Archive for August, 2009

31
Aug

Latin American Journalists Face New Opposition

RIO DE JANEIRO — For the family of José Sarney, Brazil’s Senate president, the daily onslaught of newspaper reports about nepotism and corruption accusations against him was too much to bear.

So Mr. Sarney’s son Fernando, who manages most of the family’s private businesses, turned to a federal judge in Brasília, winning an injunction to stop a leading newspaper, O Estado de São Paulo, from publishing any more reports about the allegations.

The court’s action, in late July in the midst of a drawn-out battle in the Senate over Mr. Sarney’s future, immediately raised cries of censorship. It was widely seen here as a setback after important strides in removing restrictions to a free press, including a decision in April by Brazil’s Supreme Court to strike down a dictatorship-era law that imposed harsh penalties for slander and libel.

Beyond Brazil, though, the Sarney case has underscored concerns across Latin America that despite a decade defined by the rise of populist leaders who have promised to help the downtrodden, many judges continue to bow to the whims of the powerful in censoring journalists.

In recent months, journalists across the region have faced opposition not only from courts but also from the leaders of several countries, who have moved to restrict critical coverage and paint the news media as the enemy.

That tendency has been especially glaring in Venezuela. Since taking office in 1999, the government of President Hugo Chávez has pursued strategies to limit the independence of the media, including the recent endorsement of a move to revoke the licenses of dozens of radio stations and approval this month of an education law that would further restrict the media.

“What is happening in Venezuela you can see in other parts of Latin America,” said Carlos Lauría, senior Americas program coordinator with the Committee to Protect Journalists in New York. In Nicaragua, Ecuador, Colombia, Bolivia and Argentina, in particular, he said, leaders “are reacting with a lot of intolerance to criticism in the media.”

President Evo Morales of Bolivia has described the press as the main enemy of the government. In Nicaragua, President Daniel Ortega and his wife, Rosario Murillo, the government’s chief of communications, have described the private media as C.I.A.-financed “children of Goebbels.” Critical journalists have faced smear campaigns by official government media outlets intended to discredit independent reporters, Mr. Lauría said.

In Brazil, the Sarney case is just the latest example of a lower court’s accepting a request to prevent a media outlet from broadcasting or publishing reports on suspected corruption. A string of news media reports have charged that José Sarney used his position as Senate president to award jobs to friends and family, and that he held an illegal bank account, among other claims.

After O Estado began running articles detailing transcripts of telephone calls recorded by the police, in which Fernando Sarney discussed business deals and his father’s Senate influence, the younger Mr. Sarney reached out to the judge in Brasília, Dácio Vieira, who granted the injunction.

Lawyers for the Sarneys have called O Estado’s articles libelous and denied the accusations against José and Fernando Sarney. The injunction came as the Senate’s ethics council — controlled by supporters of President Luiz Inácio Lula da Silva, an ally of Mr. Sarney — considered 11 allegations against Mr. Sarney for possible impeachment.

On Aug. 12, the president of the ethics council, Paulo Duque, discarded all the allegations; Mr. Duque later explained his decision by saying the charges were based only on “media reports car loans.”

But Ricardo Gandour, O Estado’s editor in chief, said, “The recordings show a senator with his son and close family members negotiating jobs and benefits as if the Senate were a private company, the property of the family.”

Mr. Gandour called the injunction unconstitutional. He said the paper was appealing the court’s decision and continuing its investigation.

In Venezuela, Mr. Chávez and his supporters have been stepping up efforts to restrict news media coverage. After he denounced in late July what he called a private media “tyranny” on the airwaves, regulators revoked the licenses of 34 of the country’s radio stations, saying they were not properly licensed.

Venezuela’s information minister, Blanca Eekhout, said those responsible for “media lies” should face criminal charges. A draft law on “media crimes” presented to the legislature at the end of July makes it an offense, punishable by imprisonment, to provide false information that is deemed to harm the interests of the state or pose a security threat.

On Aug. 3, more than 30 armed pro-government militants stormed the offices of a private broadcaster, Globovisión, setting off tear gas. The station, known for its strident criticism of Mr. Chávez’s government, has been the target of continued government harassment, with Venezuelan regulators opening five administrative proceedings against it, according to the Committee to Protect Journalists.

