Curtains for Rice's State hopes?

By Walter Shapiro

Before the initials CIA came to stand for Covert Intimate Affairs, the battle over the next secretary of state would have been the main event of post-election November. Normally, it doesn’t get better than a brand-name Washington struggle pitting the newly reelected president against the Republican senator he defeated in 2008 over filling the Cabinet post soon to be vacated by an ex-president’s wife. 

Barack Obama’s ill-camouflaged inclination to name Susan Rice, the ambassador to the United Nations, as Hillary Clinton’s successor would normally be about as contentious as, well, a confirmation hearing for David Petraeus in 2011. Rice, an undersecretary of state in the Clinton administration, has by most accounts performed well in a job that pivots around the micro-wording of Security Council resolutions rather than grand geopolitical visions.

But all that good will evaporated when Rice, drawing the short straw as Obama’s designated foreign-policy spinner, dutifully made the rounds of the Sunday shows on Sept. 16, five days after the Libyan attacks. Repeating the White House line, Rice argued that, based on “the best information,” a “spontaneous protest” outside the American consulate in Benghazi attracted heavily armed “extremist elements” who murdered Ambassador Chris Stevens and three other Americans. 

In John McCain’s splenetic view, Rice’s TV commentary smacks of a White House cover-up, since subsequent reporting has shown that initial accounts of a triggering protest were incorrect. As McCain put it Wednesday on Fox News, threatening to filibuster the nomination, “Susan Rice should have known better and if she didn’t know better, she is not qualified.”

At Obama’s first press conference since (gasp) June, the president displayed uncharacteristic moxie in his defense of Rice, who was a key foreign-policy supporter during his 2008 primary campaign against Hillary Clinton. Obama called the attacks on Rice “outrageous” Wednesday and said that if the Republicans “think she’s an easy target, then they’ve got a problem with me.”

All this posturing could be moot if Obama taps John Kerry for secretary of state, although the 2004 Democratic nominee now seems more likely to be headed to the Pentagon to replace Leon Panetta. (The secretary of defense has become one of the last remaining white-men-only jobs in government).

And even though one of the great political novels, “Advise and Consent” by Allen Drury, is built around a confirmation fight over a would-be secretary of state, this has always been one job that the Senate has given a president wide discretion in filling. For all the Iraq-war bluster over the appointment of Condoleezza Rice, Senate Democrats mustered only 13 votes against her in 2005, the highest number of votes against a secretary of state nomination since the early 19th century.

What makes all of this relevant now – before Obama has named a Hillary Clinton replacement – is that it underscores the illogic of most Senate confirmation fights. There may be hidden but valid strategic reasons to oppose a Rice Stuff nomination at State. But it represents a blame-the-messenger stretch even by Washington standards to ensnare Rice in the aftermath of Benghazi.

As should be obvious, the U.N. ambassador has nothing directly to do with embassy security, American covert operations in the Middle East or the flow of intelligence about terrorism. All Rice was doing in her television appearances on September 16 was reciting from talking points presumably prepared by the White House national security team based on information provided by the CIA and other agencies. According to reporting by Washington Post national security columnist David Ignatius, the CIA was still clinging to its belief that the Benghazi attacks began with a spontaneous protest when Rice made her ill-fated rounds of the Sunday shows.

This is not to deny the mysteries that are swirling around the Obama administration’s response to Benghazi. All roads lead to Libya may be the unified field theory linking all current Washington scandals. The Wall Street Journal suggested in a front-page article Thursday that a major reason why Petraeus’ resignation was accepted with such alacrity was the CIA director’s determination to shield the spy agency from blame over Benghazi. The CIA’s release of its Benghazi timeline reportedly angered National Intelligence Director James Clapper, who then used the revelation of Petraeus’ affair as a cudgel to drive him out of government.

Most likely the Republican fury over Benghazi is over-wrought, but it is also easy to grasp. The often secretive Obama administration may be tempted to try to keep everything under wraps, aside from a few sanitized disclosures, in the name of national security. But while there are presumably intelligence risks that would accompany full disclosure, the alternative is letting (probably outlandish) conspiracy theories fester.

The confusion surrounding Benghazi may be attributable to the fog of war – or the fog of a presidential election campaign. In any case, the American people deserve to know what happened and whether the root causes were bad intelligence, bad luck or just bad public explanations.

