administration officials

Ex-White House Aide to Be Economic Adviser

September 13, 2013 by NewsMaker

The shift, which was confirmed by several administration officials and will be announced on Friday, does not portend change in the president’s economic agenda. But with Mr. Sperling’s exit on Jan. 1 after nearly three years in the White House and two at the Treasury Department, Mr. Obama will lose an adviser who has been known as a perpetual motion machine for progressive domestic policy ideas since the Clinton administration.

As director of the White House National Economic Council — an office that President Bill Clinton created and President George W. Bush retained — Mr. Sperling provided briefings to the president and oversaw the development of economic policies on domestic programs, taxes, and trade with other departments and agencies. He is best known for his work on Mr. Obama’s job-creation initiatives and tax cuts for lower- and middle-income Americans and for small businesses. His nickname in the West Wing was Small Business.

“It’s in no small part due to Gene’s efforts that tax credits for low-income working families now lift more children out of poverty than any other program or policy,” said Robert Greenstein, president of the liberal Center on Budget and Policy Priorities.

If Hillary Rodham Clinton runs for president in 2016, Mr. Sperling, 54, is expected to join her team, a quarter-century after he played a prominent role in her husband’s first presidential campaign.

“There’s probably no one in the country who’s better than Gene Sperling at developing policy and presenting it in a way that is easily understood. He sits at the nexus of policy, politics and communications probably as well as anyone,” said Dan Pfeiffer, Mr. Obama’s senior strategist. “When Gene gets a project, there is no force that can stop him from executing it. He will work all night, call anyone, convene a thousand meetings in order to get it done.”

Mr. Zients, 46, had no government experience when he joined the administration in June 2009 as the deputy director for management at the Office of Management and Budget. He had made his fortune as an executive at corporate management and media companies and at his own private equity firm, Portfolio Logic, and was chosen by the president for his expertise in business and management efficiencies.

He was easily confirmed by the Senate and designated by the president as the government’s “chief performance officer,” a job that Mr. Obama proposed in his presidential campaign. Mr. Zients identified ways to cut federal costs through eliminating, reorganizing or consolidating agencies and introducing more efficient ways of operating.

Mr. Zients quickly impressed Mr. Obama and was long rumored for promotion. But he alienated Senator Max Baucus, the Montana Democrat who is chairman of the Senate Finance Committee and was opposed to Mr. Zients’s recommendations that would have removed government functions from the committee’s jurisdiction. That breach has complicated Mr. Zients’s advancement.

He has twice been acting director of the budget office when the top job was open. The first time, in 2010, Mr. Zients was deemed by the White House to have too little budget experience to succeed Peter R. Orszag, and the job went to Jacob J. Lew.

Mr. Zients again became acting director when Mr. Lew, who is now Treasury secretary, left in early 2012 to become White House chief of staff. Mr. Zients was acting director for all of 2012 because the White House did not want to risk a confirmation fight in an election year.

After his re-election, the president was under fire for having too few female advisers, For budget director, he turned to Sylvia Mathews Burwell, who was known among senior Obama officials for her work at the National Economic Council, the Treasury Department and the budget office in the Clinton administration.

When Mr. Obama announced her nomination in March at the White House, with Mr. Zients looking on, the president hinted that Mr. Zients might soon rejoin in the administration. “There’s no question that Jeff’s skill and versatility have served the American people very well,” Mr. Obama said, adding, “I expect it will continue to serve us well in the future.”

The president considered Mr. Zients for United States trade representative, but he would have to be vetted by Mr. Baucus’s committee. The job went to Michael B. Froman, one of Mr. Obama’s close advisers at the White House.

Mr. Zients was also considered for commerce secretary, though Mr. Obama’s favorite candidate was a longtime financial supporter from Chicago, the businesswoman Penny Pritzker, who now holds the post. The new opening for Mr. Zients became available when Mr. Sperling told Mr. Obama months ago that he would be leaving after 2013. The director of the National Economic Council does not have to be confirmed by the Senate.