Then, just days ago, a dozen journalists who were marching peacefully to protest the new education law were intercepted by Chávez supporters and beaten with sticks, according to photos of the incident. The government at first condemned the attack, but more recently said the journalists had provoked their attackers. The education law prohibits “the dissemination of ideas and doctrines contrary to the national sovereignty and the hallowed principles and values in the Constitution.”

A vote in February to change Venezuela’s Constitution and allow for indefinite re-election emboldened the Chávez government to go after the media more forcefully, said Marcelino Bisbal, a media professor at Universidad Católica Andrés Bello in Caracas. “From that moment, the government began a war to neutralize, control and construct ways to self-censor and intimidate the media.”

José Miguel Vivanco, the Americas director for Human Rights Watch, said Venezuela was the “noticeable exception” to a trend in Latin America over the last decade toward “gradual but sustainable progress” in the area of free speech. “The region has been able to move in the right direction,” he said, “mostly thanks to the leadership taken by superior courts — either constitutional or supreme courts.”

Countries in the region have also been moving to enact laws to grant all citizens access to information. Mexico was the first to draft such a law, at the beginning of the decade. The latest example is Chile, which put its law in place in April. It has already resulted in the release by government officials of requested information, including an admission in July by the country’s economy minister that Chile was using hundreds of times more antibiotics in its salmon farming than a rival producer, Norway.

The government in Brazil proposed a similar law in May that Congress has yet to vote on.

Mar

26
Aug

Japanese Shares Reach a 10-Month High

HONG KONG — Japanese stocks rose to a 10-month high on Wednesday, driven by a modest shift into defensive sectors, while stocks in Shanghai turned positive on the week as investors cheered corporate results.

Thin summer trading volumes, however, kept prices choppy.

Major European stock futures were down 0.2 percent, while U.S. stocks futures were up 0.4 percent set to extend gains after U.S. single-family home prices grew for a second straight month. Analysts were expecting the Ifo survey of German business sentiment to show an across the board pickup later on Wednesday.

“There’s no mistake that the economy is on a recovery track from both the macro and micro perspective, and the market is in an upward trend,” said Junichi Misawa, senior fund manager at STB Asset Management in Tokyo.

Still, having already priced in an upturn in the global economy, investors were looking for more signs that growth can be sustained once the impact of massive government stimulus spending fades.

Volatility in Chinese shares has also kept investors guessing. The Shanghai composite index rose 1.8 percent on Wednesday but has still lost around 13 percent so far in August, on track for its biggest monthly decline since the darkest month of the financial crisis in October 2008.

The precipitous move has triggered questions on whether other high-flying equity markets were due for a correction. Japan’s Nikkei share average closed up 1.4 percent, at the highest since Oct. 3.

Shares of index heavyweight Toyota Motor rose 1.5 percent on a report the carmaker would cut global production capacity and post an operating profit in the 2010 financial year.

However, while news of the capacity cut shored up the stock, it also reinforced worries about persistent weakness in global consumer demand, which is key to a solid recovery.

Japan’s exports slipped in July as annual declines in exports to the United States and China accelerated, a sign that the impact of stimulus measures in major economies worldwide may be starting to wane.

“Things have stopped getting worse, but a return to trend gains in production and trade is a pipe-dream,” Patrick Bennett, Asia foreign exchange and rates strategist with Societe Generale in Hong Kong, said in a note.

Traders will be watching U.S. durable goods orders and new home sale data later on Wednesday for more clues on whether consumers are ready to start spending again.

The MSCI index of Asia Pacific stocks traded outside Japan rose 0.6 percent Weakness in the technology and consumer discretionary sectors — two of the most expensive segments of the Asian market — kept the broader market in check.

Hong Kong’s Hang Seng index was up 0.5 percent but remained susceptible to ups and downs in the Shanghai market.

U.S. oil futures for October delivery were largely unchanged on the day around $72 after a 3 percent drop overnight on profit taking after the market was unable to push crude above $75 a barrel.

Inventory data from the American Petroleum Institute late on Tuesday showed a big buildup in U.S. crude oil stocks last week, keeping a lid on the market. Still, analysts raised their 2010 median price forecast for a fifth straight month to $73.39.

