Terror group fills Syria rebels' space






STORY HIGHLIGHTS


  • U.S. declared a key opposition group in Syria a terrorist organization

  • New report says it is the most effective group in the opposition, with 5,000 fighters

  • Nada Bakos: The group has ties to al Qaeda but also seeks to provide social services

  • She says the chances are slim that it could be persuaded to give up radical goals




Editor's note: Nada Bakos is a former Central Intelligence Agency analyst.


(CNN) -- In the midst of the struggle against Bashar al-Assad's government stands Jabhat al-Nusra, recently designated by the U.S. State Department as a foreign terrorist organization.


A new report by the Quilliam Foundation in London says the organization is the most effective arm of the Syrian insurgency and now fields about 5,000 fighters against the Assad regime.


Practically speaking, the terrorist designation means little that is new for the immediate struggle in Syria. Shortly after al-Nusra claimed credit for one of its early suicide bombings in January 2012, the Obama administration made known al-Nusra's connection to al Qaeda in Iraq, a group with which I was intimately familiar in my capacity as an analyst and targeting officer at the Central Intelligence Agency.



Nada Bakos

Nada Bakos



The administration's position was reinforced when Director of National Intelligence James Clapper one month later testified in front of the Senate Armed Services Committee that "...we believe al-Qaeda in Iraq is extending its reach into Syria."


Analysis: Study shows rise of al Qaeda affiliate in Syria


Al-Nusra is filling a power vacuum through charitable efforts to galvanize local support and generating influence among Syrians. In light of al-Nusra's influence in Syria, the real question is not so much about the scope and scale of al-Nusra currently, but rather how should the United States respond to its rise, particularly after al-Assad's eventual exit?



Historically, the U.S. government seemed to believe that as soon as people are given the chance, they will choose and then create a Jeffersonian democracy. Then we are surprised, if not outraged, that people turn to organizations such as Hamas, Hezbollah or the Muslim Brotherhood in electoral contests. These organizations often provide the basic necessities that people need to survive: food, water, medical care, education and security.


As ideologically distasteful as we might find them, they are often doing things corrupt, weak or failing governments do not: providing the basic necessities that people need to survive (let alone create the conditions that enable people to aspire to thrive).


Why does al-Nusra keep quiet about its ties to al Qaeda in Iraq? The documents pulled from the Abottabad raid that killed Osama bin Laden shed light on his awareness that the al Qaeda brand had been deteriorating.








Bin Laden urged regional groups, "If asked, it would be better to say there is a relationship with al Qaeda, which is simply a brotherly Islamic connection, and nothing more," according to CNN. Bin Laden and Ayman al-Zawahiri had criticized the Jordanian-born founder and leader of al Qaeda in Iraq, Abu Musab al-Zarqawi, for his killing of civilians and lack of political acumen to win public support.


Talk about al Qaeda seems distant. It was a bogeyman made real in 1993 when it unsuccessfully attacked the World Trade Center and terrifyingly tangible in 2001 when its operatives succeeded in destroying the twin towers and expanded their attacks to the Pentagon and the air over Pennsylvania. Its looming shadow has since faded from the public eye, particularly with the death of bin Laden. Its vision and ideology, however, continue to have a strong appeal.


Now that al Qaeda central has a less visible role, what makes players like al-Nusra and al Qaeda in Iraq threats? Even today, after Zarqawi's death, al Qaeda in Iraq has managed to continue to wreak havoc in Iraq and in the region through an autonomous, adaptable structure.


Al-Nusra has declared itself a player in the fight for a global jihad, a bold statement for what is today a localized group . Even small groups, however, have the potential to disrupt regional stability and complicate America's pursuit of its national security objectives—a fact I learned firsthand tracking and trying to stem the rise, influence and efficacy of al Qaeda in Iraq in the aftermath of the U.S. invasion of Iraq.


Zarqawi, until his death in 2006, was able to confound U.S. forces and attack Jordan by attracting recruits from North Africa (including Libya), Central Europe, Jordan and Syria.


Some of Zarqawi's earliest recruits were veterans of the Syrian Muslim Brotherhood, an organization that lashed out against the Syrian government during the 1980s. Captured records from a raid near the city of Sinjar, Iraq, indicated that during the 2006-2007 time frame, 8% of al Qaeda in Iraq operatives were Syrians. The percentage likely ebbed and flowed as the group formed, became influential and waned, but it suggests that there was no shortage of recruits amenable to engage in religious conflict in Syria as recently as 5-10 years ago.


The most striking thing about the captured records, however, is that it appears almost every foreign fighter entering Iraq to join al Qaeda in Iraq came through Syria. As a targeter, I can tell you that facilitation networks are key: they are the means by which groups such as al Qaeda in Iraq are funded, supplied and sustained. During the Iraq war, Zarqawi's top aides in Syria played a critical role in recruiting, funding and operational planning outside Iraq.


One of the things U.S. officials and the international media should watch for is how al-Nusra uses its terrorist designation: If it seeks to use the declaration to burnish its jihadist credentials, it might be able to bolster the image of the organization in the eyes of the extremist community and parlay that recognition into larger, or steadier, streams of funding—a development that will make the group more viable over the long-term or allow it to expand its operations or influence in the short- to mid-term.