Otherwise, at the most promising bring-us-together moment of his presidency, the newly reelected Obama will find himself endlessly battling over Benghazi as he attempts to forge a second-term national security team.

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Sina banks on Weibo but weak fourth quarter guidance spooks investors
















(Reuters) – Chinese Internet company Sina Corp said its fourth quarter will be hit by a softer economy and posted weaker-than-expected sales guidance, despite a stronger revenue contribution from its hot microblogging platform Weibo.


Shares in Sina fell 7 percent after it forecast adjusted net revenue of $ 132 million to $ 136 million in the current quarter, below analysts’ expectations for $ 151.9 million according to Thomson Reuters I/B/E/S.













Sina, which makes most of its revenue from online advertising both on its website and Weibo, is facing stiff headwinds as firms slash advertising budgets due to a worsening economic outlook.


“We are going to see a weaker quarter for advertising overall in the fourth quarter,” said Charles Chao, Sina’s chief executive on an earnings conference call. The firm forecast Q4 advertising revenues would rise 6-8 percent from a year earlier.


Chao said Weibo contributed 16 percent to total revenue in the third quarter, up from 10 percent in the previous quarter. The platform, which is very popular with white-collar workers, university students and celebrities, had 424 million registered users at the end of the quarter, up from 368 million three months earlier.


Advertisers, like luxury brands, that traditionally don’t advertise with Sina’s main portal website flocked to Weibo to test out the social platform, Chao said.


There were about 230,000 Weibo advertising accounts in the quarter, and Sina was in the process of rolling out a online payment system and new Weibo advertising product to increase monetization at the end of the fourth quarter.


“We believe a ‘promoted feed advertising’ will become one of the major forms of (Weibo) advertising going forward,” said Chao, adding that the product will be effective also on mobile platforms, allowing Sina to tap into Weibo’s growth on mobile devices.


Q3 PROFIT BEAT


For the third quarter, Sina’s net profit was $ 9.9 million compared with a loss of $ 336.3 million a year earlier, and slighly ahead of analysts’ expectations of $ 7.5 million.


Sina’s quarterly advertising revenue rose 19 percent to $ 120.6 million, while non-advertising revenue rose 9 percent to $ 31.8 million.


The company started monetizing Weibo by offering special services to business accounts and selling VIP memberships to regular users earlier this year.


For its mobile-value-added-services business, Sina said it expects revenue to continue to decline due to new regulatory policies.


The company was also affected by a spat between Japan and China over islands in the East China Sea as Japanese automakers cut back on advertising in China. Chao said he expected the impact to last into the fourth quarter.


“It did have an impact on our third quarter as well as our fourth quarter. We did see cancellations from customers related to Japanese automobiles in the month of September and it impacted the fourth quarter (too),” Chao said.


Sina shares fell 6.74 percent to $ 49.52 in extended trading. They closed at $ 53.10 on the Nasdaq on Thursday.


(Additional reporting by Aurindom Mukherjee in Bangalore; Editing by Sriraj Kalluvila and Richard Pullin)


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Jamaica to abolish slavery-era flogging law
















KINGSTON, Jamaica (AP) — Jamaica is preparing to abolish a slavery-era law allowing flogging and whipping as means of punishing prisoners, the Caribbean country’s justice ministry said Thursday.


The ministry said the punishment hasn’t been ordered by a court since 2004 but the statutes remain in the island’s penal code. It was administered with strokes from a tamarind-tree switch or a cat o’nine tails, a whip made of nine, knotted cords.













Justice Minister Mark Golding says the “degrading” punishment is an anachronism which violates Jamaica’s international obligations and is preventing Prime Minister Portia Simpson Miller‘s government from ratifying the U.N. convention against torture.


“The time has come to regularize this situation by getting these colonial-era laws off our books once and for all,” Golding said in a Thursday statement.


The Cabinet has already approved repealing the flogging law and amendments to other laws in the former British colony, where plantation slavery was particularly brutal.


The announcement was welcomed by human rights activists who view the flogging law as a barbaric throwback in a nation populated mostly by the descendants of slaves.