The Australian dollar inched up 0.4 percent to $0.8357 and has been less reactive this week to Chinese stock market moves. Earlier in August, sudden drops in the Shanghai market sucked the Australian currency down with it.

The ICE Futures U.S. dollar index, which gauges its value against a basket of six other major currencies, was steady on the day and hardly changed in August.

Investors are eager to know if the dollar will resume a downward trend in September, as more dealers return from holiday and trading volumes pick up.

Japanese Shares Reach a 10-Month High

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25
Aug

Wall St rises on housing, consumer data

NEW YORK (Reuters) – U.S. stocks pushed ahead on Tuesday after strong housing and consumer confidence data briefly sent indexes to 2009 highs, and investors were relieved about Ben Bernanke's renomination as Fed chairman.

Consumer confidence increased more than expected in August, the Conference Board said, while the S&P/Case-Shiller home price index rose in June for a second straight month.

A rebound in home prices and stronger consumer spending are deemed critical for the U.S. economy to bounce back from its worst recession in decades.

Financial shares ranked among the top gainers, with Prudential Financial (PRU.N) up 4.3 percent at $51.57 and JPMorgan Chase & Co (JPM.N) up 2.3 percent at $43.99. The KBW insurance index (.KIX) rose 2.5 percent.

The market got a boost from the housing and confidence data according to Joe Saluzzi, co-manager of trading at Themis Trading in Chatham, New Jersey.

"But after a 50 percent rally off the lows, you'd expect to see housing improving at this point. Otherwise, what was the rally all about?" he said.

He said Bernanke's nomination was expected and a change in direction would have sent stocks tanking.

The Dow Jones industrial average (.DJI) rose 80.11 points, or 0.84 percent, to 9,589.39. The Standard & Poor's 500 Index (.SPX) gained 8.50 points, or 0.83 percent, to 1,034.07. The Nasdaq Composite Index (.IXIC) added 15.27 points, or 0.76 percent, to 2,033.25.

The broad S&P 500 index briefly hit a 10-month intraday high, and is on track for its sixth straight monthly gain.

Shares of homebuilders rose on the upbeat housing data, with DR Horton (DHI.N), up 4.7 percent at $13.26. It led the Dow Jones U.S. home construction index (.DJUSHB) up 4.1 percent.

U.S. President Barack Obama nominated Bernanke for a second term as Fed chairman, saying he "approached a financial system on the verge of collapse with calm and wisdom.

In other economic news, official forecasts said the U.S. national debt will nearly double over the next 10 years.

Wall St rises on housing, consumer data

Hot News: Obama to renominate Bernanke as Fed chief

25
Aug

Wikipedia to Limit Changes to Articles on People

Wikipedia, one of the 10 most popular sites on the Web, was founded about eight years ago as a long-shot experiment to create a free encyclopedia from the contributions of volunteers, all with the power to edit, and presumably improve, the content.

Now, as the English-language version of Wikipedia has just surpassed three million articles, that freewheeling ethos is about to be curbed.

Officials at the Wikimedia Foundation, the nonprofit in San Francisco that governs Wikipedia, say that within weeks, the English-language Wikipedia will begin imposing a layer of editorial review on articles about living people.

The new feature, called “flagged revisions,” will require that an experienced volunteer editor for Wikipedia sign off on any change made by the public before it can go live. Until the change is approved — or in Wikispeak, flagged — it will sit invisibly on Wikipedia’s servers, and visitors will be directed to the earlier version.

The change is part of a growing realization on the part of Wikipedia’s leaders that as the site grows more influential, they must transform its embrace-the-chaos culture into something more mature and dependable.

Roughly 60 million Americans visit Wikipedia every month. It is the first reference point for many Web inquiries — not least because its pages often lead the search results on Google, Yahoo and Bing. Since Michael Jackson died on June 25, for example, the Wikipedia article about him has been viewed more than 30 million times, with 6 million of those in the first 24 hours.

“We are no longer at the point that it is acceptable to throw things at the wall and see what sticks,” said Michael Snow, a lawyer in Seattle who is the chairman of the Wikimedia board. “There was a time probably when the community was more forgiving of things that were inaccurate or fudged in some fashion — whether simply misunderstood or an author had some ax to grind. There is less tolerance for that sort of problem now.”

