April 1, 2023

Parliament Asks Murdoch to Discuss Hacking

On Tuesday, the British Parliament called on Mr. Murdoch “to give evidence to discuss his comments” about the culture of paying off police that he made on March 6 to nearly two dozen journalists and newspaper executives from The Sun. A tape of the 45-minute conversation first emerged on the British investigative journalism Web site Exaro News on July 4.

On the audiotape, Mr. Murdoch listens to the journalists, nearly all of whom had been questioned for hacking and other illegal news-gathering practices, talk about the impact of the scandal on their lives. He told them, “I’m just as annoyed as you are at the police, and you’re directing it at me instead.” Through the conversation, Mr. Murdoch spoke in a gravelly and often indignant voice about how The News of the World, now defunct, was targeted for practices that were largely commonplace in British journalism.

“One of our high-priced lawyers would say it’s our fault, but that situation existed at every newspaper in Fleet Street,” Mr. Murdoch said.

He also promised to continue to provide support to journalists even if they are found guilty.

“I will do everything in my power to give you total support, even if you’re convicted or get six months or whatever. I think it’s just outrageous,” he said, adding, “I don’t know of anybody or anything that did anything that wasn’t being done across Fleet Street and wasn’t the culture.”

Mr. Murdoch was invited back to appear before Parliament, according to a government official who would not be named under standard parliamentary rules. At this point, members of Parliament have not officially sent Mr. Murdoch an invitation and an interview is not expected to take place until after the House of Commons returns from its summer break. Because Mr. Murdoch has been invited and not summoned, the meeting will take place when Mr. Murdoch is in Britain.

Ashley Huston, a spokeswoman for News Corporation, said in a statement that “Mr. Murdoch welcomes the opportunity to return to the Select Committee and answer their questions. He looks forward to clearing up any misconceptions as soon as possible.”

Mr. Murdoch’s voice on the tapes sounds notably different from the more subdued tone he took when he spoke before Parliament about the hacking scandal that closed The Sun, forced the company to withdraw its takeover bid of British Sky Broadcasting, also known as BSkyB, and helped lead to the split of News Corporation into two separate companies. In July 2011, he appeared with his son James before the Culture, Media and Sport Committee, then in April 2012, he appeared before a judicial panel.

In the past, Richard Greenfield, a media analyst at BTIG Research, predicted that the problems presented by the hacking scandal would ultimately benefit shareholders because of the eventual split into two companies. Last month, he wrote on his blog that News Corporation had made strides and that “shares have rebounded from fears tied to the phone hacking scandal.”

Stephen Castle contributed reporting.

Article source: http://www.nytimes.com/2013/07/10/business/media/parliament-asks-murdoch-to-discuss-hacking.html?partner=rss&emc=rss

Spain Touts Progress in Reducing Budget Deficit

In his annual state of the nation speech, Mr. Rajoy told Parliament that the budget deficit fell to less than 7 percent of gross domestic product last year. In 2011 the deficit was 9.4 percent of G.D.P., according to Eurostat, the European Union statistics office.

“A year ago, no outsider was betting on Spain, not one,” Mr. Rajoy said. “Today, nobody is betting that Spain will not manage to come out of this.”

Although the deficit shrank, Spain fell short of its goal of reducing the 2012 spending gap to 6.3 percent of G.D.P., as the government had promised its euro zone partners.

Spain’s financing problems have eased significantly since September, when the European Central Bank said it was ready to buy debt from Spain and other struggling euro economies in order to bring down interest rates. The promise alone was enough to accomplish that goal; the bond-buying program has yet to be activated.

The annual interest rate paid on Spain’s 10-year government bonds stood at 5.2 percent on Wednesday. Last summer, after Madrid was forced to negotiate a European bailout for its savings banks, the rate stood at 7.5 percent, a level considered unsustainable over the long term.

In a further sign of Spain’s eased market access, the Treasury offered investors dollar-denominated bonds Wednesday for the first time since September 2009. The sale of the five-year bonds is intended to raise about $2 billion, Reuters reported, citing an unidentified government official.