“We don’t really see that (the flogging law) has any part in the approach of dealing with crime in a modern democracy,” said group spokeswoman Susan Goffe.


But there are no shortage of crime-weary Jamaicans who feel that authorities should not drop the old statutes but instead enforce them, arguing that thieves who steal livestock or violent criminals who harm innocent people should receive a whipping to teach them a lesson.


“The worst criminals need strong punishing or else they’ll do crimes over and over,” said Chris Drummond, a Kingston man with three school-age children. “Getting locked up is not always enough.”


The last to suffer the punishment in Jamaica was Errol Pryce, who was sentenced to four years in prison and six lashes in 1994 for stabbing his mother-in-law.


Pryce was flogged the day before being released from prison in 1997 and later complained to the U.N. Human Rights Committee, which ruled in 2004 that the form of corporal punishment was cruel, inhuman and degrading and violated his rights. Jamaican courts then stopped ordering whipping or flogging.


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Reckitt trumps Bayer with $1.4 billion bid for Schiff
















NEW YORK/LONDON (Reuters) – Reckitt Benckiser Group Plc has trumped Bayer AG‘s agreed deal to buy Schiff Nutrition International Inc with a higher offer of $ 1.4 billion for the U.S. vitamin maker.


The bid, which tops Bayer’s $ 1.2 billion price, opens up a potential bidding war for Schiff, whose portfolio of vitamins and nutritional supplements, such as MegaRed for heart care and Move Free for joints, is appealing to companies seeking stable sources of growth.













Reckitt, the British consumer products group behind Cillit Bang cleaner and Durex condoms, said late on Thursday it would offer $ 42 for each Schiff share, a 23.5 percent premium over the $ 34 per share that Bayer, Germany’s biggest drugmaker, agreed to pay on October 30.


Shares of Schiff Nutrition surged nearly 30 percent to $ 44 in after-hours trading on the New York Stock Exchange, above Reckitt’s offer and indicating some investors expect the bidding to go higher still.


Reckitt’s offer values Schiff at about 3.6 times its forecast 2013 annual sales, which is around the top end of deal multiples in the non-prescription drugs industry.


But it would get Reckitt into the $ 30 billion global market for vitamins and supplements for the first time, complementing its existing strength in other areas of consumer health.


“When this offer was made by Bayer – which was a bilateral agreement and not a public auction process – we knew that this was an area we would be very interested in,” Reckitt Chief Executive Officer Rakesh Kapoor told Reuters.


“That’s why we started to work and look at it once again to see whether this would be attractive to our shareholders. Based on our due diligence, we believe it is and that’s why we’ve come up with a strong offer.”


Analyst Andrew Wood at brokerage Bernstein said the deal made good strategic sense for Reckitt.


“This is particularly true given (Reckitt’s) … excellent M&A track record and its ability to quickly extract big synergies from acquired companies,” he said.


Its past deals in the health sector include buying Boots’ over-the-counter business in 2006 for 1.9 billion pounds ($ 3.0 billion), cough medicines company Adams in 2008 for $ 2.3 billion and Durex condoms group SSL for 2.5 billion pounds in 2010.


$ 22 MLN BREAKUP FEE


Reckitt said it expected the deal to boost earnings immediately on an adjusted basis and Bernstein’s Wood predicted an uplift of about 1 to 2 percent in 2013 earnings per share.


A Bayer spokesman declined to comment and representatives for Schiff could not be immediately reached for comment.


While Bayer may bide its time before reacting to Reckitt’s move, its management will be under pressure to salvage a deal that was well received by investors.


“A bidding war cannot be ruled out. Bayer probably has to match the Reckitt offer. This would result in an acquisition price which might get unattractive for Bayer,” DZ Bank analyst Peter Spengler said in a research note.


Bayer shares were 0.6 percent higher by 1145 GMT, while Reckitt dipped 0.8 percent.


Under the terms of its deal with Bayer, Schiff is allowed to entertain superior offers made in writing before November 28. If it decides to go with another offer, it would have to pay a relatively modest $ 22 million breakup fee to Bayer.


With Schiff now in play, analysts said the situation could also attract interest from other parties – in particular Johnson & Johnson , the only other leading consumer health player lacking a presence in vitamins and supplements.


Schiff Chairman Eric Weider and private equity firm TPG Capital controlled 85 percent of the company’s voting power, as of the end of October.


