IMF chief jailed without bail in NY hotel-sex case

Dominique Strauss-Kahn

NEW YORK – Haggard and unshaven after a weekend in jail, the chief of the International Monetary Fund was denied release on bail Monday on charges of trying to rape a hotel maid as allegations of other, similar attacks by Dominique Strauss-Kahn began to emerge.

In France, a lawyer for a novelist said the writer is likely to file a criminal complaint accusing Strauss-Kahn of sexually assaulting her nine years ago. A French lawmaker accused him of attacking other maids in previous stays at the same luxury hotel. And in New York, prosecutors said they are working to verify reports of at least one other case, which they suggested was overseas.

Strauss-Kahn's weekend arrest rocked the financial world as the IMF grapples with the European debt crisis, and upended French presidential politics. Strauss-Kahn, a member of France's Socialist party, was widely considered the strongest potential challenger next year to President Nicolas Sarkozy.

Making his first appearance on the sex charges, a grim-looking Strauss-Kahn stood slumped before a judge in a dark raincoat and open-collared shirt. The 62-year-old, silver-haired Strauss-Kahn said nothing as a lawyer professed his innocence and strove in vain to get him released on bail.

The judge ruled against him after prosecutors warned that the wealthy banker might flee to France and put himself beyond the reach of U.S. law like the filmmaker Roman Polanski.

"This battle has just begun," defense attorney Benjamin Brafman told scores of reporters outside the courthouse, adding that Strauss-Kahn might appeal the bail denial.

Strauss-Kahn is accused of attacking a maid who had gone in to clean his penthouse suite Saturday afternoon at a luxury hotel near Times Square. He is charged with attempted rape, sex abuse, a criminal sex act, unlawful imprisonment and forcible touching. The most serious charge carries five to 25 years in prison.

Strauss-Kahn, who has headed the international lending agency since 2007, was in New York on personal business and was paying his own way, so he cannot claim diplomatic immunity, the IMF said. He could seek that protection only if he were conducting official business, spokesman William Murray said. The agency's executive board met informally Monday for a report on the charges against Strauss-Kahn, its managing director.

The French newspaper Le Monde, citing people close to Strauss-Kahn, said he had reserved the $3,000-a-night suite at the Sofitel hotel for one night for a quick trip to have lunch with his daughter, who is studying in New York.

The 32-year-old maid told authorities that she thought the suite was empty but that Strauss-Kahn emerged from the bathroom naked, chased her down a hallway, pulled her into a bedroom and dragged her into a bathroom, police said.

He seized her breasts, tried to pull down her pantyhose, grabbed at her crotch and forced her to perform oral sex on him during the encounter at about noon, according to a court complaint. She ultimately broke free, escaped the room and told hotel staffers what had happened, authorities said. She was treated at a hospital for minor injuries.

"The victim provided a very powerful and detailed account of the violent sexual assault," Assistant District Attorney John "Ardie" McConnell said. He added that forensic evidence may support her account. Strauss-Kahn voluntarily submitted to a forensic examination Sunday night.

Brafman said defense lawyers believe the forensic evidence "will not be consistent with a forcible encounter." Defense lawyers wouldn't elaborate, but Brafman said "there are significant issues that were already found" that make it "quite likely that he will be ultimately be exonerated."

Prosecutors asked the judge to hold Strauss-Kahn without bail, noting that he lives in France, is wealthy, has an international job and was arrested on a Paris-bound plane at Kennedy Airport. He had left the Sofitel hotel before police arrived, leaving his cellphone behind, and appeared hurried on surveillance recordings, authorities said.

At one point, Strauss-Kahn called the hotel "in a panic" about the phone, a law enforcement official said Monday.

Hotel security officers hadn't found a phone, but they were instructed by NYPD investigators to set a trap by informing him they had it and asking where they could get it to him, said the official, who spoke on condition of anonymity because the investigation had not been completed.

Strauss-Kahn told them he was about to board a flight — unknowingly tipping off authorities to his whereabouts, the official said.

Prosecutors said they couldn't force Strauss-Kahn's return from France if he went there.

"He would be living openly and notoriously in France, just like Roman Polanski," said Chief Assistant District Attorney Daniel Alonso, referring to the film director long sought by California authorities for sentencing in a 1977 child sex case. Swiss police arrested him in 2009, but he was freed last year when Switzerland declined to extradite him to the United States.

Defense lawyers suggested bail be set at $1 million and promised that the IMF managing director would remain in New York City. His lawyers said Strauss-Kahn wasn't trying to elude police Saturday: The IMF head rushed out of the hotel at about 12:30 p.m. to get to a lunch date with a family member, then caught a flight for which he had long had a ticket, according to Brafman and fellow defense lawyer William W. Taylor.

"This is not a case of someone who commits a crime, runs to the airport and jumps on the first available plane," Brafman said.

Still, Criminal Court Judge Melissa C. Jackson said the fact that Strauss-Kahn was on a plane when arrested "raises some concerns." She ordered him jailed at least until a court proceeding on Friday.

Strauss-Kahn makes an annual tax-free salary as head of the IMF of $420,930, plus an annual "scale of living" allowance of $75,350, according to a 2007 IMF press release.