Madrid also hopes to sell as much as €4 billion in bonds at an auction on Thursday. If the sale is successful, the government will have sold a fifth of the debt it plans to issue for the full year.

Mr. Rajoy, however, is confronting his most serious political challenge since he took office in December 2011. He has been engulfed in a widening corruption scandal that has put the spotlight on his own finances and those of other leaders of his governing Popular Party.

Last month, the Swiss authorities disclosed that the party’s former treasurer, Luis Bárcenas, had amassed €22 million, or $29 million, in Swiss bank accounts. Mr. Bárcenas is now also under investigation over whether he made payments to Mr. Rajoy and other politicians through a secret party fund, an allegation that Mr. Bárcenas and other senior Popular Party members have denied. Earlier this month, Mr. Rajoy released his recent tax returns — a first for a Spanish prime minister — to rebut the graft allegations.

“I’m disgusted that there are cases of corruption in Spain, but I’m proud that the institutions pursue them,” Mr. Rajoy told Parliament on Wednesday.

Even though the number of graft cases has soared since 2008 and the bursting of Spain’s construction bubble, Mr. Rajoy added that “it is malicious to claim that there is a general state of corruption in Spain.”

Still, Mr. Rajoy told lawmakers he wanted to stiffen court sentences for people found guilty of corruption. The prime minister did not make reference to Mr. Bárcenas or anyone else under investigation, but this week Alfonso Alonso, the Popular Party’s parliamentary spokesman, said the party was “profoundly ashamed” that it had kept Mr. Bárcenas on its payroll through last year even though Mr. Bárcenas resigned as party treasurer in 2009 after he was indicted in an earlier stage of the corruption investigation.

And while the markets may be pleased by Spain’s recent fiscal performance, Mr. Rajoy continues to face mass street protests against the government’s spending cuts and other austerity measures, which many Spaniards blame for prolonging the recession and raising the unemployment rate to 26 percent. Another big protest is scheduled in central Madrid on Saturday.

Mr. Rajoy told lawmakers that his government would shift its focus from spending cuts to measures intended to promote economic growth. He pledged new tax breaks for entrepreneurs and easier financing for small and midsize companies through the state-owned Instituto de Crédito.

Article source: http://www.nytimes.com/2013/02/21/business/global/spain-touts-progress-in-reducing-budget-deficit.html?partner=rss&emc=rss

DealBook: Ex-Regulator Has Harsh Words for Bankers and Geithner

Sheila Bair has written a book about her time as chairwoman of the F.D.I.C.Chip Somodevilla/Getty ImagesSheila Bair has written a book about her time as chairwoman of the F.D.I.C.

Sheila C. Bair, who tormented Wall Street and its Washington allies as a banking regulator, is taking a fresh swipe at her foes in retelling the dark days of the financial crisis.

In a book to be released on Tuesday, the former chairwoman of the Federal Deposit Insurance Corporation takes aim at the bankers she blamed for the crisis. She also criticized fellow regulators, including current Treasury Secretary Timothy F. Geithner, for their response to the problems.

Ms. Bair painted Mr. Geithner, the former head of the Federal Reserve Bank of New York, as an apologist for Wall Street, opposing some postcrisis reforms. She questioned whether his effort to inject billions of dollars into nine big banks masked a rescue intended solely for Citigroup, a theory that other government officials have rejected.

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“Participating in these programs was the most distasteful thing I have ever done in public life,” said Ms. Bair, in the book, “Bull By the Horns: Fighting to Save Main Street from Wall Street and Wall Street from Itself.”

People close to Mr. Geithner note that he issued early warnings about Wall Street risk-taking and championed a regulatory crackdown on big banks.

Lee Sachs, a former top Treasury Department official, said on Monday that Mr. Geithner never acted to protect Citigroup or any single institution, but rather the entire system. In 2004, the New York Fed under Mr. Geithner ordered Citigroup to pay $70 million for consumer lending violations.