For Bayer, the planned acquisition of Schiff represents part of a strategy to expand into steadier, albeit less profitable, areas as a counterweight to prescription medicines, where there are high risks of clinical trial failures and patent expiries.


Reckitt, meanwhile, is keen to build up its healthcare business, which already includes painkillers, anti-acne creams and condoms. It also makes a range of household and personal care products.


Morgan Stanley is acting as financial adviser to Reckitt, while Houlihan Lokey is advising Schiff alongside Rothschild. Bayer is being advised by Bank of America Merrill Lynch. ($ 1 = 0.6300 British pounds)


(Additional reporting by Ludwig Burger in Frankfurt, Anjuli Davies in London and Zeba Siddiqui in Bangalore; Editing by Sriraj Kalluvila and David Holmes)


Health News Headlines – Yahoo! News



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NBC to replace “Today Show” producer, source says
















(Reuters) – NBC is expected to name Alexandra Wallace, a senior vice president of the network’s news division, as the executive in charge of “The Today Show,” the latest reshuffling of the show’s personnel after it slipped to second in ratings this year behind “Good Morning America.”


Wallace, who would be the first woman in charge of the long-running NBC show that pioneered early morning TV in the United States, will be named along with a producer to replace Jim Bell, according to a person familiar with the decision.













Bell, who has headed the show since 2005, was blamed this year for the controversial firing of Ann Curry as anchor alongside Matt Lauer.


Curry was replaced by Savannah Guthrie in June.


“Good Morning America” or GMA, produced by Walt Disney‘s ABC unit, closed the gap with “Today.”


“Today,” the top-rated morning show for 16 consecutive years, started the current TV season number two. In late October, NBC drew 7,000 more viewers than GMA among 25 to 54 year-old viewers, the age group advertisers most want to reach, its first lead since September 10. GMA still led among overall viewers.


The first two hours of “The Today Show,” from 7 a.m. to 9 a.m., collected $ 485 million in ad revenues in 2011, up 6.6 percent from 2010, according to Kantar Media, which provides data to advertisers. GMA took in $ 299 million last year.


It is unclear when the changes at “The Today Show” will take effect, according to The New York Times, which first reported the shakeup.


Bell this summer produced NBC’s Summer Olympics coverage and is expected to become the full-time executive producer of the network’s ongoing Olympic coverage.


NBC, a unit of Comcast Corp., is also in the midst of layoffs at its entertainment unit, shedding 500 positions primarily at its cable channels. Jay Leno’s late night TV show cut about two dozen of its crew members about two months ago.


(Reporting By Ronald Grover)


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Egypt presses truce as violence escalates

GAZA CITY, Gaza Strip (AP) — Egypt's prime minister rushed to the aid of the Gaza Strip's Hamas rulers Friday in the midst of an Israeli offensive there, calling for an end to the operation. Palestinian militants took advantage of an Israeli halt in fire during the visit to rain rockets on Israel, including a strike on the bustling metropolis of Tel Aviv for a second straight day.

Three days of fierce fighting between Israel and Gaza militants has widened the instability gripping the region, straining already frayed Israel-Egypt relations. The Islamist Cairo government recalled its ambassador in protest and dispatched Prime Minister Hesham Kandil to the Palestinian territory Friday in a show of solidarity with Hamas.

Israel, meanwhile, showed signs it was preparing to widen the offensive. After days of battering militant targets with airstrikes, Israeli forces were massing along the border in preparation for a possible ground invasion.

The operation began Wednesday with the assassination of Hamas' military chief and dozens of airstrikes on rocket launching sites. While Israel claims to have inflicted heavy damage, militants have fired hundreds of rockets into southern Israel, bringing the entire region to a standstill. At least 21 Palestinians and three Israelis have been killed, according to medical officials on both sides.

Israel, at Egypt's request, suspended its attacks during the Egyptian official's brief visit, but Palestinians brushed aside this first possible break in the escalating conflict with a wide-ranging rocket barrage. Hamas officials claimed Israel carried out several airstrikes during the visit — a claim that Israel rejected.