According to the 2000 biography "Les Vies Cachees de DSK" by Vincent Giret and Veronique Le Billon, Strauss-Kahn's wife, Anne Sinclair, was one of France's highest-paid TV journalists before she gave up her job to avoid a possible conflict of interest when her husband became a government minister in 1997. The biography says Sinclair is also a wealthy heiress, whose grandfather Paul Rosenberg was a prominent modern art dealer before the Second World War.

French newspapers have inventoried the couple's real estate holdings, which reportedly include a six-room apartment in Paris' chic 16th arrondissement; a 240-square-meter apartment on the luxurious Place des Vosges; a home in Marrakech, and a house in Washington.

Strauss-Khan will be held in protective custody in the city's Rikers Island jail because of his high profile, said city Correction Department spokesman Stephen Morello. Unlike some inmates, who share 50-bed barracks, Strauss-Kahn will have a single-bed cell and eat all his meals alone there. Also, when he is outside his cell, he will have a guard escort.

Meanwhile, a lawyer for 31-year-old French novelist Tristane Banon said she will probably file a complaint alleging Strauss-Kahn sexually attacked her in 2002. Lawyer David Koubbi told French radio RTL that Banon hadn't pressed her claim earlier because of "pressures" but would do so now because "she knows she'll be taken seriously."

The Associated Press is identifying Banon as an alleged victim of sexual assault because she has gone public with her account.

Banon's mother, Anne Mansouret, a regional Socialist official in Normandy, said she had advised her daughter at the time against pursuing her claim.

A French lawmaker from a rival political party also alleged, without offering evidence, that Strauss-Kahn had victimized several maids during past stays at the Sofitel near Times Square.

The hotel issued a statement calling conservative lawmaker Michel Debre's claims "baseless and defamatory." Sofitel management "has had no knowledge of any previous attempted aggressions," the hotel said, adding that it had set up a hotline for workers to report incidents more than a year ago.

McConnell, the assistant district attorney, said in court Monday that New York authorities are working to verify at least one other case of "conduct similar to the conduct alleged." When the judge asked whether the potential other incident occurred in the United States, McConnell said he "believed that was abroad."

Strauss-Kahn's lawyers said they had no immediate response to the allegations emerging from overseas.

In France, defenders of Strauss-Kahn, a former finance minister who had topped the polls as a possible candidate in presidential elections next year, said they suspected he was the victim of a smear campaign.

The 187-nation IMF provides emergency loans to countries in severe distress and tries to maintain global financial stability.

Source: AP News

Irony of ironies: IMF chief charged with attempted rape, sexual assault

IMF Chief Dominique Strauss-Khan a sexual predator?

NEW YORK – The leader of the International Monetary Fund and a possible candidate for president of France was arrested Sunday in connection with the violent sexual assault of a hotel maid after being yanked from an airplane moments before it was to depart for Paris, police said.

Dominique Strauss-Kahn, 62, was arrested on charges of a criminal sex act, attempted rape and unlawful imprisonment and was awaiting arraignment. He had been taken off the Air France flight at John F. Kennedy International Airport on Saturday afternoon by officers from the Port Authority of New York and New Jersey and was turned over to New York police, said Paul J. Browne, New York Police Department spokesman.

His lawyer, Benjamin Brafman, did not immediately respond to phone or email messages seeking comment from The Associated Press. "We have not yet been able to meet with our client and we may have more to say tomorrow," Brafman told The New York Times late Saturday.

France woke to the bombshell news Sunday to surprise and a degree of caution. Online commentators questioned whether the incident could have been part of a smear campaign by the unpopular President Nicolas Sarkozy, whose political fortunes have been flagging, against his primary rival in the race for next year's presidential elections.

The incident could completely shake up the race for president next year, and throw the long-divided Socialists back into disarray about who they could present as a challenger to Sarkozy.

"It's a cross that will be difficult for him to bear," said Dominique Paille, a political rival to Strauss-Kahn on the center left, on BFM television.

"It's totally hallucinating. If it is true, this would be a historic moment, but in the negative sense, for French political life," Paille said. Still, he urged, "I hope that everyone respects the presumption of innocence. I cannot manage to believe this affair."

The 32-year-old woman told authorities that she entered Strauss-Kahn's suite at the luxury Sofitel hotel not far from Manhattan's Times Square at about 1 p.m. Eastern time (1600 GMT) Saturday and he attacked her, Browne said. She said she had been told to clean the spacious $3000-a-night-suite suite, which she had been told was empty.

According to an account the woman provided to police, Strauss-Kahn emerged from the bathroom naked, chased her down a hallway and pulled her into a bedroom, where he began to sexually assault her. She said she fought him off, then he dragged her into the bathroom, where he forced her to perform oral sex on him and tried to remove her underwear. The woman was able to break free again and escaped the room and told hotel staff what had happened, authorities said. They called police.

When detectives arrived moments later, Strauss-Kahn had already left the hotel, leaving behind his cellphone, Browne said. "It looked like he got out of there in a hurry," Browne said.

The NYPD discovered he was at the airport and contacted Port Authority officials, who plucked Strauss-Kahn from first class on the Air France flight that was just about to leave the gate.

The maid was taken by police to a hospital and being treated for minor injuries. John Sheehan, a spokesman for the hotel, said its staff was cooperating in the investigation.