Mr. Sperling said that he was leaving for personal reasons. He has been commuting in recent months to Los Angeles, where his wife, Allison Abner, a scriptwriter and producer, moved with their son and daughter to help develop a new Fox television show. The two met in 2001 when Ms. Abner was a writer on “The West Wing” and Mr. Sperling, after eight years in the Clinton White House, was a consultant.

He said he will not look for a private sector job until he leaves the White House, but did not rule out working in Washington if he had more flexibility to be with his family. Mr. Sperling will be among those advising the president this fall in the fights with Congressional Republicans over spending and the debt limit. And with Republicans blocking much of Mr. Obama’s legislative agenda, Mr. Sperling will continue looking for ways that the president can use existing programs and executive actions to spur the economy, especially manufacturing. A current focus for Mr. Sperling, a native of Ann Arbor, Mich., is to steer federal assistance to a bankrupt Detroit.

Article source: http://www.nytimes.com/2013/09/13/us/politics/ex-white-house-aide-to-be-economic-adviser.html?partner=rss&emc=rss

Filed Under: Economy News Tagged With: administration officials, george w bush, perpetual motion machine

Cyberattacks on Rise Against U.S. Corporations

May 13, 2013 by NewsMaker Leave a Comment

The targets have primarily been energy companies, and the attacks appeared to be probes, looking for ways to seize control of their processing systems. The attacks are continuing, officials said. But two senior administration officials said Sunday that they were still not certain exactly where the attacks were coming from, or whether they were state-sponsored or the work of hackers or criminals.

“We are concerned by these intrusions, and we are trying to make sure they don’t lead to something much bigger, as they did in the Saudi case,” said one senior American official. He was referring to the aggressive attack last summer that affected 30,000 computers at Saudi Aramco, one of the world’s largest oil producers. After lengthy investigations, American officials concluded that Iran had been behind the Saudi Aramco attack.

Another official said that in the new wave of attacks, “most everything we have seen is coming from the Middle East,” but he did not say whether Iran, or another country, appeared to be the source.

Last week’s warning was unusual because most attacks against American companies — especially those coming from China — have been attempts to obtain confidential information, steal trade secrets and gain competitive advantage. By contrast, the new attacks seek to destroy data or to manipulate industrial machinery and take over or shut down the networks that deliver energy or run industrial processes.

That kind of attack is much more like the Stuxnet worm that the United States and Israel secretly used against Iran’s nuclear enrichment plants several years ago, to slow Iran’s progress toward a nuclear weapons capability. When that covert program began, President Obama, among other officials, expressed worry that its eventual discovery could prompt retaliatory attacks.

Two senior officials who have been briefed on the new intrusions say they were aimed largely at the administrative systems of about 10 major American energy firms, which they would not name. That is similar to what happened to Saudi Aramco, where a computer virus wiped data from office computers, but never succeeded in making the leap to the industrial control systems that run oil production.

The Washington Post first reported the security warning on Friday. Over the weekend the Obama administration described what had led to the warning. Those officials began describing the activity as “probes that suggest someone is looking at how to take control of these systems.”

According to one United States official, Homeland Security officials decided to release the warning once they saw how deeply intruders had managed to penetrate corporate systems, including one that deals with chemical processes. In the past, the government occasionally approached individual companies it believed were under threat. Last week’s warning “is an effort to make sure that the volume and timeliness of the information improves,” in line with a new executive order signed by the president, one senior official said.

The warning was issued by an agency called ICS-Cert, which monitors attacks on computer systems that run industrial processes. It said the government was “highly concerned about hostility against critical infrastructure organizations,” and included a link to a previous warning about Shamoon, the virus used in the Saudi Aramco attack last year. It also hinted that federal investigations were under way, referring to indications “that adversary intent extends beyond intellectual property to include use of cyber to disrupt business and control systems.”

At Saudi Aramco, the virus replaced company data on thousands of computers with an image of a burning American flag. The attack prompted the defense secretary at the time, Leon E. Panetta, to warn of an impending “cyber 9/11” if the United States did not respond more efficiently to attacks. American officials have since concluded the attack and a subsequent one at RasGas, the Qatari energy company, were the work of Iranian hackers. Israeli officials, who follow Iran closely, said in interviews this month that they thought the attacks were the work of Iran’s new “cybercorps,” organized after the cyberattacks that affected their nuclear facilities.