Israel promised to "hold its fire" during Kandil's visit "on the condition that during that period, there won't be hostile fire from Gaza into Israel," an Israeli official said, speaking on condition of anonymity to disclose the decision. The official also said Prime Minister Benjamin Netanyahu remained committed to maintaining the historic 1979 peace treaty with Egypt.

But militant factions rejected the gesture and the Israeli military said Gaza militants fired off 60 rockets after Kandil crossed into Gaza from Egypt, heavily guarded by Egyptian security personnel wearing flak jackets and carrying assault rifles.

Kandil was greeted by Gaza's Hamas prime minister, Ismail Haniyeh, who was making his first public appearance since Israel launched the offensive. The two visited wounded Palestinians at Shifa hospital in Gaza City, where medics had brought in the lifeless body of a 4-year-old boy.

Tears streaming from his eyes, Kandil claimed afterward that the boy was killed in an Israeli airstrike, and called for an end to the operation.

"What I saw today in the hospital, the wounded and the martyrs, the boy, the martyr Mohammad Yasser, whose blood is still on my hands and clothes, is something that we cannot keep silent about," he said.

Neighbors said the boy was killed in a blast around 8:30 am, around the time Kandil was entering the territory.

Israel, which ordinarily confirms strikes, vociferously denied carrying out any form of attack in the area since the previous night.

Kandil's visit came after a night of fierce exchanges and signals that Israel might be preparing to invade Gaza. Overnight, the military said it targeted about 150 of the sites Gaza gunmen use to fire rockets at Israel, as well as ammunition warehouses, bringing to 450 the number of sites struck since the operation began Wednesday.

Israeli troops, tanks and armored personnel carriers massed near the Palestinian territory, signaling a ground invasion might be imminent.

Militants unleashed dozens of rocket barrages overnight, setting off air-raid sirens throughout an area that is home to some 1 million Israelis.

One rocket, fired Friday afternoon, set off air raid sirens and an explosion in Tel Aviv, Israel's bustling cultural and commercial capital. Police spokesman Micky Rosenfeld said no one was injured and it appears the rocket landed in the Mediterranean.

It was the second straight day that rockets have reached the Tel Aviv area, marking a significant improvement in the militants' capabilities. Gaza militants have never before managed to strike the city.

Israel considers an attack on the city to be a major escalation. The rocket attacks on Tel Aviv appear to be raising the likelihood of an Israeli ground invasion of Gaza.

___

Teibel reported from Jerusalem.

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Canada’s Carney says rate hikes “less imminent”
















TORONTO (Reuters) – Interest rate hikes have become less imminent than the Bank of Canada once expected, although rates are still likely to rise, central bank Governor Mark Carney said in an interview published on Saturday.


“Over time, rates are likely to increase somewhat, but over time, so a less imminent timing relative to our expectation,” Carney said in an interview with the National Post newspaper.













Canada’s economy rebounded better than most from the global economic recession, and the Bank of Canada is the only central bank in the Group of Seven leading industrialized nations that is currently hinting at higher interest rates.


But Carney has also made clear that there will be no rate rise for a while, despite high domestic borrowing rates that he sees as a major risk to a still fragile economy.


“We’ve been very clear in terms of lines of defense in addressing financial vulnerabilities,” he said in the interview. “And the most prominent one, obviously, in Canada, is household debt.”


He said the bank was monitoring the impact of four successive government moves to tighten mortgage lending, which aimed to take the froth out of a hot housing market without causing a damaging crash in prices.


A Reuters poll published on Friday showed the majority of 20 forecasters believe the government has done enough to rein in runaway prices, preventing the type of crash that devastated the U.S. market.


The experts expect Canadian housing prices to fall 10 percent over the next several years, but they do not expect the recent property boom to end in a U.S.-style collapse.


(Reporting by Janet Guttsman; Editing by Vicki Allen)


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“Twilight Saga” ends with movie love letter to fans
















LOS ANGELES (Reuters) – “Twilight” fans bid an emotional farewell this week to Bella, Edward and Jacob in “Breaking Dawn-Part 2,” the romantic book and movie franchise that ignited a pop culture infatuation with blood-sucking vampires and werewolves.


The tumultuous love triangle between human girl Bella Swan, vampire Edward Cullen and werewolf Jacob Black, that has gripped avid fans known as “Twi-hards” for seven years, comes to a tantalizing end as “Breaking Dawn-Part 2″ hits movie theaters around the world.