Strauss-Kahn, a married father of four, was briefly investigated in 2008 over whether he had an improper relationship with a subordinate female employee. The IMF board found his actions "regrettable" and said they "reflected a serious error of judgment."

William Murray, a spokesman for the IMF in Washington, said the IMF had no immediate comment. Strauss-Kahn's offices in Paris couldn't be reached when the news broke overnight in France. One of his allies, Jean-Marie Le Guen, expressed doubt about the incident.

"The facts as they've been reported today have nothing to do with the Dominique Strauss-Kahn that we know," Le Guen said on BFM television. "Dominique Strauss-Kahn has never exhibited violence toward people close to him, to anyone."

Strauss-Kahn was supposed to be meeting in Berlin on Sunday with German Chancellor Angela Merkel about aid to debt-laden Greece, and then join EU finance ministers in Brussels on Monday and Tuesday. The IMF is responsible for one-third of Greece's existing loan package, and his expected presence at these meetings underlined the gravity of the Greek crisis.

Strauss-Kahn took over as head of the IMF in November 2007. The 187-nation lending agency is headquartered in Washington and provides help in the form of emergency loans for countries facing severe financial problems.

Strauss-Kahn won praise for his leadership at the IMF during the financial crisis of 2008 and the severe global recession that followed.

More recently, he has directed the IMF's participation in bailout efforts to keep a European debt crisis which began in Greece from destabilizing the global economy.

In October 2008, Strauss-Kahn issued an apology to the IMF staff after accusations that he had a sexual relationship with an IMF subordinate.

"While this incident constituted an error in judgment on my part, for which I take full responsibility, I firmly believe that I have not abused my position," Strauss-Kahn wrote in an email to IMF staff.

The board found that the relationship was consensual. The IMF employee left the fund and took a job with the European Bank for Reconstruction and Development.

Before taking the top post at the IMF, Strauss-Kahn had been a member of the French National Assembly and had also served as France's Minister of Economy, Finance and Industry from June 1997 to November 1999.

He had been viewed as a leading contender to run on the Socialist Party's ticket to challenge the re-election of French President Nicolas Sarkozy.

Strauss-Kahn, dubbed DSK in France, was seen as the strongest possible challenger to Sarkozy in next year's presidential elections. Strauss-Kahn has not declared his candidacy, staying vague in interviews while feeding speculation that he wants France's top job.

The New York accusations come amid French media reports about Strauss-Kahn's lifestyle, including luxury cars and suits, that some have dubbed a smear campaign.

He sought the Socialist Party's endorsement in the last elections, in 2007, but came in second in a primary to Segolene Royal. Royal, the first woman to get so close to France's presidency, lost to Sarkozy in the runoff.

After Sarkozy won, the new president championed Strauss-Kahn as a candidate to run the IMF. Sarkozy's backers touted the move as a sign of the conservative president's campaign of openness to leftists — but political strategists saw it as a way for Sarkozy to get a potential challenger far away from the French limelight.

Royal, who continues to harbor presidential ambitions of her own, remained prudent Sunday about the allegations.

"He has the right to the presumption of innocence," she said on Europe-1 radio. "My thoughts go to his family and his loved ones and to the man who is going through this. Let's not transform this event in a political soap opera for the moment. It would be indecent."

The global financial crisis thrust Strauss-Kahn into an unexpectedly prominent role and boosted his global standing in time to consider a 2012 French presidential bid.

He is credited with preparing France for the adoption of the euro by taming its deficit and persuading then-Prime Minister Lionel Jospin to sign up to an EU pact of fiscal prudence.

A former economics professor, Strauss-Kahn joined the Socialist party in 1976 and was elected to parliament in 1986 from the Val-d'Oise district, north of Paris. He went on to become mayor of Sarcelles, a working-class immigrant suburb of Paris.

His first government post was industry minister under former President Francois Mitterrand. As finance minister, he reduced France's debt repayments through a raft of privatizations including the sale of shares in France Telecom SA and Air France.

Rebel Libyan finance head seeking line of credit (really?)

Embattled Libyan leader Muammar Qaddafi

SEATTLE – A University of Washington economics lecturer who now handles finances for the Libyan rebel government says he's meeting with U.S. officials in Washington, D.C., to find a line of credit for the group opposed to Moammar Gadhafi.

Ali Tarhouni told The Seattle Times that the rebel government would be backed by assets in Libya, but those are currently frozen by the United States and other countries.

The 60-year-old taught microeconomics until March, when he returned to his native Libya to act as finance minister for the opposition's National Transitional Council.

He says he's certain Gadhafi will be killed or forced from the government because he has lost legitimacy in Libya, the Arab and Muslim world and other countries.

Tarhouni's wife and four children have remained in Washington state.

Source: The Seattle Times, http://www.seattletimes.com

Gingrich plays up his wife (the one he cheated on his second wife with)....

Callista Gingrich: Mike Stewart/AP

As Newt Gingrich prepares at last to officially launch his White House bid Wednesday, expect one item on the former House Speaker's resume to play an especially prominent role: his marriage.

As the New York Times' Sheryl Gay Stolberg notes today, Gingrich's third wife, Callista, is taking on a major part of her husband's White House bid as he seeks to push back against what could be one of his key vulnerabilities in his upcoming campaign: his philandering history.