David E. Sanger reported from Washington, and Nicole Perlroth from San Francisco. Michael S. Schmidt contributed reporting from Washington.

Article source: http://www.nytimes.com/2013/05/13/us/cyberattacks-on-rise-against-us-corporations.html?partner=rss&emc=rss

Filed Under: Global Business Tagged With: administration officials, aggressive attack, saudi aramco

Setback to Boeing’s Hopes for Longer Range for 787

March 9, 2013 by NewsMaker Leave a Comment

Boeing designed the jet to fly 330 minutes — five-and-a-half hours — from the nearest airport at any point on its routes, a feature that would allow extended flights over water or deserted regions like the North Pole. That held tremendous appeal for airlines, which often must stay within three hours of emergency landing spots, and Boeing estimated that 450 new routes would be created.

But Boeing is struggling to get past the 787’s recent smoke and fire episodes with its lithium-ion batteries that have led to the grounding of all 50 planes delivered so far. And with investigators in the United States and Japan still looking for the cause of those problems, it could be months before federal regulators would feel confident enough in Boeing’s redesign of the batteries to approve extending 787 flights to ultralong distances from the jetliner’s current three-hour limit.

That could dilute its appeal to some airlines and further raise the costs of the program for Boeing, which already was unlikely to make a profit on any 787s for at least two years. The company could lose orders and have to pay penalties to carriers if the 787 failed to meet its performance targets.

“It is crucially important that the powers that be get convinced that Boeing can contain and exhaust a fire, and that the fix really worked,” said Hans J. Weber, the president of Tecop International, an aviation consulting firm.

He said that even after the jets start flying again, Boeing and the airlines would have to monitor the activity inside the batteries for tens of thousands of flight hours before experts would feel sure enough that the fixes would prevent a fire or that the jet’s range could be safely expanded.

Federal Aviation Administration officials said it was premature to speculate about what they might decide about the plane’s range. Boeing said Friday that it had not changed its goal to win approval for the longer flights.

The 787 fleet was grounded in January after the battery in one jet ignited in Boston and another battery began smoldering on a flight in Japan.

Boeing and other companies that rely on the volatile lithium-ion batteries, including hybrid carmakers, worry about public perceptions of the batteries and want to get the planes back up in the air as soon as possible. The F.A.A. is expected to approve a plan next week to start testing the possible fixes.

Mr. Weber said that several studies had suggested that jetliners have an average of 18 to 20 minutes to land if a fire erupts without special containment in a cargo or equipment bay. And it could take 20 minutes more to get all the passengers and crew members off the plane, he said.

As a result, George W. Hamlin, an aviation consultant, said he believed that to justify even its current ability to fly up to three hours from the nearest airport, Boeing would have to demonstrate that its new battery case could contain a fire for at least 180 minutes. Otherwise, he said, the plane’s appeal could diminish.

Having a fire in a plane is a situation all pilots dread. (They are trained to find the nearest landing spot.) But containing a potential fire could be an acceptable answer for the F.A.A., Mr. Weber and Mr. Hamlin said.

The agency already has many requirements to offset other safety concerns on planes. For instance, Mr. Weber said, the F.A.A. accepts the risk of one engine failing in flight by requiring that all twin-engine jets can fly on the remaining one.

And while the current rule that 787s must stay within three hours of airports is sufficient for most North American, trans-Atlantic and even many flights across the Pacific Ocean, several Middle Eastern, Australian and Asian airlines are counting on the extension to gain more flexibility in their routes and maximize the fuel savings from the plane.

“The part of the raison d’être in the design of the 787 is being able to connect virtually anywhere,” Mr. Hamlin said.