An important differentiator between al Qaeda in Iraq and al-Nusra is one of its tactics: Zarqawi made a practice of indiscriminately killing Iraqi civilians, effectively terrorizing the Iraqi population, especially the Shiite minority. Zarqawi, despite identifying with al Qaeda, had a much thinner theological basis than al Qaeda central.


Key figures at al Qaeda central such as bin Laden and Zawahiri argued with Zarqawi over his tactics, complaining that alienating mainstream Muslims would not help achieve the over-arching goal of instilling Sharia law.


Al-Nusra is using some of the same tactics as al Qaeda in Iraq (e.g., suicide bombings, kidnappings and car bombs), but it appears to be trying to strike a balance Zarqawi was unwilling to make: Not only does it seem to be avoiding alienating—if not antagonizing—the larger population, but it also is providing the people of Syria with a range of goods and services such as food, water and medical care—basic necessities that people need to survive in the best of times, let alone when their country is in the throes of a civil war.


If this becomes a trend, it might signal that al-Nusra aspires to be more like Hezbollah or Hamas, organizations that defy neat categorization based on the range of social, political and military activities they engage in and the resultant legitimacy they have in the eyes of their constituencies.


In the Syrian uprising, the opportunity for meaningful U.S. intervention might have passed: Exhaustion from operations in Iraq and Afghanistan have taken their toll on the U.S. military, have taxed the national treasury, and sapped political will, especially as the state of the economy remains at the center of the debate in Washington.


Our absence from the fight is going to cost us if the al-Assad regime fails, leaving rebel groups like al-Nusra dictating the direction, pace and scope of a new Syria.


Given that managing affairs in the Middle East has never been one of our strong suits, the question at this point should be how can the United States, particularly the Department of State, best engage groups that might be inimical to U.S. values but necessary to our interests in the Middle East? For that, I am not sure there is a clear or simple answer.


One opportunity would be if the United States uses its designation of al-Nusra as both a stick and carrot, cajoling and encouraging it to enter into mainstream politics when (or if) the Assad regime falls.


My read of al-Nusra, however, is that, like Zarqawi, it does not aspire to be a political player and is unlikely to settle for a political role in the new government. Instead, it may aim to play the spoiler for any transitional government and use its resources and political violence to empower and encourage other like-minded extremists. With time and opportunity, al-Nusra could not only add to regional instability in the Middle East, but also rekindle global jihad.



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The opinions expressed in this commentary are solely those of Nada Bakos.






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Exhumation of poisoned lottery winner proceeds









Cook County authorities continue to move toward exhuming the body of a Chicago man who died of cyanide poisoning weeks after winning a $1 million lottery jackpot.
 
Cook County prosecutors are drafting court papers and expect a judge to hear the matter on Friday at the Daley Center courthouse, Sally Daly, a spokeswoman for State’s Attorney Anita Alvarez, said today.

Chief Medical Examiner Stephen J. Cina sent a sworn statement to prosecutors on Tuesday explaining why an autopsy was needed in order to ensure a complete investigation.
 
The exhumation could take place as soon as next week, according to sources familiar with the process.
 
The mystery surrounding Urooj Khan's death has sparked international media interest.

As first reported by the Tribune in a front-page story on Monday, Khan died suddenly last July just weeks after winning a million-dollar prize.

Finding no trauma to his body and no unusual substances in his blood, the medical examiner's office declared his death to be from natural causes and he was buried at Rosehill Cemetery without an autopsy.

About a week later, a relative told the medical examiner’s office to take a closer look at the 46-year-old’s death. By early December, comprehensive toxicology tests showed that Khan had died of a lethal amount of cyanide, prompting Chicago police and county prosecutors to investigate his homicide.

While a motive has not been determined yet, police haven't ruled out that Khan was killed because of his lottery win, a law enforcement source has told the Tribune.

Khan, the owner of three dry cleaners on the North Side, died before he could collect the lump-sum winnings – about $425,000 after taxes.

The Tribune reported in Wednesday’s newspaper that authorities investigating the homicide executed a search warrant at the home he had shared with his wife, Shabana Ansari.

She later was interviewed by detectives for more than four hours, answering all their questions, according to her attorney, Steven Kozicki.
 
jmeisner@tribune.com



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Venezuela's top court endorses Chavez inauguration delay


CARACAS (Reuters) - Venezuela's top court endorsed the postponement of Hugo Chavez's inauguration this week and ruled on Wednesday that the cancer-stricken president and his deputy would continue in their roles, despite a cacophony of opposition complaints.


Critics had argued the 58-year-old's absence from his own swearing-in ceremony on January 10 meant a caretaker president must be appointed. Chavez has not been seen in public nor heard from in almost a month following surgery in Cuba.


"Right now we cannot say when, how or where the president will be sworn in," Supreme Court Chief Judge Luisa Morales told a news conference.


"As president re-elect there is no interruption of performance of duties ... The inauguration can be carried out at a later date before the Supreme Court."


The decision opens the door in theory for Chavez to remain in office for weeks or months more from a Cuban hospital bed - though there is no evidence he is even conscious.


It leaves the South American country in the hands of Vice President Nicolas Maduro, as de facto leader of the government.


The opposition say that is a brazen violation of the constitution, and that Maduro should leave office on Thursday when the current presidential term had been due to expire.