The new editing procedures, which have been applied to the entire German-language version of Wikipedia during the last year, are certain to be a topic of discussion this week when Wikipedia’s volunteer editors gather in Buenos Aires for their annual Wikimania conference. Much of the agenda is focused on the implications of the encyclopedia’s size and influence.

Although Wikipedia has prevented anonymous users from creating new articles for several years now, the new flagging system crosses a psychological Rubicon. It will divide Wikipedia’s contributors into two classes — experienced, trusted editors, and everyone else — altering Wikipedia’s implicit notion that everyone has an equal right to edit entries.

That right was never absolute, and the policy changes are an extension of earlier struggles between control and openness.

For example, certain popular or controversial pages, like the ones for the singer Britney Spears and for President Obama, are frequently “protected” or “semi-protected,” limiting who, if anyone, can edit the articles.

And for seven months beginning in November, The New York Times worked with Wikipedia administrators to suppress information about the kidnapping of David Rohde, a correspondent in Afghanistan, from the article about him. The Times argued that the censorship would improve his chances of survival. Mr. Rohde escaped from his Taliban captors in June, but the episode dismayed some Wikipedia contributors.

The new system comes as some recent studies have found Wikipedia is no longer as attractive to first-time or infrequent contributors as it once was.

Ed H. Chi of the Palo Alto Research Center in California, which specializes in research for commercial endeavors, recently completed a study of the millions of changes made to Wikipedia in a month. He concluded that the site’s growth (whether in new articles, new edits or new contributors) hit a plateau in 2007-8.

For some active Wikipedia editors, this was an expected development — after so many articles, naturally there are fewer topics to uncover, and those new topics are not necessarily of general interest.

But Mr. Chi also found that the changes made by more experienced editors were more likely to stay up on the site, whereas one-time editors had a much higher chance of having their edits reversed. He concluded that there was “growing resistance from the Wikipedia community to new content.”

To other observers, the new flagging system reflects Wikipedia’s necessary acceptance of the responsibility that comes with its vast influence.

“Wikipedia now has the ability to alter the world that it attempts to document,” said Joseph Reagle, an adjunct professor of communications at New York University whose Ph.D. thesis was about the history of Wikipedia.

Under the current system, it is not difficult to insert false information into a Wikipedia entry, at least for a short time. In March, for example, a 22-year-old Irish student planted a false quotation attributed to the French composer Maurice Jarre shortly after Mr. Jarre’s death. It was promptly included in obituaries about Mr. Jarre in several newspapers, including The Guardian and The Independent in Britain. And on Jan. 20, vandals changed the entries for two ailing senators, Edward M. Kennedy and Robert C. Byrd, to report falsely that they had died.

Flagged revisions, advocates say, could offer one more chance to catch such hoaxes and improve the overall accuracy of Wikipedia’s entries.

Foundation officials intend to put the system into effect first with articles about living people because those pieces are ripe for vandalism and because malicious information within them can be devastating to those individuals.

Exactly who will have flagging privileges has not yet been determined, but the editors will number in the thousands, Wikipedia officials say. With German Wikipedia, nearly 7,500 people have the right to approve a change. The English version, which has more than three times as many articles, would presumably need even more editors to ensure that changes do not languish before approval.

“It is a test,” said Jimmy Wales, a founder of Wikipedia. “We will be interested to see all the questions raised. How long will it take for something to be approved? Will it take a couple of minutes, days, weeks?”

Mr. Wales began pushing for the policy after the Kennedy and Byrd hoaxes, but discussions about a review system date back to one of the darkest episodes in Wikipedia’s history, known as the Seigenthaler incident.

In 2005, the prominent author and journalist John Seigenthaler Sr. discovered that Wikipedia’s biographical article connected him to the assassinations of John F. Kennedy and Robert F. Kennedy, a particularly scurrilous thing to report because he was personally close to the Kennedy family.

Since then, Wikipedians have been fanatical about providing sources for facts, with teams of editors adding the label “citation needed” to any sentence without a footnote.

“We have really become part of the infrastructure of how people get information,” Mr. Wales said. “There is a serious responsibility we have.”