As The Ticket has previously reported, Gingrich faces a tricky balancing act. On one hand, he is trying to recast his image as a happily married man--and father and grandfather, as he frequently notes. But in trumpeting his new standing as a reliable family man, he's also playing up his relationship with the woman with whom he cheated on his second wife, Marianne, who last year accused her ex-husband of trying to rewrite history in characterizing the couple's break-up.

These days, Gingrich rarely makes a political move without Callista, a former Capitol Hill staffer whom the former GOP lawmaker became extramaritally involved with while he was still speaker of the House. She's a constant presence at his side, is featured prominently on his "exploratory phase" website and, as the Times notes, is frequently cited by Gingrich, who now begins his sentences with the phrase, "Callista and I."

Yet Callista Gingrich has rarely spoken about her views of the campaign. Asked at a recent event if she's ready for the scrutiny the GOP primary will surely bring on their relationship, Gingrich wore a frozen smile as her husband answered for her, Stolberg writes. "Seems to be," the former House speaker declared.

In public appearances and in targeted interviews with conservative media, including the Christian Broadcasting Network, Gingrich has repeatedly offered mea culpas for his past marital infidelities, saying they were caused, in part, because he was ambitious and "worked too hard."

In an interview with Fox News Sunday in late March, he reiterated that he believes God has forgiven him for his mistakes, but he acknowledged that he might not receive the same treatment from voters. He called questions about his character "legitimate"—though he said he hoped voters will "put into context" his personal behavior with the larger span of his career and his current marriage.

"We'll find out six months to a year from now whether people are forgiving," Gingrich said.


Source: The Ticket

Osama Bin Laden raid: US team was prepared to "fight its way out"....

President Barack Obama insisted that the team to hunt down Osama Bin Laden be large enough to fight its way out in case it met resistance from Pakistani forces, the New York Times reports.

The size of the assault team was expanded days before the operation, unnamed military and administration officials quoted by the paper say.

Pakistan has begun an investigation into how Bin Laden lived undetected.

But relations with the US have been severely strained by the raid.

US President Barack Obama had previously urged Pakistan to investigate how the al-Qaeda leader could live in the garrison city of Abbottabad undetected and to find out if any officials knew of his whereabouts.

But in a statement to parliament on Monday announcing the inquiry, Pakistani Prime Minister Yousuf Raza Gilani insisted that allegations of Pakistani complicity and incompetence were "absurd".

He said that Pakistan was "determined" to examine the failures to detect Bin Laden and he mounted a robust defence of Pakistan's record in fighting terrorism.

He also added that the US raid was "a violation of sovereignty".

The BBC's M Ilyas Khan in Islamabad says that although there have always been questions over the level of Pakistan's commitment to demobilise the Taliban and certain elements of al-Qaeda, the raid on 2 May is the first clear proof of the Americans giving up hope that the Pakistanis would really ever deliver.

But the UK's Guardian newspaper reported that a deal struck between former Pakistani President Pervez Musharraf and former US President George W Bush in 2001, paved the way for the US to conduct a unilateral raid inside Pakistan if they knew of Bin Laden's whereabouts.

The paper quotes serving and retired Pakistani and US officials as saying that under the terms of the arrangement Pakistan would "vociferously protest the incursion" after it took place.

'Return fire'

But the latest details of the operation reveal the extent to which the US was prepared to go in order to capture or kill the al-Qaeda leader.

"Their instructions were to avoid any confrontation if at all possible. But if they had to return fire to get out, they were authorised to do it," one senior Obama administration official is quoted by the New York Times as saying.

In the original plan, two helicopters were going to stay on the Afghan side of the border to be called upon for assistance should the need arise. They would have been about 90 minutes away from the Bin Laden compound.

But, the paper reports, just 10 days before the raid President Obama reviewed the operational plans and the decision was taken to send two more helicopters carrying additional troops, which followed the aircraft carrying the assault team.

"Some people may have assumed we could talk our way out of a jam, but given our difficult relationship with Pakistan right now, the president did not want to leave anything to chance," the New York Times quoted one unnamed senior administration official as saying.

"He wanted extra forces if they were necessary."

Interrogators on standby

US forces had been instructed to avoid engaging with Pakistani forces and if a confrontation appeared imminent, there were plans for senior US officials to call Pakistani counterparts to avert a clash, senior administration officials are quoted as saying.

But the size of the US force was increased when the president expressed his concern that this was not enough to protect those on the ground, the paper reports.

Other details that emerged about the operation include:

• Two specialist teams were on standby, probably on the aircraft carrier Carl Vinson in the Arabian Sea: one to bury Bin Laden if he was killed, and a second team of lawyers, interrogators and translators if he was taken alive
• One of the back-up helicopter teams was actually used when one of the first team's helicopters was damaged
• US surveillance aircraft were watching and listening to how Pakistan's security forces responded to the raid to determine how long the team could safely remain on the ground

Correspondents say that Pakistan plays a crucial role in America's war efforts in Afghanistan, and too much public pressure on Pakistan could jeopardise the relationship.

And despite strained relations, Pakistan's prime minister also reiterated that Washington remained a key ally of Islamabad, in Monday's speech to parliament.