They say National Assembly boss Diosdado Cabello, another powerful Chavez ally, should take over the running of the country while new elections would be organized within 30 days.


Maduro would be the ruling Socialist Party's candidate.


Government leaders insist Chavez, 58, is fulfilling his duties as head of state, even though official medical bulletins say he suffered complications after the surgery, including a severe lung infection, and has had trouble breathing.


His resignation or death would transform politics in the OPEC nation, where he is revered by poor supporters thankful for his social largesse, but denounced by opponents as a dictator.


RALLY PLANNED FOR THURSDAY


Opposition leader Henrique Capriles, who lost a presidential election to Chavez in October, said the Supreme Court had become politicized under the socialist leader's administration.


"The tribunal gave an interpretation (of the constitution) in order to solve a problem that the government has," Capriles told a news conference.


Moody's Investors Service warned on Wednesday that Venezuela's sovereign credit rating, already at junk status, faces short-term risks over any political transition.


Prices of Venezuela's widely traded bonds have soared lately on Chavez's health woes, but dipped this week as investors' expectations of a quick government change apparently faded.


The president has undergone four operations, as well as weeks of chemotherapy and radiation treatment, since being diagnosed with an undisclosed type of cancer in his pelvic area in June 2011.


He looked to have staged a remarkable recovery from the illness last year, winning a new six-year term at a hard-fought election in October. But within weeks of his victory he had to return to Havana for more treatment.


The government has called for a huge rally outside the Miraflores presidential palace in Caracas on Thursday, and allied leaders such as Uruguay's Jose Mujica, Bolivia's Evo Morales and Nicaragua's Daniel Ortega have said they will visit - despite Chavez's absence.


Argentine President Cristina Fernandez, a close friend, has announced plans to visit Chavez in Cuba on Friday.


The unprecedented silence by Chavez, who is well known for his hours-long rambling speeches, has convinced many Venezuelans that his 14 years in power may be coming to an end.


Unlike after his previous operations in Cuba, no photographs have been published of him recuperating, and social media in Venezuela is buzzing with rumors he is on life support.


Cabello, the pugnacious head of the National Assembly, has repeatedly ruled out taking over as caretaker president to order a new presidential election, saying Chavez remains in charge.


"Tomorrow we will all go to the Miraflores palace," he told a televised Socialist Party meeting on Wednesday. "The people will be invested as president. We are all Chavez!"


(Additional reporting by Marianna Parraga, Diego Ore and Enrique Andres Pretel; Editing by Andrew Cawthorne and Eric Walsh)



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Wall Street slips as earnings season gets under way

NEW YORK (Reuters) - Stocks fell on Tuesday, retreating from last week's rally on the "fiscal cliff" deal in Washington, as companies started to report results for the fourth quarter.


After a 4.3 percent jump in the two sessions around the close of the fiscal cliff negotiations, the S&P has declined a bit, with investors finding few catalysts to extend the rally that took the benchmark to five-year highs.


"We had a brief respite, courtesy of what happened on the fiscal cliff deal and the flip of the calendar with new money coming into the market," said Bucky Hellwig, senior vice president at BB&T Wealth Management in Birmingham, Alabama.


Shares of AT&T Inc dropped 1.7 percent to $34.35, making it one of the biggest drags on the S&P 500, after the company said it sold more than 10 million smartphones in the quarter.


This figure beat the same quarter in 2011, but also means increased costs for the wireless service provider. Providers like AT&T pay hefty subsidies to handset makers so that they can offer discounts to customers who commit to two-year contracts.


Fourth-quarter profits are expected to beat the previous quarter's lackluster results, but analyst estimates are down sharply from October. Quarterly earnings are expected to grow by 2.7 percent, according to Thomson Reuters data. Dow component Alcoa, the largest U.S. aluminum producer, reported results after the closing bell.


The Dow Jones industrial average <.dji> dropped 55.44 points, or 0.41 percent, to 13,328.85. The Standard & Poor's 500 Index <.spx> fell 4.74 points, or 0.32 percent, to 1,457.15. The Nasdaq Composite Index <.ixic> lost 7.01 points, or 0.23 percent, to 3,091.81.


"The stark reality of uncertainty with regard to earnings, plus the negotiations on the debt ceiling, are there and that doesn't give investors a lot of reason to take bets on the long side," Hellwig said.


With AT&T's fall, the S&P telecom services index <.gspl> was the worst performer of the 10 major S&P sectors, down 2.7 percent.


Sears Holdings shares dropped 6.4 percent to $40.16 a day after the company said Chairman Edward Lampert would take over as CEO from Louis D'Ambrosio, who is stepping down due to a family member's health issue. The U.S. retailer also reported a 1.8 percent decline in quarter-to-date sales at stores open at least a year.


Markets went lower as some of the first reported earnings were weak.


"It doesn't seem to be bouncing back, it might stay here or sell off a little further," said Stephen Carl, head of U.S. equity trading at The Williams Capital Group in New York.


Shares of restaurant-chain operator Yum Brands Inc fell 4.2 percent to $65.04 a day after the KFC parent warned sales in China, its largest market, shrank more than expected in the fourth quarter.