Wikipedia to Limit Changes to Articles on People

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24
Aug

China to keep policy loose as economy faces new woes

BEIJING (Reuters) – China will maintain its stimulative policy stance because the economy, far from being on solid footing, is facing fresh difficulties, Premier Wen Jiabao said on Monday.

In a downbeat statement on the government's website following a trip to the eastern province of Zhejiang, known as a hotbed of private enterprise, Wen said Beijing would ensure a sustainable flow of credit and a "reasonably sufficient" provision of liquidity to support growth.

A drop in new yuan bank loans in July to 356 billion yuan ($52 billion), compared with an average of over 1.2 trillion yuan in each of the first six months of the year, has created worries among some analysts that the recent rebound in growth could be knocked off track.

"We must clearly see that the foundations of the recovery are not stable, not solidified and not balanced. We cannot be blindly optimistic," Wen was cited as saying on http://www.gov.cn.

"Therefore, we must maintain continuity and consistency in macroeconomic policies, and maintaining stable and quite fast economic growth remains our top priority. This means we cannot afford the slightest relaxation or wavering."

China still faced great pressure from the slowdown in demand for exports, Wen said, adding that it was difficult to boost domestic demand in the short term to fill in the gap — despite the boost from the government's 4 trillion yuan ($585 billion) stimulus package.

Thanks to the pump-priming, annual economic growth in the second quarter accelerated to 7.9 percent from 6.1 percent in the first three months of the year.

Although the most important aim of the stimulus was to prevent a sharp drop in growth, Wen said its purpose was also to make China's economic growth model more sustainable.

In particular, he said China would continue to increase fiscal spending on infrastructure and environmental protection.

"The impact of some short-term policies will fade gradually, but it takes time to see the effects of medium- and long-term policies, and there are many new difficulties and problems in economic operations," he said.

The comments come amid volatility in the Shanghai stock market that has fanned worries the economy could be coming off the boil as the government reins in break-neck credit growth.

The Shanghai Composite Index (.SSEC) ended up 1.1 percent on Monday after falling 2.8 percent last week in wide-ranging trading. It is now down by nearly 14 percent from its peak reached on August 4.

China's latest economic data for July indicated that while growth was moderating after a strong second quarter, the recovery remained on track to achieve the government's goal of 8 percent growth for the full year.

Central bank adviser Fan Gang said in remarks published on Monday that he expected growth to hold up at 8 percent next year as well, as property and corporate investment, together with rising exports, pick up the slack from waning government investment.

(Reporting by Zhou Xin, Simon Rabinovitch, Langi Chiang and Aileen Wang; Writing by Jason Subler; Editing by Kazunori Takada)

China to keep policy loose as economy faces new woes

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23
Aug

UBS chairman says clients not harmless victims: report

ZURICH (Reuters) – Clients of UBS facing disclosure of their accounts to U.S. tax authorities were not harmless victims and legal cases against former UBS bankers did not affect the bank, its chairman told Swiss Sunday newspapers.

"The clients are not just harmless victims. They knew what they wanted to evade," Kaspar Villiger, chairman of the world's second-largest wealth manager, said in an interview with SonntagsBlick.

"But they trusted the bank that it would work. Now we have to correct that," said Villiger, adding it was still not the responsibility of UBS to make sure clients paid their taxes.

Switzerland last week agreed to reveal the names of thousands of UBS's rich U.S. clients to Washington, settling a tax-avoidance dispute that had battered the bank's reputation and damaged Switzerland's prized bank secrecy.

Villiger did not believe systematic tax evasion had been a problem in countries other than the United States, he said in a separate interview with NZZ am Sonntag, adding that legal action against former U.S. bankers did not affect the bank.

"The personnel consequences have been solved in so far as those responsible no longer work for UBS. We have not discovered any misdeeds relevant to Swiss criminal law," Villiger said. "That means we have no reason to take action against individual employees."

Under Swiss law, tax fraud is a criminal offence, while tax evasion is punishable only with a fine.

Villiger did not expect the introduction of an automatic exchange of client data between countries in future.

"If Europe took unilateral action to introduce an information exchange and also forced this on Switzerland, money would flow to Asia in a big way," he said.