Article source: http://www.nytimes.com/2013/03/09/business/setback-to-boeings-hopes-for-longer-range-for-787.html?partner=rss&emc=rss

Filed Under: Global Business Tagged With: administration officials, emergency landing, half hours

Obama Sends Trade Deals to Congress for Approval

October 4, 2011 by NewsMaker Leave a Comment

The White House is depending on Republican support for the trade agreements to overcome the passionate opposition of Democrats concerned about the loss of American jobs to foreign competition. But it agreed to submit the deals to Congress only after receiving what administration officials described as sufficient assurances that House Republicans would also approve an expansion of benefits for displaced workers. The Senate approved an expansion of the benefits program last month.

President Obama and Republican leaders have spotlighted the trade agreements repeatedly as a powerful opportunity for Washington to help the economy, but the projected benefits are modest. The government estimates that the deals would increase annual exports of American goods by about $12 billion, or roughly 1 percent. Service providers like banks and law firms are also expected to benefit.

“These agreements will support tens of thousands of jobs across the country for workers making products stamped with three proud words: Made in America,” Mr. Obama said in a statement. “We’ve worked hard to strengthen these agreements to get the best possible deal for American workers and businesses, and I call on Congress to pass them without delay.”

Under special rules that govern the consideration of trade deals, Congress has 90 days to approve or reject the agreements, but it cannot amend the terms. The House speaker, John A. Boehner, said Monday that the deals were a “top priority” and promised to move quickly.

“Today we have overcome a crucial hurdle to helping put Americans back to work,” Mr. Boehner said. Then he took a swipe at the White House. “While the delay was unacceptably long and likely cost jobs, I am pleased the Obama administration has finally done its part.”

Trade agreements reduce the price of American goods and services in foreign markets — and foreign goods and services here — by eliminating tariffs, or taxes, on those products. Most economists say the overall benefits are substantial, increasing demand and reducing prices. But the outcomes for individuals are much more varied. Consumers may benefit from the availability of cheaper foreign goods even as more expensive American workers are losing their jobs.

The United States has comprehensive free trade agreements with 17 countries, including Mexico and Canada. The proposed agreement with South Korea could increase annual sales of American goods — including dairy products, pork, poultry, chemicals and plastics — by up to $10.9 billion, according to a 2007 estimate by a federal agency, the United States International Trade Commission. That estimate did not include sales services like banking and legal work, which are also likely to be considerable.

The agreement with Colombia, a much smaller trading partner, would increase annual demand for American goods by about $1.1 billion, the commission estimated. It said the impact of the Panama agreement would be smaller; it did not provide an estimate.

The White House said the deals would “provide a major boost to our exports.”

Representative Eric Cantor, the House majority leader, described the deals as “a key component of the House Republicans’ job plan.”

Both sides said passing the agreements would create thousands of jobs.

The Bush administration completed negotiation of the three agreements in 2006, but approval was blocked by Congressional Democrats. Mr. Obama lifted the agreements from the dustbin in 2009 as part of a broader effort to revive the economy. To address the concerns of labor unions and other opponents, the administration renegotiated provisions in each of the deals.

Article source: http://feeds.nytimes.com/click.phdo?i=dd556754af2c7238df4184df39e38a95

Filed Under: Business News Tagged With: administration officials, assurances, proud words

Obama Calls for Jobs Plan with Payroll Tax Cut

September 9, 2011 by NewsMaker Leave a Comment

Speaking to a joint session of Congress, Mr. Obama ticked off a list of measures he said would put money in people’s pockets, encourage companies to begin hiring again, and jolt an American economy at risk of relapsing into recession. And he all but ordered Congress to pass the legislation.

“You should pass this jobs plan right away,” the president declared.

With Republicans already lining up to condemn the plan, Mr. Obama said, “The question is whether, in the face of an ongoing national crisis, we can stop the political circus and actually do something to help the economy.”

Though Mr. Obama’s proposals were widely expected — an extension and expansion of the cut in payroll taxes; new spending on schools and public works projects; and an overhaul of unemployment insurance — the overall package was considerably larger than expected, with an estimated $447 billion in stimulus money.

While Republicans did not often applaud Mr. Obama’s plans, party leaders greeted his proposals with a degree of conciliation. “The proposals the president outlined tonight merit consideration,” Speaker John A. Boehner said in a statement. “We hope he gives serious consideration to our ideas as well.”