GameStop was one of the worst performers on the S&P 500 as shares slumped 6.3 percent to $23.19 after the video game retailer reported low customer traffic for the holiday season and cut its guidance.


Shares of Monsanto Co gained 2.5 percent to $98.42 after reaching a more than four-year high at $99.99. The world's largest seed company raised its earnings outlook for fiscal year 2013 and posted strong first-quarter results.


Volume was below the 2012 average of 6.42 billion shares traded per day, as 6.19 billion were traded on the New York Stock Exchange, NYSE MKT and Nasdaq.


Declining stocks outnumbered advancing ones on the NYSE by 1,495 to 1,458, while on the Nasdaq decliners beat advancers 1,305 to 1,158.


(Reporting by Gabriel Debenedetti; Editing by Kenneth Barry and Nick Zieminski)



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Bucks coach Scott Skiles out, Boylan to fill in


MILWAUKEE (AP) — Once again, an NBA team has parted ways with head coach Scott Skiles. Once again, veteran assistant Jim Boylan is being asked to pick up the pieces.


One day after Milwaukee and Skiles agreed it was time for a change, the Bucks said Tuesday that Boylan will coach the team for the rest of the season. General manager John Hammond downplayed the notion that Skiles had lost control of the locker room or otherwise felt friction with management.


"Scott and I did not have a frosty relationship. Scott did not hate this team," said Hammond, who noted that more than half the season remains. "We're not a team in dire straits ... we're expecting good things to happen."


Boylan met with reporters before Tuesday night's home game against Phoenix.


"We'll do what we've been doing as far as being professional, getting ourselves ready for every game and getting out there and competing," Boylan said. "That's my job right now, to get us back on the right track, move us in the right direction and I think the guys we have on the team right now are quality people and committed to that task. That'll be our ultimate goal."


If this change sounds familiar, it should: Skiles was fired as head coach in Chicago on Christmas Eve in 2007 after the Bulls started 9-16. Boylan, an assistant in Chicago, took over and went 24-32. He was fired at the end of the season.


In an interview Tuesday with the Milwaukee Journal Sentinel, Skiles disputed the notion that he didn't like his team.


"There's always the normal coach-player friction that goes on," Skiles said in the Journal Sentinel interview. "Guys at this level are great players. This is, as NBA teams go, this is a good group of guys."


Hammond said he and Skiles had been having a number of conversations recently about the future of the team. He said there was no single factor in Skiles' departure, and that no other assistant coaches were leaving.


"It was a mutual decision. We both agreed to make this decision," he said.


Skiles had a 162-182 record in four-plus seasons with Milwaukee, with one playoff appearance — a first-round loss to Atlanta in seven games during the 2009-10 season. He was a hard-nosed, defensive-minded coach who sometimes seemed to have difficulty meshing with a roster built around volume shooters Brandon Jennings and Monta Ellis.


Jennings said he heard about the change in a phone call Monday night from Skiles and not from anyone within the organization.


"I think that's why I was a little bit frustrated at first," he said. "Just the fact that I had to hear it from my own coach and not the team. If I'm supposed to be their franchise player, why don't I hear the news first?"


Jennings said he was shocked but not upset about the change. He said he spoke with Skiles for about 20 minutes.


"We had our ups and downs, we had great times here," he said. "I have nothing but respect for him because as a rookie he did put the ball in my hands first."


Luc Mbah a Moute said he was shocked and had a great experience playing for Skiles, but coaching changes simply were part of the business of the NBA.


"I kind of had an idea of hearing that the team wasn't really happy with the way everything was going, and not just this year, you know the last couple of years with Skiles," he said. "This year we were kind of like started a good start and then went through a patch where we didn't play so great."


Boylan said the initial change he would make was to insert forward Ersan Ilyasova into the starting lineup for Ekpe Udoh.


Ilyasova re-signed with the Bucks during the summer, but saw his minutes decrease to 22 per game this year after playing 27 in the 2011-12 season. He said he was looking forward to playing for Boylan.


"For me, it's not a big deal you know, if you start or not, my concern has been about the minutes," Ilyasova said. "When you come from the season I had last year, I didn't expect to play less than last year."


Skiles' agent, Keith Glass, said it was hard to pinpoint when Skiles began thinking of stepping aside, but all parties agreed the timing was right.


"There was no blowup. There was no animosity going on. I think everybody made the right decision for their own respective sides," he said.


Two other coaches, the Lakers' Mike Brown and Brooklyn's Avery Johnson, are also out of work in this young season. Brown was fired after five games and Johnson late last month, about three weeks after being named Eastern Conference coach of the month.


The 57-year-old Boylan has been the lead assistant for the Bucks the past four seasons. In a 20-year NBA coaching career, he has also been an assistant in Cleveland, Vancouver, Phoenix, Atlanta and Chicago.


Boylan said he was too worried about keeping the job when he succeeded Skiles in Chicago.


"Last time, from a personal standpoint, I was too worried about trying to keep the job and it kind of restricted me as time went on," he said. "I made the determination when this happened last night, that I was going to try and enjoy this and just do what I like to do which is coach these guys, being around these guys and the coaching staff and the organization and just enjoy it.


"Have a good time with it and get the guys to play hard and compete and let the chips fall where they may at the end," he said.