Switzerland sold its 9 percent stake in UBS, making a solid profit on last year's rescue of its largest bank, the day after the historic agreement with Washington. The buyers were international investors, showing confidence in the bank, Villiger told SonntagsBlick.

Serious, systematic tax evasion should not be protected by bank secrecy, said Villiger, but Swiss banks would face increased competition in future as a result of the agreement.

"Swiss banks hid behind bank secrecy for years," said Villiger. "The competition has got bigger with the disappearance of the difference between tax fraud and tax evasion."

Switzerland's Foreign Minister, Micheline Calmy-Rey, told SonntagsZeitung that the Swiss state could hand over the data of other clients to U.S. authorities if requested given cases of "tax fraud and the like" as set out in the agreement over UBS.

"Accounts would only have to be disclosed in cases that are absolutely of the same kind. That can not be ruled out," she said in the interview.

UBS should pay for the costs of the Swiss government to reach the agreement with the U.S., though the legal basis for doing this still had to be cleared up, she added.

"If the Federal Government wants to have the costs reimbursed, then we will do that," Villiger told SonntagsBlick.

Villiger was pleased with the progress UBS had made in recent months on key issues like the U.S. tax case and improving its capital base, but said the bank, which booked the biggest loss in Swiss corporate history in 2008, still had a way to go.

"The majority of the work is still in front. We have to return to profitability," he said.

(Reporting by Jason Rhodes)

UBS chairman says clients “not harmless victims”: report

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22
Aug

US Envoy Gathers Darfur Rebels for Unity Attempt

US envoy Scott Gration (File)President Obama’s special envoy to Sudan is expressing confidence that Darfur rebel groups can unite to send a single message in talks with the Khartoum government. VOA correspondent Peter Heinlein spoke to the envoy in the Ethiopian capital, Addis Ababa, where he is meeting rebel leaders.U.S. special envoy Scott Gration held talks with the heads of several competing Darfur rebel groups at his makeshift headquarters in an Addis Ababa hotel. Participants included members of Abdelwahid Nur’s Sudanese Liberation Army, which has refused to participate in previous unity talks. Gration told VOA he is encouraged by the apparent willingness of rival factions to put aside differences that doomed previous efforts to forge a unified front in talks with Khartoum on ending Darfur’s six year war.”There’s more unity than I expected, and what I’ve seen is, in a very short time they’ve been able to put together a road map that is based on common themes and a common approach, so I believe that the big differences are behind us, and now we’re talking about how do we implement, how do we make it happen,” he said.Gration, a former U.S. Air Force general, has upset some Darfur activist groups with his emphasis on engaging rather than isolating the Khartoum government. He has advocated loosening some sanctions to allow delivery of development aid to southern Sudan before the scheduled 2011 referendum on independence. He has also said he sees no reason to justify keeping Sudan on the U.S. terrorism list.He says his current visit to the region, which included a surprise stop in Khartoum, is aimed at achieving four objectives. “In Darfur we’re trying to ensure that people in the short term have humanitarian assistance they need to get through this rainy season. In addition, security is a big issue for us, so we’re looking at ways to support the United Nations effort, ways we can reduce the tensions between Chad and Sudan, and then this rebel unification is a big deal,” he explained. “We need to ensure that the rebels come together in a unified way so we don’t have spoilers when this is all done, so we don’t have groups that arm themselves and try to disrupt what we are able to accomplish, and then we want to make sure there is a process so the people of Darfur can express their will and can be part of a democratic transformation that allows them to get back their rights and to get back their voice and to make a difference in their own future,” he said.Gration describes his role as a facilitator in helping the Darfur rebels patch up their differences, and creating an environment where lasting unity is possible. He tells VOA he is hopeful the Addis Ababa meetings might produce a common leadership of the rebel movement.”But what we’re looking for is not the leader that the United States or Egypt or Libya wants, we’re looking for a leader the Darfuri people want, somebody they can unify behind, who can be an articulate spokesman for their issues, so that when they get into the negotiation session with the government of Khartoum, they can articulate their positions and reach an agreement that will give them a lasting peace in Darfur,” he said. Gration earlier this week went to southern Sudan, for the signing of an agreement aimed at bolstering the 2005 Comprehensive Peace Agreement that ended a 22-year north-south civil war.The separate conflict in Darfur erupted in 2003, when rebels started a full-scale insurgency, demanding a greater share of the country’s oil wealth and a larger voice in the national government.The United Nations estimates 300,000 people died in the early years of the Darfur war, and that the death toll continues to rise at a rate of about 150 a month. The government says those figures are exaggerated, and puts the total death toll at about 10,000.