Source: BBC News

Hiring by companies hits 5-year high in April

Job seekers line up at a recent Job Fair in Los Angeles, CA.

REUTERS – Companies created jobs at the fastest pace in five years in April, pointing to underlying strength in the economy even as the jobless rate rose to 9.0 percent.

Private sector hiring, including a big jump at retailers, boosted overall nonfarm payrolls by 244,000, the largest increase in 11 months, the Labor Department said on Friday. Economists had expected a gain of only 186,000.

The private sector created 268,000 jobs, the most since February 2006, while government payrolls shrank.

The data backed views the economic recovery would regain speed this quarter after stumbling in the first three months of the year. Earlier this week, other reports pointed to a slowing in the labor market.

"What we're seeing is a sustained pick-up in hiring and it suggests that businesses have gained enough confidence to look past short-term fluctuations in demand," said Aaron Smith, a senior economist at Moody's Analytics in West Chester, Pennsylvania.

Investors on Wall Street cheered the report, which showed job gains across the board, with the exception of government. U.S. stocks rose for the first time this week, while prices for longer-dated government debt fell.

The dollar rose broadly and some of the gains were driven by a German news report, later denied, suggesting Greece had raised the possibility of leaving the euro zone.

While the economy has created jobs for seven straight months, gains remain too meager to make much of a dent in the pool of 13.7 million Americans who are out of work.

A recent spike in first-time applications for state unemployment benefits caused some economists to worry that job growth could slow in May and June. Initial claims vaulted to an eight-month high last week.

Still, the pace of job growth averaged 233,000 over the past three months, an acceleration from 104,000 in the prior three months that suggests the recovery is growing firmer.

Nigel Gault, chief U.S. economist at IHS Global Insight in Lexington, Massachusetts, said the rise "shows good momentum that should allow the economy to absorb the twin shocks from the Middle East and Japan without too much damage."
JOBLESS RATE UP

The unemployment rate in April backed away from a two-year low of 8.8 percent to rise for the first time in five months. It is derived from a separate survey of households, which showed a sharp decline in employment and a modest rise in the size of the labor force.

Economists, however, place more weight on the larger, less-volatile survey of employers, which found 46,000 more jobs than previously thought were created in the prior two months.

The report capped a good week for President Barack Obama, whose approval ratings received a lift from the killing of Osama bin Laden. A healthier jobs market could prove key to his hopes to win reelection in 2012.

The White House can also take relief from a big drop in oil prices on Thursday that should soon drag gasoline costs lower. Brent crude futures fell for a fifth straight day on Friday.

"We've added over the last 14 months more than two million jobs in the private sector. This is the best month of private sector job growth in five years. So I don't think that's nibbling, that's clearly a move in the right direction," White House economic adviser Austan Goolsbee told Reuters Insider.

The relatively vigorous expansion in payrolls in April, if sustained, could encourage some members of the Federal Reserve to begin pushing for interest rates hikes.

New York Federal Reserve Bank President William Dudley minimized any move soon toward tightening saying the economy has a "considerable way to go to meet the Fed's dual mandate of full employment and price stability.

Most economists agree, noting that there is still a huge amount of slack in the labor market and wage growth remains tepid. Average hourly earnings rose a mere 3 cents in April and are up a modest 1.9 percent from a year ago.

A Reuters survey of economists at top financial institutions showed many expected the U.S. central bank to raise benchmark rates by the end of the third quarter of 2012.

Only a fraction of the more than eight million jobs lost in the 2007-2009 recession have been recovered. Even at April's relatively rapid rate of job growth, it would take nearly 2-1/2 years to reclaim all those jobs.

DETAILS OF REPORT FAIRLY UPBEAT

High gasoline and food prices weighed on U.S. economic growth in the first quarter when the economy grew at a subdued 1.8 percent annual rate. It had expanded at a 3.1 percent clip in the final three months of last year.

"GDP growth should pick up to more than 3 percent in the second quarter. If oil prices stay down ... the economy can maintain that pace in the second half," said IHS Global's Gault.

Details of the payrolls report were generally upbeat, even though government employment contracted for a sixth straight month in April, shedding 24,000 jobs.

The bulk of gains in payrolls were in the private services sector which created 224,000 new positions after adding 194,000 in March. Within that segment, retail saw a surge of 57,100 jobs -- the most since 2000 -- and leisure and hospitality added 46,000 new workers.

Though fast-food chain McDonald's last month announced it was taking on 50,000 new staff, those jobs were unlikely to have been included in April's payrolls as the hiring was done after the survey period for the report.

Employment in goods-producing industries increased 44,000, with construction payrolls climbing by 5,000 and manufacturing gaining 29,000.

Sony Data Breach Exposes Users to Years of Identity-Theft Risk

May 3 (Bloomberg) -- Sony Corp., maker of the PlayStation 3 video-game console, may have exposed customers to years of potential identity theft after hackers breached the company’s online entertainment networks in mid-April.

The risk will stay with as many as 100 million customers of Sony’s PlayStation Network, Sony Online Entertainment and Qriocity film and music service for years, even as the chance of credit-card fraud recedes, said Steve Ward, a spokesman for Fairfax, Virginia-based online-security company Invincea.

“The attackers may have your name, your birth date, potentially your mother’s maiden name,” Ward said in an interview. “These are all the things used to check your identity, and that can be used to falsify it.”

