China.