US Envoy Gathers Darfur Rebels for Unity Attempt

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22
Aug

Ex-UBS Banker Who Fed Data to U.S. Is Sentenced

FORT LAUDERDALE, Fla. (AP) — A former banker described by prosecutors as the man most responsible for igniting a investigation into rich Americans’ use of secret Swiss bank accounts to evade taxes was sentenced Friday to more than three years in prison.

Prosecutors gave Bradley Birkenfeld, a 44-year-old American, credit for voluntarily disclosing illegal tactics by the Swiss banking giant UBS and others. But they said Mr. Birkenfeld initially refused to admit his own misconduct, hoping to collect a cash whistle-blower reward.

“He refused to disclose his own wrongdoing,” said Kevin Downing, senior trial lawyer in the Justice Department’s tax division. “It’s a major problem for us.”

Prosecutors had recommended a two-and-a-half-year sentence, half off the potential maximum of five years for Mr. Birkenfeld’s guilty plea to a single fraud conspiracy charge. Judge William Zloch of Federal District Court decided on a sentence of three years and four months, coupled with a $30,000 fine and followed by three years’ probation.

Mr. Birkenfeld’s lawyers pleaded for probation only, and Mr. Birkenfeld himself told Judge Zloch his only goal was to expose wrongdoing at UBS and the Swiss banking system. Mr. Birkenfeld first met on his own with Justice Department investigators in summer 2007, which Mr. Downing said began an inquiry that has roiled the world’s banks and prompted numerous criminal tax evasion prosecutions.

“Without Mr. Birkenfeld walking into the door of the Department of Justice in summer of 2007, I doubt this massive fraud scheme would have been discovered by the United States government,” Mr. Downing said.

Partly because of Mr. Birkenfeld’s disclosures, UBS this week agreed to disclose to the United States the names of 4,450 wealthy Americans suspected of hiding assets and dodging taxes in secret accounts. Three other Swiss bankers and a Swiss lawyer also are facing criminal charges; four American clients of UBS have already pleaded guilty and at least 150 more are under investigation.

Mr. Birkenfeld, a Swiss resident for 15 years, said he did not initially tell investigators about his role in tax crimes because he felt constrained by Swiss law prohibiting disclosures about bank clients except under court order.

“If I divulged any names without a subpoena, I would go to jail in Switzerland,” Mr. Birkenfeld said. But Mr. Downey said Mr. Birkenfeld was given assurances he would not be prosecuted by the Swiss.

Ex-UBS Banker Who Fed Data to U.S. Is Sentenced

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21
Aug

GM moves closer to picking Magna for Opel: sources

FRANKFURT (Reuters) – General Motors is moving closer to picking Germany's favored buyer, Magna International and its Russian partners, for its Opel business when GM's board meets on Friday, sources close to the matter said.

"It's going in the direction of Magna," one of the sources told Reuters, adding GM's board would probably favor the automotive group's offer over that of Brussels-based financial investor RHJ International.

The deal could be sealed next week after final talks with the German government, the source added.

Opel trustees who oversee a majority stake in Opel have to approve any decision. Billions of euros in aid from European countries with Opel plants are riding on the outcome.

Berlin and German states that host Opel plants have made abundantly clear they want Magna to get the carmaker and are set to provide 4.5 billion euros ($6.4 billion) in state aid to make it happen.

Talks to sell Opel have lasted for months and have become a political hot potato ahead of German elections in September because a deal will entail billions of euros in aid from European governments as well as thousands of job cuts.

German Chancellor Angela Merkel and German states think the Canadian automotive group's expertise can save more of the 25,000 Opel jobs in Germany.

Magna's co-CEO Siegfried Wolf said last week the Canadian company and its Russian partner Sberbank had reached an agreement in principle with GM over a contract to buy 55 percent of Opel, raising hopes of a deal.