“If anything, he was quite focused on the pain the country was suffering,” Mr. Sachs said.

Another government official who attended some of the meetings with Ms. Bair and Mr. Geithner said she was overstating the animus. A Treasury Department spokeswoman declined to comment on Ms. Bair’s attacks because officials had not read the book.

In a statement, a Citigroup spokeswoman defended the bank, whose bailout earned a profit for taxpayers. “Since Vikram Pandit became C.E.O. during the financial crisis, Citi has executed a strategy based on returning to the basics of banking and building a culture of responsible finance. It is a simpler, smaller, safer and stronger institution than it was five years ago and this record speaks for itself.”

Drawn from personal e-mails and notes, Ms. Bair’s book joins the growing collection of financial crisis histories. While the book contributes a few revelations to the annals of Wall Street, Ms. Bair mostly notably highlights the challenge of being the only woman in the room. At crucial times during the crisis, she said, Mr. Geithner and other top regulators kept her in the dark.

“Maybe the boys didn’t want Sheila Bair playing in their sandbox,” she wrote.

A Kansas native, Ms. Bair portrayed herself as a lifelong Republican with a populist streak. She was among the first regulators to sound the alarms about the subprime mortgage bubble. When the crisis emerged, she pushed for banks to replenish their capital cushions.

Ms. Bair, who is now senior adviser to the Pew Charitable Trusts, spent much of the book criticizing the go-go attitude that fueled the crisis. She also delivered blistering assessments of several crisis-era chiefs. She said, for example, that the deal-making skills of Kenneth D. Lewis, then Bank of America’s chief, “were clearly wanting.”

But she saved the sharpest critique for Mr. Geithner, calling him the “bailouter in chief.”

When the F.D.I.C. was negotiating the contours of a plan to guarantee bank debt, she said that Mr. Geithner pushed the agency to charge banks only a “minimal” fee in return for the government support. Mr. Geithner and other regulators argued that it was counterproductive to assign hefty costs at a time when the industry needed saving.

“Geithner just couldn’t see things from my point of view,” Ms. Bair wrote.

Over her five-year tenure, Ms. Bair struggled to break into the clubby nature of high finance, detailing in the book how Mr. Geithner and others shut her out of major decisions. The F.D.I.C., for example, was not involved in picking which banks would receive the first round of bailout funds. One regulator circulated an e-mail questioning “the audacity of that woman.”

Much of the book is devoted to the regulators’ dealings with just one company, Citigroup, which received more government support than any other bank. Ms. Bair fleshed out her frustrations with Mr. Geithner and his desire, in her eyes, to treat a dysfunctional bank with kid gloves.

She even suggested that the industrywide bailouts were meant mainly to help Citigroup. Other commercial banks were in considerably better shape, she noted, and beleaguered investment banks like Morgan Stanley had secured private investments.

“How much of the decision-making was being driven through the prism of the special needs of that one, politically connected institution?” Ms. Bair wrote.

Other players in the crisis will most likely criticize her concerns as reductive, especially in light of major problems at Bank of America, which required two bailouts. While other banks were healthier than Citi, regulators opted for an across-the-board plan to instill confidence in the industry and the economy.

Even so, Ms. Bair laid out new details in the book suggesting that regulators went further than previously thought to protect Citigroup.

Early on in the crisis, she said, Mr. Geithner wanted Ms. Bair’s agency to financially support Citigroup’s planned $1-a-share acquisition of Wachovia. In turn, the F.D.I.C. would receive $12 billion in preferred stock and warrants.

Mr. Geithner and Citigroup held private talks about the deal without telling Ms. Bair, according to her account. Regulators then planned to allow Citigroup to count the stock as capital, a boost to the bank’s “sagging capital ratios.”