The value of stolen credit-card numbers diminishes each day after a data breach becomes known because users and bank-card issuers typically step up monitoring. Sony, which was attacked between April 16 and April 19, said it had encrypted customers’ credit-card numbers with security that would make codes difficult to read by hackers who penetrated the system.

“There is no evidence that our main credit card database was compromised,” Sony said in a statement to its users. “It is in a completely separate and secured environment.”

The best sign that Sony’s assertion is true may be the passage of two weeks without reports from credit-card issuers of wide-scale fraud, according to an FBI cyber-crime investigator who asked not to be named because he wasn’t authorized to speak to the press.

As more days go by, it’s less likely card numbers were stolen or, if they were, that potential losses will be large, the person said.

The FBI’s San Diego office is investigating the matter, said agent Darrell Foxworth, a spokesman for the office.

Third Service Attacked

Tokyo-based Sony said yesterday that the attack on its PlayStation Network and Qriocity online music and film service in mid-April also gave hackers access to data from Sony Online Entertainment, a separate unit that makes role-playing games. Hackers gained access to 23,400 credit card and debit records from non-U.S. customers and the personal account information of 24.6 million account holders.

The disclosure that a third service was compromised came a day after top Sony executives offered a public apology and said they had no evidence a separate 10 million credit card numbers registered to PlayStation Network and Qriocity had been stolen in the attacks.

“We have to regain the trust and confidence of our users,” Kazuo Hirai, Sony’s executive deputy president in charge of consumer products and network services, said May 1 at a Tokyo press conference.

Financial Impact

Hackers exploited a known security vulnerability to gain access to 77 million PlayStation Network and Qriocity user names, addresses, gender, birth dates and other information, Sony said. It wasn’t clear from the statement how many of the 24.6 million accounts in the newly reported breach share duplicate user information.

The financial impact Sony faces depends on how well the company convinces customers it “will make things right,” Michael Pachter, an analyst with Wedbush Securities in Los Angeles, said in an interview with Bloomberg Television. He estimates credit-card fraud, repairs to its networks and marketing costs will amount to $50 million.

“There will be a hit if in fact they see their business dip,” Pachter said. “I’d say $50 million, not $24 billion, and I think Sony can handle $50 million.”

‘Hash’ Protection

The breach of Sony Online Entertainment exposed information from an outdated 2007 database, including about 12,700 non-U.S. credit or debit card numbers and expiration dates, Sony said yesterday in a statement. The credit-card information didn’t include security codes, the company said. The three- and four- digit codes are used as a second source of authentication for many online vendors.

The stolen data may include 10,700 direct debit records of customers in Austria, Germany, the Netherlands and Spain. The compromised debit account information included customer names, bank account numbers and account names, Sony said.

Sony also suggested customer passwords may have been less vulnerable than originally thought.

Passwords were protected by a level of security called hash algorithm in which the word users type in is converted on Sony’s servers to a string of characters entirely unrelated to the original password, Patrick Seybold, a Sony spokesman, said yesterday on the company’s official blog.

“It is very difficult, if not impossible, to reverse the process and find the password from the hash,” according to a security website linked to the PlayStation blog.

E-Mail Vulnerabilities

There were signs the hackers may be trying to hijack e-mail accounts by attempting to access ones provided to Sony, and plugging in PSN passwords to see if they were re-used for both, according to H.D. Moore, the chief security officer for Rapid7, a Boston-based online security firm. Accounts that have been compromised are vulnerable to use by spammers or other malevolent individuals.

Andrew Kovacs, a Google Inc. spokesman, declined to say whether the company had detected widespread password re-use attempts on Gmail, one of the largest free e-mail services.

Sony has been recommending people who use the same password for other unrelated services or accounts change them. The company also said it is moving its data center from San Diego, appointing a chief information security officer, updating game- console system software and requiring users to change their passwords.

Service Restoration

“We expect Sony to be able to overcome this issue by implementing stronger security measures, enabling it to win back the trust of its stakeholders,” Ryosuke Katsura, senior analyst for Mizuho Securities Co. in Tokyo, who has an “outperform” rating on Sony shares, said in a research note yesterday.

Sony said it expected online services to be fully restored by the end of May, with partial restoration occurring in phases around the world beginning this week. Customers may get complimentary downloads and 30 days of free premium services, Sony said.

It takes about a half a year to stabilize sales and confidence in a company’s network after a breach, Lawrence Ponemon, founder of the Ponemon Institute, which studies the financial cost of data breaches, said in an interview.

“During that period, a company like Sony can lose millions of dollars,” Ponemon said.

Racial undercurrent of 'birther' debate

THE TICKET - During the 2008 campaign, questions about John McCain's birth in the Panama Canal Zone on a U.S. military base prompted some to ask whether McCain was eligible to be president, since the Constitution stipulates that anyone not born in the United States is not eligible to be president.

Amid a flurry of news reports, McCain's own campaign announced in February 2008 that it was conducting an investigation. When a bipartisan pair of lawyers announced the following month that McCain was indeed eligible, the issue virtually died--apart from a Senate resolution that pretty much laid the question to rest by attesting to the facts surrounding McCain's birth and citizenship.