But GM's top negotiator for the Opel deal, John Smith, has repeatedly cited the positive aspects of RHJ's offer, which he says would be easier to implement than Magna's plan.

RHJ has presented an industrial concept as convincing as Magna's while requiring less state aid, he has said.

The field of bidders narrowed to two when Italian carmaker Fiat and China's Beijing Automotive (BAIC) dropped out.

Merkel reiterated in an interview with a German newspaper her preference for Magna's offer and said she was "very skeptical" about the prospects for RHJ.

German Economy Minister Theodor zu Guttenberg said it was too early to say Opel was saved even if the sale process wraps up quickly.

"In my view you will be able to celebrate the rescue of Opel only when it is clear that Opel has established itself as a competitive company on global markets," he told the Financial Times Deutschland newspaper, adding this would certainly not be the case in the next few weeks or months.

GM, which emerged from bankruptcy protection on July 10, this week agreed to sell its Saab car business to a tiny Swedish luxury carmaker, the first in a series of big sales the U.S. group is planning as it slims down.

(Additional reporting by Maria Sheahan, editing by Will Waterman)

GM moves closer to picking Magna for Opel: sources

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20
Aug

U.S. clunker program may end by early September: report

(Reuters) – The U.S. government's "cash for clunkers" autos sales incentive program may be wound down as soon as early September, the Wall Street Journal said, citing a person familiar with the matter.

The U.S. government is expecting a surge in last-minute clunker deals when a closing date is announced and wants to avoid a situation where dealers agree to sales after the program's funds have been exhausted, the person told the paper.

Under the program, the government gives consumers a rebate of up to $4,500 for trading in older, inefficient vehicles for new, fuel-sipping ones. Washington scrambled early this month to add $2 billion when the popular program's initial $1 billion funding was quickly spent.

The U.S. Department of Transportation did not immediately respond to a Reuters email seeking comment.

(Reporting by Ajay Kamalakaran in Bangalore; Editing by Hans Peters)

U.S. “clunker” program may end by early September: report

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20
Aug

Deeres earnings fall 27 percent

CHICAGO (Reuters) – Deere & Co (DE.N) reported a higher-than-expected third-quarter profit as improved profitability in its core agriculture machinery business helped to offset weakness in construction and forestry equipment.

But the company said it expected to barely break even in current quarter, sending its shares lower in premarket trade.

The world's largest maker of tractors and harvesters, which is cutting production in anticipation of lower demand next year, reported a third-quarter profit of $420 million, or 99 cents a share, down from $575.2 million, or $1.32 a share, last year. Sales fell 24 percent to $5.89 billion.

Analysts, on average, had expected the company to report a profit of 56 cents per share on sales of $5.27 billion.

Analyst Eli Lustgarten of Longbow Research called the results "a clean beat," although 20 cents of the earnings came from non-operating items, including a lower tax rate.

The Moline, Illinois-based company reiterated its forecast for a full-year net profit of "approximately $1.1 billion."

Since Deere has already reported earnings of $1.1 billion for the first nine months of the year, the guidance implied a break even or possibly even a marginally unprofitable fiscal fourth quarter.

"They're burying the fourth quarter with these production cuts," Lustgarten said. "And so their guidance is for a marginally break-even quarter."

Analysts had expected Deere to report a fourth-quarter profit of 33 cents a share, according to Reuters Estimates.

Deere shares were trading t $44.60 in premarket trading, down from Tuesday's close of $45.09.

(Reporting by James B. Kelleher, editing by Maureen Bavdek and Ted Kerr)

Deere’s earnings fall 27 percent

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19
Aug

China-led sell-off weighs on stocks

NEW YORK (Reuters) – Stocks fell at the open on Wednesday as a drop in Chinese shares prompted renewed selling in global equity markets on fears stock prices have outpaced the economic recovery.

The Dow Jones industrial average (.DJI) was down 64.54 points, or 0.70 percent, at 9,153.40. The Standard & Poor's 500 Index (.SPX) was down 7.69 points, or 0.78 percent, at 981.98. The Nasdaq Composite Index (.IXIC) was down 18.28 points, or 0.93 percent, at 1,937.64.

(Reporting by Angela Moon; Editing by Padraic Cassidy)

China-led sell-off weighs on stocks

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