The president’s plan is comparable to the two-year $787 billion package pushed through by Mr. Obama in 2009, because senior administration officials said the bulk of this stimulus would flow into the economic bloodstream in 2012.

The centerpiece of the American Jobs Act is an extension and expansion of the cut in payroll taxes, worth $240 billion, under which the tax paid by employees would be cut in half through 2012. Smaller businesses would also get a cut in their payroll taxes, as well as a tax holiday for hiring new employees.

Mr. Obama said a typical household would benefit to the tune of $1,500 next year.

“I know some of you have sworn oaths to never raise any taxes on anyone for as long as you live,” he said. “Now is not the time to carve out an exception and raise middle-class taxes, which is why you should pass this bill right away.”

But he also repeated his long standing position that the wealthiest Americans and biggest corporations should “pay their fair share” — in other words, that corporate loopholes should be closed and the Bush era tax cuts on the wealthiest not extended yet again.

“Should we keep tax loopholes for oil companies? Or should we use that money to give small business owners a tax credit when they hire new workers? Because we can’t afford to do both,” he said. “Should we keep tax breaks for millionaires and billionaires? Or should we put teachers back to work so our kids can graduate ready for college and good jobs? Right now, we can’t afford to do both.”

These are questions that will be hard fought this spring as Congress hammers out the second phase of the summer budget deal that headed off the prospect that the government’s borrowing power would reach its limit.

Mr. Obama insisted that everything in the package would be paid for by raising the target for long-term spending cuts to be negotiated by a special Congressional committee. He did not detail his arithmetic, which White House officials said would hinge on how much of the plan gets through Congress.

“There should be nothing controversial about this piece of legislation,” Mr. Obama said in his prepared remarks. “Everything in here is the kind of proposal that’s been supported by Democrats and Republicans.”

After a summer consumed by a bitter debate between the White House and House Republicans over how to reduce the federal debt and deficit, Mr. Obama kept his focus Thursday squarely on the need to create jobs. He acknowledged that the government’s role in fixing the problem was limited.

“Ultimately, our recovery will be driven not by Washington, but by our businesses and our workers,” he said. “But we can help. We can make a difference. There are steps we can take right now to improve people’s lives.”

Article source: http://feeds.nytimes.com/click.phdo?i=0b6fa33dc788285ad681c83ffef7fd62

Filed Under: Business News Tagged With: administration officials, merit consideration, payroll taxes

News Analysis: News Analysis: A Balancing Act For President Obama

September 3, 2011 by NewsMaker Leave a Comment

The challenge for Mr. Obama is that he must do both.

Despite Republican opposition to spending measures or tax cuts to spur job creation and economic growth, the president is under pressure to fight for a significant stimulus program. The demands come not only from Democrats, but also from many economists, financial analysts and executives who fear a relapse into recession.

But as administration officials are well aware, another display of partisan gridlock this fall could again provoke a downgrade of the United States’ credit and market upheavals that would further batter consumer confidence.

Mr. Obama has said bipartisanship is his aim. Yet even the president’s letter asking to address Congress next Wednesday provoked sparring. House Speaker John A. Boehner insisted on the following day, and more than 24 hours later extended the official invitation, which the White House immediately accepted. The embarrassing episode bodes badly for the reception that Mr. Obama’s ideas will receive, and for the parties’ ability to reach a much more difficult agreement on budget priorities by December as required in the deficit reduction deal last month.

“It is my intention,” the president wrote, “to lay out a series of bipartisan proposals that the Congress can take immediately to continue to rebuild the American economy by strengthening small businesses, helping Americans get back to work and putting more money in the paychecks of the middle class and working Americans, while still reducing our deficit and getting our fiscal house in order.”

People familiar with the White House’s planning say Mr. Obama will focus in his speech on the specifics of his immediate job-creation plans, but leave the details of his longer-term deficit reduction program for later. They say he does not want to dilute the political impact of his jobs message with controversies, especially with his Democratic base, over deficit-reduction ideas like raising the eligibility age for future Medicare recipients.