The “Twilight” film franchise, based on a series of novels by Stephenie Meyer, rocketed the three main stars, Kristen Stewart (Bella), Robert Pattinson (Edward) and Taylor Lautner (Jacob), into the spotlight and the first four films have grossed more than $ 2.5 billion at the worldwide box office.


For director Bill Condon, who shot both parts of “Breaking Dawn” together and split into two movies post-production, the fifth and final film was all about the fans – who get a surprise twist to the ending.


“The real challenge was to make sure it was a satisfying climax,” Condon told reporters. “The film opens with an overture of all the main scenes from all five movies, and at the end, I…brought (it) back to the spirit of the old movies.”


The movie pays homage to the angst-ridden teenage romance between Bella and Edward that was underscored by the off-screen real-life romance between Stewart, 22, and Pattinson, 26.


“Breaking Dawn-Part 2″ shifts the action from a love story to a family story, as the Cullen clan recruit their extended vampire family to protect Bella and Edward’s daughter Renesmee from an ancient vampire coven.


“I think it’s very sweet, especially the ending of it, I think it’s very close to the book as well. It seems to be that it’s really made for the fans,” Pattinson told Reuters.


GOING OFF BOOK


While the past four films have stayed true to the books, author Meyer and screenwriter Melissa Rosenberg came up with a plot twist that adds a major scene that may surprise movie-goers.


“(The action) is off screen in the novel because we only see what Bella sees, and this was just a way of making visual what some of the other characters might have seen,” Meyer told reporters.


“It does feel very surprising. There’s something new to see but to me it doesn’t seem like it’s going hugely off the page,” she added.


While the fourth film saw Bella’s human life draw to a conclusion when she died giving birth to a human-vampire hybrid baby with new husband Edward, “Breaking Dawn-Part 2,” sees Bella as a mother and a newly-transformed vampire.


“The coolest thing about vampire Bella is that I got to play her as a human for so long, and the special parts of each vampire are always informed by the great things that they were as a human and so I got to walk in those shoes,” Stewart told Reuters.


“Everything made total sense to me. I waited for so long (to play a vampire), once I finally got it, it was so comfortable, I couldn’t wait,” the actress added.


“The Twilight Saga,” first published in 2005, kicked off a wave of vampire or supernatural-themes books, films and TV shows including HBO’s “True Blood,” the CW TV network’s “The Vampire Diaries” and Richelle Mead’s “Vampire Academy” series of young adult novels.


As the sun sets on the franchise Meyer brought to life, the author said that while she didn’t rule out the possibility of finding more stories in the vampire-werewolf universe, she had closed the chapter on the Cullens.


“I don’t know if I’ll ever get back to these (stories). Someday I’ll write down what was going to happen next. It’s sad knowing I don’t have another party with the kids again, I really hope I have a chance to at least see my friends again,” she told Reuters.


(Reporting by Piya Sinha-Roy, editing by Jill Serjeant and Marguerita Choy)


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Multibillion-dollar health fund fires watchdog
















GENEVA (AP) — The board of a $ 23 billion health fund trying to restore its image fired its top internal watchdog, whose office has been uncovering financial losses.


The Global Fund to Fight AIDS, Tuberculosis and Malaria said in a statement Thursday that its board had terminated the employment of Inspector General John Parsons “after a careful review of his performance, which was found to be unsatisfactory.” It said this was based on performance and independent peer reviews and a report by the board committee that oversees Parsons’ office.













The board said it would soon name an interim inspector-general and expects to find a permanent replacement within six months.


The fund also is selecting a new executive director Thursday from among four finalists. The previous director resigned because of a review panel that the fund created after Associated Press articles last year about financial losses. The articles led some donors to withhold funding, and the fund scaled back spending.


Those losses were uncovered by the office that Parsons had headed since 2007. The office — whose teams of auditors and investigators are supposed to function independently — was created in 2005 at the urging of the fund’s biggest donor, the United States.


Before joining the Global Fund, Parsons, a British citizen, had gained more than 35 years of experience in audits, investigations and evaluations and had served as a director at U.N. agencies UNESCO and UNICEF. He headed Britain’s National Audit Office from 1989 to 1996.