Milwaukee, losers of four straight when the coaching change was announced, started out a surprising 6-2, only to lose seven of its next nine. The Bucks followed that with a four-game winning streak, the kind of wild swings that didn't sit well with a coach who values consistency — both in play and preparation.


"Considering like a week ago we were 16-12 and beat Miami, you probably wouldn't have guessed this would have happened a week later," forward Mike Dunleavy said.


Skiles did help coax a breakout season out of Larry Sanders, who has emerged as a rebounding and shot-blocking monster over the last few weeks. The demanding coach pushed Sanders to be more consistent, and the lanky forward/center has responded. He grabbed 20 rebounds against Boston on Dec. 21 to start a string of double-digit rebound nights in five of his last eight games and leads the league with 3.07 blocks per game.


Skiles' focus on defense was always going to be tested by a roster revolving around Jennings and Ellis, two flashy scorers who prefer to get up and down the court and lure opposing teams into shootouts.


Jennings and Ellis have been giving plenty of effort, but the Bucks were in the middle of the pack in points allowed per game (15th) and field goal percentage defense (18th), below Skiles' lofty expectations.


Still, the Bucks are only a few games behind Indiana in the Central Division, despite injuries to Beno Udrih and top defender Mbah a Moute, and in seventh place in the Eastern Conference playoff chase.


Skiles' departure could be the first in a series of big shake-ups for the Bucks. Hammond is in the final year of his deal, while Jennings and Ellis can both become restricted free agents after this season.


Hammond said he and team owner Herb Kohl are in discussions about an extension, but he declined to elaborate on the progress of their conversations.


As for Skiles, he is now 443-433 as an NBA head coach in 12-plus seasons, which also includes stints with Chicago and Phoenix. He started this season with a host of new players, though the biggest trade during his tenure was the deal that sent former No. 1 draft pick Andrew Bogut to Golden State for Ellis.


"I never heard Scott say a negative thing to me about that trade or anything else," Glass said. "Everybody has their own opinions on the way things are done, but Scott was always on board with — in terms of support — whatever move was made. ... And I think he liked Monta. I never heard him say a word about that at all in a negative sense."


Glass said it was too early to say whether Skiles was looking to stay in coaching.


"Today is not the day for that ... but I'm sure we will discuss that in the next month or so," he said. "But he's not burning right now."


AP Sports Writers Jon Krawczynski in Minneapolis and Andrew Seligman in Chicago and AP Freelancer DiGiovanni in Milwaukee contributed to this report.


___


Dinesh Ramde can be reached at dramde(at)ap.org.


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Wanted: Mars Colonists to Explore Red Planet






If you think you have the right stuff to help colonize Mars, you’ll soon get your chance to prove it.


The Netherlands-based nonprofit Mars One, which hopes to put the first boots on the Red Planet in 2023, released its basic astronaut requirements today (Jan. 8), setting the stage for a televised global selection process that will begin later this year.






Mars One isn’t zeroing in on scientists or former fighter pilots; anyone who is at least 18 years old can apply to become a Mars colony pioneer. The most important criteria, officials say, are intelligence, good mental and physical health and dedication to the project, as astronauts will undergo eight years of training before launch.


“Gone are the days when bravery and the number of hours flying a supersonic jet were the top criteria,” Norbert Kraft, Mars One’s chief medical director and a former NASA researcher, said in a statement. “Now, we are more concerned with how well each astronaut works and lives with the others, in the long journey from Earth to Mars and for a lifetime of challenges ahead.”


Mars One plans to launch a series of robotic cargo missions between 2016 and 2021, which will build a habitable Red Planet outpost ahead of the arrival of the first four colonists in 2023. More settlers will arrive every two years after that. There are no plans to return the pioneers to Earth. [Mars One: 'Big Brother' on Mars? (Video)]


The organization will fund most of its ambitious activities by staging a global reality-TV event that follows the colonization effort from astronaut selection through the settlers’ first years on Mars.


Mars One, which transitioned from a private company to a nonprofit late last year, has already received a number of inquiries from prospective colonists, officials said.


“Well before the official Astronaut Selection Program, we received more than 1,000 emails from individuals who desire to go to Mars,” Suzanne Flinkenflögel, Mars One’s communications director, said in a statement. “We are working hard to launch our selection campaign as soon as possible, to open the doors to everyone who aspires to do something tremendous in their lifetime.”


Final astronaut candidates will be selected after review by Mars One experts and a global TV event. Those chosen will be employed by Mars One during their Earth-based training and for the length of their time on the Red Planet, officials said.


To learn more about the selection process, go to www.thenextgiantleap.com.


Follow SPACE.com on Twitter @Spacedotcom. We’re also on Facebook & Google+


Copyright 2013 SPACE.com, a TechMediaNetwork company. All rights reserved. This material may not be published, broadcast, rewritten or redistributed.
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Case of Wall Street greed gone too far




Goldman Sachs CEO Lloyd Blankfein was one of the executives whose stock award was accelerated to beat higher tax rate.