The signals from the White House suggest that Mr. Obama’s agenda will not be so bold as to satisfy many liberals clamoring for New Deal-style programs. On Tuesday, 68 progressive groups wrote to Mr. Obama urging him “to move beyond these half-measures designed to appeal to a narrow ideological minority who have repeatedly shown their unwillingness to negotiate.”

Still, they say Mr. Obama’s plan will be far more ambitious than would have been expected just months ago, given the weakened economy. He has concluded, Democrats say, that Republicans will oppose anything he proposes, and with an election looming, Mr. Obama must make clear what he stands for.

Expected among those stimulus proposals is an extension for another year of the payroll tax cut for workers that Mr. Obama and Republicans agreed to last December, which has meant $1,000 more this year for the average family. Mr. Obama has been considering whether to seek an expansion of the payroll tax cut for employers. And he is expected to propose a separate tax credit for employers who increase their payrolls.

The total cost could reach several hundred billion dollars. But the White House figures that tax cuts have the best chance of Republican support.

Yet Republicans say they oppose another round of stimulus measures, a stance consistent with their argument that Mr. Obama’s original $800 billion stimulus package was a failure. And despite their party’s longstanding support of tax cuts, Republican leaders say they are opposed to any revenue-losing proposals unless they are offset by equal spending cuts — a condition they did not make for extending the Bush-era tax cuts.

That sets up an opportunity, as Democrats see it, to saddle Republicans with the blame for a weak economy.

“The president wants to work with Republicans and Democrats to create jobs and grow the economy,” said Dan Pfeiffer, the White House communications director. “If nothing happens, it will be because Republicans in Congress made a conscious decision to do nothing. And that is a choice that will have tremendous consequences for the country.”

Mr. Obama also will propose added spending that Republicans are even more certain to oppose.

Much of the money would go to infrastructure projects. Mr. Obama is expected to again propose an infrastructure bank to support work on roads, bridges, airports, schools and other public works. Because such a bank would take up to 18 months to get under way, Mr. Obama has indicated he will propose other innovative ways to support such work quickly.

To hold down overall federal costs, and to avoid having to go to Congress, Mr. Obama and his advisers have been looking for ways to divert existing government money to purposes that will create jobs, especially in the hard-hit construction industry. School repairs and retrofitting buildings for energy efficiency will be a focus. And Mr. Obama is expected to argue that to the extent that states and local governments are relieved of school construction costs, they must avoid further layoffs of teachers.

For the long-term unemployed, the White House is considering a program like one in Georgia, which had Republican support there. The idea is to find temporary jobs for people at no expense to employers, providing them with on-the-job training while they receive unemployment compensation or a government stipend, in hopes of ultimately getting hired or finding a similar job elsewhere.

“It’s very important for the president to set forth his vision,” said Representative Chris Van Hollen of Maryland, the senior Democrat on the House Budget Committee. “I don’t think he should limit his vision to what may or may not pass the House of Representatives.”

Article source: http://feeds.nytimes.com/click.phdo?i=9bfc48b0e4b5efac05ed825abcb17b8c

Filed Under: Economy News Tagged With: administration officials, consumer confidence, partisan gridlock

U.S. Inquiry Said to Focus on S.&P. Ratings

August 25, 2011 by NewsMaker Leave a Comment

The investigation began before Standard Poor’s cut the United States’ AAA credit rating this month, but it is likely to add fuel to the political firestorm that has surrounded that action. Lawmakers and some administration officials have since questioned the agency’s secretive process, its credibility and the competence of its analysts, claiming to have found an error in its debt calculations.

In the mortgage inquiry, the Justice Department has been asking about instances in which the company’s analysts wanted to award lower ratings on mortgage bonds but may have been overruled by other S. P. business managers, according to the people with knowledge of the interviews. If the government finds enough evidence to support such a case, which is likely to be a civil case, it could undercut S. P.’s longstanding claim that its analysts act independently from business concerns.

It is unclear if the Justice Department investigation involves the other two ratings agencies, Moody’s and Fitch, or only S. P.

During the boom years, S. P. and other ratings agencies reaped record profits as they bestowed their highest ratings on bundles of troubled mortgage loans, which made the mortgages appear less risky and thus more valuable. They failed to anticipate the deterioration that would come in the housing market and devastate the financial system.