But the winner of the 2008 election, Barack Obama, has faced a relentless campaign questioning his U.S. citizenship--and thereby the legitimacy of his presidency--that has disregarded the facts.

Questions regarding Obama's birth certificate have persisted for more than two years, as the president noted Wednesday at a press conference announcing the release of his long-form birth certificate. A vast array of evidence attests to Obama's citizenship--including a certificate of live birth, signed affidavits from people who viewed Obama's long-form birth certificate, confirmation by Hawaiian officials, and independent investigations by news outlets. Nevertheless, "this thing just keeps going" as Obama said this morning. Even after the White House released the long-form certificate of Obama's birth, birther leader Orly Taitz—who has filed unsuccessful lawsuits seeking to obtain access to Obama's birth certificate—sought to cast doubt on the document's authenticity, suggesting that in 1961, Hawaiian officials would have classified Obama as "Negro" rather than using designation "African," which suggests, in her view, a more contemporary concern for "political correctness."

So what's fueling the dogged questioning of Obama's origins? Many critics of the birther movement say its core tenets--and its stubborn resistance to evidence disproving those beliefs--can be traced to racial hostilities. The fundamental birtherist conviction, these critics say, is that an African-American can't have legitimately won the presidency--and that his elevation to power therefore has to be the result of an elaborate subterfuge.

"There is a real deep-seated and vicious racism at work here in terms of trying to de-legitimate the president," Peniel Joseph, a professor of history at Tufts University, told The Ticket.

"This is more than just a conspiracy," Peniel added. "I think this is fundamentally connected to white supremacism in this country."

Miami Herald columnist Leonard Pitts Jr. in early April called for the connection to be publicly drawn between birthers and racism: "So it is time to call this birther nonsense what it is--not just claptrap, but profoundly racist claptrap."

And columnist Michael Tomasky wrote for The Guardian Wednesday that the birther conspiracy "had to be the only explanation for how this black man got to the White House." He added: "And if you think race isn't what this is about at its core, ask yourself if there would even be a birther conspiracy if Barack Obama were white and named Bart Oberstar. If you think there would be, you are delusional."

In a similar vein, Rev. Jesse Jackson told Politico yesterday that Donald Trump's campaign to get Obama to release his birth certificate is deeply rooted in race.

"Any discussion of [Obama's] birthplace is a code word," Jackson said. "It calls upon ancient racial fears." Jackson later added that, in his view, Trump "is now tapping into code-word fears that go far beyond a rational discourse."

Birthers emphatically deny such criticism. But it's difficult to apprehend the ongoing resistance to proof of Obama's citizenship without crediting racial fear as a significant factor. At first, after all, many adherents of birtherism argued that the administration fueled speculation by failing to release the long-form version of Obama's birth certificate, but now that this version has been released to the public, the call continues to go out for other kinds of information about Obama's past to be released--a level of scrutiny that neither McCain nor Obama's 43 predecessors in the Oval Office were expected to face.

Trump, who has railed against Obama as he floats himself as a presidential contender, on Wednesday at a press conference in New Hampshire called for Obama to release his academic transcripts:

The word is, according to what I've read, that he was a terrible student when he went to Occidental. He then gets to Columbia. He then gets to Harvard. I heard at Columbia he wasn't a very good student. He then gets to Harvard. How do you get into Harvard if you're not a good student. Maybe that's right or maybe that's wrong. But I don't know why he doesn't release his records. Why doesn't he release his Occidental records?

Trump and others have accused Obama of not authoring his memoir, while many Obama detractors continue to argue he is secretly Muslim. Both Jackson and Peniel noted that never before has a sitting president's nationality been questioned.

Meanwhile, an eye-opening recent study from the University of Delaware appears to confirm that race-minded detractors of Obama view him as "less American"--as Dan Vergano writes for USA Today.

The study, which surveyed blacks and whites on their opinions of Obama compared to Vice President Joe Biden, found that whites classified as "higher prejudice-predicted Whites" viewed Obama as "less American"--a view that, in turn, resulted in lower evaluations of the president's performance.

"Finally, many in the media have speculated that current criticisms of Obama are a result of his race, rather than his agenda. We believe that the current results are an empirical demonstration that this is sadly the case," the study concluded in its analysis. "As the United States approaches important decisions regarding issues such as economic reform, health care, and overseas military interventions, the intrusion of racial attitudes in the evaluation of political leaders' performance is ironically inconsistent with what many believe to be 'American.' "

Two separate national polls conducted this spring found that about half of Republicans don't believe Obama was born in the United States.

But Democrats and Republicans alike say that "birther" talk will be a political liability for whoever propagates the discussion.

"I don't think it's an issue that moves voters," Republican National Committee chairman Reince Priebus told reporters Tuesday. "It's an issue in my opinion that I don't personally get too excited about, because I think the more important question is what's going on in this country in regards to jobs, to debt, and the deficit and spending. Those are the things that people are worried about. People aren't worried about these other issues."

As Netflix profit soars, CEO, CFO warn of higher costs, slower growth

SILICON VALLEY - Netflix (NFLX) reports growth in profit, revenue and subscribers, but warns of increased costs. Plus: Yahoo (YHOO), Nintendo, Facebook. And: New-home sales, Silicon Valley tech stocks.