STORY HIGHLIGHTS


  • Goldman Sachs granted $65 million in stock to execs before new tax rates began

  • Susan Antilla says the firm's CEO had endorsed higher rates, called for entitlement cuts

  • She says Goldman benefits from the implicit promise that U.S. will bail it out

  • Antilla: It was unseemly for Goldman to rush the payments to shield execs from new rates




Editor's note: Susan Antilla is a columnist at Bloomberg View and a contributor to TheStreet.com. She has written about finance for more than 30 years. She is author of "Tales From the Boom-Boom Room: The Landmark Legal Battles That Exposed Wall Street's Shocking Culture of Sexual Harassment." Follow her on Twitter @antillaview.


(CNN) -- Nobody likes to pay taxes, so can you blame the good folks at Goldman Sachs & Co. for doing what they could to avoid the higher rates that kicked in on January 1?


While the rest of us were donning our party clothes on New Year's Eve, the legal worker bees at Goldman were pushing the send button on 10 regulatory filings to the Securities and Exchange Commission.


By the time the ball dropped in Times Square, regulators had been notified that $65 million in Goldman stock had been granted a month early, helping a cluster of powerful multimillionaire executives trim their tax tab.


Among the 10 who shared that $65 million, Chief Executive Officer Lloyd Blankfein, Chief Operating Officer Gary Cohn and Chief Financial Officer David Viniar wound up with $8.4 million apiece in Goldman stock.



Susan Antilla

Susan Antilla



Blankfein's compensation in 2011 was $16.2 million. Cohn and Viniar that year made $15.8 million. Even Gordon Gekko would be impressed to see that bosses making that much money were able to catch a tax break for a couple hundred thousand.


The 10 executives who skirted 2013's higher rates were not the only Goldmanites who benefited from the "accelerated" vesting. Michael DuVally, a Goldman spokesman, acknowledged there was "a group larger than" the 10 but declined to say how many. DuVally would not comment on who made the decision to grant the shares early.


The shrewd Goldman move is hardly unique among rich business executives or even 99 percenters of more modest means. It was no secret that higher taxes were coming this year, and taxpayers of all shapes and sizes did what they could to ensure that "tax events" would occur in 2012.



Even environmental activist and Nobel Prize winner Al Gore tried, albeit without success, to unload his Current TV to Al Jazeera before the new year dawned.


What makes the Goldman move distasteful is that it wasn't even two months ago that CEO Blankfein was mouthing off in a Wall Street Journal op-ed that he endorsed tax increases "especially for the wealthiest" -- along with a plug to cut entitlements to all you freeloaders out there.








If you're pushing the position that the rich should pay more to help fix the deficit, it doesn't quite follow to employ a tax dodge, says Dennis Kelleher, president of the Washington-based public interest group Better Markets Inc.


"Goldman's quickie year-end tax shenanigans deprived the government of what it otherwise would get," he says. "So they either cause the debt to go up, or cause others to pay more by the taxes they are avoiding."


DuVally, the Goldman spokesman, declined to comment when I asked whether it was inconsistent for Goldman to make a move for its executives to avoid taxes after Blankfein endorsed increases for the wealthy.


I've got to hand it to Goldman. The firm is a master of the "have-your-cake-and-eat-it-too" brand of politics and public relations. One minute, Goldman is cranking out press releases about its devotion to women entrepreneurs in its philanthropic "10,000 women" program. The next, it is announcing its annual list of new partners that includes a paltry 10 women but 60 men.


Goldman was a victim on the defensive when Greg Smith, a former employee, wrote a New York Times op-ed on March 14, blasting the firm for having "morally bankrupt people" who needed to be weeded out. You could almost feel sorry for poor Goldman, which shipped out a memo reminding employees that their estimable employer had been named one of the best places to work in the United Kingdom only weeks before the London-based Smith's "Why I Am Leaving Goldman Sachs" essay.


By the time Smith published a book seven months later, the firm had turned ruthless revenge-seeker, even sharing parts of Smith's self-evaluations with the media. A "best place to work?" Really? Careful what you say in the press -- and in your HR file -- if you get your paycheck from a Goldman-style operation.


The brouhaha over Smith's op-ed and book stirred up debate of the "What did you expect of an investment bank operating in capitalistic society?" type.


Fair enough. Banks are not in the philanthropy business -- even if they spend as much time as Goldman does talking about its good deeds and famous "business principles." ("Our clients always come first" is famously No. 1 on the list.)


At Goldman and other "too big to fail" banks, though, employees walk through the doors each morning knowing that the rest of us will be forced to bail them out again should another crisis ensue. We taxpayers provide the insurance policy that they enjoy without ever sending us premiums. In October of 2008, Goldman got $10 billion in taxpayer money from the Troubled Asset Relief Program, which it ultimately paid back.


Blankfein, like other bank CEOs, would later make the case that Goldman wasn't "relying on" that government help.


But leaf through the tomes of some of the regulators who lived through the crisis, and you start to wonder whether our tax-dodging heroes might be out of jobs today if the public hadn't fronted a bailout.


From "Bull by the Horns," by former Federal Deposit Insurance Corp. chairman Sheila Bair: Goldman and Morgan Stanley were "teetering on the edge" in the fall of 2008.


From "Bailout: An Inside Account of how Washington Abandoned Main Street While Rescuing Wall Street," by Neil Barofsky, former special inspector general to oversee the Troubled Assets Relief Program: Federal Reserve chairman Ben Bernanke "confided that he believed that Goldman Sachs would have been the next to go" after Morgan Stanley.