Since the crisis, the agencies’ business practices and models have been criticized from many corners, including in Congressional hearings and reports that have raised questions about whether independent analysis was corrupted by the drive for profits.

The Securities and Exchange Commission has also been investigating possible wrongdoing at S. P., according to a person interviewed on that matter, and may be looking at the other two major agencies, Moody’s and Fitch Ratings.

Ed Sweeney, a spokesman for S. P., said in an e-mail: “S. P. has received several requests from different government agencies over the last few years. We continue to cooperate with these requests. We do not prevent such agencies from speaking with current or former employees.” S. P. is a unit of the McGraw-Hill Companies, which is under pressure from some investors and has been considering whether to spin off businesses or make other strategic changes this summer.

The people with knowledge of the investigation said it had picked up steam early this summer, well before the debt rating issue reached a high pitch in Washington. Now members of Congress are investigating why S. P. removed the nation’s AAA rating, which is highly important to financial markets.

Representatives of the Justice Department and the S.E.C. declined to comment, as is customary for those departments, on whether they are investigating the ratings agencies.

Even though the Justice Department has the power to bring criminal charges, witnesses who have been interviewed have been told by investigators that they are pursuing a civil case.

The government has brought relatively few cases against large financial concerns for their roles in the housing blowup, and it has closed investigations into Washington Mutual and Countrywide, among others, without taking action.

The cases that have been brought are mainly civil matters. In the spring, the Justice Department filed a civil suit against Deutsche Bank and one of its units, which the government said had misrepresented the quality of mortgage loans to obtain government insurance on them. Another common thread — in that case and several others — is that no bank executives were named.

Despite the public scrutiny and outcry over the ratings agencies’ failures in the financial crisis, many investors still rely heavily on ratings from the three main agencies for their purchases of sovereign and corporate debt, as well as other complex financial products.

Companies and some countries — but not the United States — pay the agencies to receive a rating, the financial market’s version of a seal of approval. For decades, the government issued rules that banks, mutual funds and others could rely on a AAA stamp for investing decisions — which bolstered the agencies’ power.

A successful case or settlement against a giant like S. P. could accelerate the shift away from the traditional ratings system. The financial reform overhaul known as Dodd-Frank sought to decrease the emphasis on ratings in the way banks and mutual funds invest their assets. But bank regulators have been slow to spell out how that would work. A government case that showed problems beyond ineptitude might spur greater reforms, financial historians said.

Article source: http://feeds.nytimes.com/click.phdo?i=60344544f6092632cb2608f60de15e9a

Filed Under: Your Money Tagged With: aaa credit, administration officials, political firestorm

U.S. Inquiry Is Said to Focus on S.&P. Ratings

August 18, 2011 by NewsMaker Leave a Comment

It is unclear if the Justice Department investigation involves the other two ratings agencies, Moody’s and Fitch, or only S. P.

Representatives of the Justice Department and the S.E.C. declined to comment, as is customary for those departments, on whether they are investigating the ratings agencies.

Even though the Justice Department has the power to bring criminal charges, witnesses who have been interviewed have been told by investigators that they are pursuing a civil case.

Article source: http://www.nytimes.com/2011/08/18/business/us-inquiry-said-to-focus-on-s-p-ratings.html?partner=rss&emc=rss

Filed Under: Global Business Tagged With: administration officials, justice department investigation, wrongdoing

Geithner Will Stay for Now, the Treasury Department Says

August 8, 2011 by NewsMaker Leave a Comment

“Secretary Geithner has let the president know that he plans to stay on in his position at Treasury,” Jenni R. LeCompte, a Treasury spokeswoman, said in a written statement. “He looks forward to the important work ahead on the challenges facing our great country.”

Mr. Geithner, 49, said a month ago that he would decide on his future after the administration and Congress reached a deal to increase the nation’s debt limit, raising the possibility that he would step down. Mr. Obama signed the debt ceiling legislation into law last Tuesday.