When Wells Fargo swooped in with a higher offer that required no government backing, Ms. Bair indicated her support for the new deal. Mr. Geithner, she said, was “apoplectic” and wanted the F.D.I.C. to stand behind Citigroup, which then raised its bid. The Fed ultimately approved the Wells Fargo deal and Citigroup required two infusions of government capital.

As Citi continued to suffer in 2009, Ms. Bair pressed for the bank to put its troubled assets into a “bad bank” supported by private money. Ms. Bair said she received no support from other regulators, who feared it would unnerve the markets.

In the book, Ms. Bair also scrutinized Mr. Geithner’s approach to reforming Wall Street. Detailing new elements of the debate over the Dodd-Frank act, she argued that Mr. Geithner worked with Republican lawmakers to “water down” new regulations like the so-called Volcker Rule. Other people close to the Dodd-Frank debate recall that Mr. Geithner supported the rule but agreed to exemptions to secure Republican votes.

When Ms. Bair and other officials mentioned to lawmakers their concerns about a draft version of the legislation, she said Mr. Geithner summoned regulators to deliver an “expletive-laced tongue lashing.”

For her part, Ms. Bair acknowledged her own temper flare-ups. When preparing for Congressional testimony one night, she recalled having stomped out of the room in a fit of exhaustion. Ms. Bair, who received a security detail after threats on her safety, also lashed out at journalists who she felt were unfair, underscoring her sensitivity to the glare of the spotlight.

“I get cranky when sleep-deprived,” she wrote.

Bull by the Horns Chapter 1 (PDF)

Bull by the Horns Chapter 1 (Text)

Article source: http://dealbook.nytimes.com/2012/09/24/ex-regulator-has-harsh-words-for-bankers-and-geithner/?partner=rss&emc=rss

TransCanada in Eminent Domain Fight Over Pipeline

Randy Thompson, a cattle buyer in Nebraska, was informed that if he did not grant pipeline access to 80 of the 400 acres left to him by his mother along the Platte River, “Keystone will use eminent domain to acquire the easement.” Sue Kelso and her large extended family in Oklahoma were sued in the local district court by TransCanada, the pipeline company, after she and her siblings refused to allow the pipeline to cross their pasture.

“Their land agent told us the very first day she met with us, you either take the money or they’re going to condemn the land,” Mrs. Kelso said. By its own count, the company currently has 34 eminent domain actions against landowners in Texas and an additional 22 in South Dakota.

In addition to enraging those along the proposed pipeline’s 1,700-mile path, the tactics have many people questioning whether a foreign company can pressure landowners without a permit from the State Department — the agency charged with determining whether the project is in the “national interest.” A decision is expected by year’s end on the pipeline, which would carry crude oil from Alberta to American refineries.

A government official with knowledge of the permitting process who would address the issue only on condition of anonymity said, “It is presumptuous for the company to take on eminent domain cases before there is any decision made.”

Landowners have begun joining forces and challenging the company’s assumption that it can legally seize land.

“With so many unanswered questions about the safety of this project, perhaps it’s time for the U.S. to hit the brake pedal,” Mr. Thompson wrote in testimony for a House Energy and Commerce Committee hearing in May. “And perhaps it’s time that our government starts placing the concerns of American citizens over and above those of a foreign corporation.”

Mr. Thompson said he intends to fight to keep the pipeline, 36 inches in diameter, off his land. Eminent domain laws generally allow for the confiscation of private property if taking it is judged to serve a larger public good. These kinds of laws differ slightly from state to state as do the processes by which pipelines are approved and licensed. As a result, there is both debate and confusion over whether TransCanada has the right to use the courts to demand easements from property owners in advance of final approval for the project.

A TransCanada spokesman, Shawn Howard, says the company does not have to wait for a license from the State Department to begin securing land. He said the company has tried to obtain voluntary agreements, but when that fails the company has the right to force lease agreements upon landowners in all six states the pipeline would pass through.  All of TransCanada’s permit applications, he said, have been made through its subsidiary in Omaha, Keystone Pipeline.