Netflix earnings

Netflix -- the Los Gatos online DVD rental pioneer turned Internet viewing destination -- this afternoon reported a $60 million profit for its most recent quarter, up 88 percent from a year earlier. Revenue jumped 46 percent to $719 million.

During the quarter, Netflix added nearly 3.6 million subscribers.

"We are delighted to report another strong quarter of growth in subscribers, now at 23.6 million globally, revenue and earnings," Netflix CEO Reed Hastings and Chief Financial Officer David Wells wrote in a letter to shareholders posted on the company's site. "This growth underscores the value of our increased spending on an ever-broader selection of TV shows and movies, our constantly improving personalization technology, and the Netflix brand."

Netflix's earnings came in at $1.11 a share -- beating Wall Street forecasts, according to Thomson.

However, the company warned that future subscriber growth may slow as the costs of securing programming for its online viewing service increases. It expects 24 million to 24.8 million customers at the end of the current quarter. It also expects profit of $50 million to $62 million -- or 93 cents to $1.15 a share -- on revenue of $762 million to $778 million. By contrast, analysts on average had been expecting earnings of $1.19 a share on $763 million in revenue.

Netflix released results just after the stock markets closed this afternoon. Earlier, the shares finished regular trading at $251.67, down 55 cents, or 0.2 percent, from last week's closing price. The stock was dropping sharply in after-hours trading.


Source: Silicon Valley Mercury News

ElBaradei suggests war crimes probe of Bush team

NEW YORK – Former chief U.N. nuclear inspector Mohamed ElBaradei suggests in a new memoir that Bush administration officials should face international criminal investigation for the "shame of a needless war" in Iraq.

Freer to speak now than he was as an international civil servant, the Nobel-winning Egyptian accuses U.S. leaders of "grotesque distortion" in the run-up to the 2003 Iraq invasion, when then-President George W. Bush and his lieutenants claimed Iraq possessed doomsday weapons despite contrary evidence collected by ElBaradei's and other arms inspectors inside the country.

The Iraq war taught him that "deliberate deception was not limited to small countries ruled by ruthless dictators," ElBaradei writes in "The Age of Deception," being published Tuesday by Henry Holt and Company.

The 68-year-old legal scholar, head of the International Atomic Energy Agency (IAEA) from 1997 to 2009 and recently a rallying figure in Egypt's revolution, concludes his 321-page account of two decades of "tedious, wrenching" nuclear diplomacy with a plea for more of it, particularly in the efforts to rein in North Korean and Iranian nuclear ambitions.

"All parties must come to the negotiating table," writes ElBaradei, who won the Nobel Peace Prize jointly with the IAEA in 2005. He repeatedly chides Washington for reluctant or hardline approaches to negotiations with Tehran and Pyongyang.

He is harshest in addressing the Bush administration's 2002-2003 drive for war with Iraq, when ElBaradei and Hans Blix led teams of U.N. inspectors looking for signs Saddam Hussein's government had revived nuclear, chemical or biological weapons programs.

He tells of an October 2002 meeting he and Blix had with Secretary of State Colin Powell, National Security Adviser Condoleezza Rice and others, at which the Americans sought to convert the U.N. mission into a "cover for what would be, in essence, a United States-directed inspection process."

The U.N. officials resisted, and their teams went on to conduct some 700 inspections of scores of potential weapons sites in Iraq, finding no evidence to support the U.S. claims of weapons of mass destruction.

In his own memoir, published last November, Bush still insisted it was right to invade to remove a "homicidal dictator pursuing WMD." But the ex-president also wrote of a "sickening feeling" when no arms turned up after the invasion, and blamed an "intelligence failure" for the baseless claim, a reference to a 2002 U.S. intelligence assessment contending WMD were being built.

But that assessment itself offered no concrete evidence, and Bush and his aides have never explained why the U.S. position was not changed as on-the-ground U.N. findings came in before the invasion.

ElBaradei cites examples, including the conclusion by his inspectors inside Iraq that certain aluminum tubes were designed for artillery rockets, not for uranium enrichment equipment to build nuclear bombs, as Washington asserted.

The IAEA chief reported this conclusion to the U.N. Security Council on Jan. 27, 2003, and yet on the next day Bush — in a "remarkable" response — delivered a State of the Union address in which he repeated the unfounded claim about aluminum tubes, ElBaradei notes.

Similar contradictions of expert findings occurred with the claim, based on a forgery, that Iraq had sought uranium from Niger, and an Iraqi exile's fabrication that "mobile labs" were producing biological weapons.

"I was aghast at what I was witnessing," ElBaradei writes of the official U.S. attitude before the March 2003 invasion, which he calls "aggression where there was no imminent threat," a war in which he accepts estimates that hundreds of thousands of Iraqi civilians were killed.

In such a case, he suggests, the World Court should be asked to rule on whether the war was illegal. And, if so, "should not the International Criminal Court investigate whether this constitutes a `war crime' and determine who is accountable?"

Formidable political and legal barriers would seem to rule out such an investigation. But ElBaradei, citing the war-crimes prosecution of Serbia's Slobodan Milosevic, sees double standards that should end.

"Do we, as a community of nations, have the wisdom and courage to take the corrective measures needed, to ensure that such a tragedy will never happen again?" he asks.

Source: AP News