We need to change the conversation here.


Goldman and its too-big-to-fail brethren are banks that accepted welfare and are in debt to U.S. taxpayers for averting disaster. This hasn't been about hard-nosed capitalism since those first TARP wire transfers made their way into Goldman Sachs' coffers.


As for the bank's recent tax-reduction maneuver, it's another reminder that Goldman's management is either clueless about how bad it looks or doesn't care. Sometimes bad PR is a just a cost of doing business.


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The opinions expressed in this commentary are solely those of Susan Antilla.






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Medical examiner seeks to exhume body of poisoned lottery winner













Urooj Khan


Urooj Khan won the $1 million in the lottery just weeks before he died suddenly of a heart attack in his West Rogers Park home last summer. Now, months after his death, Chicago police were conducting a homicide investigation after it was discovered that he had been poisoned.
(January 7, 2013)



























































Cook County authorities investigating the cyanide-poisoning death of a Chicago man who had hit a lottery jackpot want to exhume his body to conduct an autopsy.

In a telephone interview today with the Tribune, Medical Examiner Stephen J. Cina said he sent a sworn statement to prosecutors laying out why he wanted the body of Urooj Khan exhumed. The state’s attorney’s office is planning to file papers in civil court in coming days asking a judge to approve the exhumation of Khan’s remains, spokeswoman Sally Daly said.


As first reported by the Tribune in a front-page story Monday, Khan, 46, who owned a dry cleaning business on the city’s North Side, died suddenly last July just weeks after winning a million-dollar prize at a 7-Eleven store near his home. Finding no trauma to his body and no unusual substances in his blood, the medical examiner's office declared his death to be from natural causes and he was buried at Rosehill Cemetery without an autopsy.





About a week later, a relative told the medical examiner’s office to take a closer look at Khan’s death. By early December, comprehensive toxicology tests showed that Khan had died of a lethal amount of cyanide, prompting Chicago police and county prosecutors to investigate his homicide.


While a motive has not been determined yet, police haven't ruled out that Khan was killed because of his big lottery win, a law enforcement source told the Tribune. He died before he could collect the winnings – about $425,000 after taxes.


 jmeisner@tribune.com


jgorner@tribune.com






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Venezuela postpones inauguration for cancer-stricken Chavez


CARACAS (Reuters) - Venezuela will postpone the inauguration of President Hugo Chavez for a new term due to health problems, the government said on Tuesday, another sign the socialist leader's cancer may be bringing an end to his 14 years in power.


The 58-year-old former soldier who has dominated the South American OPEC nation since 1999 has not been heard from since surgery on December 11 in Cuba - his fourth operation since he was diagnosed with an undisclosed type of cancer in June 2011.


The announcement outraged opposition leaders who insist that Chavez must be sworn in before the National Assembly on January 10 as laid out in the constitution, or temporarily step aside and leave an ally in power.


"The commander president wants us to inform that, based on his medical team's recommendations, the post-operative recovery should extend past January 10," said Vice President Nicolas Maduro, Chavez's chosen successor, in a letter read to the legislature.


"As a result, he will not be able to be present at the National Assembly on that date."


The letter said authorities would seek another date for the inauguration ceremony but did not say when it would take place or give a time frame for Chavez's return from Havana.


Rather than being sworn in by the legislature, he would take his oath at a later date before the Supreme Court, the letter said, as allowed by the constitution.


Government leaders insist Chavez is completely fulfilling his duties as head of state, even though official medical bulletins say he has a severe pulmonary infection and has had trouble breathing.


The government has called for a massive rally outside the presidential palace on Thursday, and allied presidents including Uruguay's Jose Mujica and Bolivia's Evo Morales have confirmed they will visit Venezuela this week despite Chavez's absence.


Argentine President Cristina Fernandez has announced plans to visit Chavez in Havana on Friday.


But the unprecedented silence by the president - famous for regularly speaking for hours in meandering broadcasts - has left many convinced he could be in his last days.


His resignation or death would upend politics in the oil-rich nation, where he enjoys a deity-like status among poor supporters thankful for his social largesse.


His critics call him a fledgling dictator who has squandered billions of dollars from crude sales while dashing the independence of state institutions.


CONSTITUTION DISPUTE


The constitution does not specify what happens if the president does not take office on January 10.


The Supreme Court, controlled by Chavez allies, called a news conference for Wednesday. It is widely expected to announce an interpretation of the constitution that will give Chavez leeway to take office when he is fit to do so.


If he dies or steps aside, new elections would be called within 30 days. Before leaving for Havana in December, the president instructed his supporters to back Maduro in that vote if he were unable to continue.


Opposition leaders argue that Congress chief and Chavez ally Diosdado Cabello should take over, as mandated by the constitution if the president's absence is formally declared.


Cabello has ruled that out, saying the president continues to be in charge.


"Who could have believed the opposition would be screaming for Diosdado Cabello to be given the presidency of the republic?" he said during a rambunctious session of Congress. "That's crazy, the opposition is losing it."


Meanwhile opposition deputies accused the Socialist Party of failing to follow Chavez's instructions - a scene that would have been unimaginable before Chavez's prolonged absence.


"President Chavez is the only one among you who has spoken clearly," said opposition leader Julio Borges.