“We have been given the legal advice that we can do this in parallel to the process going on in Washington,” Mr. Howard said. “If we didn’t think we had the authority or ability to do this, we wouldn’t be doing it.”

A senior State Department official, who asked not to be identified because the permit process is continuing, said TransCanada had not sought federal approval to invoke eminent domain. He said the department had no authority on the issue and that it was up to state law and the courts to determine appropriate use of eminent domain laws.

Landowners and their lawyers are pushing local courts to do just that. While it is impossible to say how many cases are working their way through the legal system, in addition to the 56 Texas and South Dakota cases, TransCanada acknowledges it has sent “Dear Owner” letters to dozens of families in Nebraska.

Timothy Sandefur, a lawyer with the Pacific Legal Foundation, a nonprofit advocate for property rights issues, said that if the project is approved, the company will be on firmer ground. As unfair as the laws might seem, he said, the right of way of pipelines and railroads as public goods has been well established, regardless of whether they are foreign-owned. “Property owners almost never win these suits,” he said.

But lawyers for the landowners, particularly in Nebraska, Oklahoma and Texas, argue that TransCanada has not met the requirements to invoke eminent domain under those states’ laws. In South Dakota, however, a judge has already ruled that TransCanada could use eminent domain to secure land for a previous pipeline project.

David A. Domina, a Nebraska lawyer whose firm represents 45 landowners, said there was “no way” that TransCanada has eminent domain powers under Nebraska law, and that the company was “acting in bad faith.”

In East Texas, where residents are used to having cordial dealings with oil companies, landowners said they had never seen a company behave as aggressively as has TransCanada.

Article source: http://www.nytimes.com/2011/10/18/us/transcanada-in-eminent-domain-fight-over-pipeline.html?partner=rss&emc=rss

Slovakia’s Prime Minister Vows to Resign if Euro Vote Fails

As the deadline approached, Prime Minister Iveta Radicova told lawmakers in Bratislava in a closed negotiating session for the governing parties that she would either tie the decision on the bailout fund to a confidence vote or bring the matter to a simple vote and resign if it did not pass, a government official said.

The vote on expanding the size of the fund, known as the European Financial Stability Facility, and its powers is scheduled for Tuesday. The free-market Freedom and Solidarity Party, one of the four parties in the coalition, has refused to back it, prompting a political crisis that could bring down the government.

The coalition parties will meet one final time on Tuesday morning, before the afternoon session of Parliament, to try to reach a compromise. “The decision will be made tomorrow morning,” said the government official, speaking on the condition of anonymity about private negotiations. A confidence vote would explicitly tie the fate of the government to the fate of the bailout, putting additional pressure on holdouts to concede.

Politicians in capitals across Europe are closely watching the developments in Bratislava. An agreement to expand the fund was reached in July by the leaders of the 17 countries that use the euro. All of the countries need to approve the accord for the changes to take effect. Malta approved the plan on Monday, leaving Slovakia as the last of the 17 nations to take up the accord for formal consideration.

The resistance in Slovakia is the most significant hurdle standing in the way of the deal. The possibility that Slovakia, a small former Communist country with a population of 5.5 million, could scuttle an agreement endorsed and passed by European powers like Germany, France and Italy had seemed inconceivable.

If Slovakia’s Parliament does not approve the agreement, the future of the euro currency could be in jeopardy, along with a united Europe and quite possibly the stability of the global economy.

The leader of Freedom and Solidarity, Richard Sulik, who is also speaker of the Parliament, has steadfastly refused to support the financial stability fund. He contends that it is unfair to ask Slovakia, the second-poorest country in the euro zone, to guarantee loans for richer countries like Greece and Portugal. If the measure is approved, Slovakia will contribute roughly $10 billion in debt guarantees to a $590 billion euro zone stability fund.

“We cannot allow the Slovakian taxpayers to be massively damaged,” Mr. Sulik said in an interview last week. He vowed not to change his mind.