But the White House pressed Mr. Geithner to stay, citing a need for stability in Mr. Obama’s economic team and a desire to avoid another confrontation with Senate Republicans, who have used the filibuster to delay or prevent votes on many of Mr. Obama’s nominees to important executive branch positions.

By late last week, administration officials were saying privately that it appeared Mr. Geithner would stay through the end of Mr. Obama’s term, although he had not yet told the White House his final decision, pending conversations with his family.

Jay Carney, the White House spokesman, said in a statement on Sunday, “The president asked Secretary Geithner to stay on at Treasury and welcomes his decision.”

Article source: http://feeds.nytimes.com/click.phdo?i=f46204da7e18be3f3a7e70f15ff190f3

Filed Under: Business News Tagged With: administration officials, treasury department, white house spokesman

White House Names a New Chief of Information Technology

August 4, 2011 by NewsMaker Leave a Comment

Mr. VanRoekel, 41, who joined the Obama administration from Microsoft in 2009 as managing director of the Federal Communications Commission, will succeed Vivek Kundra, the White House plans to announce on Thursday.

The federal government spends about $80 billion a year on information technology, more than any corporation. But the government, analysts agree, has not achieved the kind of productivity gains from its technology investment that is evident in the private sector.

The long-term trend of productivity growth in the private sector, said Jeffrey D. Zients, a deputy director of the Office of Management and Budget, has been about 1.5 percent a year. Yet productivity growth in the federal government, he noted, has been less than a third that level.

Senior administration officials came into office convinced that computing technology could be bought and used more intelligently to save money, reduce waste and make government work better. “We believe that the use of information technology is the single biggest reason for the gap between the public and private sector,” Mr. Zients said in an interview on Wednesday.

Mr. Kundra, 36, led the effort to overhaul the government’s approach to technology for more than two years. He is going to Harvard to take a joint appointment at the Kennedy School of Government and the Berkman Center for Internet and Society at the law school.

Mr. Kundra, analysts say, came in with an ambitious agenda and made some progress. When he arrived at the White House, Mr. Kundra recalled, he was handed a thick pile of papers, documenting $27 billion in technology projects that where running well over budget and well behind schedule.

To address the problem, the administration built IT Dashboard, a Web site accessible to the public that tracks the spending and progress federal technology projects. Mr. Kundra and his team have used the project-tracking data to conduct TechStat sessions, reviews of the government’s largest, most troubled technology initiatives. As a result, projects have been pared back or eliminated, saving $3 billion, the government estimates.

Under Mr. Kundra, analysts say, the government agencies have moved to adopt new technologies that can improve efficiency. The government is shifting to cloud computing, in which people access applications like e-mail over the Internet rather than in desktop software. Another tool is software that shares computing tasks across several machines in a data center, reducing the number of computers — and data centers — needed.

The government has begun a program intended to close 800 of its 2,000 data centers over the next four years. That effort is on track to close 195 computer centers this year.

The pace of technology projects has accelerated as well. The government estimates that the average time needed to deliver a software application or component has been trimmed to eight months, from 24 months.

In its drive to make its technology less costly and more nimble, the government has, said Shawn P. McCarthy, an analyst at IDC, “definitely made progress down that path, though probably not as much as Vivek Kundra had wanted.”

The administration has also put all kinds of government data on the Web, mostly on the Web site Data.gov, including economic, health care, environmental and other information. There are now more than 389,000 data sets online, and citizen programmers have created more than 230 applications using the data.

Mr. VanRoekel worked for Microsoft for 15 years, including a stint as an assistant to Bill Gates, the co-founder. Mr. VanRoekel was a supporter of President Obama, attended the inauguration, and after a conversation with Julius Genachowski, the new chairman of the F.C.C., went to work for him.

As the government’s chief information officer, Mr. VanRoekel said he planned to move ahead with the work Mr. Kundra began.

“We’re trying to make sure that the pace of innovation in the private sector can be applied to the model that is government,” Mr. VanRoekel said.

Article source: http://feeds.nytimes.com/click.phdo?i=cb5b10e884f581babbd907be26561711

Filed Under: Business News Tagged With: administration officials, productivity growth, thick pile