Parsons could not immediately be reached for comment Thursday.


Health News Headlines – Yahoo! News



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Sources: BP to pay record fine for Gulf Coast disaster

HOUSTON/WASHINGTON (Reuters) - BP Plc is expected to pay a record U.S. criminal penalty and plead guilty to criminal misconduct in the 2010 Deepwater Horizon disaster through a plea deal reached with the Department of Justice that may be announced as soon as Thursday, according to sources familiar with discussions.


Three sources, who spoke to Reuters on condition of anonymity, said BP would plead guilty in exchange for a waiver of future prosecution on the charges.


BP confirmed it was in "advanced discussions" with the Department of Justice (DoJ) and the Securities & Exchange Commission (SEC).


The talks were about "proposed resolutions of all U.S. federal government criminal and SEC claims against BP in connection with the Deepwater Horizon incident," it said in a statement on Thursday, but added that no final agreements had been reached.


The discussion do not cover federal civil claims, both BP and the sources said.


London-based oil giant BP has been locked in months-long negotiations with the U.S. government and Gulf Coast states to settle billions of dollars of potential civil and criminal liability claims resulting from the April 20, 2010, explosion aboard the Deepwater Horizon rig.


The sources did not disclose the amount of BP's payment, but one said it would be the largest criminal penalty in U.S. history. That record is now held by Pfizer Inc, which paid a $1.3 billion fine in 2009 for marketing fraud related to its Bextra pain medicine.


The DoJ declined to comment.


The deal could resolve a significant share of the liability that BP faces after the explosion killed 11 workers and fouled the shorelines of four Gulf Coast states in the worst offshore spill in U.S. history. BP, which saw its market value plummet and replaced its CEO in the aftermath of the spill, still faces economic and environmental damage claims sought by U.S. Gulf Coast states and other private plaintiffs.


The fine would far outstrip BP's last major settlement with the DoJ in 2007, when it payed about $373 million to resolve three separate probes into a deadly 2005 Texas refinery explosion, an Alaska oil pipeline leak and fraud for conspiring to corner the U.S. propane market.


The massive settlement, which comes a week after the U.S. presidential election, could ignite a debate in Congress about how funds would be shared with Gulf Coast states, depending on how the deal is structured. Congress passed a law last year that would earmark 80 percent of BP penalties paid under the Clean Water Act to the spill-hit states of Louisiana, Mississippi, Alabama, Florida and Texas.


POTENTIAL LIABILITY


In an August filing, the DoJ said "reckless management" of the Macondo well "constituted gross negligence and willful misconduct" which it intended to prove at a civil trial set to begin in New Orleans in February 2013. The U.S. government has not yet filed any criminal charges in the case.


Given that the deal will not resolve any civil charges brought by the Justice Department, it is also unclear how large a financial penalty BP might pay to resolve the charges, or other punishments that BP might face.


Negligence is a central issue to BP's potential liability. A gross negligence finding could nearly quadruple the civil damages owed by BP under the Clean Water Act to $21 billion in a straight-line calculation.


Still unresolved is potential liability faced by Swiss-based Transocean Ltd, owner of the Deepwater Horizon vessel, and Halliburton Co, which provided cementing work on the well that U.S. investigators say was flawed. Both companies were not immediately available for comment.


According to the Justice Department, errors made by BP and Transocean in deciphering a pressure test of the Macondo well are a clear indication of gross negligence.


"That such a simple, yet fundamental and safety-critical test could have been so stunningly, blindingly botched in so many ways, by so many people, demonstrates gross negligence," the government said in its August filing.


Transocean in September disclosed it is in discussions with the Justice Department to pay $1.5 billion to resolve civil and criminal claims.


The mile-deep Macondo well spewed 4.9 million barrels of oil into the Gulf of Mexico over a period of 87 days. The torrent fouled shorelines from Texas to Florida and eclipsed in severity the 1989 Exxon Valdez spill in Alaska.


BP has already announced an uncapped class-action settlement with private plaintiffs that the company estimates will cost $7.8 billion to resolve litigation brought by over 100,000 individuals and businesses claiming economic and medical damages from the spill.


(Additional reporting by Andrew Callus in London; Editing by Edward Tobin and David Stamp)

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