The opposition Smer-Social Democracy party could bridge the gap, but its leader, the former prime minister Robert Fico, will support the proposal only in exchange for new elections, which could return him to power.

Few Slovaks want to foot the bill for other countries’ overspending. But surveys show that the European Union is popular in Slovakia, and people are very proud of having adopted the currency while neighbors like Poland and their former countrymen, the Czechs, have not.

Article source: http://feeds.nytimes.com/click.phdo?i=365b065990b8dec4e0fac812c79b09a6

Dissolution of Hacker Group Might Not End Attacks

But security experts said on Sunday that the dissolution of the group might not signal an end to the attacks, which have hit dozens of Web sites, including those of prominent targets like the Central Intelligence Agency, the United States Senate, the Arizona state police and Sony.

Indeed, in its farewell message posted on Saturday, the group, also known as LulzSec, urged other hackers to join the “revolution” aimed at governments and corporations that it started recently with Anonymous, a much larger collective of politically minded hackers from which many of the LulzSec members sprung.

“It looks like these sort of ‘hacktivist’ ideas are spreading and gaining popularity,” said Dino A. Dai Zovi, a prominent independent security consultant. He said that LulzSec appeared to be trying to inspire others to join a sprawling, if fragmented, array of local groups, which could feed more attacks.

In recent weeks, LulzSec has become a target itself, as global law enforcement authorities and rival hackers have gone after the group. One man associated with LulzSec, Ryan Cleary, was arrested last week in Britain. Meanwhile, a growing assemblage of rival hackers has been working to unmask the core half-dozen LulzSec members and feed information on them to the authorities.

American officials on Sunday characterized the attacks carried out by LulzSec as “nuisances” rather than real security threats. One government official said that LulzSec had never penetrated government servers or stolen any classified information.

“What we are really worried about is people getting access to our systems, or putting malware on it,” said the official, speaking on condition of anonymity.

The official said that even though it was possible that LulzSec had disbanded, hackers tended to operate in a world of shifting alliances and it would be easy for a new group copying LulzSec’s techniques to appear in the future.

“All it takes is one guy in his basement to do this, not an organized group,” the official said.

On Monday, the Department of Homeland Security plans to introduce a system to help institutions eliminate common programming errors that allow hackers to easily infiltrate databases and steal user names and passwords. The agency’s hope is that the program, which is voluntary, will make it easier for companies and agencies to better secure their corners of the Internet, thus contributing to a safer global network.

Some security experts and hackers were skeptical of LulzSec’s sudden about-face and said they believed the group intended to continue its activities. The latest announcement could be just another ploy for attention, rival hackers said on Twitter and on private online message boards.

Over the last several weeks, LulzSec had said repeatedly on its Twitter feed that it planned to continue attacking governments and financial institutions indefinitely.

Members of LulzSec did not respond to phone calls and e-mails on Sunday.

Whatever happens to LulzSec, the brash and public brand of hacking that it embraced and defined may be here to stay, some experts say. The group’s attacks on prominent targets, accompanied by raucous bragging on social networks and chat rooms, helped it amass more than 280,000 followers on Twitter. It has used that megaphone, as well as chat rooms, to try to recruit more hackers to its ranks.

Some of LulzSec’s activities had a political tinge. For example, it said its theft and public disclosure of Arizona law enforcement records was in response to the state’s tough laws aimed at illegal immigrants. But the group claimed that its hacking was primarily a celebration of the “lulz,” or laughs, and the members seemed to lap up the media attention they generated.

But if LulzSec had continued, it would have faced an increasing risk that its members would be captured, said Chris Wysopal, the chief technology officer of the security firm Veracode.

“By stopping now and regrouping, I think they will live to hack another day,” he said. “If anything, there will be more people hacking in their footsteps.”

Mr. Wysopal added, “Until they’re arrested — if they ever do get arrested — I don’t think anything will slow down.”

Mark Mazzetti contributed reporting.

Article source: http://www.nytimes.com/2011/06/27/technology/27hack.html?partner=rss&emc=rss