He was drowned out by pro-Chavez deputies clapping and chanting the socialist leader's name and rebuffed by Cabello, who had long been considered a potential successor to Chavez until he was passed over for Maduro.


"It's not my fault you weren't chosen, don't take your frustration out on me," Borges quipped.


Another opposition deputy complained that during the debate a copy of the constitution was thrown across the chamber from the direction of the Socialist Party's deputies.


Chavez's supporters have held near-daily vigils for his recovery, while opposition activists accuse the president's allies of a Cuban-inspired manipulation of the situation.


Maduro has taken over the day-to-day running of the government and looks set to continue in the role past Thursday.


The mustachioed former bus driver lacks Chavez's charisma, but he has sought to imitate the president's style with vituperative attacks on the opposition and televised ribbon-cutting ceremonies.


With the micro-managing Chavez away, major policy decisions in Venezuela, such as a widely expected devaluation of the bolivar currency, appear to be on hold.


Venezuelan bond prices, which had soared in recent weeks on Chavez's health woes, dipped on Monday and Tuesday as investors' expectations of a quick government change apparently dimmed.


"The 'regime change' euphoria seems excessive taking into account the unclear legal transition and perhaps, more importantly, the risk that regime change does not allow for policy change," New York-based Jefferies' managing director Siobhan Morden said in a note on the bonds.


(Editing by Daniel Wallis and Eric Beech)



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Wall Street edges off five-year high, awaits earnings

NEW YORK (Reuters) - Stocks lost ground on Monday, as investors drew back from recent gains that lifted the S&P 500 to a five-year high, in anticipation of sluggish growth in corporate profits.


Shares of financial companies dipped after a group of major U.S. banks agreed to pay a total of $8.5 billion to end a government inquiry into faulty mortgage foreclosures. The KBW bank index <.bkx>, a gauge of U.S. bank stocks, was down 0.3 percent.


Other sectors were hit as well, most notably energy and utilities. The S&P 500 energy sector index <.gspe> fell 0.8 percent and the utilities sector <.gspu> was off 1.1 percent.


The day's decline came a session after the S&P 500 finished at a five-year high, boosted by a budget deal and strong economic data. The S&P 500 rose 4.6 percent last week, the best weekly gain in more than a year.


"It's a little bit of taking some risk off the table ahead of profit season, you're not going to see anything all that great" on earnings, said Larry Peruzzi, senior equity trader at Cabrera Capital Markets Inc in Boston.


Earnings are expected to be only slightly better than the third-quarter's lackluster results, and analysts' current estimates are down sharply from where they were in October. Fourth-quarter earnings growth is expected to come in at 2.8 percent, according to Thomson Reuters data.


Aluminum company Alcoa Inc begins the reporting season by announcing its results after Tuesday's market close. Alcoa shares fell 1.7 percent at $9.10.


The Dow Jones industrial average <.dji> dropped 50.92 points, or 0.38 percent, to 13,384.29. The Standard & Poor's 500 Index <.spx> fell 4.58 points, or 0.31 percent, to 1,461.89. The Nasdaq Composite Index <.ixic> lost 2.84 points, or 0.09 percent, to 3,098.81.


Ten mortgage servicers - including Bank of America , Citigroup , JPMorgan , and Wells Fargo - agreed on Monday to pay $8.5 billion to end a case-by-case review of foreclosures required by U.S. regulators.


In a separate case, Bank of America also announced roughly $11.6 billion of settlements with mortgage finance company Fannie Mae and a $1.8 billion sale of collection rights on home loans.


The bank also entered into agreements with Nationstar Mortgage Holdings and Walter Investment Management to sell about $306 billion of residential mortgage servicing rights.


Bank of America shares lost 0.2 percent at $12.09 while Nationstar Mortgage Holdings jumped 16.8 percent to $38.83.


Citigroup shares were up 0.09 percent to $42.47, and Wells Fargo shares fell 0.5 percent to $34.77.


"The financials probably have the wind behind them now with a lot of the regulations coming out ... the market has to absorb a lot of the gains, and for that reason there's a pullback from this level," said Warren West, principal at Greentree Brokerage Services in Philadelphia.


Shares of U.S. jet maker Boeing Co dropped 2 percent after a Boeing 787 Dreamliner aircraft with no passengers on board caught fire at Boston's Logan International Airport on Monday morning.


Amazon.com shares hit their highest price ever at $269.22 after Morgan Stanley raised is rating on the stock. Shares were up 3.6 percent at $268.46.


Video-streaming service Netflix Inc shares gained 3.4 percent to $99.20 after it said it will carry previous seasons of some popular shows produced by Time Warner's Warner Bros Television.


Walt Disney Co stock fell 2.3 percent to $50.97. The company started an internal cost-cutting review several weeks ago that may include layoffs at its studio and other units, three people with knowledge of the effort told Reuters.


Volume was lower than average, as 4.78 billion shares were traded on the New York Stock Exchange, NYSE MKT and Nasdaq. This is well below the 2012 average of 6.42 billion per session.


Declining stocks outnumbered advancing ones on the NYSE by 1,629 to 1,363, while on the Nasdaq decliners beat advancers 1,438 to 1,066.


(Reporting By Gabriel Debenedetti; Editing by Kenneth Barry and Nick Zieminski)



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